Annual Report and Accounts 2024
Safety,
resilience
and progress
Page 5
Integrating
knowledge
through M&A
Page 6
Our new
4PRO
offering
Page 10
Global
leader
in heat
management
CONTENTS
STRATEGIC REPORT
IFC Highlights
01 We are RHI Magnesita
02 Chair’s statement
05 CEO review
08 Our business model and value chain
12 Our strategic framework
22 Key performance indicators
26 Our stakeholders
32 Operational review
39 Financial review
46 Sustainability
48 Our risk management approach
48 Effective risk management
51 Our internal control system
53 Viability statement
54 Principal risks
64 Sustainability Statement
GOVERNANCE
173 Governance at a glance
174 Chair’s introduction to corporate governance
176 Board of Directors
180 Board composition
182 Executive Management Team
183 Corporate Governance report
200 Nomination & Governance Committee report
204 Corporate Sustainability Committee report
206 Audit & Compliance Committee report
212 Remuneration Committee report
218 Directors’ Remuneration Policy
220 Annual Report on Remuneration
FINANCIAL STATEMENTS
232 Consolidated Statement of Profit or Loss
233 Consolidated Statement
of Comprehensive Income
234 Consolidated Statement of Financial Position
235 Consolidated Statement of Cash Flows
236 Consolidated Statement of Changes in Equity
238 Notes to the Consolidated Financial
Statements 2024
300 Company Financial Statements
of RHI Magnesita N.V.
302 Notes to the Company Financial
Statements 2024
OTHER INFORMATION
312 Independent Auditor’s report
322 Limited assurance report of
the independent auditor on the
consolidated sustainability statement
325 Alternative performance measures (“APMs”)
327 Glossary
329 Shareholder information
Our purpose is to master heat, enabling global industries
to build sustainable modern life. We offer refractory
products and services that shape tomorrow’s world. Our
advanced products are essential for our customers in the
steel, cement, metals, glass and chemicals industries.
HIGHLIGHTS
Revenue
€3.5bn
2023: €.3.6bn
Adjusted EBITA
€407m
2023: €409m
Adjusted profit after
tax
€263m
2023: €241m
Adjusted earnings
per share
€5.32
2023: €4.98
Net debt: Pro Forma
Adjusted EBITDA
2.3x
2023: 2.3x
Dividend per share
€1.80
2023: €1.80
per share
Adjusted operating
cash flow
€419m
2023: €418m
ROIC
9.8%
2023: 10.7%
C0 emissions
1.57t CO/t
2023: 1.62t CO/t
Recycling rate
14.2%
2023: 12.6%
Lost time injury
frequency
0.11
2023: 0.16
Global leader
in heat
management
Integrity, honesty, reliability
and respectful collaboration
Adjusted EBITA margin
(2023: 11.4%)
Green steel project
contract awards in 2024
robotic and
machinery solution
systems sales
contracts awarded
in 2024
11.7%
5
18
WE ARE RHI MAGNESITA
1RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
CHAIR’S STATEMENT
As the global leader in the
critical refractory industry we
have a responsibility to lead the
way in sustainability and ethical
business practices.
Dear Shareholders,
I am pleased to present the achievements
and performance of RHI Magnesita in
2024, which was another year of difficult
conditions in the refractory market. We
have demonstrated our resilience and the
continuing validity of our strategy despite
facing many challenges.
Our successful M&A programme continues
with the €391 million acquisition of Resco
in the US, alongside the ongoing integration
of the businesses we acquired in 2022
and 2023. Our strategy to grow through
acquisition in the refractory industry
remains intact and is already generating
value despite weak demand conditions.
Refractories are essential for modern life;
without them it is not possible to
manufacture steel, glass, cement,
non-ferrous metals and petrochemical
products. RHI Magnesita is the global
leader in this highly specialised and vital
industry and we have a responsibility to
lead the market in sustainability and ethical
business practices, as well as delivering
value for shareholders.
Health and safety
I am saddened to report that the Group
experienced a fatality in June 2024 at
its Dalian plant in China, in addition to the
previously reported fatal incident in Austria
that occurred in February 2024. No serious
injury or fatality in the workplace can ever
be acceptable and the Board is fully focused
on supporting management to bringing
about the necessary changes to prevent
them. I am satisfied that appropriate,
far-reaching measures are being taken
to improve performance and that the
issue is being given the priority it deserves.
Your Board will continue to monitor the
situation closely.
Strategic priorities
Despite significant volatility in end markets,
supply chains and global trade we remain
confident that our strategy is the best
approach to generating value in our industry.
During periods of disruption we must
remain focused on our long-term goals
if we are to succeed.
One of the key strengths of RHI Magnesita
is the ability to generate stable earnings
and cash flow with consistent margins
and return on invested capital throughout
business cycles. This enables us to
consistently allocate capital to growth,
which at present we believe is best delivered
through an active M&A programme that
continues to gather momentum, alongside
delivering a regular dividend to shareholders.
We are proud to deliver
a wider benefit to society
through our leadership
of the refractory industry.
€396m
Capital allocated
to M&A in 2024,
including Resco
Herbert Cordt
Chair
Essential for
modern life
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 20242
CHAIR’S STATEMENT CONTINUED
Leaders
in innovation
and sustainability
Pioneering new technologies
We are developing new technologies
to reduce emissions in the refractory
production process
Recycling
Recycling has been the main
contributor to the Group’s CO
emissions reductions to date.
There are also significant
waste management and
circular economy benefits
for our customers.
1.6t
of CO can be
saved per tonne
of recycled raw
material used
Green steel opportunity
Steel producers launching
green steel projects are turning
to RHI Magnesita for refractory
solutions. Five contract awards
were made in 2024.
€50m
Investment
over four years
Sustainability R&D
RHI Magnesita committed to an
investment of €50 million over the
period from 2021-25 into the research
and development of new technologies
to avoid or capture CO emissions.
8%
The steel industry
accounts for around
8% of global
CO emissions
We are committed to
decarbonising our industry
1. Avoid new
CO emissions,
for example
through the
use of recycling
2. Carbon capture
and storage
or utilisation at
our raw material
production sites
3. Transition to
clean energy
sources such
as renewable
electricity and
green hydrogen
4. Decarbonise
our supply chain
using techniques
proven in our
own operations
3RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Our capital allocation priorities seek to
balance growth with providing a reliable
return for shareholders, supported by
long-term resilience and sustainability.
Sustainability is integrated into our strategy
and is not treated as a separate topic. This
means any investments we make into new
ventures with a sustainability related goal
need to meet the same investment return
criteria as any other M&A transaction or
organic investment project that competes
for capital. Sustainability goals are also
embedded into our other strategic
priorities, for example we are building up
recycling capacity through acquisition and
increasing our market share in non-basic
refractories, which will be important for
certain customers as they undergo their
own decarbonisation processes.
External market conditions
Each year there are new uncertainties,
economic and political developments to
which we must adapt. In 2024, elections in
key geographies have resulted in a change
in priorities for new governments with
important consequences for our customer
industries and end markets.
A key driver of market conditions for RHI
Magnesita is the transition of the Chinese
economy away from steel intensive growth
based on infrastructure and real estate
development towards a consumption based
economy with changing demand patterns
for raw materials. Steel production in
China has peaked and is forecast to reduce
in coming years. This is a major change for
industry and commodity markets for whom
strong growth in Chinese demand over the
last 25 years has been a strong driving force.
New growth in East Asia, the Middle East
and India is encouraging but at a smaller
scale and is not yet enough to compensate
for the decline in Chinese demand.
Due to the weaker demand environment for
refractories, input costs in many categories
reduced in 2024, resulting in pricing
pressure as competitors reduce prices in
line with lower costs. This represents the
end of the recent cycle of cost and price
inflation which necessitated action on our
part to defend margins.
People and culture
In uncertain times it is important to be able
to unite behind a consistent purpose, goals
and corporate culture. By living our values
we can react to challenges, gauge our
performance and set an example to the
many new colleagues who have joined
the Group in recent years.
One of our key priorities is to encourage
greater gender diversity. We have a target
of 33% female representation in the Board
of Directors which is currently met and a
longer-term aspiration to increase this to
45%. In senior management we are aiming
to hit the 33% target for EMT and direct
reports in 2025 and this ratio was
26% at the end of 2024. We have many
initiatives in process to achieve the target
and I am confident we are making the
necessary progress.
Dividend
The Board has recommended a final
dividend of €1.20 per share in respect
of the financial year ending 31 December
2024, bringing the total dividend for the
year to €1.80 per share. This level of
dividend is aligned with our policy to
maintain dividend cover of below three
times adjusted earnings and is balanced
against the other funding requirements
of the business as we manage capital
expenditures, M&A spend and gearing
levels through this important period
in our strategic development.
Summary
We are the global leader of a critical
industry that is essential for modern life.
We are seeking to build on this leadership
by executing our strategy to grow via
M&A in this fragmented market. We can
be proud of what we have built up to this
point and enthusiastic for our future
prospects together.
CHAIR’S STATEMENT CONTINUED
RHI Magnesita is
the global leader in
this highly specialised
and vital industry.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 20244
Weak end markets continued to
impact the business in 2024. The
contribution from M&A, operational
excellence and network efficiencies
supported relatively stable
revenues, margins and profitability.
We continue to execute on our
three strategic pillars of reducing
costs, expanding our business
model and growing in markets
where we are underrepresented.
Health and safety is our absolute priority
and I am saddened to report that two fatal
incidents occurred at our production sites
in H1 2024. Health and safety improvements
have been prioritised at all levels of
management; together we are undertaking
a complete review of our safety standards,
culture, leadership and key serious injury
and fatality risks.
During the year we established the
RHI Magnesita HELP fund, a registered
association in Austria focused on providing
immediate financial assistance to individuals
and families affected by workplace safety
incidents across our global network. I am
proud to say that the HELP fund has been
funded primarily through voluntary
contributions from RHI Magnesita staff,
with a matching contribution from the
Company. From these sources the HELP
fund raised over €800,000 in its first year
and payments to qualifying recipients have
already commenced.
Operational excellence underpins our
customer offering, our industrial operations
and financial performance. The work to drive
improvements is translating into tangible
benefits in both of these areas. Our main KPIs
in 2024 were PIFOT (“Process In Full On
Time”) and net promoter scores in customer
surveys. Both of these achieved record
highs in 2024. Other operational indicators
and inventory management metrics also
showed improvements, contributing to a
reduction in working capital and strong
cash flow conversion this year.
Our digital transformation is well
underway, consisting of a group-wide
replacement of the core operating systems
(including ERP) alongside a redesign of
our core business processes, all focused
on improving customer experience.
In Q4 we entered into a business process
outsourcing agreement with Capgemini
which will result in broader career
opportunities for our shared service centre
colleagues, deliver cost savings and, most
importantly, lead to sharper execution of the
critical processes which are the foundation
of our ability to deliver for our customers
more reliably. We will be investing over
€100 million into this platform to deliver
greater value to customers and more
effective integration of acquisitions.
R&D and the new ‘4PRO’ service offering
are critical to deliver improvements to our
customers. Constantly improving world-
leading refractory performance is reliant
upon continuous adaptation of existing
solutions according to customer needs and
the development of new technologies that
will deliver the next iteration of product
performance improvements, and efficiency
gains in our own manufacturing processes.
I am pleased to report strong growth in
sales of robotics solutions for automated
lining repairs in 2024 and exciting new
developments in production techniques
with high potential for sustainability, cost
and performance improvements. Our
offering in this area has been consolidated
under a central function offering Advanced
Technologies to ensure that we can move
our customers up the margin curve to
higher value added products and services.
During 2024 we expanded our solutions
contract offering under the 4PRO brand.
4PRO represents a holistic approach to
high-performance refractory applications,
based on closer collaboration with
customers seeking continuous
Safety, resilience
and progress
Stefan Borgas
Chief Executive Officer
CEO REVIEW
Scan the QR code to read
Stefan’s review of 2024
5RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
CEO REVIEW CONTINUED
Integrating
knowledge
through M&A
S
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&
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€77m
2024 EBITDA
contribution from
2023 M&A
2
Acquisitions
agreed in
2024
€396m
Capital allocated
to M&A in 2024,
including Resco
Since 2017 we have pursued
a proactive and selective
M&A growth strategy,
establishing RHI Magnesita
as the leading consolidator
in the industry.
Given the relatively mature global refractory
market with low growth expectations, our
strategy focuses on growth through an
active M&A programme rather than
investing in new production capacity.
With each acquisition we integrate into
our network, we gain valuable insights
into market opportunities and diverse
business models.
We build momentum by responsibly
integrating the businesses we acquire,
offering exciting career development
opportunities for individuals and global
growth potential for product specialists
or regional champions looking to
expand globally.
Simon Kuchelbacher
Head of M&A
Capital allocation and M&A strategy
Balanced approach
to capital allocation
RHI Magnesita maintains a
purposeful approach to capital
allocation which seeks to
balance shareholder returns,
acquisitions and organic
investments that will deliver
long-term growth and
productivity gains. After
maintenance capital
expenditures and the ordinary
dividend, M&A, organic
investments and share buybacks
compete for capital. We target
gearing of 1.0-2.0x EBITDA
with the flexibility to increase
to c.2.5x for compelling
M&A opportunities.
2.3X
31 Dec 2024 gearing
Our resilient margins, stable
profitability throughout
macroeconomic cycles and
high levels of cash conversion
support the targeted gearing
range of up to c.2.5x for M&A.
Capital Allocation
2018 to 2024 (%)
Organic investments 29%
M&A 27%
Maintenance 22%
Dividend 18%
Share buyback 4%
Dividend
Maintenance
capex
Net
operating
cash flow
Gearing
1.0-2.0x
C.2.5x for M&A
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 20246
CEO REVIEW CONTINUED
improvement in production techniques
as well as the pursuit of sustainability
objectives and circular economy initiatives.
Our M&A-led growth strategy delivered
strong results despite headwinds from weak
market conditions. The six acquisitions
completed in 2023 contributed Adjusted
EBITDA of €77 million, in line with
guidance of c.€80 million. During 2024
we completed the acquisition of Refrattari
Trezzi, expanding our recycling activities
in Europe.
In the US, we reached agreement on the
acquisition of Resco Group in April 2024
and successfully completed the transaction
on 28 January 2025, for a final deal value of
€391 million. This acquisition is a major step
forward for our North American business.
Resco’s strengths in the petrochemical,
cement and aluminium industries are
complementary to our existing business
and will provide opportunities in these
market segment worldwide by leveraging
RHI Magnesita’s global footprint. The much
larger US plant footprint will allow us to
accelerate our ‘local for local’ production
strategy, onshoring significant manufacturing
activity into the US and shortening supply
chains. Resco is the largest acquisition we
have undertaken since the combination of
RHI and Magnesita in 2017 and I am excited
about the prospects for our future growth in
this dynamic and valuable refractory market.
The new team is fired-up!
We remain committed to our strategy to
allocate capital to growth via M&A. We note
that there have been other transactions
in the sector in 2024, with Shinagawa’s
acquisition of Gouda Refractories Group
and Vesuvius PLC’s purchase of Piromet
in Türkiye. During 2025 our focus will
be primarily on network optimisation,
the integration of recent acquisitions and
reducing net debt, with any additional
M&A likely to be limited in scope.
We expect to incur network optimisation
expenses in Europe and Brazil as a result
of plant footprint adjustments following
the Resco acquisition and other M&A
transactions completed in 2022 and 2023.
Total restructuring costs in the base
business of €60 million and associated
capital expenditure of €40 million are
planned over the period 2025-27, to deliver
€10 million of EBITA benefit in 2025,
€20 million in 2026 and €30 million
per annum thereafter.
Our greatest strength lies in our people.
Every contribution matters and strengthens
our collective success, increasingly also
from colleagues joining RHI Magnesita
as a result of M&A. We continue to learn
more about our industry, identifying new
opportunities and benefitting from the
expertise of talented teams and individuals
as we integrate acquired businesses.
Sustainability means the protection
and preservation of resources for future
generations. Our Company traces its
origins back to 1834. Today, as the leading
global supplier of refractories, which are
essential for the creation of basic building
materials for modern life, we can be certain
that our industry will remain essential for
many years to come. Refractory production
is CO intensive and RHI Magnesita has
pioneered new technologies for reducing
CO emissions. Our journey to recycle
secondary raw materials increasingly
requires the development of cutting edge
technologies, which are now in industrial
testing. In 2025 we will be piloting a CO
re-mineralisation technology together
with MCi Carbon. Further progress requires
engagement with suppliers to adopt
low-carbon energy sources.
Our customers are amongst the
highest emitters of CO globally and
are undergoing their own transformation
to decarbonise. When developing new
production technologies they are
increasingly turning to RHI Magnesita
as their preferred partner for refractory
solutions. We have now won five major
contract awards for green steel projects;
this will be an important source of high
value-add business going forwards.
RHI Magnesita has produced a
Sustainability Statement according to
ESRS for the 2024 financial year. Having
completed a lengthy double materiality
assessment and complied in full with the
disclosure requirements, the Group is
of the view that the outcome of the ESRS
process is not beneficial to stakeholders.
ESRS places an unreasonable burden in
terms of financial cost and other corporate
resources which cannot be deployed
to actual sustainability improvements.
RHI Magnesita urges relevant regulators
and legislators to look again at the way that
ESRS has been implemented in practice to
allow companies to redirect resources from
reporting to action. We note that the
European Commission has proposed
a revision to ESRS through its Omnibus
Directive and we hope for improvement.
Our financial performance was resilient
considering the challenging end market
conditions, which saw a decrease in sales
volumes of 1% in the base business and
6% lower pricing. The contribution from
M&A and operational efficiency delivered
stable revenues and Adjusted EBITA of
€407 million (2023: €409 million) with
margin increasing to 11.7% (2023: 11.4%).
It is a sign of our strong operational
performance that we were able to maintain
margin in a falling price environment, despite
lower vertical integration contribution and
the additional burden from high fixed cost
under-absorption due to shrinking volumes.
Adjusted EPS increased to €5.32 (2023:
€4.98) and cash generation was strong
at 103%, contributing to a reduction in net
debt of €53 million to €1,251 million and
gearing of 2.3x (2023: 2.3x), in line with
our target range.
The short-term outlook for our industry
remains weak and we must be ready
to respond with fast decision making.
China’s necessary and clearly
communicated economic transition is the
most significant factor affecting industrial
markets worldwide including refractory
markets. The long term outlook for
future-oriented commodities and materials
such as copper, aluminium and glass
remains strong. However, project demand
in the industrial segment is expected to
decline in the near term.
Should any recovery in refractory demand
occur, RHI Magnesita is well positioned to
benefit due to its high levels of operational
gearing and vertical integration capability.
During this extended downturn, we have
greatly increased our customer base
through the acquisition of 12 businesses with
a total deal value of €1.2 billion and we are
seeing real benefits from synergies as these
acquisitions are integrated into our network.
Against this backdrop, we continue to
believe that adaptability, discipline and
innovation will deliver long-term success.
7RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Raw materials
Recycle
Removal
Maintenance
Optimisation
Design
Installation
Monitoring
Logistics
Refractory
production
R&D
Purpose,
values and
culture
OUR BUSINESS MODEL
Our business model
We are masters of heat, the leading global supplier of high-grade refractory products,
systems and solutions. We have a vertically integrated value chain ranging from raw
material sourcing to refractory production and performance-based solutions.
We apply our strengths…
Our people
and culture
The expertise and
dedication of our
people underpins
our success.
Our technology
High-performance,
customised
refractory products
and services create
value for our
customers.
Vertical
integration
In 2024 we sourced
internally 67% of
our magnesite and
dolomite raw
material needs.
Local-for-local
operations
We seek to produce
refractories close
to our customers
to shorten supply
chains and
reduce costs.
Capital allocation
Balanced approach
with M&A, organic
investments and
buyback competing
for capital after
maintenance capex
and dividends.
Sustainability
leadership
We lead the industry
in recycling and we
are developing new
technologies to
reduce CO.
…to create stakeholder value.
Shareholders
ROIC in excess
of WACC
consistently
creates value.
Reliable core
dividend, 3x
covered by EPS.
Debt holders
and lenders
€1.8 billion of
gross borrowings
with closely
managed
maturity profile
and long-term
banking
relationships.
Customers
The primary
focus of our
efforts. Creating
value for
customers is
the source of
value creation
for all others.
Communities
Our social
licence to
operate relies
on close ties with
communities
who jointly
benefit from
our stakeholder
activities.
Employees
Our people
determine our
success and
share in the
benefits.
Governments
Partnering in the
development
of industrial
projects and
natural
resources.
Suppliers
Long-term
relationships
with suppliers
who share
our values.
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S
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s
…across our value chain…
Read more about what we do across
our value chain on the next page
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 20248
Raw materials Refractory production Logistics
RHI Magnesita operates raw
material sites in Austria, Brazil,
China, Czechia, Türkiye and
USA. 67% of magnesite and
dolomite raw material usage
by volume was source internally
in 2024, contributing 0.8% to
Group Adjusted EBITA margin.
The Group operates
53 refractory production
plants in Europe, Türkiye,
India, China and the Americas.
Smaller markets in East Asia,
the Middle East, Africa and
Australasia are supplied from
regional hubs.
Timely raw material and finished
goods deliveries with effective
inventory management
strategies are crucial to ensure
customer delivery reliability
whilst minimising working
capital and operating costs.
Research &
Development
Design Installation
Development of new products,
customisation and improved
production techniques are
essential to maintaining our
position as market leader.
R&D is also required to
achieve our longer-term
sustainability objectives.
The capability to design
refractory solutions for new
projects or new customers
locks in future recurring
revenues from refractory sales.
New contract wins in green
steel projects demonstrate
the Group’s success in 2024.
Customers often outsource the
highly technical task of lining
installation to RHI Magnesita.
Refractory performance is
dependent on correct
installation, with high quality
control requirements.
Monitoring Maintenance Optimisation
We offer digital sensors
to monitor refractory usage,
depletion or slag levels in real
time. Kiln surveys can identify
hot spots or deformities. Such
services are often carried out
within a solutions contract
framework.
Refractory maintenance can
include gunning or other repairs
to extend the useful life of
refractory linings. Efficient use
of refractory linings can have
meaningful benefits for other
operating costs at customer sites,
such as energy consumption.
Maximise customer plant
utilisation and minimise
operating costs associated with
energy usage or maintenance
downtime. Post mortem
analyses of used refractories are
carried out to optimise product
formulations over time.
Removal Recycle
Plan and execute the removal
of linings after maximum safe
usage has been achieved. Sort
refractory waste to optimise
recycling recovery yields.
Reclaim valuable refractory
material for reuse, with
significant circular economy
benefits. Our proprietary
technology ensures high
performance with significant
CO emissions reduction
potential.
OUR BUSINESS MODEL CONTINUED
Our value chain
We design, produce, deliver, install, monitor, maintain,
remove and recycle optimised refractory solutions for
our global customer base.
9RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
4PRO
A comprehensive offering that
reflects our expanded capabilities
For many years RHI Magnesita has been at
the forefront of the industry in its ability to
offer a complete refractory solution to its
customers, charged per unit of customer
output and not based on refractory
consumption. This arrangement has
enabled us to build many long-term
relationships and to improve the efficiency
of customer plants by employing the best
available technology and working practices.
Our offering is now much broader and we
have launched the 4PRO initiative to achieve
another step-change in the relationship
we have with our customers.
Sustainable products
RHI Magnesita prioritises sustainability
by developing low-carbon and
emission-free refractory products.
Our commitment to a circular economy
drives us to incorporate recycling into
our production processes, significantly
reducing our environmental impact while
delivering high-performance solutions.
Robotics
We leverage advanced robotics to enhance
the precision and safety of our manufacturing
processes. By automating hazardous tasks,
we not only improve operational efficiency
but also protect our workforce from certain
dangerous conditions.
OUR BUSINESS MODEL CONTINUED
Systems
Our cutting-edge refractory systems are
designed to meet the unique demands of
high-temperature industries. These systems
optimise performance and reduce energy
consumption, reflecting our dedication
to innovation and sustainability.
Sensors
We utilise state-of-the-art sensor
technology for real-time monitoring and
control. These sensors provide critical data
that allows us to maintain safety, optimise
processes, and ensure the highest levels
of operational efficiency.
Digital solutions
Our digital platforms empower us to
optimise key industrial processes like slag
foaming and mass balance. By leveraging
data-driven insights, we enhance both
efficiency and sustainability in our operations.
Highly specialised engineering
Our team of specialised engineers is
dedicated to creating bespoke solutions
that address complex industrial challenges.
We ensure that our products and systems
meet the highest standards of performance,
safety, and efficiency.
Decarbonisation solutions
We are pioneering technologies
to significantly reduce CO emissions
through initiatives like carbon capture pilots
and the development of low-carbon
footprint products.
Clean and green steel solutions
We support the steel industry’s transition
to sustainability by providing innovative
refractory solutions that enhance energy
efficiency and reduce emissions. Our
products are integral to achieving cleaner
and greener steel production.
Evolving our customer
relationships is not an
option, it is a necessity.
Over the years our business
model has evolved and
today we are able to offer
our customers a new level
of interaction.
More than
products
& services
Gustavo Franco
Chief Customer Officer
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202410
P
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p
s
Long Term
Agreements
Refractory
Material
Social
Responsibility
Connectivity
Automation
Robotics
Data Access
Connectivity
Sensors
Joint
Development
Digital
Solutions
CO
2
FootprintOn site services
& Supply Chain
Circular EconomySupervision
Local for LocalProcess
Consulting
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OUR BUSINESS MODEL CONTINUED
A new interaction
4PRO is a new form of
interaction with our customers
offering innovative solutions
to the contemporary challenges
of industry and society.
RHI Magnesita’s offering extends far
beyond refractory products and basic
services. Our portfolio includes recycled
products, robotics, systems, sensors,
digital solutions, decarbonisation solutions
and green steel solutions.
4PRO recognises the need to take a
holistic approach covering ‘Planet, People,
Partnership and Performance’.
80%
of customers are interested
in the 4PRO offering when
made aware of it
Scan the QR code
to discover 4PRO
Customer service support
11RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
OUR STRATEGIC FRAMEWORK
Our strategic
framework
RHI Magnesita’s
strategic pillars:
• To improve Competitiveness through
cost control, production network
efficiencies, streamlined process
execution, automation and digitalisation.
• To grow revenues and margins by
enhancing our Business model.
• Drive Market leadership through M&A
and organic growth to strategically
increase market share in geographies
and applications where the Group
is underrepresented.
The three pillars of our strategy are
underpinned by a focus on people,
corporate culture and our commitment
to sustainability leadership in the
refractory industry.
Each strategic pillar represents an
opportunity to deliver significant long-term
value for shareholders as a highly
competitive global leader in refractories
with breadth and scale.
The Group’s long-term strategy is aligned
to its purpose of mastering heat to enable
global industries to build sustainable,
modern life. The Board reviews the strategy
annually to dynamically respond to
changing market conditions, industry
developments and stakeholder priorities.
The Board believes that the Group’s
strategy is the optimum route for
delivering long-term value creation for
all stakeholders. More information on how
the Group interacts with its stakeholders
to ensure that strategic priorities are
aligned can be found on page 26.
Competitiveness Business model Markets People and culture Sustainability
Reduce operating costs
Cost-saving initiatives include reducing
SG&A, plant footprint optimisation,
automation and digitalisation, supply
chain management and selected capital
expenditure projects to reduce raw material
and conversion costs.
Expand the business model
We seek to maximise value for our
customers and increase margins through
the offering of a broad range of products
and services, growing the proportion of
revenue derived from solutions contracts
and expanding our recycling activities.
Grow market share in geographies and
products where we are under-represented
The Group aims to grow its share of the
global refractories market via a consolidation
strategy targeting businesses in high-growth
markets or market segments where the
Group is currently underrepresented.
Enablers of our strategy
RHI Magnesita fosters a culture of
innovation, openness, pragmatism and
high performance to support the delivery
of its strategy. Hiring and retaining talented
teams and individuals is essential for the
Group to grow and maintain
its leadership position.
Sustainability leadership
RHI Magnesita seeks to maintain its
leadership position in sustainability in
the refractory industry to gain cost, pricing
and market share advantages over the long
term. We are committed to reducing
emissions from our activities and to assisting
our customers with their own transitions.
Progress
Adjusted EBITA margin increased to 11.7%
(2023: 11.4%) and gross margin improved
to 24.3% (2023: 24.0%), supported
by FX movements.
Decreases in input costs were broadly
offset by lower pricing, whilst SG&A
discipline, improved fixed costs absorption
and strong sales in higher margin
non-ferrous metals and glass projects
supported higher margins.
Progress
The scope of the existing solutions
contract offering was broadened and
relaunched under the brand 4PRO during
2024, to include the full range of the
Group’s capabilities.
Recycling volumes continued to increase,
with 14.2% of raw materials now sourced
from reclaimed material. The acquisition
of Refrattari Trezzi develops the Group’s
European recycling activities.
Progress
The €391 million acquisition of Resco Group
was agreed in April 2024 and completed
in January 2025. Resco’s strengths in the
petrochemical, cement and aluminium
industries are complementary to the Group’s
existing business and will accelerate the
‘local for local’ production strategy,
reducing network costs and shortening
supply chains.
One other acquisition was made in 2024
in the recycling sector, Refrattari Trezzi.
Progress
The highest priority cultural initiative
during 2024 has been to develop the
Group’s health and safety culture in light
of recent incidents. A multi-year initiative
supported by dss+ is underway.
Diversity, equity and inclusion initiatives
undertaken included EmpowHer workshops,
a global mentoring programme for female
staff, a hiring partnership with Female
Factor, unconscious bias training and
focus on gender diversity in the Global
Trainee Programme.
Progress
The Group made strong progress towards
achieving its 2025 sustainability targets
and established new medium-term targets
for 2030.
The 2024 Annual Report contains
the Group’s first CSRD-compliant
sustainability statement.
Priority areas addressed in 2024 were
health and safety, supply chain diligence
and R&D for CO emissions reduction.
Outlook
The Group is targeting structural cost
savings in both raw material and refractory
production in 2025. The ramp up of the
Brumado kiln in Brazil is expected to
result in improved raw material margins.
Refractory margins are intended to be
increased through the realisation of
M&A synergies and possible network
optimisation, which may include site
closures. The Group has also entered into
an outsourcing agreement with Capgemini
expected to result in SG&A savings.
Outlook
Rollout of 4PRO concept is intended to
increase the breadth of customer offering.
Plan flexibility to be increased to react
to changes in demand patterns.
Recycling rate target for 2025 is 15%
and 2030 target has been set at 20%.
M&A (e.g. Resco) will continue to add to
the Group’s capabilities across geographies
and product segments.
Outlook
The near-term priority is to fully integrate
recently acquired businesses and realise
value from synergies.
The Group is likely to prioritise cash
generation and the paying down of net debt
in 2025. However, it maintains an active
M&A pipeline and will remain flexible in
assessing any new opportunities which
may arise.
Outlook
Continued focus on health and safety
performance improvements.
Short-term Board gender diversity is at
target (33%) but senior leadership (EMT-1)
representation is 26% and requires further
action to meet the 2025 target of 33%.
Outlook
The Group is focused on achieving its
2025 sustainability targets, which requires
further progress on recycling, CO emissions
intensity and gender diversity.
Occupational health and safety will remain
the highest priority with ongoing investment
to improve performance.
Read more about this strategic pillar
Pages 14 & 15
Read more about this strategic pillar
Pages 16 & 17
Read more about this strategic pillar
Pages 18 & 19
Read more about this strategic pillar
Pages 20 & 21
Read more about this strategic pillar
Pages 46 & 47
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202412
OUR STRATEGIC FRAMEWORK CONTINUED
Competitiveness Business model Markets People and culture Sustainability
Reduce operating costs
Cost-saving initiatives include reducing
SG&A, plant footprint optimisation,
automation and digitalisation, supply
chain management and selected capital
expenditure projects to reduce raw material
and conversion costs.
Expand the business model
We seek to maximise value for our
customers and increase margins through
the offering of a broad range of products
and services, growing the proportion of
revenue derived from solutions contracts
and expanding our recycling activities.
Grow market share in geographies and
products where we are under-represented
The Group aims to grow its share of the
global refractories market via a consolidation
strategy targeting businesses in high-growth
markets or market segments where the
Group is currently underrepresented.
Enablers of our strategy
RHI Magnesita fosters a culture of
innovation, openness, pragmatism and
high performance to support the delivery
of its strategy. Hiring and retaining talented
teams and individuals is essential for the
Group to grow and maintain
its leadership position.
Sustainability leadership
RHI Magnesita seeks to maintain its
leadership position in sustainability in
the refractory industry to gain cost, pricing
and market share advantages over the long
term. We are committed to reducing
emissions from our activities and to assisting
our customers with their own transitions.
Progress
Adjusted EBITA margin increased to 11.7%
(2023: 11.4%) and gross margin improved
to 24.3% (2023: 24.0%), supported
by FX movements.
Decreases in input costs were broadly
offset by lower pricing, whilst SG&A
discipline, improved fixed costs absorption
and strong sales in higher margin
non-ferrous metals and glass projects
supported higher margins.
Progress
The scope of the existing solutions
contract offering was broadened and
relaunched under the brand 4PRO during
2024, to include the full range of the
Group’s capabilities.
Recycling volumes continued to increase,
with 14.2% of raw materials now sourced
from reclaimed material. The acquisition
of Refrattari Trezzi develops the Group’s
European recycling activities.
Progress
The €391 million acquisition of Resco Group
was agreed in April 2024 and completed
in January 2025. Resco’s strengths in the
petrochemical, cement and aluminium
industries are complementary to the Group’s
existing business and will accelerate the
‘local for local’ production strategy,
reducing network costs and shortening
supply chains.
One other acquisition was made in 2024
in the recycling sector, Refrattari Trezzi.
Progress
The highest priority cultural initiative
during 2024 has been to develop the
Group’s health and safety culture in light
of recent incidents. A multi-year initiative
supported by dss+ is underway.
Diversity, equity and inclusion initiatives
undertaken included EmpowHer workshops,
a global mentoring programme for female
staff, a hiring partnership with Female
Factor, unconscious bias training and
focus on gender diversity in the Global
Trainee Programme.
Progress
The Group made strong progress towards
achieving its 2025 sustainability targets
and established new medium-term targets
for 2030.
The 2024 Annual Report contains
the Group’s first CSRD-compliant
sustainability statement.
Priority areas addressed in 2024 were
health and safety, supply chain diligence
and R&D for CO emissions reduction.
Outlook
The Group is targeting structural cost
savings in both raw material and refractory
production in 2025. The ramp up of the
Brumado kiln in Brazil is expected to
result in improved raw material margins.
Refractory margins are intended to be
increased through the realisation of
M&A synergies and possible network
optimisation, which may include site
closures. The Group has also entered into
an outsourcing agreement with Capgemini
expected to result in SG&A savings.
Outlook
Rollout of 4PRO concept is intended to
increase the breadth of customer offering.
Plan flexibility to be increased to react
to changes in demand patterns.
Recycling rate target for 2025 is 15%
and 2030 target has been set at 20%.
M&A (e.g. Resco) will continue to add to
the Group’s capabilities across geographies
and product segments.
Outlook
The near-term priority is to fully integrate
recently acquired businesses and realise
value from synergies.
The Group is likely to prioritise cash
generation and the paying down of net debt
in 2025. However, it maintains an active
M&A pipeline and will remain flexible in
assessing any new opportunities which
may arise.
Outlook
Continued focus on health and safety
performance improvements.
Short-term Board gender diversity is at
target (33%) but senior leadership (EMT-1)
representation is 26% and requires further
action to meet the 2025 target of 33%.
Outlook
The Group is focused on achieving its
2025 sustainability targets, which requires
further progress on recycling, CO emissions
intensity and gender diversity.
Occupational health and safety will remain
the highest priority with ongoing investment
to improve performance.
Read more about this strategic pillar
Pages 14 & 15
Read more about this strategic pillar
Pages 16 & 17
Read more about this strategic pillar
Pages 18 & 19
Read more about this strategic pillar
Pages 20 & 21
Read more about this strategic pillar
Pages 46 & 47
13RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
OUR STRATEGIC FRAMEWORK CONTINUED
Competitiveness
Reducing the
cost base
We seek to maintain and
improve our cost position
through adapting and
investing in our production
network, managing SG&A,
streamlining process
execution and using
automation and
digitalisation to modernise
manufacturing processes.
Cost efficiency drives margins
and returns
The global refractory market is competitive
with many of the Group’s peers operating
on a ‘cost-plus’ pricing model. RHI Magnesita
offers high-performance products and
value added services, for which our
customers are prepared to pay a premium,
but is still exposed to broader pricing trends
in the market.
To retain market share, our pricing must
therefore reduce if industry input costs
come down, as they did in 2024. Average
pricing per tonne reduced by 7% in 2024
exactly for this reason, but margins still
increased. In this competitive environment,
the best way to expand margins is by
reducing our cost base, without impacting
product quality or customer experience.
If costs can be sustainably reduced and the
benefits of these efficiency gains are retained
within the business by holding pricing
constant, profitability can be sustainably
improved over the medium and long term.
ROIC performance is more sensitive
to improved profit margins than reducing
invested capital. A €14 million improvement
in SG&A (as was delivered in 2024)
delivers an increase in ROIC equivalent
to a reduction of c.€140 million in invested
capital. Cost savings of this magnitude
can be easier to achieve than structural
reductions in capital employed.
How we will maintain and
improve our cost position
Our plants have been operating at
significantly below full capacity for two
years and there is significant operational
gearing opportunity. If refractory demand
recovers and sales volumes can be
increased we stand to benefit as the fixed
cost underabsorption which is currently
weighing on margins will be reduced. We
are deliberately maintaining the flexibility
to increase production into a recovery,
although we are also evaluating whether
it is necessary to retain all of this surplus
capacity as we progress our M&A strategy.
Whilst there are strong potential benefits
from any future recovery in volumes,
we do not rely only on external market
developments and we are continuing to
work on structurally improving our cost
base. The main focus of our efforts in
2024 was the rollout of our Operations
Excellence System (“OES”). OES will bring
uniformity in processes, standards and
parameters to allow comparability,
accurate financial analysis and business
steering, standardised production and
consistent delivery of operational KPIs.
Vertical integration
RHI Magnesita is partially vertically
integrated in the production of magnesite
and dolomite based refractory raw
materials. In 2024, we produced 67% by
volume of the total amount of these raw
materials and 64% by value. Magnesite
and dolomite based raw materials
accounted for 54% by value of all raw
materials consumed by RHI Magnesita in
2024, and 34% of all externally purchased
raw materials. The most important grouping
of raw materials besides magnesite and
dolomite which we purchase externally are
alumina-based materials, which increased
in price significantly in the second half
of 2024.
The Group owns and operates a highly
cost competitive portfolio of magnesite
and dolomite raw material assets, such that
it is consistently able to produce these raw
materials at a lower cost than would be
incurred if we purchased them externally.
We calculate the contribution to Group
Adjusted EBITA margins for the raw
material assets and refractory plants
separately based on the market prices
for the raw materials on the open market.
In 2024, our raw material assets
contributed 0.8% of margin points to the
Group EBITA margin of 11.7%. Whilst this
is a record low for vertical integration
contribution, it is still a positive number and
validates our low cost position. Raw material
prices are at historically low levels and
€14m
SG&A reduction 2023-24
24.3%
Gross margin 2024
(2023: 24.0%)
11.7%
Adjusted EBITA margin 2024
(2023: 11.4%)
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202414
OUR STRATEGIC FRAMEWORK CONTINUED
loss-making marginal producers in China
are coming under pressure to withdraw
supply from the market.
Owning and operating low cost raw
material assets remains part of our
long-term strategy and whilst ROIC from
vertical integration is below the Group’s
cost of capital of 8.2% in 2024 and
therefore not generating an economic
profit, this is the first time that ROIC in raw
materials has been lower than refractory
ROIC in over ten years. We are confident
that this short-term trend can quickly
reverse if demand recovers and raw
material prices increase.
CO emissions
Our production process is CO intensive
and plants located in Europe are required
to purchase CO certificates for all emissions
above our free allocation. The cost of
purchasing the required CO certificates
in 2024 was €6 million (2023: €2 million).
CO costs are expected to increase in the
future as free allocations are withdrawn and
with the transition to CBAM. RHI Magnesita
operates a hedging strategy in regard to
future CO costs to improve cost visibility.
The average price per tonne paid in 2024
was €59.30. The most impactful way
to reduce CO costs is to reduce Scope 1
emissions from our European plants and
we have a number of initiatives underway
to achieve this. We have increased the
use of waste and biofuels in our kilns,
implemented energy efficiency projects
and trialled the use of recycled materials
within raw material plants, displacing
geogenic process emissions.
Shared services outsourcing
RHI Magnesita launched a long-term
strategic partnership in December 2024
which transferred shared services centre
staff in Spain, Mexico, India and China
to Capgemini. Under the terms of the
partnership we expect to generate cost
savings and process efficiencies, as well
as delivering exciting new career
developments for our colleagues who
have transferred to Capgemini. We are
simultaneously redesigning our business
processes and upgrading our digital
architecture and together these initiatives
offer the potential for significant efficiency
gains, resulting in lower costs and improved
customer experience.
Network optimisation
The success of our M&A programme means
that our production and distribution network
is expanding. In the same way as we adapted
the network after the combination of RHI
and Magnesita in 2017 we are reassessing
our production and logistics needs following
acquisitions in 2022 and 2023 and the
addition of Resco in 2025. It is possible that
we will need to make adjustments such as
the closure or downsizing of plants in
regions which are currently net exporters
to improve competitiveness through
local-for-local production, where beneficial.
This may incur restructuring costs in the
short-term in order to realise longer-term
efficiency gains. This year we have taken
the decision to write down €29 million of
expenditure that was previously invested to
increase output in Brazil for export to North
America. We will now seek to increase
domestic US production, following the
acquisition of Resco. We continue to assess
the optimum structure for our plant network
and this is likely to be an ongoing task as
a natural consequence of M&A. This is the
right strategy to pursue in our low growth
market, where scale and cost efficiency
will ultimately determine our success.
“ We are deliberately
maintaining the flexibility
to increase production into
a recovery. Scale and cost
efficiency will ultimately
determine our success.”
Rajah Jayendran
Chief Technology Officer
15RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Business model
Enhancing
the business
model
Key strengths of our business model
RHI Magnesita is a leading global supplier of
high-grade refractory products, systems and
solutions with a vertically integrated value
chain. We are able to offer complete solutions
to our customers due to our broad range of
refractory products, global manufacturing
footprint and expertise in the management
of heat in modern industrial processes.
Our service offering has evolved to include
digital, sustainability and circular economy
focused products and services and was
relaunched in 2024 under the 4PRO brand
to reflect the full range of our capabilities.
Refractories are an essential part of our
customers’ manufacturing processes with the
potential to influence costs and performance
in areas that extend far beyond the refractory
contract. As a large scale, global player we
are able to meet our customers’ critical needs
to maintain a consistent supply of high-
quality refractory products and services,
without which they would not be able to
operate. Reliability and quality control are
essential foundations of our success.
Enhancing our customer offering
We are continually seeking to develop
our business model by:
1. Moving customers up the margin
curve, encouraging the use of higher
value-added products and services;
2. Increasing the proportion of revenue
derived from the 4PRO offering;
3. Increasing the use of recycled raw
materials, which has significant
environmental benefits for all parties
and the potential to support a new
business line in the provision of ‘green’
refractory raw materials;
4. Offering more sustainable or more efficient
refractory products with a lower product
carbon footprint to support our customers
in reducing their Scope 3 emissions;
5. Reducing product complexity;
6. Making supply chain and logistics
planning improvements;
7. Digitalising our customer-facing tools
and seeking to capture data to deliver
process efficiencies; and
8. Funding R&D of new robotics or other
automation technologies with potential
for efficiency and health and safety
improvements.
4PRO
4PRO recognises the need to take a
holistic approach covering ‘Planet, People,
Partnership and Performance’. Our portfolio
now includes recycled products, robotics,
systems, sensors, digital solutions,
decarbonisation solutions and green
steel solutions.
Due to the potential benefits that can
be captured by improving refractory
performance, we are now able to
approach customers with a much higher
level of strategic engagement and not
only as a supplier of commoditised
or consumable items.
Circular economy vision
RHI Magnesita initially invested into
recycling of raw materials as a sustainability
initiative to reduce CO emissions in its own
activities. After proving the technology and
the equivalent performance of products
containing higher levels of recycled raw
materials, the bottleneck for expansion
became the ability to source and sort
residual refractory waste at customer sites.
Through acquisitions of specialist waste
collectors and by entering into partnerships
with customers to improve waste collection
and the sorting process at sites, we have
been able to significantly increase the
tonnage of waste material obtained and
increase the yield of useful material from
waste. The best result for recycling of
refractory waste can be obtained if the
material is sorted immediately when broken
out, protected when stored and shipped
to a recycling facility in as short a time
as possible after breakout. As we have
approached customers to develop these
techniques we have been able to offer
a waste processing solution. This utilises
material which would otherwise be sent
to landfill, with associated costs.
RHI Magnesita supplies
a broad range of refractory
products and services to
its global customer base.
4PRO expands the
refractory solutions we
can offer, reflecting our
broader capabilities.
20%
Market share in refractories
excluding China
25%
Global market share in
cement kiln refractories
OUR STRATEGIC FRAMEWORK CONTINUED
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202416
Our capabilities took a major step forward in
2024 with the launch of the new ‘RAPTOR’
waste sorting unit, This scalable solution
utilises automated sorting technologies
based on laser spectrometry and
hyperspectral imaging cameras to
significantly speed up and improve
accuracy in the waste sourcing process.
RHI Magnesita’s rapidly developing
practices in the effective sourcing of
reusable refractory waste may result in
greater quantities of recycled raw materials
being reclaimed than can be utilised within
the Group’s own network. Surplus material,
with a low or zero carbon footprint, will
then become available for sale to other
refractory producers. Such material is likely
to become significantly more valuable as
carbon costs increase, for example with the
implementation of the EU Carbon Border
Adjustment Mechanism, which will greatly
increase the cost of high CO footprint raw
material sourced from China.
Complexity reduction
RHI Magnesita offers highly customised
products to its customers, with bespoke
specifications developed over many years
of iterative improvement. This leads to
increasing product complexity and a
proliferation of product SKUs over time.
This process is accelerated by M&A, since
with the acquisition of new businesses the
Group acquires new product specifications
which may be similar to existing products
already offered. Complexity can result
in small batch sizes with lower margins
or plant inflexibility if products are
not interchangeable.
The complexity reduction programme
(CoRe) was launched to meet this challenge
and has become increasingly important as
the Group’s M&A activities have increased.
CoRe encourages customers and sales
teams to migrate to a core portfolio of
products where this will not impact
product performance.
Digital transformation
Harnessing the potential future benefits of
artificial intelligence requires foundational
investment today in technology and data
management. RHI Magnesita is investing
approximately €35 million per year over
the period 2024-2026 to modernise its
technology platform, including a global
ERP upgrade and updates to planning and
logistics systems. With fully standardised
and interchangeable data we will be able
to serve our customers in increasingly
sophisticated ways and deliver
improvements to the speed and reliability
of our supply chain and distribution network.
Automation and robotic solutions
Sales of robotic and machinery solutions
grew significantly in 2024, with 18 new
contracts awarded. The Group has been
investing in the development of such
systems for a number of years to deliver
productivity and safety improvements
for customers and to lock-in long-term
refractory supply agreements. RHI
Magnesita will continue to develop
automation solutions to maintain its
leadership position in lining installation
repair and monitoring.
Green steel projects
RHI Magnesita has now secured contracts
for refractory design and supply for five
green steel projects worldwide. Such
contracts represent material new project
revenue and validation of the Group’s
strategy to position itself as the leading
supplier of refractory linings and services
for Direct Reduction, Open Bath, Electric
Arc and Basic Oxygen furnaces, which are
expected to be essential for the large-scale
adoption of green steel production globally.
OUR STRATEGIC FRAMEWORK CONTINUED
17RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Markets
Driving market
leadership
OUR STRATEGIC FRAMEWORK CONTINUED
We see a major opportunity
to generate value through
consolidation of the global
refractory industry,
targeting businesses in
high-growth geographies
or product segments where
the Group is currently
underrepresented.
Growth through consolidation
in a fragmented industry
RHI Magnesita has completed 11 acquisitions
since December 2021 with a total deal value
of €1.2 billion. The Group is continuing
to execute its strategy to grow through
acquisition in the global refractory industry,
which remains fragmented creating the
opportunity to grow in product segments
or geographic markets where the Group
is underrepresented.
Resco
RHI Magnesita agreed to acquire Resco
Group in April 2024 and completed the
transaction on 28 January 2025, for an
enterprise value of €391 million. The
acquisition is a major step forward for the
North America region. Resco’s strengths in
the petrochemical, cement and aluminium
industries are complementary to the Group’s
existing business and will accelerate the
strategy for local production, on-shoring
significant manufacturing activity into the
US, reducing network costs and shortening
supply chains. Resco is the largest acquisition
the Group has undertaken since the
combination of RHI and Magnesita in 2017.
Trezzi
The €5 million acquisition of Refrattari
Trezzi was completed in June 2024,
expanding recycling activities in Europe.
Acquiring recycling specialists enables
RHI Magnesita to source increased
quantities of reclaimed refractory material
to supply its growing recycling business.
Integrating knowledge
Each business we acquire brings talented
new individuals into the Group. We seek
to retain the expertise of teams joining the
RHI Magnesita network and in many cases
to roll out innovative products and business
models on a global scale which may
previously have been limited to specific
product segments or geographies.
Buy, don’t build
The global refractory market has low growth
expectations and the Group’s strategy
is to grow primarily through acquisition
rather than the construction of greenfield
facilities. Investing in new capacity is
unlikely to lead to acceptable financial
returns in a market which is already
adequately supplied. Significant synergies
can be realised through M&A, based on
revenue synergies, procurement and other
cost savings and network efficiencies.
10%
Revenue growth in India,
China and Türkiye
16%
of revenue generated
by flow control
€77m
Adjusted EBITDA contribution
from businesses acquired in 2023
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202418
Industry consolidation opportunity
RHI Magnesita is building on its global leadership position in the refractory industry
Growth in underrepresented geographies
Network or logistics synergies
Flow control growth
Alumina-based refractories (non-basic)
Complementary product offering
Sustainability leadership
Resco Group
Sörmaş
Mireco
Seven
Dalmia GSB
P-D Refractories
Refrattari Trezzi
DBRL
Hi-Tech
Chongqing
Jinan New Emei
USA India ChinaEurope
OUR STRATEGIC FRAMEWORK CONTINUED
“ Our M&A strategy
has gathered momentum
and we are now well
established as the leading
consolidator in the sector.”
Date Consideration
Regional
markets
Product
markets
Chongqing December 21 €5 million China & East Asia Industrial
Mireco March 22 €13 million Europe, CIS, Türkiye Recycling
Sörmaş October 22 €46 million Europe, CIS, Türkiye Industrial, Steel
DBRL January 23 27 million shares
in RHI Magnesita
India Ltd.
India, West Asia &
Africa
Industrial, Steel
Hi-Tech January 23 €86 million India, West Asia &
Africa
Steel Flow Control
Dalmia GSB April 23 €13 million Europe, CIS, Türkiye Steel lances and precast
products
Jinan New Emei May 23 €40 million China & East Asia Steel Flow Control
Seven
Refractories
July 23 €84 million Europe, CIS, Türkiye
and North America
Alumina-based mixes
P-D Refractories October 23 €45 million Europe, CIS, Türkiye Alumina refractories for
Industrial customers
Refrattari Trezzi June 24 €5 million Europe, CIS, Türkiye Recycling
Resco Group January 25 €391 million North America, UK Industrial, Steel
Stefan Borgas
Chief Executive Officer
19RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
OUR STRATEGIC FRAMEWORK CONTINUED
People and culture
Our greatest
strength
The successful
implementation of our
strategy relies on a talented
and incentivised workforce
with a customer-focused
culture.
Our purpose and culture
RHI Magnesita’s culture is built upon our
corporate purpose: to master heat, enabling
global industries to build sustainable
modern life. Delivering for our customers is
at the centre of everything we do, supported
by four values of innovation, openness,
pragmatism and performance.
The EMT dedicates a full day each year
to discuss culture and performance of
senior managers in the Group. The inputs
to this include the outcomes of surveys of
employees across a broad range of topics
such as the transformational ERP project
and outsourcing project, new joiners, H&S
surveys, the detail of compliance reports
and reports of misconduct, integration
surveys, which cover both those in new
assets and in the existing Group footprint,
and external employer rating websites.
Where benchmarks are available, these
help to contextualise the outputs for the
EMT in a more quantitative way.
The headline cultural values remain the
same as in 2019 and with the assistance
of cultural champions in all our regions,
we instill these values upon joining the
RHI Magnesita Group with a dedicated
workshop led by our Culture team, which
welcomes new colleagues and sets them
up for success with a clear briefing on the
values, and engages them to consider what
these values mean in practice and what
inappropriate behaviours in the cultural
framework would look like.
In 2024, the EMT launched a programme
to validate the cultural values and refresh
the Company’s purpose, vision and mission.
As part of this, the EMT considered
themes arising from the feedback on
leadership in the organisation, recognition
of achievements and psychological safety,
which is critical to an open and
transparent culture.
In early 2025, the EMT considered inputs
from over 3,000 colleagues across varying
levels and all regions and resolved to
refresh the values with updated detail and
relaunch the Group’s customer focused
culture in the course of 2025.
Diversity, Equity and Inclusion
RHI Magnesita’s workforce comprises
employees from over 90 countries, bringing
together a rich diversity of experiences,
backgrounds, and perspectives that drive
innovation and resilience within our
business model. This diversity aligns with
our strategic goals, enabling us to adapt to
the dynamic global markets we operate in.
We truly believe it is a strength of our
multi-national company. Leveraging the
diversity we enjoy across our regions brings
different viewpoints, ways of approaching
and solving problems, and generates
learnings about how we can all succeed
together. We are committed to fostering a
culture of lifelong learning and supporting
both personal and professional growth,
ensuring that our employees are equipped
to meet evolving business needs while
contributing to our organisation’s
long-term success.
RHI Magnesita shows its commitment to
diversity in a myriad of ways, including in
our day to day decisions as an EMT and are
supported by the Global Gender Equality
Policy and Diversity Charter which is
endorsed by the most senior managers
in RHI Magnesita. Alongside our Code of
Conduct and other relevant policies and
guiding principles, these statements set
out clearly for our employees, including
contract workers and those who join us
through acquisition, how we expect to
behave with each other. They support our
business with compliance and management
of risks. You can find these policies here.
5.21%
Voluntary employee turnover
(2023: 6.50%)
26%
Gender diversity in leadership
(2023: 28%)
33%
Gender diversity of our Board
(2023: 29%)
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202420
OUR STRATEGIC FRAMEWORK CONTINUED
Simone Oremovic
EVP, People, Projects,
Integrations & Recycling
“ People are our core asset
and securing our people
and culture advantage is
critical to our continued
success. A highly motivated
and engaged team is more
likely to deliver superior
operational outcomes.”
These policies are established to ensure
that our employees are treated equally
in the workplace irrespective of age,
gender, marital or civil partnership status,
pregnancy, maternity, family responsibilities,
political beliefs, colour, nationality and
ethnic or national origins, religion,
disability, sexual orientation, and gender
identity. In this approach we seek to foster
business growth boosts business success,
drive innovation, and elevate our brand
in the competitive marketing landscape.
You can read about the initiatives that the
management have taken to improve our
leadership gender diversity level to try to
meet our 2025 target on page 23. We will
continue to work to support and develop
female talent in our organisation, whilst
recognising the structural and historic factors
which influence our ability to do so.
21RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
KEY PERFORMANCE INDICATORS
Key performance
indicators
The Board and management
have identified the
following KPIs which they
believe reflect the key
indicators of financial and
non-financial performance.
The non-financial information, as presented
within the Director’s Report, which in this
document, comprises the Strategic report
and Governance section of this Annual
Report, complies with the Dutch Disclosure
of Non-Financial Information.
Read more on risk management
Page 48
Safety: LTIF Relative CO emissions
(t CO/t)
Use of secondary
raw materials
Voluntary employee
turnover
Gender diversity
in leadership
2024
2023
2022
2021
2020
0.11
0.16
0.20
0.19
0.13
2024
2023
2022
2021
2020
1.57
1.62
1.71
1.76
1.86
2024
2023
2022
2021
2020
14.2%
12.6%
10.5%
6.8%
5.0%
2024
2023
2022
2021
2020
5.21%
6.50%
6.50%
6.80%
5.10%
2024
2023
2022
2021
2020
26%
28%
21%
22%
25%
Link to strategy Link to strategy
Link to strategy
Link to strategy Link to strategy
KPI relevance
Safety is paramount to the successful
running of our business. Lost Time Injury
Frequency (LTIF) is the main indicator used
to measure safety performance. The Group’s
goal is zero accidents.
KPI relevance
Climate change poses strategic and
operational risks to our business, as well
as opportunities. The Group’s target is
to reduce Scope 1, 2 and 3 (raw materials)
by 15% per tonne of product by 2025
(versus 2018 baseline).
KPI relevance
Recycling plays a critical role in achieving
our 2025 emissions reduction target
while also developing the circularity of
our business. Our target is to reach 15%
secondary raw material (SRM) content
in refractories by 2025.
KPI relevance
Voluntary turnover is one way of
measuring the Group’s success in retaining
its employees.
KPI relevance
Diversity is important in terms of
maintaining our competitiveness and
economic success, and gender diversity
is our first priority. Our target is to increase
female representation in senior leadership
to 33% by 2025.
How it is measured
The number of accidents resulting in
lost time of more than eight hours, per
200,000 working hours, determined
on a monthly basis.
How it is measured
Tonnes of total Scope 1, 2 and 3 (raw
materials) carbon emissions per tonne of
product. Scope 1 emissions consist of onsite
emissions, Scope 2 comprise purchased
electricity, and Scope 3 are measured from
raw materials production.
How it is measured
Share of SRM content as a percentage
of total raw materials.
How it is measured
The percentage of employees who
voluntarily left the Company during the
year and were replaced by new employees.
How it is measured
Number of women as a percentage of all
those in leadership positions (EMT and EMT
direct reports).
2024 performance
LTIF reached 0.11 in 2024, representing
a 31% reduction compared to 2023.
Total Recordable Injury Frequency (TRIF)
decreased to 0.41 from 0.46 in 2023.
Two fatalities occurred in our operations in
2024 - one at the Breitenau plant in Austria
and a second at the Dalian plant in China.
2024 performance
In 2024, total CO emissions (Scope 1, 2
and 3 - raw materials) were 4,4 million
tonnes and our emissions intensity has
reduced by 14%. Since the baseline year
of 2018, the Group has exceeded its initial
targets in recycling, offset by delayed
progress in switching to alternative fuels.
A new target has been adopted to reduce
CO emissions intensity by a further 10%
by 2030, compared to the 2024 baseline.
2024 performance
Use of SRM was at 14.2% in 2024,
compared with 12.6% in 2023. The speed
with which we can continue to increase
overall Group recycling rates from this
point may moderate due to dilution impact
from new acquisitions.
2024 performance
Voluntary turnover decreased in 2024
to 5.2%. The rate remains relatively low,
reflecting uncertainty in the global
economic environment.
2024 performance
Despite our numerous internal and external
initiatives (trainee programme, female
mentoring programme, EmpowHer
programme and others), we continue
to face challenges in attracting female
candidates. This may be due to the nature
of our industry, which is traditionally
male-dominated. While we remain
committed to maintaining 33% female
representation in senior leadership roles,
we recognise that achieving this must be
done sustainably and without compromising
fairness in the selection process.
Non-financial
Link to strategy
Competitiveness
Business model
Markets
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202422
KEY PERFORMANCE INDICATORS CONTINUED
Safety: LTIF Relative CO emissions
(t CO/t)
Use of secondary
raw materials
Voluntary employee
turnover
Gender diversity
in leadership
2024
2023
2022
2021
2020
0.11
0.16
0.20
0.19
0.13
2024
2023
2022
2021
2020
1.57
1.62
1.71
1.76
1.86
2024
2023
2022
2021
2020
14.2%
12.6%
10.5%
6.8%
5.0%
2024
2023
2022
2021
2020
5.21%
6.50%
6.50%
6.80%
5.10%
2024
2023
2022
2021
2020
26%
28%
21%
22%
25%
Link to strategy Link to strategy
Link to strategy
Link to strategy Link to strategy
KPI relevance
Safety is paramount to the successful
running of our business. Lost Time Injury
Frequency (LTIF) is the main indicator used
to measure safety performance. The Group’s
goal is zero accidents.
KPI relevance
Climate change poses strategic and
operational risks to our business, as well
as opportunities. The Group’s target is
to reduce Scope 1, 2 and 3 (raw materials)
by 15% per tonne of product by 2025
(versus 2018 baseline).
KPI relevance
Recycling plays a critical role in achieving
our 2025 emissions reduction target
while also developing the circularity of
our business. Our target is to reach 15%
secondary raw material (SRM) content
in refractories by 2025.
KPI relevance
Voluntary turnover is one way of
measuring the Group’s success in retaining
its employees.
KPI relevance
Diversity is important in terms of
maintaining our competitiveness and
economic success, and gender diversity
is our first priority. Our target is to increase
female representation in senior leadership
to 33% by 2025.
How it is measured
The number of accidents resulting in
lost time of more than eight hours, per
200,000 working hours, determined
on a monthly basis.
How it is measured
Tonnes of total Scope 1, 2 and 3 (raw
materials) carbon emissions per tonne of
product. Scope 1 emissions consist of onsite
emissions, Scope 2 comprise purchased
electricity, and Scope 3 are measured from
raw materials production.
How it is measured
Share of SRM content as a percentage
of total raw materials.
How it is measured
The percentage of employees who
voluntarily left the Company during the
year and were replaced by new employees.
How it is measured
Number of women as a percentage of all
those in leadership positions (EMT and EMT
direct reports).
2024 performance
LTIF reached 0.11 in 2024, representing
a 31% reduction compared to 2023.
Total Recordable Injury Frequency (TRIF)
decreased to 0.41 from 0.46 in 2023.
Two fatalities occurred in our operations in
2024 - one at the Breitenau plant in Austria
and a second at the Dalian plant in China.
2024 performance
In 2024, total CO emissions (Scope 1, 2
and 3 - raw materials) were 4,4 million
tonnes and our emissions intensity has
reduced by 14%. Since the baseline year
of 2018, the Group has exceeded its initial
targets in recycling, offset by delayed
progress in switching to alternative fuels.
A new target has been adopted to reduce
CO emissions intensity by a further 10%
by 2030, compared to the 2024 baseline.
2024 performance
Use of SRM was at 14.2% in 2024,
compared with 12.6% in 2023. The speed
with which we can continue to increase
overall Group recycling rates from this
point may moderate due to dilution impact
from new acquisitions.
2024 performance
Voluntary turnover decreased in 2024
to 5.2%. The rate remains relatively low,
reflecting uncertainty in the global
economic environment.
2024 performance
Despite our numerous internal and external
initiatives (trainee programme, female
mentoring programme, EmpowHer
programme and others), we continue
to face challenges in attracting female
candidates. This may be due to the nature
of our industry, which is traditionally
male-dominated. While we remain
committed to maintaining 33% female
representation in senior leadership roles,
we recognise that achieving this must be
done sustainably and without compromising
fairness in the selection process.
Non-financial
Link to strategy
Competitiveness
Business model
Markets
23RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
KEY PERFORMANCE INDICATORS CONTINUED
Revenue Adjusted EBITA margin Adjusted EPS Leverage ROIC R&D and Technical
Marketing spend
2024
2023
2022
2021
2020
€3,487m
€3,572m
€3,317m
€2,551m
€2,259m
2024
2023
2022
2021
2020
11.7%
11.4%
11.6%
11.0%
11.5%
2024
2023
2022
2021
2020
€5.32
€4.98
€4.82
€4.52
€3.28
2024
2023
2022
2021
2020
2.3x
2.3x
2.3x
2.6x
1.5x
2024
2023
2022
2021
2020
9.8%
10.7%
12.3%
10.8%
10.5%
2024
2023
2022
2021
2020
€83m
€83m
€79m
€63m
€62m
Link to strategy Link to strategy
Link to strategy
Link to strategy
Link to strategy
Link to strategy
KPI relevance
This demonstrates the growth of
the business. By increasing our global
refractory market share, continually
enhancing our product and service
offering, the Company is focused on
achieving revenue growth and aims
to outperform the refractories market
on an annual basis.
KPI relevance
Adjusted EBITA margin provides a measure of
profitability and demonstrates the successful
execution of the Company’s strategy.
KPI relevance
Reflecting the income statement in a clear
way and taking the equity structure into
account, the Board believes Adjusted EPS
to be one of the indicators that demonstrates
shareholder value.
KPI relevance
Appropriate leverage provides the business
with headroom for compelling investment
opportunities, but also enables shareholder
distribution.
The Board has defined a long-term
leverage target range of 1.0 to 2.0x
(c.2.5x for M&A).
KPI relevance
Return on invested capital (“ROIC”) is
used to assess the Group’s efficiency in
executing its capital allocation strategy,
which is aimed at enabling organic growth,
disciplined M&A and shareholder returns.
KPI relevance
Excellence in R&D and strong technical
marketing capabilities are key contributors
to our competitiveness. This demonstrates
our commitment to driving innovation and
to being the leading provider of services
and solutions within the refractories
industries. The Company aims to invest at
least 2.2% of revenue per annum in R&D
and technical marketing.
How it is measured
Total Group revenue, as reported in the
financial statements.
How it is measured
Adjusted EBITA divided by revenue,
as reported in the financial statements.
Adjusted EBITA is an APM and more
information can be found on page 325.
How it is measured
Earnings per share, excluding other
financial income and expenses.
Adjusted EPS is an APM and more
information can be found on page 325.
How it is measured
Net debt to Pro Forma Adjusted EBITDA.
Leverage is Net debt divided by Pro Forma
Adjusted EBITDA which are APMs. More
information can be found on page 325
and 326.
How it is measured
Calculated as net operating profit after tax,
divided by average invested capital for the
year. ROIC is an APM and more information
can be found on page 326.
How it is measured
Annual spend on research and
development, before subsidies and
including opex and capex.
2024 performance
Revenue for 2024 amounted to
€3,487 million, 2% lower than 2023,
mostly due to a weak market environment.
2024 performance
The Group recorded an EBITA margin of
11.7% in 2024, and 30bps higher than 2023.
This was due to stringent cost management.
2024 performance
Adjusted EPS of €5.32 per share was
higher than the €4.98 per share recorded
at 2023 largely given the substantial
FX tailwind.
2024 performance
Leverage remained flat at 2.3x at the end
of 2024.
2024 performance
ROIC decreased in 2024 to 9.8%,
mostly driven by an increase in average
invested capital.
2024 performance
€83 million was committed to R&D and
technical marketing in 2024, equating to
2.4% of revenues, exceeding the Group’s
annual commitment of 2.2%.
Financial
Link to strategy
Competitiveness
Business model
Markets
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202424
KEY PERFORMANCE INDICATORS CONTINUED
Revenue Adjusted EBITA margin Adjusted EPS Leverage ROIC R&D and Technical
Marketing spend
2024
2023
2022
2021
2020
€3,487m
€3,572m
€3,317m
€2,551m
€2,259m
2024
2023
2022
2021
2020
11.7%
11.4%
11.6%
11.0%
11.5%
2024
2023
2022
2021
2020
€5.32
€4.98
€4.82
€4.52
€3.28
2024
2023
2022
2021
2020
2.3x
2.3x
2.3x
2.6x
1.5x
2024
2023
2022
2021
2020
9.8%
10.7%
12.3%
10.8%
10.5%
2024
2023
2022
2021
2020
€83m
€83m
€79m
€63m
€62m
Link to strategy Link to strategy
Link to strategy
Link to strategy
Link to strategy
Link to strategy
KPI relevance
This demonstrates the growth of
the business. By increasing our global
refractory market share, continually
enhancing our product and service
offering, the Company is focused on
achieving revenue growth and aims
to outperform the refractories market
on an annual basis.
KPI relevance
Adjusted EBITA margin provides a measure of
profitability and demonstrates the successful
execution of the Company’s strategy.
KPI relevance
Reflecting the income statement in a clear
way and taking the equity structure into
account, the Board believes Adjusted EPS
to be one of the indicators that demonstrates
shareholder value.
KPI relevance
Appropriate leverage provides the business
with headroom for compelling investment
opportunities, but also enables shareholder
distribution.
The Board has defined a long-term
leverage target range of 1.0 to 2.0x
(c.2.5x for M&A).
KPI relevance
Return on invested capital (“ROIC”) is
used to assess the Group’s efficiency in
executing its capital allocation strategy,
which is aimed at enabling organic growth,
disciplined M&A and shareholder returns.
KPI relevance
Excellence in R&D and strong technical
marketing capabilities are key contributors
to our competitiveness. This demonstrates
our commitment to driving innovation and
to being the leading provider of services
and solutions within the refractories
industries. The Company aims to invest at
least 2.2% of revenue per annum in R&D
and technical marketing.
How it is measured
Total Group revenue, as reported in the
financial statements.
How it is measured
Adjusted EBITA divided by revenue,
as reported in the financial statements.
Adjusted EBITA is an APM and more
information can be found on page 325.
How it is measured
Earnings per share, excluding other
financial income and expenses.
Adjusted EPS is an APM and more
information can be found on page 325.
How it is measured
Net debt to Pro Forma Adjusted EBITDA.
Leverage is Net debt divided by Pro Forma
Adjusted EBITDA which are APMs. More
information can be found on page 325
and 326.
How it is measured
Calculated as net operating profit after tax,
divided by average invested capital for the
year. ROIC is an APM and more information
can be found on page 326.
How it is measured
Annual spend on research and
development, before subsidies and
including opex and capex.
2024 performance
Revenue for 2024 amounted to
€3,487 million, 2% lower than 2023,
mostly due to a weak market environment.
2024 performance
The Group recorded an EBITA margin of
11.7% in 2024, and 30bps higher than 2023.
This was due to stringent cost management.
2024 performance
Adjusted EPS of €5.32 per share was
higher than the €4.98 per share recorded
at 2023 largely given the substantial
FX tailwind.
2024 performance
Leverage remained flat at 2.3x at the end
of 2024.
2024 performance
ROIC decreased in 2024 to 9.8%,
mostly driven by an increase in average
invested capital.
2024 performance
€83 million was committed to R&D and
technical marketing in 2024, equating to
2.4% of revenues, exceeding the Group’s
annual commitment of 2.2%.
Financial
Link to strategy
Competitiveness
Business model
Markets
25RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
OUR STAKEHOLDERS
Engaging for
mutual success
RHI Magnesita cannot operate in a vacuum. We can
only succeed if we conduct ourselves responsibly and
have positive relationships with our stakeholders.
Shareholders
Why they are important
As providers of capital and owners of the
business, our shareholders play a central
role in the Company’s growth and
development. By fostering and maintaining
their support, we are able to implement our
strategy and objectives.
How the Company engages
The Company is listed on the London
and Vienna Stock Exchanges, with London
as its primary listing location.
The Company issues consistent, fair,
balanced and understandable information to
these stock exchanges to ensure efficient and
fair functioning of financial markets. Care
is taken to ensure messaging is consistent
and publications are compliant with the EU
and UK Market Abuse Regime, UK Listing
Rules, Austrian Stock Exchange Act, and
Corporate Governance Codes and guidance.
The Investor Relations department
maintains an ongoing dialogue with
shareholders and analysts which is fed
back to senior management.
Regular engagement is facilitated via
one-on-one meetings, investor presentations
and webcasts, the AGM, industry
conferences and events and site visits.
How the Board engages
The Executive Directors meet regularly
with investors and analysts (both in person
and via digital channels). On request,
the SID and Deputy Chair meets with
shareholders to discuss governance
matters. In 2024 this covered the Board’s
oversight of strategy and risk, Board skills,
diversity and composition, and
sustainability metrics.
The Investor Relations team regularly
provides analyst coverage of the market
and shareholder sentiment to the Board.
This includes shareholder commentary,
and comparison of the Company’s
performance against its peers. The
Company’s brokers also provide valuable
and pertinent perspectives from their wider
experience base, which gives context to
the Board for regulatory news publications.
The Chair and SID and Deputy Chair also
engaged with larger shareholders to hear
about their priorities and answer questions
around both tactical and strategic delivery.
As part of the process to consult on the
Remuneration Policy in 2024, the Chair
of the Remuneration Committee engaged
with shareholders holding over 80% of
the rights in the Company on the proposed
policy adopted at the 2024 AGM,
The changes in late 2024 in remuneration
principles and guidelines from various
proxy agencies representing the investment
community, were briefed to the
Remuneration Committee.
The Board benefits from long-term
shareholder representative Directors,
who share their perspective and priorities
to guide management and reflect the
shareholder experience, whilst also taking
care to recognise minority shareholder
interests and priorities.
Priority topics raised by stakeholders
• Company strategy and implementation,
particularly regarding M&A and capital
allocation.
• Operational and financial performance
including cash generation, sales volumes,
pricing considering raw material costs,
and trading outlook.
• Geopolitical outlook and associated
changes to global economic factors.
• Sustainability agenda and activities,
such as contract wins in green steel,
sustainability targets.
• Climate strategy and associated
capex investment.
• Incentives linked to reduction of CO
emissions and other ESG matters.
• Company’s preparedness to comply
with CSRD.
• Board composition including gender
diversity and the skills and experience
represented.
Outcomes
Shareholder perspectives were
fundamental considerations in Board
discussions on a wide range of topics,
including the implementation of
remuneration policy, accounting
judgements, capital allocation decisions,
gearing and leverage, and ESG strategy.
Feedback about the Group’s acquisition
strategy from shareholders informs the
strategy and planning for the future in
terms of liquidity and business capacity.
A number of acquisitions have been
made since 2022 and the priorities of
shareholders will continue to be a driving
factor in the future acquisition approach.
Two dividends, final and interim, were paid
in 2024, in line with the dividend policy
and shareholder expectations.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202426
OUR STAKEHOLDERS CONTINUED
Debt holders and lenders
Why they are important
Our lenders and debt holders are an
important source of the financial liquidity
that the Group requires to operate. They
are integral to the long-term sustainable
success and growth initiatives of the business.
How the Company engages
The Group CFO and Group Treasurer
execute strategies approved by the Board
by regularly engaging with debt holders
and lenders to secure favourable terms,
mitigate risks, and ensure sustainable
and solid relationships.
Regular engagement with these
stakeholders is facilitated via one-on-one
and Group meetings and presentations.
How the Board engages
The Treasury department maintains an
ongoing, transparent dialogue with its debt
holders and lenders, and reports regularly
to the Audit & Compliance Committee
and Board.
The Board has a clearly defined approval
and delegation of authorities matrix for
the contracting of debt instruments,
and actively contributes and engages
in discussions with the Group CFO and
Group Treasurer.
Priority topics raised by stakeholders
• Company strategy and implementation.
• Operational and financial performance
and outlook.
• Capital structure and liquidity.
• Sustainability initiatives.
• Risk management.
Outcomes
In 2024, the Group successfully raised
a €200 million syndicated term loan with
a tenor of five years. Loan proceeds have
been used to acquire Resco Group in early
2025. Furthermore, the Group prepaid
€100 million from a €150 million bilateral
term loan, which matures in April 2026,
to optimise the Group’s capital structure
and reduce excess cash.
As a result of the Group’s strong EcoVadis
ESG rating upgrade in June 2024, with
an improvement by four points to 76, the
margin payable on the Group’s ESG-linked
financings amounting to €1,983 million
(including the fully undrawn €600 million
revolving credit facility) per December
2024 was reduced by 3bps, leading
to €0.5 million savings in interest cost
on an annualised basis.
Customers and
innovation partners
Why they are important
Our customers are at the heart of our
business model and fundamental to the
sustainable future of the Group.
We collaborate across the refractory
industry, and more broadly, with external
partners such as accelerators, start-ups,
open innovation platforms, companies and
institutions to foster innovation and drive
developments in R&D.
How the Company engages
The Company connects with partners from
the private and public sector, innovators
and academia to exchange ideas and more
concretely, tackle challenges through
problem-solving approaches. Our R&D
teams, amongst others, collaborate and
engage with innovation partners on an
ongoing basis. Annually, the Company
hosts a technical advisory committee
attended by external parties to bring
together advanced perspectives from
industry, academia, and startups to
consider a variety of topics such as Artificial
Intelligence in R&D, Refractory Recycling,
and use of Hydrogen.
Our specialists are invited to present at expert
symposiums and technical conferences,
typically focusing on sustainability
innovations and refractory technology.
The business is well represented at trade
fairs across different industries, such as
steel and cement, and geographies across
the world.
We work closely with our customers to
ensure we are aware of their needs through
day-to-day contact fact-finding, technical
consulting, installation and operations
supervision and site visits.
The Company runs Customer Satisfaction
surveys to regularly assess our Net
Promoter Score. It is used as a key metric
for customer-facing teams, to ensure focus
on providing a positive customer experience
in every interaction.
How the Board engages
Customers continue to be at the heart
of the Company’s values and culture, and
as such form a central part of every Board
decision. Directors meet customers
wherever possible and as part of the Board
site visit in April, the Board was delighted to
have the chance to visit Tata Steel’s plant in
Jamshedpur, India, and see first-hand how
RHI Magnesita works side by side to support
and deliver successful outcomes. A session
with the management of Tata Steel enabled
Directors to hear their priorities and to
discuss best practice H&S procedures
adhered to by Tata Steel, as well as wider
economic factors and developments.
The Executive Directors meet regularly
with customers to discuss joint strategies,
at industry congresses, seminars and
webinars, and at technology events
and fairs.
The CSC hears from senior management
on their work with innovation partners
on the development of the Company’s
sustainability strategy, and feedback
to the Board.
27RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Priority topics raised by stakeholders
• Price increases in response to widespread
inflationary costs and low demand in
some regions.
• Service levels and lead times.
• Response to climate change and
opportunities in green transformation.
• Health & Safety.
Outcomes
Increased investment in production sites to
strengthen supply and quality of products
for customers and restructured teams and
processes to deliver better customer
service. The Group’s Net Promoter Score
continued to reach new highs in 2024,
showing the benefits of focus on areas such
as customer service delivery performance
and technical support.
Management’s work to improve operational
processes and to partner with logistics
providers who can support flexible and
cost-efficient solutions is resulting in
improved customer outcomes.
The ongoing Safety Culture Transformation
covers our own employees at customers’
sites as well as at our own plants,
laboratories and offices.
The Group’s regional structure continues
to deliver strong customer experience
through direct engagement and alignment
between local teams.
Reports from customer relationship teams
informed the Board’s strategic decisions
to develop the service offering and product
portfolios available to them, particularly with
regard to sustainable products and location
of supply. The Group is increasingly the
partner of choice in the green transition
of steel and cement in Europe.
The esteemed scientific trade journal,
Bulletin, published by RHI Magnesita,
shares the latest research on refractory
innovations as well as showcasing the
successful delivery of innovation through
the implementation of new products,
technologies and services at our
customers’ sites. Bulletin is available on the
Company website and demonstrates the
Company’s continued development and
coordination with innovation partners.
Partnerships were established with MCi
Carbon and Compact Membrane Systems
to embark on pilot schemes to develop
technology to eventually bring benefits
in carbon capture and utilisation (CCU).
Other co-operation includes initiatives
with ResourceFull, a recycling company
for waste materials, and ReSoURCE, an EU
initiative creating partnerships to develop
and fund refractory recycling equipment.
Communities
Why they are important
Wherever we operate, our business
depends on maintaining the trust of local
communities. In return for this social licence
to operate, we must conduct our business
ethically and responsibly. We must also strive
towards sustainability, not only in our own
operations but also to support socioeconomic
development and environmental protection.
How the Company engages
As a member of the UN Global Compact,
we support the UN SDGs and implement the
Global Compact principles (anti-corruption,
human rights, labour rights and environment).
These commitments drive our engagement
with policymakers, non-governmental
organisations (NGOs), and others at
a national and international level.
At a local level, each operation engages with
local communities and other stakeholders
to understand their concerns and how we
can support them.
In 2024, we specifically focused on
education and youth development, health
and medical care, and environment across
the communities in which we operate.
These three community investment pillars
align with a number of the UN SDGs,
How the Board engages
The CSC considered, and reported back
to the Board, on community engagement,
including charitable fundraising for local
communities and received updates from
management on projects in communities
in India and Brazil.
The CSC gave feedback on where Directors
felt focus should be directed and noted the
relevant legal requirements.
Priority topics raised by stakeholders
• Health and wellbeing.
• Climate change.
• Education, youth development and
employment programmes.
Outcomes
The employee volunteering programme,
established in 2022, continued in 2024
through which we are partnering with
six non-profit organisations.
We once again increased our spend on
community programmes in 2024 across our
regions, resulting in construction of libraries,
building up the skills and knowledge of
children from challenging backgrounds,
and facilitating primary healthcare and
assistance for disabled individuals in the
communities we operate in.
We made further progress on our
decarbonisation plan to help improve the
world we live in for future generations and
were pleased to see an increase in our use
of SRM to 14.2% in 2024.
RHI Magnesita was the sponsor of
the St Gallen MBA Challenge, in which
young minds considered how to build
a Circular Raw Material Business model
in different regions helping to develop
the next generation and build a more
sustainable future.
Employees
Why they are important
Attracting, retaining and developing talent
is central to the success of the Company.
Our people are crucial in the delivery of
our strategic goals. We aim to cultivate
an engaged, innovative and collaborative
workforce, with a strong focus on diversity.
OUR STAKEHOLDERS CONTINUED
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202428
How the Company engages
Communication channels include townhall
meetings, conferences for different functions
and seniority levels, and our corporate
communications mobile application
(Workvivo) which allows colleagues from
all levels and locations to be connected
and to hear consistently from senior leaders,
as well as express themselves, and highlight
their own concerns and achievements.
Colleagues throughout the Company,
who are designated as Culture Champions,
engage with the workforce on an ongoing
basis to embed our culture and values.
Regional leadership teams hold townhalls
to address regional specific issues,
e.g., local supply chain issues, employee
health and wellbeing, and site changes.
How the Board engages
Three ERDs sit on the Board, feeding
in on a range of workforce issues such as
remuneration, feedback on executives, the
operational footprint, and Health & Safety.
The Board meets with plant employees
and management, as well as holding direct
conversations with senior management on
detailed topics outside of Board meetings.
They also had a dedicated session with
trainees in late 2024 to gain more of an
understanding of the priorities of the next
generation. More details can be found
on page 216.
Local and global townhalls and Q&A
sessions are run both virtually and in person,
at both regular intervals and when there
are specific communications to be delivered,
such as the full and half year financial
results. On the Board’s visit to the Bhiwadi,
Jameshedpur and Rajgangpur plants,
as well as the regional headquarters,
all Directors attended the townhalls, sitting
amongst local employees, and the Chair of
the Board addressed colleagues, alongside
the CEO and Regional President. In one
plant, re-emphasising the tone from the
top on safety, the Chair of the CSC also
addressed those working in the plant,
reiterating her expectations about safe
working practices.
The CSC considers employee safety KPIs
at each meeting, including a root cause
analysis of any major accidents. The Board
also receives a report of Health & Safety
statistics from the CEO at each meeting.
The CSC, as well as the broader Board,
focused on the fatalities, lessons learned,
as well as receiving briefings on the
business’s response and the support
for affected colleagues at the plants.
Guidance and encouragement were given
by Board members to improve processes
and approach based in their own
experiences elsewhere.
Board Directors participated in the
mentoring programme for female talents,
sharing their own experiences as women in
the workplace, and supported the delivery
of the scheme through advising other
mentors in the Company on how to
establish a good mentoring relationship.
Priority topics raised by stakeholders
• Operational performance improvement
programmes including process and
controls improvement.
• Health & Safety and cultural changes
to foster greater transparency to build
safer working environments.
• Business restructuring and job security,
within the wider macroeconomic
backdrop (specific to certain regions).
• Regional investment and the impact
of new assets and additional colleagues.
• Responding to green steel
transformation and delivering
environment related solutions.
• Salary/wage growth.
• Recruitment, talent development
and retention.
• Work/life balance.
• Leadership behaviours and
communication, e.g., cultural role
modelling and leading by example.
• Change resilience, psychological safety,
and employee wellbeing.
Outcomes
The Company initiated a full-scale review
of safety in the organisation, supported by
dss+, a leading safety consultancy. This
involved detailed surveys and engagement
with colleagues from the shop floor through
to management to understand perceptions
and prioritisation of safety worldwide across
our regions. The Board and management
received oversight of the detailed responses
which informed the action plan.
Several initiatives and events were
implemented to strengthen our Diversity,
Equity and Inclusion (“DEI”) efforts:
• ‘EmpowHer’ workshops,
• a partnership with Female Factor
to improve hiring practices for
minority groups
• the Global Female Mentoring
Programme to promote professional
development through mentoring
of c.50 female talents; and
• a Global Trainee Programme, across all
five regions and varying functions, which
delivers gender diversity, cross-cultural
collaboration, and inclusion of new
generations. In 2024, we received
5,000 applications for this programme,
Additionally, we held quarterly global
webinars on unconscious bias training
for all employees. Over 1,000 employees
joined the global DEI seminars in 2024.
Our global Employee Engagement
team implements digital tools to develop
management skills and the Company
culture, which should lead to improved
retention.
A new regional office has been established
in Gurugram, India, as well as other recently
commissioned regional headquarters
in Tampa, USA and Contagem, Brazil.
These upgraded working environments
show investment in the local operations,
providing employees with a better
workplace environment.
Workvivo provides tips and
recommendations for health and
wellbeing, and hosts sessions to boost
wellbeing and improve work/life balance.
In certain locations there are employee
assistance programmes providing free
therapy, counselling and coaching sessions
to support colleagues.
Overall average remuneration increased,
taking into account inflation, and collective
and union agreements. A strata approach
to pay increases was taken to support lower
paid employees and in various locations
there have been detailed discussions
between trade unions and works councils
and management in a structured and
transparent manner to deliver a fair
outcome for employees.
OUR STAKEHOLDERS CONTINUED
29RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Post-acquisition, there is a consistent
and agreed process to integrate new assets
as quickly as possible which is led by the
regions together with the global
department, in order to support and retain
employees following completion of M&A
transactions. The global function ensures
consistency of approach and delivers a
coordinated and comprehensive overview
to the executive management and senior
leaders, whilst ensuring the new assets
are supported effectively by the corporate
functions, seeking regular feedback as part
of the process. The focus on retention
delivers combined leadership to leverage
synergies of best practice to set the new
structure up for success across a wide
range of metrics. The lead of integrations
by the regional teams enables a tailored
and detailed integration designed to
be sustainable and effective.
Governments
and authorities
Why they are important
Governments and authorities set the
regulatory framework within which we
operate. They also set out national and
international strategies wherein
RHI Magnesita plays a part. There is vital
interplay between industry and political
stakeholders and this relationship is the
linchpin that propels us towards a cleaner,
more sustainable future.
How the Company engages
We engage on multiple levels with
authorities in our regions. We list a few
examples from 2024 here.
Relationships with EU institutions were
strengthened through various initiatives
and personal meetings. In March, former
Energy Commissioner Kadri Simson visited
the CCU pilot plant of MCi Carbon in
Australia to investigate CCU for the
European refractory industry.
Director General Kerstin Jorna of the
EU Commission’s Directorate-General for
Internal Market, Industry, Entrepreneurship
and SMEs visited our mine in Breitenau
in May 2024. This visit was particularly
important for us in highlighting the
significance of magnesite/magnesia,
as we aim to have it listed as a ‘strategic’ raw
material in the EU.
Furthermore, in December, RHI Magnesita
hosted its first of a kind ‘Magnesia Cocktail’
networking event in Brussels, uniting the
European magnesite and magnesia
industries to advocate for the strategic
importance of magnesite and magnesia
for the European industry.
Key discussions were held with government
and party representatives from China and
East Asia on different topics such as raw
materials, mining, R&D investments, and
green energy.
In India we have ongoing dialogue with key
government agencies such as Invest India,
the nodal investment facilitation agency
of the Government of India, and Industrial
Promotion & Investment Corporation of
Odisha. In July, the Group was represented
at a high-level business meeting with
Indian Prime Minister Narendra Modi in
Vienna. This meeting provided a crucial
platform to present RHI Magnesita’s raw
material strategy and led to valuable
connections with senior officials in Prime
Minister Modi’s cabinet.
In South America, our advocacy efforts
focused on maintaining and improving
infrastructure, notably rail transport.
The Company engages promptly and
transparently as required with regulators
and governance bodies across the world,
including anti-trust authorities, SEBI (India),
AFM and SER (the Netherlands), FMA
(Austria) and the FCA and FRC (UK).
We are part of a number of industry
associations, such as the World Refractories
Association, which help us to communicate
our viewpoints as part of a wider industry
to global authorities.
How the Board engages
The Board considers responses to
authorities and encourages management
to research and consider the consultations
which are issued.
The Board receives briefings on changes
in legislation and the extent of their impact
on the Company, such as the changes to
the UK Listing Rules in 2024. The CSC also
considers changes in regulation within its
scope, such as the recent German Supply
Chain Due Diligence Act.
The Board sets an averse risk appetite
in respect of non-compliance with
regulations (see page 49), establishing
how the Directors expects the organisation
to engage with authorities and regulations.
The Board approves the Code of Conduct
which has a zero-tolerance approach to
any illegality.
Priority topics raised by stakeholders
• Raw Materials.
• Infrastructure.
• Alternative energies, sustainability,
climate change, and decarbonisation.
• Company preparedness to report
against EU’s Corporate Sustainability
reporting directive.
Outcomes
The Board endorsed management’s
approach to public affairs and political
engagement, and guided attention to the
new assets, asking management to ensure
Group standards were implemented
and maintained.
The Company has provided information
on request to governments and agencies,
actively engaging in open dialogue.
By actively engaging in regional
discussions and initiatives with political
bodies and governmental agencies, we
address unique challenges and contribute
to environmentally responsible industrial
practices on a global scale. Transparent
communication and open information
sharing progresses our goal of securing
a sustainable infrastructure for a clean
and efficient industry to secure refractory
production in Europe. In India the Group
has communicated its dedication to
aligning business objectives with national
policies and has leveraged opportunities
to show the important role the Company
plays in a fast-growing economy.
OUR STAKEHOLDERS CONTINUED
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202430
Suppliers
Why they are important
Strong relationships with our suppliers
are vital to ensure our end-to-end supply
chain. We rely on our suppliers to deliver
services and materials, and we recognise
that the availability of these goods impacts
how we execute our services to customers.
We are embracing strategic alliances and
long-term partnerships mainly for raw
materials and logistics.
How the Company engages
All suppliers are requested to confirm the
Supplier Code of Conduct. Our Sustainable
Supply Chain & Procurement Guideline
and Supplier On-Site Assessment
Guidelines are implemented consistently
across our operations.
The Company evaluates its suppliers
through a sustainability risk matrix that
assesses suppliers according to country
risk and a goal-based framework to
evaluate the majority of RHI Magnesita’s
purchase spend by supplier under its
sustainability criteria.
On-site assessments are undertaken
at suppliers to ensure compliance with
our standards. In higher-risk areas expert
external parties undertake these
assessments on behalf of the Company.
Internal on-site supplier assessments have
been completed across all five of the
Group’s regions.
The Company has focused on building
longer-term partnerships with certain
strategic suppliers to establish more stable
and reliable supply chains.
The Company operates fair payment terms
for suppliers, whilst leveraging benefits for
its own financial health.
How the Board engages
The CSC received reports from
management on supplier on-site
assessments and engagement, and
considered progress on the Company’s
sustainable procurement initiatives.
The Board receives regular updates
on the business’s work to future-proof our
supply chain and the work undertaken to
adapt our processes to an increasingly
volatile environment.
In 2024, the Board considered and
approved the Modern Slavery Act
Statement for publication. The statement
can be found on the Company’s website.
Priority topics raised by stakeholders
• Inventory levels.
• Supply chain resiliency & black swan
event playbook.
• Climate action.
• Safety.
• Raw material pricing and rising risk
of trade restrictions.
• Sustainable procurement.
Outcomes
The efforts to improve tactical and strategic
supply chain management continued in
2024 and the next steps will be to upgrade
the systems and tools for use in the teams’
work driving efficiencies and improving
supplier and employee experience.
The Group engaged in a partnership
with o9 Solutions to deliver an advanced
end-to-end integrated standard supply
chain planning tool that will enable us
to optimise our supply chain processes.
In Europe we initiated a new railway line
and eTruck solutions in partnership with
MSC Mediterranean Shipping Company
to further ensure the supply of refractory
products to international customers
quickly, reliably and sustainably.
Furthermore, the global roll-out of our
Oracle Transportation Management system
for finished goods ocean freight in 2024
increases our visibility and enhances the
ease of doing business. This journey will be
continued in 2025 focusing on land freight
and raw material shipments.
Greater numbers of suppliers are signed
up to the Supplier Code of Conduct and are
increasingly more aware of the Company’s
expectations on product carbon footprint
data and about the on-site assessment
process. This has led to greater adoption
across associated industries and, it is
hoped, will have driven improvements
in ESG matters.
The insights from on-site assessments in
2024 have led to improvements in quality,
transparency and supplier relationships.
Tools used to increase supply chain
transparency have identified labour
practices which were not aligned with
RHI Magnesita’s Code of Conduct and
relationships were suspended and then
discontinued with the relevant supplier.
OUR STAKEHOLDERS CONTINUED
31RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
OPERATIONAL REVIEW
We think global
and act local
RHI Magnesita owns and
operates a global network
of 65 refractory production
sites and is capable of
supplying a full range
of high-quality refractory
products and services
across the globe.
Following the merger of RHI and Magnesita
in 2017, the production network was
restructured and optimised through the
closure of high-cost sites and consolidation
of production into modernised low-cost
locations. The Group follows a local-for-
local strategy with production facilities
located as close as possible to its customers,
to deliver an optimal customer experience,
reduce freight and customs duties and
minimise working capital requirements
associated with international shipments.
% of production in region
Key raw material freight routes:
Internal raw materials
External raw materials
South America
88%
North America
57%
Europe & Türkiye
92%
Africa
0%
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202432
OPERATIONAL REVIEW CONTINUED
Our acquisition strategy seeks to fill regional
product gaps or add plant locations to
improve logistics or position for growth.
Changes in global refractory usage, foreign
exchange rates, freight and energy costs can
impact the competitiveness of our production
network. An agile and forward looking
approach is required to ensure that we
are fully optimised for changing market
conditions from time to time.
In 2022 RHI Magnesita established an
operational governance structure consisting
of five regional business units. Managing
the business through a regional structure
enables the Group to serve its customers
better through faster local decision making
and improved accountability.
Vertical integration in refractory
raw materials
RHI Magnesita’s low-cost raw material
production represents a significant
advantage versus refractory producers
who purchase raw materials on the open
market at higher prices.
The Group consumes 81% of its own raw
material production internally, with minimal
external sales and guaranteed security of
supply. The contribution of vertical
integration to the Group’s margins has
been consistently positive over many years,
demonstrating the structural cost advantage.
The benefit is maximised during periods
of high market prices for raw materials and
the current contribution from raw material
production to Group’s Adjusted EBITA
margin of 11.7% is therefore lower than
historical levels at 0.8% (2023: 1.7%).
India
72%
China
83%
NME
0%
Asia &
Australasia
0%
33RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Steel overview
Supplying refractory products and services
to the steel industry accounted for 68% of
RHI Magnesita’s revenues in 2024 and the
Group retained its leading position globally
with a c.13% market share, or c.20%
excluding China and East Asia. Refractory
products are required to protect steel
making equipment from extremely high
temperatures of up to 1,800°C, chemical
corrosion and abrasion. Refractory product
applications include iron making (blast
furnace or direct reduction), primary
steel-making (basic oxygen furnace or
electric arc furnace) as well as ingot and
continuous casting. New applications are
under development for production of green
steel and the Group was awarded five
contracts for such projects in 2024.
RHI Magnesita offers a complete range of
products and solutions for the steel making
process. The lifespan of refractory products
in the steel making process can range
from hours to months depending on the
application, for example a slide gate is
a consumable item that may need to be
replaced every four hours whilst the lining
of a primary steel making furnace could
require re-lining at six month intervals.
Refractory consumption in steel making
is therefore classified as an operating
expense by steel producers and usually
accounts for around 2-3% of operating
costs, on average.
Steel segment revenues decreased by 4%
to €2,373 million (2023: €2,461 million)
and by 3% in constant currency terms
(2023: €2,434 million) as a 3% increase
in sales volumes supported by M&A was
offset by 6% lower pricing. Excluding M&A,
the base business increased shipped
volumes by 1%, a strong performance
compared to World Steel Association data
which indicates a decrease of 0.9% in
global steel output in 2024.
Steel 2024
2023
reported
2023
(constant
currency) Change
Change
(constant
currency)
Revenue (€m) 2,373 2,461 2,434 (4)% (3)%
Gross profit (€m) 551 550 576 0% (4)%
Gross margin 23.2% 22.3% 23.7% 90bps (50)bps
Industrial 2024
2023
reported
2023
(constant
currency) Change
Change
(constant
currency)
Revenue (€m) 1,114 1,111 1,094 0% 2%
Gross profit (€m) 297 307 305 (3)% (3)%
Gross margin 26.6% 27.7% 27.9% (110)bps (130)bps
Global steel demand decreased in the
key markets of China and North America
in 2024 but grew in India, West Asia
& Africa, Europe and South America.
Domestic production in some markets was
displaced by exports from China where
domestic consumption of steel reduced
by approximately 6% and production
by approximately 3%. The approximate
3% gap represents the increase in exports,
which increased from approximately
90 million tons in 2023 to approximately
120 million tons in 2024.
Industrial overview
RHI Magnesita is a leading supplier
of refractory products and services
to customers in the cement and lime,
non-ferrous metals, glass, energy,
environmental and chemicals industries.
These Industrial customers accounted for
32% of Group revenues in 2024 and have
longer replacement cycles compared to
Steel customers, ranging from one to
20 years. Refractories are classified as
capital expenditure by Industrial customers
and represent between 0.2% and 1.5% of
total costs over the life cycle of a facility.
RHI Magnesita has a c.25% market share
globally in cement refractories, c.20%
market share in non-ferrous metals
applications, c.19% in the glass industry
and c.5% in other industrial applications
such as energy, environment, chemicals
and foundry.
Industrial revenues were stable at
€1,114 million (2023: €1,111 million) and
increased by 2% in constant currency
terms, with shipped volumes increasing
by 11%, supported by M&A, whilst average
pricing reduced by 9%.
Steel revenue
€2,373m
2023: €2,461m
Steel revenue by region
North America 27%
Europe, CIS & Türkiye 24%
India, West Asia & Africa 23%
South America 15%
China & East Asia 11%
Industrial revenue
€1,114m
2023: €1,111m
Industrial revenue by region
North America 18%
Europe, CIS & Türkiye 33%
India, West Asia & Africa 18%
South America 10%
China & East Asia 15%
Minerals 6%
OPERATIONAL REVIEW CONTINUED
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202434
Cement & Lime revenues reduced by
12% to €376 million (2023: €424 million),
representing 11% of Group revenues in 2024
as pricing reduced by 7% and sales volumes
reduced by 4%. Strong growth in sales
volumes in Process Industries of 101% and
Glass of 19%, mainly resulting from M&A,
were offset by the 4% decline in the larger
Cement & Lime segment and 9% lower
Non-ferrous metals sales. The Non-ferrous
metal business remained the highest margin
segment for the Group, with a gross margin
of 44% in 2024 (2023: 42%).
Minerals
The Group sourced 42% of its raw material
needs by value, in line with its vertical
integration strategy. Raw materials not
utilised internally are sold in the open
market and reported under Minerals within
the Industrial segment, generating revenues
of €65 million in 2024 (2023: €80 million).
Mineral sales volumes declined by 11%,
coupled with lower market prices for raw
materials, leading to a reduction in revenue.
Regional business units
In 2023 RHI Magnesita established an
operational governance structure consisting
of five regional business units, which
continued in 2024. Managing the business
through a regional structure enables the
Group to serve its customers better through
faster local decision making and improved
accountability, supporting our local for
local production strategy.
Europe, CIS & Türkiye
Europe, CIS & Türkiye revenues increased
by 3% to €926 million (2023: €894 million),
or by 5% in constant currency terms.
Average price per tonne declined by 11%
due to end market weakness in construction
and automotive and a changing product
mix, but this was more than offset by a 17%
increase in shipped volumes due to the full
year contribution from M&A completed in
2023. Excluding M&A, base business sales
volumes reduced by 2% and price per
tonne was 14% lower, with revenues
reducing by 15%.
Europe, CIS & Türkiye
Pricing reduced by 11%, offset by the
contribution from 2023 M&A. Industrial
sales volumes increased by 40% driven
by a full year contribution from P-D.
North America
Sales volumes reduced by 1% and
overall pricing by 3%. Gross profit margin
increased to 30.9% (2023: 27.9%) due
to effective cost management and
resilient Industrial pricing.
India, West Asia & Africa
A 4% increase in sales volumes was
offset by a 6% decline in pricing due
to increased competition and product
mix changes.
South America
Volumes declined by 3% and pricing
by 7% mainly due to weakness in the
Industrial business. Brumado rotary kiln
project was completed and ramped up.
China & East Asia
Steel refractory sales volumes excluding
M&A increased by 5%.
40%
increase in Industrial
sales volumes in Europe,
CIS & Türkiye due to M&A
5%
increase in base business
steel sales volumes in China
& East Asia
OPERATIONAL REVIEW CONTINUED
35RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Gross profit increased by 10% to €195 million
(2023: €177 million), as higher gross margins
of 21.1% (2023: 19.8%) were supported
by the contribution from higher margin
businesses acquired in 2023 and a
reduction in the key input costs of energy
and purchased raw materials. In the second
half of the year, a significant increase in
alumina prices drove up costs for acquiring
alumina based refractory raw materials and
disruption in the global graphite supply
chain also resulted in cost increases.
Steel revenues decreased by 1% in
constant currency terms on 7% higher
shipped volumes, as M&A delivered
volume growth despite subdued customer
demand. Steel production in the European
Union increased by 2.6% and in Türkiye
by 9.4% according to WSA data, reflecting
recovery from a low base in Europe and
strong growth and relative stability in
Türkiye compared to the surrounding
region. Whilst steel output in the European
Union increased year on year, producers
continue to face a combination of
deteriorating prices, rising costs and low
demand relative to historic levels. These
factors led some customers to reduce
capital expenditure in favour of running
repairs and to increase sourcing of cheaper
imported refractories. The challenging
market conditions for steel customers also
resulted in the delay of some green steel
projects, but these were temporary
postponements and not cancellations.
Industrial segment sales volumes increased
by 40% and revenues by 15% in constant
currency terms, supported by a full year
contribution from process industries
focused P-D Refractories. Whilst volumes
in Cement & Lime and Non-ferrous metals
reduced by 15% and 23% respectively, this
was more than offset by a 49% increase in
Glass sales volumes and 216% increase in
Industrial applications, mainly due to M&A.
Waste to energy is a strategic growth focus
within Industrial applications where the
Group was able to increase market share
in both maintenance and greenfield project
support. Sales of digital products
increased, including laser technologies
for refractory evaluation at customer sites.
Such products are already widely in use in
the Cement & Lime segment and are now
gaining traction with Non-ferrous metals
and Industrial applications customers.
The Europe and Türkiye region has
benefited from significant inorganic
growth in recent years with the addition
of MIRECO, Sörmaş, Dalmia GSB, Seven
Refractories and P-D Refractories in 2022
and 2023. Regional leadership have been
focused on the integration of each of these
businesses and the achievement of synergy
targets. MIRECO delivered strong growth
in recycling rates, Sörmaş prepared for the
initial adoption of the Group’s new ERP
system and the Bochum plant previously
owned by Dalmia GSB completed
necessary legal, financial and operational
integration processes during the year.
Certain Seven Refractories businesses
now form RHI Magnesita’s new Alumina
Monolithics business unit and synergy
realisation is on track, despite low demand
conditions. Network optimisation in Europe
is expected to be required to fully realise
the synergy benefits of M&A completed
in the last three years.
The Mainzlar plant in Germany will
be closed in 2025 and the Group may
consider further plant footprint optimisation
in Europe following recent M&A.
North America
Revenues in North America decreased by
5% to €852 million (2023: €894 million)
or by 4% in constant currency terms, due
to a 1% reduction in sales volumes and
3% lower average pricing.
Despite lower revenues, the region grew
Gross profit by 5% to €263million (2023:
€250 million) as margins were successfully
increased to 30.9% (2023: 27.9%) due
to effective cost management and
resilient pricing in Cement & Lime
and Non-ferrous metals.
Steel volumes reduced 2% and pricing by
3% resulting in 4% lower revenues, whilst
gross margin expanded to 30.7% (2023:
28.3%). Utilisation rates in US steel mills
remained low, at approximately 76%in
2024 and reducing below this level at the
end of the year following the US election
in November. North America steel output
according to WSA data declined by 4.2%
in 2024 whilst RHI Magnesita estimates
that output from its customers in the region
reduced by 6%, compared to the 2%
decline in sales volumes. The Group
continues to build out its product offering
and secured agreements with three
additional tap hole clay customers during
the year. In the electric arc furnace
segment, a contract for refractory supply
including an automated robotic solution
for gunning repair was awarded in Canada,
by a large customer converting to EAF
from BOF steel production. Other robotics
contracts were awarded in the US, including
multiple new tundish cage solutions.
OPERATIONAL REVIEW CONTINUED
Revenue 2024
2023
reported
2023
(constant
currency) Change
Change
(constant
currency)
Europe, CIS & Türkiye 926 894 884 3% 5%
Steel 558 574 565 (3)% (1)%
Industrial 368 320 319 15% 15%
North America 852 894 889 (5)% (4)%
Steel 648 673 670 (4)% (3)%
Industrial 204 221 220 (8)% (7)%
India, West Asia & Africa 744 762 757 (2)% (2)%
Steel 541 582 577 (7)% (6)%
Industrial 203 180 180 13% 13%
South America 473 522 504 (9)% (6)%
Steel 362 393 386 (8)% (6)%
Industrial 112 129 118 (13)% (6)%
China & East Asia 426 418 416 2% 3%
Steel 264 239 237 10% 11%
Industrial 163 179 178 (9)% (9)%
Minerals 65 80 78 (19)% (17)%
Total 3,487 3,572 3,529 (2)% (1)%
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202436
Industrial sales volumes saw greater
variation across segments with a weak
Cement & Lime result more than offset
by strong trading in Glass and Industrial
applications, resulting in an overall
increase in sales volumes of 1%. Higher
pricing in Non-ferrous metals and reduced
input costs were the key drivers of the
increase in Industrial Gross margin to
31.7% (2023: 27.0%). Cement and concrete
production in the US reduced by 8% and
was the main driver of a 13% reduction in
Cement & Lime refractory sales volumes.
The Group continued to expand its offering
to a broader range of customers and was
awarded a contract for aluminium furnace
design and refractory supply, the first of
its kind in the region.
Inventory management was a key focus
to minimise working capital and finished
goods inventories were successfully
reduced despite falling customer demand
over the year. PIFOT and net promoter
scores in customer surveys remained close
to all-time highs.
The integration of Seven Refractories’
US sites is largely complete, with a new tap
hole clay line now commissioned at the
plant in Huron, US. RHI Magnesita agreed
to acquire US based Resco in April 2024
and the acquisition completed in January
2025. The integration of Resco into the
Group’s North American business and the
realisation of planned synergies will now
be the primary focus for regional leadership.
The US increased its recycling rate to a new
high of 14.2% (2023: 8.3%). New health
and safety reporting structures and a ‘stop
work’ system were implemented at the
Pevely and York plants.
India, West Asia & Africa
Revenues in the India, West Asia & Africa
region decreased by 2% to €744 million
(2023: €762 million) or by 2% in constant
currency, as a 4% increase in sales volumes
was offset by a 6% decline in average
pricing due to increased competition and
product mix changes. Base business sales
volumes, excluding the full year
contribution from 2023 M&A, increased
by 2% with similar pricing pressure and
mix impacts.
Gross profit reduced by 17% to €155 million
(2023: €187 million) as gross margins
reduced to 20.8% (2023: 24.5%), caused
by the 6% reduction in average pricing
on relatively stable unit costs.
Steel revenues decreased by 7% to
€541 million (2023: €582 million) with a
1% increase in sales volumes offset by an
8% decrease in prices, as the full effect of
pricing pressure fell on the Steel segment
whilst Industrial pricing was stable. The
main cause of pricing pressure in Steel was
the impact of surplus low-priced imports
from China entering the Indian market due
to weakening demand in China. Steel gross
margins compressed to 19.2% from 22.8%
in 2023, mostly as a result of competitive
pricing pressure, which outweighed the
benefit of a 4% improvement in unit costs.
OPERATIONAL REVIEW CONTINUED
37RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Domestic steel production in India grew
by 6% in 2024 according to WSA data,
however imports from China and Vietnam
increased to partially satisfy growth in local
demand. In India the Group remains well
positioned to benefit from new DRI, blast
furnace and coke oven projects under
construction and customers have reacted
positively to the growth strategy in iron
making, DRI furnace refractories and pellet
production. In the Middle East some new
steel projects were postponed due
to current unfavourable market conditions
but this was offset by new business growth
in induction and reheating furnaces in Iraq,
Saudi Arabia, Libya and Africa. The Group
secured three new solutions contracts in
India and three in the Middle East, alongside
two contract renewals outside India.
Industrial revenues increased by 13%
to €203 million (2023: €180 million)
reflecting a 13% increase in sales volumes
on stable pricing. The main driver of the
increase in revenues was the Cement
& Lime segment, where sales volumes
increased by 15% and revenue by 17%,
with new demand coming from greenfield
and brownfield cement projects in India
and North Africa. Non-ferrous metals,
the second largest segment in the region
by revenue and gross profits, saw a 22%
decrease in sales volumes offset by 18%
higher pricing, translating to an overall 9%
decrease in revenues.
Industrial gross margin decreased to 24.9%
(2023: 30.3%) as costs increased by 7%,
mainly due to high prices for alumina-based
raw materials and a change in product mix
towards alumina-based refractory sales.
Margins improved in Non-ferrous metals
and Glass but declined in Cement & Lime
and Industrial Applications.
Capacity utilisation remained at a low level,
with space to grow in line with forecast
customer demand increases. One plant
at Bhilai was closed and production
transferred to Rajgangpur, in line with the
M&A integration strategy. Supply chain
reliability and efficiency was good
throughout the year.
South America
Revenues in South America decreased
by 9% to €473 million (2023: €522 million)
or by 6% in constant currency terms, as
shipped volumes reduced by 3% and
pricing declined by 7%. Gross profit
reduced by 3% to €142 million (2023:
€146 million) supported by an increase
in Gross margin to 30.0% (2023: 28.0%),
driven by lower input costs.
Steel revenues decreased by 8% to
€362 million (2023: €393 million) driven
by a 1% decline in shipped volumes and
7% lower average pricing. The decline
in sales volumes was slightly below the
movement in steel production for the
region, which increased by 0.6% in 2024
according to WSA data. Steel gross margin
increased to 28.5% (2023: 24.5%) as the
impact from lower pricing was more than
offset by an 11% improvement in unit costs.
New long-term contracts were signed with
key customers and revenue derived from
long-term contracts increased to 70%
of the total for the region in 2024.
Industrial revenues decreased by 13%
to €112 million, with a 6% decline in sales
volumes and 7% lower average price per
tonne. Volume decline was most
pronounced in the Non-ferrous metals
segment, with no new greenfield projects
occurring during 2024 against a strong
comparative in 2023. Pricing weakness
was most evident in Cement & Lime.
Industrial segment Gross margins reduced
to 35.2% (2023: 38.7%) as the 7% decline
in average pricing was only partially offset
by 2% lower costs.
During the year the Brumado rotary kiln
project was completed and ramped up
production. The project will reduce costs
and increase operational flexibility
considerably at this strategically important
and globally significant raw material site.
A write-down of assets in Brazil of
€29 million connected to the completion of
the Resco transaction has been recognised
in the 2024 financial results, reflecting the
network optimisation which will result in
transfer of production capacity into the US.
China & East Asia
Revenues in China & East Asia increased
by 2% to €426 million (2023: €418 million)
as strong sales volumes in Steel offset volume
decline and lower pricing in the Industrial
segment. Excluding the contribution from
M&A, revenues in the base business
declined by 8%, mainly due to lower
pricing and 2% lower shipped volumes.
Gross margins were stable at 21.0%
(2023: 21.0%) as pricing pressure was
matched by reduced input costs. Gross
profit increased slightly to €89 million
(2023: €88 million) reflecting the revenue
increase and stable margins.
Steel refractory sales volumes excluding
M&A increased by 5%, representing a
strong relative performance compared to
WSA data for China which indicates a 1.7%
decline in steel output in 2024. Shipped
volumes of refractories in East Asia
excluding M&A increased by 6%, also
outpacing overall steel output growth
in the region although this was largely due
to the restart of a key customer site that had
been suspended in 2023.
Industrial sales volumes decreased
by 5% driven by weaker demand in
construction and reduced consumption of
glass refractories, partially offset by robust
Non-ferrous metal demand in China.
Lower pricing resulted in Industrial revenue
decline of 9%, as weak Cement & Lime
results were offset by strong demand for
Non-ferrous metals refractories in China.
Industrial gross margin in the region reduced
to 27.3% (2023: 28.0%) as price weakness
outpaced the reduction in input costs.
The Group’s priority in its China & East Asia
business continues to be a sustainable
increase in margins to levels that are closer
to the average for the Group worldwide.
The Group’s strategy is to focus on higher
value-added products and services to
differentiate against lower quality
competing suppliers.
OPERATIONAL REVIEW CONTINUED
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202438
FINANCIAL REVIEW
Resilience
Efficiency
Sustainability
Ian Botha
Chief Financial Officer
“ We delivered a robust
financial performance in
spite of the challenging
macro environment.”
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 assesses
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 2023
numbers in this review are on a reported
basis, unless stated otherwise. Figures
presented at constant currency represent
2023 translated numbers against average
2024 exchange rates as disclosed in Note 3
to the Consolidated Financial Statements.
All reported volume changes year-on-year
are excluding mineral sales.
Read more on APMs on
Pages 325 & 326
€3,487m
Group revenue, broadly
in line with 2023
Revenue
The Group recorded revenues of €3,487
million, a 1% decrease from 2023 revenues
of €3,529 million on a constant currency
basis. This was primarily driven by 6%
lower average pricing and a 1% decline in
base business sales volumes, offset by 6%
growth in revenues from acquisitions
completed in 2023.
On a reported basis, the decrease in
revenue was 2% (2023: €3,572 million),
reflecting the depreciation of certain
currencies against the euro (Chinese yuan,
Indian rupee, Brazilian real, Turkish lira,
Canadian dollar) which reduced revenue
generated from those geographies in euro
terms. The foreign exchange impact on
revenues was €43 million.
Against a backdrop of weakness in the
key end markets of construction and
automotive, steel revenues decreased to
€2,373 million, representing a 4% decline
on a reported basis (2023: €2,461 million)
and a 3% decline in constant currency
terms (2023: €2,434 million), accounting
for 68% of Group revenue in 2024.
The primary driver behind the decrease in
steel revenues for the financial year 2024
was pricing. Soft end market demand also
impacted sales volumes in North and
South America. Exports of surplus steel
from China negatively affected pricing
39RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
FINANCIAL REVIEW CONTINUED
and refractory demand from domestic
steel producers in most geographies,
in particular in India.
Industrial revenues were stable at €1,114
million (2023: €1,111 million) and increased
by 2% in constant currency terms (2023:
€1,094 million), outperforming steel
revenue growth, supported by M&A.
Cement & Lime revenues decreased by
12% to €376 million (2023: €424 million),
while Non-ferrous metal revenues declined
by 12% to €247 million (2023: €281 million).
The primary factors contributing to the
decline in cement, lime, and Non-ferrous
metals were weaker end markets in China
and South America. Revenues in the glass
business increased by 19% to €217 million
(2023: €182 million), mainly driven by
a strong contribution from 2023 M&A.
Revenues from industrial applications
increased by 46% to €210 million
(2023: €143 million), also due to M&A.
During 2024 the Group re-assessed its
criteria for the timing of revenue recognition
for shipments delivered by sea freight with
third-party carriers. From 2024, control
of refractory products is determined to
transfer when the carrier issues shipping
documents that allows the customer to
redirect or otherwise control the shipped
refractory products. Group revenue in
2024 increased by €42 million (and gross
profit by €10 million) as a result of this
revised accounting policy. For further details
refer to Note 3 of the Financial Statements,
‘Significant Accounting Policies,
Judgements and Estimates’.
Cost of goods sold
Cost of goods sold decreased by 3%
to €2,639 million from €2,715 million in
2023, primarily due to a reduction in raw
material costs. The cost of purchased raw
materials fell by 7% to €1,058 million
(2023: €1,139 million). Plant-related labour
costs increased by 16% in 2024, rising from
€452 million to €523 million, mainly due
to acquisitions and salary increases to offset
inflation. After a period of disruption and
high inflation in 2023, freight and energy
costs decreased by 11% and 10%,
respectively, in 2024 as both markets
stabilised. Spending on general supplies,
including pallets, packaging, and spare
parts were broadly flat at €169 million
(2023: €170 million).
During 2024 the Group re-assessed its
criteria for inventory provisioning in light
of sustained improvements in its inventory
management. Re-valuation of stock
previously written off, which is now deemed
to be saleable at market price, resulted in
an €11 million reduction in cost of goods
sold. For further details refer to Note 3
of the Financial Statements, ‘Significant
Accounting Policies, Judgements
and Estimates’.
Raw material prices
Refractory raw material prices decreased in
2024 compared to 2023, with the price of
high-grade dead burned magnesia (“DBM”)
from China decreasing by 6% and by 1%
on average for medium-grade DBM from
China. Lower raw material prices usually
result in lower finished goods pricing for
refractories worldwide, as production costs
for non-vertically integrated competitors
are reduced. The main driver for the
decrease in DBM pricing was oversupply,
combined with lower customer demand for
refractories globally. Fused alumina, a raw
material that the Group does not produce
and which constitutes only a small portion
of the Group’s overall raw material
requirements, experienced a significant
price increase towards the end of 2024,
in line with the increase in alumina prices
in the fourth quarter.
Gross profit
The Group recorded gross profit of €848
million (2023: €857 million), a decrease of
1% on a reported basis and 4% in constant
currency terms. Gross margins increased
by 30bps to 24.3% (2023: 24.0%).
Although refractory pricing in the base
business reduced by 8%, input costs
reduced further, primarily due to lower
prices for externally purchased raw
materials as well as lower energy and
freight costs.
SG&A
Selling, general and administrative
expenses (“SG&A”), were €435 million,
a 3% decrease compared to the previous
reporting period (2023: €449 million),
attributable to stringent cost management,
lower personnel expenses and reduced
hiring levels.
Depreciation and amortisation
Depreciation increased by 2% to €136
million (2023: €134 million) and in 2025
is expected to be around €150 million
including Resco.
Amortisation of intangible assets amounted
to €39 million in 2024 (2023: €44 million)
and is expected to be approximately
€35 million in 2025, subject to the purchase
price allocation exercise relating to the
acquisition of Resco Group.
Adjusted EBITDA
The Group recorded Adjusted EBITDA of
€543 million, flat compared to the prior year
(2023: €543 million). Adjusted EBITDA
margin increased to 15.6% (2023: 15.2%)
an increase of 40bps, reflecting higher gross
margins and a decrease in SG&A expenses.
Adjusted EBITDA margin decreased by
60bps on a constant currency basis.
Adjusted EBITA
Adjusted EBITA remained broadly flat at
€407 million, compared to €409 million in
2023 on a reported basis, as the contribution
from M&A and lower input costs offset
weaker pricing and mix effects. Adjusted
EBITA from businesses acquired in 2023
was €65 million (or €77 million of Adjusted
EBITDA), broadly in line with guidance.
Adjusted EBITA margin increased to
11.7% (2023: 11.4%) as M&A contributions,
supported by lower input costs and
SG&A reduction.
Steel 2024 2023 Change
Revenue (€m) 2,373 2,461 (4)%
Gross profit (€m) 551 550 0%
Gross margin 23.2% 22.3% 90bps
Adjusted EBITA (€m) 255 240 7%
Adjusted EBITA margin 10.8% 9.7% 110bps
Industrial 2024 2023 Change
Revenue (€m) 1,114 1,111 0%
Gross profit (€m) 297 307 (3)%
Gross margin 26.6% 27.7% (110)bps
Adjusted EBITA (€m) 151 169 (11)%
Adjusted EBITA margin 13.6% 15.2% (160)bps
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202440
Vertical integration contributed a record
low 0.8ppts of the Group’s overall Adjusted
EBITA margin of 11.7%. Whilst this
contribution is lower than the 1.7ppts
contribution in 2023, primarily due to the
decline in the market prices for refractory
raw materials, the contribution was still
positive meaning that the Group is able to
source its own raw materials more cheaply
than buying in the market. Lower raw
material prices negatively impact the
calculation of the contribution from the
Group’s raw material assets, which is based
on the theoretical cost of acquiring those
raw materials in the open market.
The Group’s refractory business contributed
a historic high of 10.9 ppts towards the total
Adjusted EBITA margin of 11.7%, an increase
of 120 bps compared to the 9.7 ppts
contribution in 2023. Refractory margin
was supported by lower input costs, the
benefits of M&A synergies and structural
cost reductions resulting from the Group’s
strategic cost-saving initiatives.
Adjusted EBITA and Adjusted EBITDA both
exclude €125 million of net expenses from
adjusted performance (2023: €31 million),
including Software as a Service costs
(largely on new SAP ERP), Mainzlar Plant
closure costs and impairment of Hexa
Contagem Project, consequent on Resco
acquisition as set out in ‘Items excluded
from adjusted performance’ below.
The Adjusted EBITA performance in 2025 is
expected to be modestly above 2024 levels
including the acquisition of Resco.
Net finance expenses
Net finance expenses, which includes
interest payable on borrowings net of
interest income on cash balances, gains and
losses relating to foreign exchange, pension
expenses, present value adjustments,
factoring costs and non-controlling interest
expenses, decreased to €42 million
(2023: €100 million).
Net interest expenses remained stable
at €39 million (2023: €38 million)
comprising interest expenses on borrowings
of €61 million (2023: €58 million) and
€22 million of interest income on cash
balances on deposit (2023: €20 million).
Foreign exchange gains of €11 million
were recorded in 2024 compared to foreign
exchange related losses of €30 million
in 2023, mainly driven by US dollar
strength in Q4, weakness in the Brazilian
Real and Mexican Peso and a €(1) million
hyperinflation adjustment related to
Argentina (2023: €3 million).
Other net financial expenses amounted to
€14 million (2023: €32 million) including
factoring costs of €10 million (2023:
€12 million), pension charges of €12 million
(2023: €12 million) and present value
adjustments of €7 million (2023:
€8 million). Net financial expenses in 2024
also benefitted from a non-cash gain of
€22 million due to the revaluation of the
Group’s obligation to purchase the remaining
stakes it does not already own in Jinan New
Emei and Chongqing.
Guidance for net interest expenses
including Resco in 2025 is €60 million.
Guidance for other adjusted net financial
expenses is €30 million, resulting in
€90 million of adjusted net finance expenses
guided for 2025.
Items excluded from
adjusted performance
In order to accurately assess the
underlying performance of the business,
the Group excludes certain items from
Adjusted EBITA. Sizeable charges in the
year have been driven by Group wide
programmes aimed at improving operating
efficiency and future profitability through
business process improvements and plant
network optimisation.
In 2024 the total net adjustments to
EBITA amount to €125 million, including:
• €14 million of amortisation of onerous
contracts imposed by EU as part of
the merger with Magnesita.
• €9 million related to the disposal
of the Dashiquiao plant in China.
• €6 million related to receivables
previously written down to zero.
• €3 million of other miscellaneous income.
• €(52) million of expenditure on digital
architecture, previously guided as capital
expenditure. Spending on Software as
a Service is classified as an expense in
IFRS and cannot be capitalised as would
normally be the case with capital
expenditure. The Group incurred charges
of €39 million on the ERP upgrade in
2024 and €7 million reclassified from
2023 and €6 million on logistics and
supply chain planning software upgrades.
Investments in digital architecture are
expected to deliver value through cost
savings and margin improvement,
planning and operating efficiencies and
improved working capital management.
FINANCIAL REVIEW CONTINUED
(€m) 2024
2023
reported
2023
(constant
currency) Change
Change
(constant
currency)
Revenue 3,487 3,572 3,529 (2)% (1)%
Cost of goods sold (2,639) (2,715) (2,647) (3)% 0%
Gross profit 848 857 881 (1)% (4)%
SG&A (435) (449) (443) (3)% (2)%
R&D expenses (45) (43) (42) 6% 7%
Other income & expenses (“OIE”) (125) (31) (32) 299% 296%
EBIT 242 333 364 (27)% (34)%
Amortisation (39) (44) (43) (10)% (9)%
EBITA 281 378 408 (25)% (31)%
Adjusted items 125 31 32 299% 296%
Adjusted EBITA 407 409 439 (1)% (7)%
Refractory EBITA 379 348 - 9%
Vertical integration EBITA 28 61 - (54)%
1. Adjusted EBITA is an APM used by the Group. Refer to page 325 for definitions.
(€m) 2024 2023
Net interest
expenses (39) (38)
Interest income 22 20
Interest expenses (61) (58)
FX effects 11 (30)
Balance sheet
translation 29 (41)
Deliverables (18) 11
Other net financial
expenses (14) (32)
Present value
adjustment (7) (8)
Factoring costs (10) (12)
Pension charges (12) (12)
Capitalization of
borrowing costs 3 8
Interest expense -
Transaction costs (1) (1)
Other 13 (7)
Total (42) (100)
41RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Personnel €523m
R&D €45m
SG&A
€435m
Freight €200m
Energy €226m
Depreciation (COGS) €89m
Supplies €169m
Other €374m
Purchased
Raw Materials
€1,058m
Cost of
goods sold €2,639m
Gross Profit
€848m
Adjusted EBITA
1
€407m
Adjusted Profit
after Tax €263m
Adjusted Profit attributable
to shareholders €251m
Operating Expenses
€481m
Steel
€2,373m
Revenue
and P&L
€3,487m
Steel
€2,373m
Revenue
€3,487m
Industrial
€1,114m
Cement/ Lime
€376m
Non-Ferrous
Metals €247m
Process Industries
€426m
Minerals €65m
Tax €84m
Other net financial expenses €22m
Net interest expense €38m
Minorities €12m
• €(39) million amortisation in intangible
assets arising at the time of the merger
with Magnesita.
• €(29) million non-cash impairment of
fixed assets in Brazil, where the second
stage of the Hexa Contagem expansion
project will not be advanced following
the acquisition of Resco and intended
transfer of production capacity to the US.
The impact of this impairment was
considered as part of the business case
for the acquisition of Resco.
• €(25) million provision for restructuring
expenses at the Mainzlar, Germany
plant, to be paid in 2025 following the
announced closure of the plant in line
with the Group’s original Production
Optimisation Plan and after an
assessment of surplus production
capacity in Europe.
• €(12) million of expenses related to
investments in and losses from the
disposal of special Argentinian
government bonds.
Taxation
Total tax for 2024 in the income statement
amounted to €46 million (2023: €62 million),
representing a 23% reported effective tax
rate (2023: 27%).
Reported profit before tax amounted
to €200 million (2023: €233 million).
Adjusted profit before tax amounted
to €347 million (2023: €317 million),
with an adjusted effective tax rate of
24% (2023: 24%). Adjusted items include
non-taxable IFRS revenues related to put
option valuation and sale of fixed assets
in China, as well as non-deductible legal
restructuring costs.
The adjusted effective tax rate guidance
is between 23-25% for 2025.
Profit after tax
On a reported basis the Group recorded
profit after tax of €154 million (2023: €171
million), profit attributable to shareholders
of €142 million (2023: €165 million) and
earnings per share of €3.01 (2023: €3.50).
Adjusted profit after tax increased to
€263 million (2023: €241 million) and
Adjusted earnings per share was €5.32
FINANCIAL REVIEW CONTINUED
(€m)
2024
reported
Items
excluded
from
adjusted
performance
2024
adjusted
2023
reported
Items
excluded
from
adjusted
performance
2023
adjusted
EBITA 282 125 407 378 31 409
Amortisation (39) 39 - (44) 44 -
Net financial
expenses (43) (17) (60) (101) 9 (92)
Result of profit in joint
ventures - - - - - -
Profit before tax 200 147 347 233 84 317
Income tax (46) (38) (84) (62) (14) (76)
Profit after tax 154 109 263 171 70 241
Non-controlling
interests 12 - 12 7 - 7
Profit attributable to
shareholders 142 109 251 165 - 235
Shares outstanding 47 - 47 47 - 47
Earnings per share
(€ per share) 3.01 2.31 5.32 3.50 1.49 4.98
1. EBITA reconciled to revenue on page 40. EBITA is an APM, refer to page 325 for definition.
2. Total issued and outstanding share capital as at 31 December 2023 was 47,130,338. The Company held
2,347,367 ordinary shares in treasury. The weighted average number of shares used for calculating basic
earnings per share in FY 2023 is 47,078,254.
Revenue and P&L summary
1. Adjusted EBITA excludes amortisation of intangible assets of € 39million, which is partially accounted for in COGS and partly in SG&A.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202442
(2023: €4.98). A full reconciliation of EBITA
to EPS and Adjusted EBITA to Adjusted EPS
can be found in the table on the previous
page. Items excluded from Adjusted Profit
after tax included €17 million of net financial
expenses mainly arising from the revaluation
of the Group’s obligation to purchase the
remaining stakes it does not already own
in Jinan New Emei and Chongqing.
Profit attributable to shareholders is
stated after deducting non-controlling
interests of €12 million (2023: €6 million)
mainly arising from RHI Magnesita India Ltd.,
in which the Group holds a stake of 56%.
Guidance for non-controlling interest
expense in 2025 is approximately
€15 million.
Financial guidance and outlook
Refractory demand remains weak, with
no recovery in end market demand visible.
Falling domestic demand of customer
industries in China results in exports
of steel and other materials from China,
reducing customer output in most world
markets and therewith reducing refractory
usage. 2024 was a relatively strong year
for higher margin non-ferrous metals and
glass projects due to the timing of customer
investment projects. However, markedly
lower capex investments by these industrial
customers will reduce demand in 2025,
offsetting forecasted growth in steel
refractory demand in India, West Asia &
Africa. Revenue performance in 2025 year
to date and the outlook for H1 is weak,
driven by low volumes in steel and pricing
pressure in particular in cement and
non-ferrous metals.
The Adjusted EBITA performance in 2025
is therefore expected to be modestly above
2024 levels including the acquisition of
Resco. Adjusted EBITA is expected to be
weighted approximately 45% in the first
half and 55% in the second half of the year.
An increasing trade tariff environment may
protect customers in certain jurisdictions
and benefit refractory producers with local
for local production in the short term but
risks a medium-term negative impact on
global trade.
Sales volumes in the base business are
expected to remain flat. Adjusted EBITA
margin is guided to be stable at
approximately 11.5%.
Gearing will rise in the short term due to
the completion of the Resco transaction
but is expected to reduce back within the
targeted range of c.2.0-2.5x Pro Forma
Adjusted EBITDA by the end of 2025.
Capital expenditure on fixed assets will be
reduced to €145 million (below depreciation
of approximately €150 million), in favour
of continuing to invest in our digital
transformation, which will incur costs of
approximately €35 million per year over
the three-year period 2024-26. Capex
associated with the integration of Resco
is expected to be €30 million, spread over
the next two financial years.
The Group expects to incur network
optimisation expenses in Europe and Brazil
as a result of plant footprint adjustments
following the Resco acquisition and other
M&A transactions completed in 2022 and
2023. Total restructuring costs in the base
business of €60 million and associated
capital expenditure of €40 million are
planned over the period 2025-27, to deliver
€10 million of EBITA benefit in 2025,
€20 million in 2026 and €30 million
per annum thereafter.
Working capital
Working capital decreased to €865 million
(31 December 2023: €980 million) driven
by inventory reduction, lower accounts
receivable and higher payables.
Working capital intensity, measured
as a percentage of the last three months’
annualised revenue, decreased to 23.4%
(31 December 2023: 24.4%). Accounts
receivable intensity was 12.9%
(31 December 2023: 11.9%), accounts payable
intensity was 15.5% (31 December 2023:
12.4%) and inventory intensity increased
to 26.1% (31 December 2023: 24.9%).
Inventories decreased to €962 million
(31 December 2023: €1001 million),
due to lower input costs, reduced inventory
volumes and inventory improvement
measure implemented at plants acquired
in 2023.
Accounts receivable decreased slightly
to €474 million (31 December 2023:
€477 million), reflecting lower pricing.
Accounts receivable is calculated as
trade receivables excluding factoring
plus contract assets less contract liabilities
and downpayments received, and a full
reconciliation can be found in the
APMs section.
FINANCIAL REVIEW CONTINUED
Adjusted EPS
€5.32
2023: €4.98 per share
Adjusted EBITA margin
11.7%
2023: 11.4%
Capital expenditure
€145m
2023: €180m
43RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Accounts payable increased to €572 million
(31 December 2023: €498 million) due to
extended payment terms and higher value
raw material purchases in the second half.
Working capital financing, used to
provide low-cost liquidity and support the
Group’s commercial offering to customers,
was €289 million on 31 December 2024
(31 December 2023: €298 million),
comprising €237 million of accounts
receivable financing (factoring) and
€53 million of accounts payable
financing (forfaiting).
Working capital financing levels vary
according to business activity, and
the Board has set an internal limit
of €320 million on its use.
Working capital intensity is targeted
to be approximately 24% in 2025.
Other assets and liabilities
Cash flows from other assets and liabilities
amounted to €(93) million (2023: €(12)
million) comprising, indirect and other tax
rebates of €4 million (2023: € 14 million,),
employee pension pay outs and pension
provision movements of €(22) million
(2023: €(19) million), employee variable
remuneration and employee-related
provisions of €(24) million (2023: €29
million) and other cash flows of €(51) million
(2023: € (36) million). The €53 million
difference in variable remuneration and
employee related provisions is due to a
relatively high staff bonus payout in 2024
relating to 2023 performance, compared
to a lower bonus payout in 2023.
Capital expenditure
The Group incurred €145 million of
capital expenditure (2023: €180 million),
of which €65 million was maintenance
related (2023: €86million), €68 million
was expansionary capital expenditure
(2023: €74 million) and €12 million of
maintenance and integration capital
expenditure was incurred at newly
acquired businesses (2023: €19 million).
Capital expenditure in 2025 is expected
to be around €145 million. Maintenance
capital expenditure in the base business is
expected to be approximately €75 million,
with expansionary capital expenditure
of €55 million and maintenance and
integration capital expenditure in newly
acquired businesses of €15 million.
Spending of approximately €35 million
on digital infrastructure projects will be
expensed in accordance with IFRS and
will not be capitalised.
Acquisitions
In April 2024 the Group announced its
intention to acquire Resco Group, a US
based producer of alumina monolithics
and wide range of basic and non-basic
refractories, for an enterprise value of up
to $430 million. The transaction completed
on 28 January 2025 for an enterprise value
of $410 million, or c.€391 million.
In June 2024 the Group announced the
€5 million acquisition of Refrattari Trezzi,
a recycling specialist in Italy, expanding
its recycling footprint in Europe. Refrattari
Trezzi has been combined into the Group’s
existing MIRECO joint venture, increasing
the Group’s share in MIRECO to 55%
(2023: 51%).
The Group incurred €58 million of cash
outflow relating to acquisitions in 2024,
including € 44 million of prepayments
for the intended acquisition of Resco,
€5 million for the acquisition of Refrattari
Trezzi, €3 million for the purchase of the
remaining 49% stake in Seven Refractories
Cyprus not already owned by the Group, a
€3 million deferred payment for Jinan New
Emei and €3 million purchase of additional
stake in P-D Refractories.
Cash flow
Adjusted operating cash flow increased
to €419 million (2023: €418 million)
representing cash flow conversion from
Adjusted EBITA 103% (2023: 102%),
supported by the €115 million release
of working capital.
Free cash flow decreased to €225 million
(2023: €258 million), mainly due to higher
interest and restructuring expenses.
FINANCIAL REVIEW CONTINUED
Cash flow €m
,
2024 2023
Adjusted EBITDA 543 543
Shared-based payments - gross non-cash 9 9
Working capital changes 105 53
Changes in other assets and liabilities (93) (7)
Investments in PP&E, IA (145) (180)
Adjusted operating cash flow 419 418
Income taxes paid (69) (60)
Cash effects of other income/expenses and restructuring (62) (32)
Investments in financial assets (19) (14)
Cash inflows from the sale of PP&E and IA 16 4
Cash inflows from the sale of financial assets 11 0
Investment subsidies received 2 0
Net interest paid (71) (56)
Dividend payments to non-controlling interest (3) (3)
Other investing activities 1 1
Free cash flow 225 258
Investment in subsidiaries net of cash (7) (313)
Cash contribution NCI 0 100
Resco prepayment (44) 0
Investments in NCI (6) (8)
Payment for share issue costs 0 (3)
Dividend payments (87) (77)
Change financial receivables from joint ventures and associates (1) 2
Cash change in net debt 80 (41)
Debt from acquisitions 0 (87)
New lease obligations (29) (15)
Exchange effects 2 (1)
Others 1 (2)
Actual change in net debt 54 (146)
1. The cash flow reconciliation to net debt has been restated to reflect a change in definitions of Adjusted
operating cash flow, Free cash flow and cash change in net debt.
2. A full reconciliation to the change in cash and cash equivalents can be found in the APM section
on pages 325 and 326.
3. Adjusted operating cash flow is an APM. A definition and reconciliation can be found in the APM section
on page 325.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202444
Cash income tax payments increased to
€69 million (2023: €60 million) and net
interest paid also increased to €71 million
(2023: €56 million), as a result of higher
average interest rates and borrowings.
Cash dividends paid in 2024 amounted
to €87million (2023: €77 million) and the
cash change in Net debt was an increase
of €80 million compared to a decrease
of €41 million in 2023.
Financial position
Net debt decreased to €1,251 million,
comprising total debt of €1,750 million,
leases of €77 million and cash and cash
equivalents of €576 million.
Total leases of €77 million (2023:
€70 million) are included in the Group’s
Net debt position as required by IFRS 16.
The Group’s gearing at the year-end
was 2.3x Net debt to Pro Forma Adjusted
EBITDA (31 December 2023: 2.3x).
Available liquidity at 31 December 2024
was €1,376 million, comprising undrawn
committed facilities of €800 million and
cash and cash equivalents of €576 million.
Out of the total gross debt of €1,750 million,
98% is denominated in euro. The floating
to fixed ratio of the gross debt is 27%
floating to 73% fixed and the weighted
average cost of debt as of 31 December
2024 was 2.96%, including swaps.
The Group will seek to maintain the ratio
of Net debt to Pro Forma Adjusted EBITDA
within the guided range of 2.0-2.5x or
above for periods of compelling M&A.
Return on invested capital
ROIC is used to assess the Group’s efficiency
in executing its capital allocation strategy,
which is aimed at enabling organic growth,
disciplined M&A and shareholder returns.
ROIC is an APM, see the APM section for
full details of how ROIC reconciles to
IFRS metrics.
Under the APM definition, ROIC was 9.8%
in 2024 (2023: 10.7%) based on Average
Invested Capital of €3,043 million (2023:
€2,854 million) and NOPAT of €298 million
(2023: €305 million). ROIC generated by
the Group’s raw material assets was 3.5%
(2023: 8.9%) and ROIC from the refractory
business was 11.0% (2023: 11.0%). The
main drivers of the decrease in ROIC were
the increase in Average Invested Capital
to €3,043 million (2023: €2,854 million)
as a result of M&A transactions completed
in 2023 and the reduction in contribution
from the Raw material assets, due to low
market prices for refractory raw materials.
The Group intends to carry out a network
optimisation over the period 2025-27
following M&A completed in the previous
three years, reducing invested capital.
Returns to shareholders
The Board’s capital allocation policy
remains to support the long-term Group
strategy, providing flexibility for both
organic and inorganic investment
opportunities and delivering attractive
shareholder returns over the medium term.
These opportunities are assessed against a
framework of strategic fit, risk profile, rates
of return, synergy potential and balance
sheet strength.
In 2024, the Group invested €68 million
in expansionary capital expenditure in
the base business and €12 million in the
integration of newly acquired businesses.
Maintenance capital expenditure was
€65 million. A further €391 million was
agreed to be allocated to the acquisition
of Resco.
Following the strong profitability, cash
generation and strategic progress delivered
in 2024, the Board has recommended a
final dividend of €1.20 per share for the
full financial year, and €85 million in
aggregate. This represents a dividend
cover of 3.0x Adjusted earnings per share.
Subject to approval at the AGM scheduled
for 7 May 2025, the final dividend will be
payable on 12 June 2025 to shareholders
on the register at the close of trading on
23 May 2025. The ex-dividend date will
be 22 May 2025. Together with the interim
dividend of €0.60 per share paid on
26 September 2024, the recommended
final dividend represents a full year
dividend of €1.80 per share in respect
of the 2024 financial year.
The Board’s dividend policy remains
to target a dividend cover of below 3.0x
adjusted earnings over the medium term.
Dividends will be paid on a semi-annual
basis with one third of the prior year’s full
year dividend being paid at the interim.
FINANCIAL REVIEW CONTINUED
ROIC
9.8%
2023: €10.7%
Adjusted EBITA
€407m
2023: €409m
Adjusted operating cash flow
€419m
2023: €418m
Dividend
€1.80 per share
2023: €1.80 per share
45RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
SUSTAINABILITY
Leading
sustainability
in our industry
RHI Magnesita’s purpose is to master heat, enabling global
industries to build sustainable modern life. Our advanced
products are essential for our customers in the steel, cement,
metals, glass, energy and chemicals industries. Through the
reliable supply of innovative refractory products and services,
we enable our customers to sustainably deliver the basic materials
that are essential for modern life. We aim to be our customers’
partner of choice on their own decarbonisation journeys.
“ We believe that
long-term financial
success is only
possible if we
also deliver our
sustainability goals.”
Highlights in 2024 Priorities for 2025
CO emissions
intensity vs 2018
reduced by
14%
Achieve CO
intensity reduction
target vs 2018
15%
Achieve recycling
rate target
15%
Female
representation
in senior
leadership at
26%
Conducted
double materiality
assessment
aligned with CSRD
requirements
Absolute CO emissions
6,050 kt CO
Scope 1, 2 and 3
Herbert Cordt
Chair
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202446
SUSTAINABILITY CONTINUED
Our framework and progress
to lead with sustainability
Our value chain Our planet Our people Our communities
We have a framework for supply
chain due diligence and we
engage with suppliers to ensure
ethical and compliant practices.
RHI Magnesita has published
a theoretical decarbonisation
pathway which sets out a
potential route to eliminate CO
emissions in its core operations
and upstream value chain
by 2060.
Our people are our greatest
strength and our first priority
is safety in the workplace.
We also seek to benefit from a
diverse and inclusive workforce
and we have targets to increase
female representation at
leadership levels.
Maintaining positive
relationships with our local
communities is integral to our
ongoing success.
Our sites are located in diverse
and sometimes remote regions
and it is essential for us to
understand local context. We
regularly engage and consult
with our stakeholders, seeking
to understand and respect their
interests and priorities.
Our target
EcoVadis assessments to
cover two-thirds of supplier
base by spend by 2025
Our target
Reduce CO emissions by 15%
per tonne of product by 2025
Reduce energy use by 5%
per tonne of product by 2025
Our target
Increase women on the
board and in leadership
to 33% by 2025
Maintain LTIF at <0.30
Our target
Maintain positive and
constructive relationships
with our host communities
Related SDG Related SDG Related SDG Related SDG
Read more on page 27 Read more on page 128 Read more on page 23 Read more on page 28
47RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
OUR RISK MANAGEMENT APPROACH
Effective
risk management
“ Our risk management
approach helps the Board
and EMT to understand
the risks associated with
the adopted strategy,
periodically assess if the
strategy is aligned with
our risk appetite, and
understand how the
chosen strategy could
affect the Group’s risk
profile, specifically the
types and amount of risk
to which the Group is
potentially exposed.”
Herbert Cordt
Chair of the
Board of Directors
Our approach to risk management
The approach to risk management
established over recent years was
maintained throughout 2024 and has
included the new plants added to the
production footprint through the
acquisitions. In 2024, a new approach
to assess the plant health and safety risks
was introduced. This was achieved by
applying an externally recognised best
practice framework for Health & Safety
risk assessment.
The risk management approach combines
top-down, bottom-up and deep-dive risk
assessments. The bottom-up risk assessment
is based on each of the plants, which
maintain ongoing risk management activity
linked to the ISO risk management practices.
Deep-dive risk assessments are performed
for areas of emerging or prevailing risks,
which, in 2024, included plant operations,
fraud management, sustainability, human
rights and trade compliance.
The top-down risk assessment is performed
by the EMT and integrates the information
from the bottom-up and the deep-dive risk
assessments to ensure that the Group risk
profile is complete and accurate. This is
then reviewed by the Audit & Compliance
Committee and the Board of Directors.
Reporting against these risks is included
periodically within EMT meetings, Audit &
Compliance Committee meetings and the
annual Board-led strategic review.
Risks and strategy
Our risk management approach helps
the Board and EMT to understand the risks
associated with the adopted strategy,
periodically assess if the strategy is aligned
with our risk appetite and understand how
the chosen strategy could affect the
Group’s risk profile, specifically the types
and amount of risk to which the Group is
potentially exposed. As part of this process,
risk scenarios are evaluated to assess
potential outcomes.
The assessment, monitoring and mitigation
of key risks to the strategy are core features
of the established risk management
approach. Risk workshops were conducted
with the EMT and Board to review the
Group risk profile in the context of the 2025
strategy and the risk appetite of the top risks
to the Group. The Group’s key financial
risks are disclosed under Note 36 to the
Consolidated Financial Statements.
Risk management cycle
1
2
3
4
5
1. Identification
Starting from all the possible
categories of risks potentially
impacting the Group, specific
risks relevant to RHI Magnesita
are identified through several
analytical tools, including
comparative analysis and
risk benchmarking.
2. Assessment
The risks identified are linked
to potential root causes and
assessed for their inherent
likelihood, inherent impact, and
velocity. Risk analysis to develop
an understanding of the possible
interdependencies between
risks is performed.
3. Mitigation
All risks considered to be outside
of the Group risk appetite, due
to their nature or their potential
financial or qualitative impacts,
are mitigated by appropriate risk
management strategies. The
implementation and effectiveness
of the defined mitigation measures
are reviewed, and additional
actions are defined if necessary.
For this purpose, risks are assessed
based on their likelihood and
impact before and after the
implementation of those
mitigation measures.
4. Monitoring
Risks and associated mitigating
measures are reassessed
quarterly during the year, with
increased frequency for those
areas experiencing significant
changes in the risk landscape.
The remaining risk level is
evaluated to ensure that it is
aligned with the Group’s risk
appetite and reviewed on a
quarterly basis by the EMT.
5. Reporting
Risks that require immediate
action are reported immediately
to line management for action.
Risks that do not require
immediate action are reported
periodically to the operational
management and on a quarterly
basis to the EMT.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202448
OUR RISK MANAGEMENT APPROACH CONTINUED
Risk appetite
We define risk appetite as “the nature
and extent of risk RHI Magnesita is willing
to accept in relation to the pursuit of its
objectives”. We look at risk appetite from
different angles, such as the severity of the
consequences should the risk materialise,
any relevant internal or external factors
influencing the risk, and the status of
management actions to mitigate or control
the risk. A scale is used to help determine
the risk appetite threshold for each risk,
recognising that risk appetite can change
over time.
If a particular risk exceeds its risk appetite
threshold, it could threaten the delivery
of our objectives and therefore require
significant risk mitigation and potentially a
change to the strategy. Risks that approach
the limit of the Group’s risk appetite may
require acceleration or enhancement of
management actions to ensure that risk
remains within appetite levels.
The risk management approach is based
on an assessment of the risk appetite
formed by the Board, covering the key risk
categories (“averse”, “limited”, “moderate”
and “high”). The risk appetite statements
are approved by the Board and are a
foundational element of our risk framework
as they provide guidance to management
on the amount and type of risk we seek to
take in pursuing our objectives. The Board
has carried out a robust assessment of the
Group’s principal and emerging risks.
In 2024, scenarios relating to Trade
Compliance were discussed in depth at the
Audit & Compliance Committee and Board
to assess the risk management approach,
alignment with the strategy, and the risk
appetite being applied.
VERY
LIKELY
LIKELY
POSSIBLE
UNLIKELY
LOW HIGHMODERATE CRITICAL
Group risk chart
Principal risks 2024
1
Macroeconomic and geopolitical environment
2
Inability to execute key strategic initiatives
3
Significant changes in the competitive environment
or speed of disruptive innovation
4
Reliability of the end-to-end supply chain
5
Sustainability – environmental and climate risks
6
Sustainability – Health & Safety risks
7
Regulatory and compliance risks (excluding trade compliance)
8
Cyber and information security risks
9
Trade compliance
10
Organisational capacity to execute strategy, including demonstrating
Company cultural values
12
5 8 9
4
7
3 6
10
49RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
OUR RISK MANAGEMENT APPROACH CONTINUED
Our principal risks
The principal risks are those that the
Board considers may have a significant
impact on the results of the Group and on
its ability to achieve its strategic objectives.
This does not represent an exhaustive list of
risks faced by the Group but encompasses
those considered to be most material to
business performance.
The risks can occur independently from
each other or in combination. Extraordinary
events have the potential to crystallise
multiple principal risks simultaneously,
significantly magnifying the adverse impact.
Eight of the ten principal risks included
in the 2023 Annual Report have been
confirmed to be equally relevant for 2024
and are reported with the same risk
definition as 2023. The principal risk for
“Regulatory and Compliance”, as reported
on in 2023, has been split into two
principal risks in 2024 (“Regulatory and
Compliance” and “Trade Compliance”)
reflecting the distinctive risk characteristics
of Trade Compliance risk compared to the
other risk elements within this category.
The principal risk reported in 2023 of
“Ability to strategically price and deliver
price increases” has been reduced in
risk rating during 2024 (due to the
demonstrated effectiveness of the related
processes and controls) and removed from
the principal risks list. Therefore, there are
again ten principal risks in 2024.
All risks have been reviewed throughout the
year and changes have been assessed to the
rating of five principal risks. Additionally, the
risk appetite relating to two of the principal
risks (“Reliability of the end-to-end supply
chain” and “Environmental and climate
risks”) has changed in 2024. These changes
are described in the section below.
Emerging risks
Identifying emerging risks is a key part
of our risk management process. All risk
assessment sessions at regional or global
level dedicate time to identifying and
discussing emerging risks. These
discussions are facilitated by Internal Audit,
Risk & Compliance who raise risk topics
with knowledge gained from benchmarking
and expert studies and combine these with
the input from over 50 senior leaders on
at least a six-monthly basis.
Emerging risks are assessed to determine
if they need to be added to the principal
risks, Top-20 Group Risk Dashboard,
lower-level risk tracking or retained on
a watchlist. Once added to the formal risk
register, emerging risks are managed in
the same manner as established risks.
The consideration of emerging risks and
changing risk landscape can also lead
to changes in the risk appetite levels.
Risks that have emerged in 2024 or
increased in relevance and therefore
received more focus include:
• Structural weaknesses in the production
network.
• Increasing complexity of sanctions
regimes.
• Risks reflecting market disruptions
and deflationary pressure.
These risks have increased due to the
impact on the Group of increased legislative
requirements, geopolitical factors and
emerging technologies. Additional risk
drivers include the enhanced production
footprint from acquisitions and the digital
transformation of the Group.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202450
The Board reviews the effectiveness of
the system of internal financial, operational
and compliance controls and the risk
management framework. RHI Magnesita
follows the corporate governance
requirements of both the Netherlands,
given the location of its incorporation, and
the UK, due to its listing. Where possible,
the disclosures are combined in this report,
however there are certain risk areas where
the respective governance requirements
necessitate similar but separate assessments.
One such area is the required disclosure
and description of RHI Magnesita’s control
environment and systems. Therefore, the
Company provides both a Management
“In-Control Statement” as is required by
the Dutch Corporate Governance Code
and an internal control system report
as is required under the UK Corporate
Governance Code. Both outline the
measures that RHI Magnesita takes to
ensure a strong control environment. You
can read more about how the Company is
preparing to meet Provision 29 of the UK
Corporate Governance Code on page 209.
The Board is ultimately responsible for
maintaining effective corporate governance,
which includes the Group’s risk management
approach, its system of internal controls
and its internal audit approach.
The Board regularly reviews the
effectiveness of the system of internal
financial, operational and compliance
controls, and the risk management
framework. The Board examines whether
the system of internal controls operates
effectively throughout the year and will
make recommendations when appropriate.
These systems have been in place
throughout 2024, and up to the date of this
report, and comply with the UK Financial
Reporting Council’s Guidance on Risk
Management, Internal Control and Related
Financial and Business Reporting. They are
based on the three lines of defence model,
supported by an end-to-end process
model and a delegation of authorities
structure reflecting the responsibility for
risk management and internal controls
at all management levels.
The Group’s internal control framework
is designed to enable the application of the
Group’s risk appetite. This typically seeks
to avoid or mitigate risks rather than to
completely eliminate the risks associated
with the accomplishment of the Group’s
strategic objectives. It provides reasonable,
but not absolute, assurance against
material misstatement or loss.
The Group has a specific risk management
approach in place and an internal control
framework in relation to its financial reporting
process. These systems include policies
and procedures to ensure that adequate
accounting records are maintained, and
transactions are recorded accurately and
fairly to permit the preparation of financial
statements in accordance with the applicable
accounting standards. For the accounting
process, an accounting manual is used to
structure the internal controls over the
accounting process. In 2024, an Internal
Controls Hub was developed which monitors
control performance, ensuring consistency in
the application of financial reporting controls.
In 2024 the Group developed and
executed projects to improve the internal
processes and systems of the Group. A key
focus area has been delivered by designing
a single set of Group-wide processes for
key activities. In 2025, a complete end to
end “process house” for all major processes
will be implemented.
Alongside this work the Group has
outsourced key transactional processes
to a company specialising in managing
service centre operations. This will ensure
continuous, quality delivery of the selected
transactional services. The main transfer
of activities to the outsource provider
occurred on 1 December 2024 and a
dedicated project team including risk
management, transition management and
service delivery monitoring was established
to ensure the continued effectiveness of
the internal control framework through and
beyond the transfer date. The Group is also
in the execution stages of a multi-year
project in replacing and upgrading its ERP
system. These activities will lead to a step
change improvement in the consistency
and efficiency of the internal control system.
The Group has an Internal Audit function,
with a reporting line to the Chair of the
Audit & Compliance Committee and a
secondary reporting line, for day-to-day
operational matters, to the CFO. The
Internal Audit function provides assurance
to the Audit & Compliance Committee and
the Board on the design and effectiveness
of the internal control framework. Internal
Audit operates within a single department
also comprising Risk Management and
Compliance. The Audit & Compliance
Committee and management ensure that
appropriate safeguards are in place to
maintain the independence of Internal
Audit. The Internal Audit, Risk &
Compliance function works as regionally
based teams, providing a locally focused
governance presence to support regional
management in line with the established
Group-wide model.
In 2024 the Head of Internal Audit, Risk
& Compliance has also fulfilled a role
to oversee the design and development
of finance-related Group processes
underpinning the upgraded ERP system.
The design of the processes and the
associated internal controls do not fall
under his responsibility. The ERP project
has an assurance provider (separate from
Internal Audit) providing updates to the
Board and EMT. The Audit & Compliance
Committee have closely monitored this
arrangement with the Head of Internal
Audit, Risk & Compliance and the work
performed to ensure that the
independence of Internal Audit and the
effectiveness of Risk Management and
Compliance are not compromised.
An external quality assessment of the
effectiveness and capability of the Internal
Audit function was performed in 2021. The
delivery of improvement points from this
report has been completed in subsequent
years and maintained in 2024.
During 2024, Internal Audit conducted
13 planned internal audits and 13 special
regional-focused investigations, reporting
OUR RISK MANAGEMENT APPROACH CONTINUED
Our internal control system
51RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
the most relevant observations and
recommendations to regional management,
the Executive Management team, and
summarised reports to the Audit &
Compliance Committee.
The reports by management and Internal
Audit, Risk & Compliance also facilitated
consideration by the Audit & Compliance
Committee of management actions in
respect of the following key control
framework challenges:
• Improving management and the internal
controls of transformational initiatives.
• Effective integration of acquired entities
into the Group’s culture and internal
control framework.
• Benchmarking the internal control
performance across the regions.
• Continuing the journey towards global
process standardisation.
The Board considers the Company’s risk
management and internal control system
are appropriate and effective to give
reasonable, but not absolute, assurance
against material misstatement or loss.
Planned and implemented improvements
of the internal control systems are
discussed regularly between the Board
and Audit & Compliance Committee.
Given the dynamic nature of the Group and
the continuing evolution of its regionalised
model, the Board has emphasised the
importance of further internal control
system improvements in 2025, most
notably the completion of global process
standardisation work to drive the new ERP
system implementation.
Management “In-Control Statement”
The Board and EMT are responsible for
ensuring adequate risk management and
internal controls systems are in place.
The core design of the internal control
systems is based on extensive work
conducted as part of the merger activity
in 2017 and reassessed in 2020 to create
a more regionally focused and agile
structure. The regional focus was further
increased in early 2022. A further step
change in process standardisation is
expected in 2025 when the new “process
house” will be implemented, including
a refreshed design for the internal control
system. The new internal control system
will be rolled out in the medium term
as part of the new ERP system.
The key internal control measures include
reviews of financial performance and key
control weaknesses at each Board meeting.
To complement the M&A strategy and
increase the focus on integration efforts of
newly acquired companies, the corporate
meeting structure to govern and monitor
the integration of acquired companies has
evolved in 2024. An Integration Toolkit
guides inputs from standardised integration
workstream teams, led by regional and
senior leaders which are consolidated
into EMT-sponsored periodic meetings.
These meetings focus on the review of
the operational and financial performance
delivery and risks against the business
cases for a period of 12 months after the
closing of the acquisition. Outputs are
consolidated in a standard format and
status updates shared with the senior
leadership group of the Company.
To further increase the focus on the
execution of the transformational initiatives
and deliver through a structured progress
tracking and a lean programme structure,
a standardised forum was created. The
structure enabled to focus on
interdependencies across the initiatives
and its risks. Furthermore, standardised key
performance indicators were established
to track the progress and effectiveness
of the initiatives. In 2025, the focus will
remain on these strategic initiatives with
a newly established governance structure
for these projects, including an EMT-led
project board for oversight, monthly project
performance review meetings, and project
circles to ensure a sustainable and
performance driven execution.
The EMT continues to monitor the effective
adoption of corporate culture and values,
especially in respect of the more remote
and newly integrated areas of the
Company; the enhancement of the
corporate culture has been accelerated by
the regional approach. The EMT have visited
selected regions in 2024 and performed
on-site deep dives into all key aspects
of regional performance. Following the
update of the Code of Conduct in early
2023, the policy to report and investigate
misconduct has been updated and
reinforced through increased training and
communication in 2024. The Board and
EMT monitor the response to issues raised
via the whistleblowing process. All key
changes in the internal control framework
were reviewed by the EMT.
OUR RISK MANAGEMENT APPROACH CONTINUED
Each leader is accountable for the
effectiveness of the internal controls within
their areas of responsibility and is required
to complete a self-certification of their
assessment. The self-certification is also
signed-off on a regional level. Measures
are applied in each functional area and
region to assess the effectiveness of
internal controls and to escalate any
identified issues. Control weaknesses
identified by management and those
identified through the quality management
system reviews, risk management activity
and internal audit reports are escalated
to the EMT for review and resolution,
all of which is overseen by the Audit &
Compliance Committee. The key control
weaknesses identified from these processes
were addressed within 2024.
In 2024, risk management activity focused
on maintaining the previously established,
mechanisms and integrating acquired
entities and outsourced services into the risk
assessment models. Plant risk management
and fraud risk management were executed
in 2024 following the established
approaches. This approach continued
to further strengthen the link between
strategy setting and risk management,
enhanced by extensive collaboration
between the respective teams.
The delivery of the risk management
approach and the results of the internal
quality assessment and planned next steps
were reviewed by the Audit & Compliance
Committee. In addition, the risk appetite
was discussed and approved by the Audit
& Compliance Committee and the Board
following a series of discussion workshops.
Therefore, Management confirms that:
• the report provides sufficient insights
into any failings in the effectiveness
of the internal risk management and
control systems with regard to the risks;
• the aforementioned systems provide
reasonable assurance that the financial
reporting does not contain any material
inaccuracies;
• based on the current state of affairs, it
is justified that the financial reporting is
prepared on a going concern basis; and
• the report states the material risks, and
the uncertainties, to the extent that they
are relevant to the expectation of the
Company’s continuity for the period
of twelve months after the preparation
of the report.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202452
Viability statement
Assessment period
The Board has assessed the prospects
and the viability of the Group over the
forthcoming 12 months, based on a detailed
financial plan (i.e. for financial year 2025)
as well as a longer period e.g. the long-term
plan to 2027. The Board believes that the
three year period remains appropriate,
being based on its internal budget,
financial planning timeframes and the
established targets and aims, which
combine to give reasonable expectations
of the Group’s position and performance.
The assessment process and
key assumptions
The Board’s assessment included review
of the potential financial impacts as well
as available financial headroom in the most
severe but still plausible scenarios that
could threaten the viability of the Group.
These scenarios considered the current
financial position of the Group and the
potential mitigations that management
reasonably believes would be available
to the Company. These mitigations include
the use of cash, access to debt facilities and
credit lines, reductions in capital expenditure,
divestments and dividend reductions.
The financial forecast is based on a number
of key assumptions, including product
prices, exchange rates, raw material prices,
energy, freight and labour costs, estimates
of production volumes, future capital
expenditure and delivery of our strategic
cost reduction and sales initiatives. In
addition, the forecast does not assume the
renewal of existing debt facilities or raising of
new debt. A key component of the financial
forecast and strategic plan is the expected
growth of steel production and the output
of non-steel clients in all regions, combined
with the development of the specific
refractory consumption, taking account
of technological improvements.
Management also performed a reverse
stress test assuming a severe decrease in
sales volumes of 14% sustained over 30
months. Management analysed the impact
of the 2008 Global Financial crisis and the
COVID-19 impact over sales volumes and
margins. Whilst the decrease in volumes
was notable, the Group was able to recover
the volumes within 12 months.
The scenarios that have been modelled are
based on severe but plausible outcomes
and associated costs are based on actual
experience where possible. The scenarios
have been considered individually and
as a cluster of events.
Assessment of viability
The Group’s liquidity amounts to
€1,176 million comprising cash and cash
equivalents of €576 million and undrawn
committed credit facilities of €600 million
as of 31 December 2024. This is sufficient
to absorb the financial impact of the risks
modelled in the stress and sensitivity
analysis. However, if these risks were to
materialise, the Group also has a range of
additional mitigating actions that enable it
to maintain its financial strength, including
reduction in fixed costs and capital
expenditure, raising debt or reducing
or cancelling the dividend.
Viability statement
The Directors believe that the Group is
well-placed to manage its principal risks
successfully. In making this statement the
Directors have considered the resilience
of the Group, taking account of its current
position, the risk appetite, the principal risks
facing the business in severe but plausible
scenarios, and the effectiveness of any
mitigating actions.
The Directors have a reasonable
expectation that the Group and Company
will be able to continue in operation and
meet its liabilities as they fall due over
the period to December 2027.
Going concern
In considering the appropriateness of
adopting the going concern basis, the
Directors assessed the Group’s potential
cash generation and considered a range
of downside scenarios that model different
degrees of potential economic downturn,
using the same model as for the viability
assessment. This assessment covers at least
12 months from the 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 breaches the
Group’s debt covenant. Further mitigating
actions within management control would
be undertaken in such scenarios, including
but not limited to, reduced future operating
and fixed costs, capital expenditure, and
dividend distributions. These mitigation
actions were not incorporated in the
downside modelling. The Directors also
considered the Group’s current liquidity
and available facilities as outlined above.
In the above scenarios and taking into
account liquidity and available resources,
and before the inclusion of all mitigating
actions, the Directors consider it is
appropriate to continue to adopt the
going concern basis for the period
ended 31 December 2024.
Scenario Principal risks
Severity of
the impact
Severe macroeconomic
downturn
1. Macroeconomic and geopolitical environment. Low
Severe macroeconomic
downturn with impact
of multiple principal risk
1. Macroeconomic and geopolitical environment,
2. Inability to deliver strategic projects,
3. Significant changes in the competitive
environment or speed of disruptive innovation,
4. Reliability of end-to-end supply chain,
10. Organisational capacity to execute strategy,
including demonstrating company cultural values.
Medium
Reverse stress test
assuming significant
and sustained reduction
in sales volumes
1. Macroeconomic and geopolitical environment. High
OUR RISK MANAGEMENT APPROACH CONTINUED
“ The Directors have a reasonable expectation that
the Group and Company will be able to continue
in operation and meet their liabilities as they fall
due over the period to December 2027.”
53RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Principal risks
OUR RISK MANAGEMENT APPROACH CONTINUED
1. Macroeconomic and
geopolitical environment
Link to strategy
Target risk appetite
KPIs
Revenue, Adjusted EBITA margin,
Adjusted EPS, ROIC
Internally monitored metrics
Key macroeconomic and financial market
indicators, steel, cement, and aluminium
forecasted production.
Risk description
Changes in the global economic
environment, financial markets conditions
and adverse geopolitical developments
may have an impact on the Group’s
revenue and profitability.
The macroeconomic environment changes
leading to sales volume reductions can
arise from industrial factors or from wider
global issues, such as a global economic
conditions, regional conflicts, or global
logistic challenges.
The demand for refractory products is
directly influenced by steel, cement, glass
and non-ferrous metal production, energy
prices and the production methods used
by customers.
Due to the current market situation,
fluctuations in sales volumes have an
impact on the utilisation of production
capacities and consequently on the
Group’s profitability and gearing.
Examples of specific risks:
• Decreasing investment and delays
in customers’ infrastructure projects
(therefore reducing steel and cement
demand) leading to lower refractory
consumption and depressed
sales volumes.
• Customers focusing on lower-cost
and more commoditised refractories
because of low-capacity utilisation.
• Lower sales volumes leading to lower
fixed cost absorption.
• Increasing costs of core resources
and supplies (e.g. energy, labour,
raw materials, freight and packaging).
• Increased trade restrictions, tariffs,
or export bans could disrupt supply
chains and increase material costs.
• Currency fluctuations could impact
the cost of imports and exports.
Target risk appetite
High
Moderate
Limited
Averse
Risk mitigation
• Initiatives to increase the Group’s
resilience, through establishing leaner
processes and lower fixed cost structures
whilst increasing the Group’s market
share and the value for our customers.
• Diversification of geographies
and industries.
• Close monitoring of production
costs fluctuations to guarantee
the expected profitability.
• Price increase initiative to pass
inflationary costs to customers.
• Early leading indicators to ensure
identification of emerging
macroeconomic trends.
• Treasury Policy and usage of financial
instruments to mitigate risk exposure
to financial markets.
• Agile, experienced, and solution-focused
management teams who can respond
quickly and innovatively to challenges.
Risk movement
During 2024, the macroeconomic
environment continued to be challenging
for the refractory industry. The refractory
industry experienced a drop in customer
demand in most markets. In addition
to major ongoing geopolitical conflicts,
2024 saw an increase in smaller but more
frequent crises, the implications of which
can be difficult to assess or predict.
This also led to inflation levels remaining
stable and tightened input production
costs. The outlook for 2025 expects a
stable inflation rate with continued high
interest rates.
The risk appetite remains high (no change
from 2023). The risk score is unchanged and
within the risk appetite but has the potential
to exceed it and is closely monitored.
Link to strategy
Competitiveness
Business model
Markets
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202454
OUR RISK MANAGEMENT APPROACH CONTINUED
Target risk appetite
High
Moderate
Limited
Averse
2. Inability to execute
key strategic initiatives
Link to strategy
Target risk appetite
KPIs
Voluntary employee turnover, Revenue,
Adjusted EBITA margin, Adjusted EPS,
Leverage, ROIC
Internally monitored metrics
Adjusted EBITA from strategic initiatives,
ROIC from strategic initiatives, completion
of strategic initiatives on-time and
on-budget.
Risk description
The Group’s strategic initiatives include
digitalisation, cost optimisation, sales
expansion, production network optimisation,
recycling and M&A projects.
Effective prioritisation and execution are
key to delivering the Group strategy. The
ambition level of these initiatives requires
a high level of management capacity to
effectively deliver change management
and strategic initiatives execution.
The failure to effectively execute these
initiatives because of external or internal
circumstances may lead to lower than
planned financial performance, including
loss of revenue and margin.
Examples of specific risks:
• Failure to develop the Company strategy
into specific actions.
• Failure to react in a timely manner
to a changing environment.
• Failure to identify trends and emerging
technologies.
• Failure to effectively deliver strategic
initiatives.
• M&A underperformance.
• Inability to fully realise benefits from
fixed asset capex investments.
Risk mitigation
• Group-wide strategy with a high focus
on key priorities.
• Postponement or cessation of
strategically non-important projects.
• Strengthening of the culture
of accountability.
• Leadership capability development
programme.
• Deep dive learning-based review
on each strategic initiative.
• Increased focus and oversight of
investments and enhanced financially-
based tracking during the delivery phase
of corporate development and cost
saving initiatives.
• Strong and impactful Group strategy
team to have a broader more challenging
role across the Group, concentrated on
global strategies for core product groups.
Risk movement
Since December 2021 the Group has
undertaken a programme of acquisitions
and much focus has been given to
generating the strategic benefits from
integrating these acquisitions with a
geographically diversified footprint.
In 2024 most focus was dedicated to
the integration of acquired companies
and transformational change projects
to enhance strategic execution and set
a strong basis to be fit for the future.
The Group has taken many learnings from
major capex projects and successfully
embedded these learnings within a new
mindset for capex for future projects.
Considering that the principal risk
covers a broad range of strategic initiatives,
the overall risk score is unchanged and
remains within the risk appetite but requires
close monitoring.
Link to strategy
Competitiveness
Business model
Markets
55RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
OUR RISK MANAGEMENT APPROACH CONTINUED
Target risk appetite
High
Moderate
Limited
Averse
Risk mitigation
• Create a climate that fosters innovation
and “out of the box” thinking.
• Continued investment in R&D,
including, importantly, on sustainability
in line with the Group’s strategy.
• Focus development activity on projects
aimed at an agile and fast impact on
the market.
• Monitoring of key R&D and innovation
metrics.
• Partnering with third-party innovation
leaders.
• Develop a digital strategy and invest
in technology infrastructure, tools,
and talent.
Risk movement
The success of this approach has been
seen in the customer satisfaction surveys.
In 2024, the Company experienced an
increase of non-traditional competitors,
particularly from regions with lower
production costs leveraging an aggressive
pricing strategy and increasing the market
pressures. Therefore the likelihood rating
and overall risk score has increased.
The Company has successfully made
progress on the strategy to enhance
capabilities and market reach through
acquisitions and continues to invest in
recycling business and sustainability.
Furthermore, the Group retains the capability
and ambition to develop customer-facing
digital solutions but aligned to the pace
of change sought by our customers.
The risk remains within the risk appetite
and is consistently monitored.
Link to strategy
Competitiveness
Business model
Markets
3. Significant changes
in the competitive
environment or speed
of disruptive innovation
Link to strategy
Target risk appetite
KPIs
Revenue, Adjusted EBITA margin,
Adjusted EPS, ROIC, R&D & Technical
Marketing Spend
Internally monitored metrics
R&D and technical marketing spend, ROIC
on such spend and time-to-market, sales
of digital products, cost savings generated
by usage of digital technologies.
Risk description
Depending on the ability of the Group to
develop adequate products and services,
the changes in customers’ preferences
towards innovative products may present
either an opportunity or a threat by
increasing pressure on demand
and margins.
The speed of evolution of customer
demand for environmentally beneficial
features, digitalisation and services may
be faster than the pace of implementation
of the Group’s digital strategy.
Examples of specific risks:
• Disruptive product technology
introduced by a competitor.
• Failure to identify digitalisation trends
and technologies.
• Competitors being faster and more
agile in responding to changing
customer requirements.
• New market entrants or non-traditional
competitors leveraging an aggressive
pricing strategy attracting customers.
• Failing to adopt AI-powered predictive
maintenance and manufacturing
processes.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202456
4. Reliability of
the end-to-end
supply chain
Link to strategy
Target risk appetite
KPIs
Revenue, Adjusted EBITA margin,
Adjusted EPS, ROIC
Internally monitored metrics
Refractory lead times, plants’ capacity
utilisation, Supply in Full on Time,
Inventory levels, customer surveys.
Risk description
The journey from raw material to finished
goods can span several months and
might require shipments across the globe.
The ability to react quickly to changes
prompted by internal and external factors
is therefore key to ensuring value delivery
to our customers.
In addition, the ability to forecast the
demand for the Group’s products is key
to enabling efficient and effective planning
of production-related activities, including
procurement, inventory planning and the
size and locations of the plants in our
production network.
Our global operations can be disrupted
by issues in a specific geography or by
industry-wide challenges. However, the
ability to transfer some of the production
between geographies to mitigate the risk
of business interruption can be deployed
as a risk mitigation strategy.
Examples of specific risks:
• Structural weakness in production
network.
• Production interruption at a single-source
manufacturing site.
• Inability to accurately predict customer
demand leading to missed sales
opportunities, inefficient production
planning and additional costs.
• Global logistic challenges impacting
the stability, speed and cost of our
end-to-end supply chain.
• A natural disaster or major political crisis
in one or more countries or regions.
OUR RISK MANAGEMENT APPROACH CONTINUED
Target risk appetite
High
Moderate
Limited
Averse
Risk mitigation
• Supply chain initiatives to improve and
address specific operational challenges.
• Regular reviews of sales, production and
financial plans, as well as longer-term
portfolio decisions, are based on
extensive research.
• Additional system resources leading
to improvements in delivery reliability
and reduction of production backlog.
• Geographical diversification of the
production network.
• Implementation of an optimised
production footprint to meet planned
requirements.
• Risk-based investment policy.
• Global insurance coverage.
• Focus on the minimisation of sole-source
materials and strategically increasing
stock levels.
• Concentrated efforts on increasing
transparency and enhancing the
communication flow.
Risk movement
In 2024 the Group achieved its highest
ever customer satisfaction ratings and the
highest PIFOT rating for on-time deliveries
in a second consecutive period.
Localised logistics challenges are still
monitored and mitigated, such as the
Red Sea shipping lane issues in late 2023.
The focus has evolved to assessing
how well the acquired sites and a more
local-for-local production approach fit with
legacy sites together to form an optimum
production network. This is being evaluated
in a single approach led by global product
strategies. The Group is currently operating
at lower than optimum plant capacity
utilisation levels in anticipation of a recovery
in core markets. Should this recovery not
occur then the risk of structural weakness
in the production network increases,
particularly given the increased plant
footprint from M&A.
Consequently, the likelihood of this risk
and the risk score has increased. The risk
remains within the risk appetite and is
consistently monitored.
Link to strategy
Competitiveness
Business model
Markets
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OUR RISK MANAGEMENT APPROACH CONTINUED
Target risk appetite
High
Moderate
Limited
Averse
Risk mitigation
• Regular environmental audits and risk
monitoring at all sites.
• Well-established Board-level Corporate
Sustainability Committee (“CSC”) to
oversee and challenge management’s
environmental and climate strategy.
• We manage, measure and report our
climate-related risks and opportunities
according to the Task Force on Climate-
related Financial Disclosures (“TCFD”)
recommendations (as described on
pages 64 to 171).
• A climate strategy focused on recycling,
carbon capture and usage, fuel switch,
energy efficiency, and innovative
customer solutions. Read more about
Tackling Climate Change on page 22.
• Increased focus on the use of secondary
raw material as a core element of the
Group’s strategy.
• The geographical diversity of the
Group’s operations and the ability to shift
production reduce the impact of single
events impacting specific geographies.
• Increased focus on sustainable
procurement.
• Executive Long-Term Incentive Plan
(LTIP) and employee bonus linked to
achievement of the Group’s CO
reduction and recycling targets.
Risk movement
In 2024, the risk appetite was changed
from Limited to Moderate. An increasing
regulatory complexity and rising risk of
potential fines is mitigated by the good
progress in the achievement of the
Group sustainability targets.
The strategic partnership between
RHI Magnesita and MCi Carbon to produce
CO-negative mineral value-added
products was granted significant funding
at the end of 2024. This will further support
to build the world’s first Carbon Capture
Utilisation (“CCU”) pilot plant for the
refractory industry in Hochfilzen, Austria.
A continuing major risk for the Group is the
proposed introduction of CBAM. For the
refractory industry, it could create a
significant impact.
The medium-term R&D programme
focused on sustainability improvement
initiatives continued during 2024.
The risk is within the Group’s risk appetite and
is continuously monitored by management.
Link to strategy
Competitiveness
Business model
Markets
5. Sustainability –
environmental and
climate risks
Link to strategy
Target risk appetite
KPIs
Relative CO emissions,
Use of secondary raw material,
Revenue, Adjusted EBITA margin,
Adjusted EPS, ROIC
Internally monitored metrics
Relative CO emissions, use of secondary
raw material, progress towards the
achievement of environmental and
climate targets.
Risk description
Controlled emissions and use of potentially
hazardous materials are inherent to the
production of refractory products.
The risk of failing to meet environmental
regulatory targets or uncontrolled emissions
at our production sites exists and may result
in high financial losses and liabilities.
The evolving regulatory environment,
the increased stakeholders’ focus, and the
Group’s commitment to sustainability led
to increasing investment and effort being
dedicated to achieving environmental
and climate goals.
There are future environmental and
climate targets that can only be met by
new technological solutions to change the
Group’s production processes and by the
delivery of environmental improvements
by the Group’s suppliers and customers.
Examples of specific risks:
• Uncontrolled emissions.
• Inability to meet sustainability targets.
• Failure in meeting stakeholders’
expectations.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202458
OUR RISK MANAGEMENT APPROACH CONTINUED
Target risk appetite
High
Moderate
Limited
Averse
Risk mitigation
• H&S objectives are defined as a core
Company objective, and the performance
is constantly monitored.
• H&S approach is based on leading global
standards and practices, including regular
risk monitoring, emphasis on “near miss”
reporting and root cause analysis.
• Focus on collaboratively enhancing
the H&S approach at customer and
supplier sites.
• Extensive focus on H&S at the Corporate
Sustainability Committee.
• Specific action plans in the event of
employee or contractor H&S incidents.
• Globally harmonised safety
instruction videos.
• Global personal protective equipment
(“PPE”) standards implemented.
• Measures focussing on a safety-conscious
workforce driven by a strong leadership
culture of H&S.
Risk movement
Following the fatal accident in 2023,
the two fatal accidents in 2024, and the
comprehensive root cause analysis of these
accidents with external specialist-led
reviews, initiatives to improve the working
practices and significant cultural changes
in relation to H&S risks were launched.
Additional measures implemented in 2024
include increased specialist resources to
develop global guidelines, and deep-dive
safety workshops with EMT, strengthening
the tone from the top to drive significant
cultural change.
Safety remains the top priority for the
Group with increased focus, investment
and management efforts in order to improve
the overall H&S performance and bring
the risk back to within the risk appetite.
Whilst recognising the measures launched
in 2024 and the planned additional
measures for 2025, Executive Management
emphasise that meaningful change to this
risk can only come from sustained cultural
change across the Group. Recent statistical
analysis showed that a significant level of
all accidents within the Group recorded in
2024 had the potential to be severe or fatal
accidents. Therefore the likelihood rating
of the risk has increased from 2023.
The risk level remains outside the risk
appetite with continued management
commitment to reduce the risk level and
bring it within the risk appetite in 2025.
Link to strategy
Competitiveness
Business model
Markets
6. Sustainability –
Health & Safety risks
Link to strategy
Target risk appetite
KPIs
LTIF, Revenue, Adjusted EBITA margin,
Adjusted EPS, ROIC, SIFp
Internally monitored metrics
Total Recordable Injury Frequency (“TRIF”),
Lost Time Injury Frequency (“LTIF”),
Preventive Ratio, Near Misses, Unsafe
Situations, Serious Injuries & Fatalities (“SIFp”)
Risk description
Employees and contractors may be
exposed to Health & Safety (“H&S”) hazards
in our plants of which inherent risks cannot
be completely eliminated.
Our activities and products may potentially
cause accidents at our customers’ sites.
Beyond the harm to individuals, H&S
incidents can lead to high financial penalties,
site closure, the loss of licence to operate
in geographical territories and a loss in
reputation for the Group.
The health of our employees and
contractors, both mental and physical,
is a significant area of risk to the Group.
Examples of specific risks:
• Fatal or serious accident at
manufacturing or customer site.
• Site shut down due to H&S incidents.
• Loss in reputation for the Group due
to severe H&S accidents.
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OUR RISK MANAGEMENT APPROACH CONTINUED
Target risk appetite
High
Moderate
Limited
Averse
7. Regulatory and
compliance risks
(excluding trade
compliance)
Link to strategy
Target risk appetite
KPIs
Revenue, Adjusted EBITA margin,
Adjusted EPS, ROIC
Internally monitored metrics
Completion rate of various internal
compliance trainings, whistleblowing
reports, data privacy incidents.
Risk description
The Group faces increasing
regulatory complexity and operates
in some geographies with inherently
high corruption risks.
We strive to establish a culture of
compliance throughout the organisation.
We are exposed to regulatory and
compliance risks which may result in
financial losses or operational restrictions.
Regulatory changes could impact the
profitability of our operations and require
investment to achieve compliance.
Examples of specific risks:
• Failure to act in accordance with our
Code of Conduct.
• Violation of anti-bribery and corruption
laws by employees or third-party
representatives.
• Violation of data privacy regulations.
Risk mitigation
• Ethical values supported by strong
corporate culture.
• Code of Conduct and compliance
policies and procedures.
• Enhancement of global training,
documentation of compliance matters
and communication.
• Various whistleblowing channels are
available to employees and external
parties to report compliance concerns.
Concerns can also be reported
anonymously, and all reports are
followed up by qualified professionals.
• Range of interventions performed in
conjunction with each acquired
business to assess regulatory risk and
introduce and embed the Group’s
compliance approach.
Risk movement
In 2024, the risk was re-evaluated
and split into two risks. This risk focuses
on areas of non-compliance as defined
by the Association of International Fraud
Examiners. The second risk relates to Trade
Compliance and is described as principal
risk 9 on page 49.
This risk has decreased. Integration efforts
in 2024 ensured and demonstrated that
acquired entities have a consistent approach
to compliance. This was mainly measured
by the training programmes launched and
the usage of the established reporting
channels. Furthermore, the processes and
systems are deemed effective to prevent
and detect potential misconduct.
The overall risk level is within the Group’s
risk appetite.
Link to strategy
Competitiveness
Business model
Markets
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OUR RISK MANAGEMENT APPROACH CONTINUED
8. Cyber and information
security risks
Link to strategy
Target risk appetite
KPIs
Revenue, Adjusted EBITA margin,
Adjusted EPS, ROIC
Internally monitored metrics
Security incidents classified by severity,
phishing test fail rates, triage escalation time.
Risk description
The Group’s reliance on IT systems and
the greater focus on digitalisation result in
a growing exposure to cyber and information
security risks due to factors such as the
adoption of advanced technologies,
interconnected systems, and sophisticated
cyber threats.
The possible impact of cyber and
information security risks could range from
operational disruptions, loss of intellectual
property, legal compliance issues and
frauds, to significant reputation losses.
Examples of specific risks:
• Intellectual property or confidential
data theft.
• Personal data breach.
• Software or hardware failure leading
to critical business process interruption.
• Cyber-attacks on office and production
IT leading to financial losses
(e.g. ransomware, sabotage).
Risk mitigation
• EMT crisis management simulation
exercise held focusing on cyber security.
• Global information and cyber security
policies drafted in line with information
security best practices, standards
and frameworks.
• Continuous awareness campaign
and training.
• Regular risk assessment and
penetration testing.
• Cyber security detection and
response team.
• Network, device and application
protection.
Risk movement
The Group experienced a continued
increase in the inherent risk level of cyber
and information security risks due to the
fast-evolving cyber and information
security global landscape.
Furthermore, the Company is undergoing
a transformation process that is increasingly
integrating networked production systems,
technologies and digital platforms
throughout the supply chain. While these
innovations enable significant efficiency
and competitive advantages, they also
come with increased inherent cyber
and information security risks.
The Group continued to implement
additional risk-mitigating measures to
respond to this rising threat, including
awareness campaigns, data encryption
and OT security monitoring, and crisis
management simulations.
The risk level is unchanged from 2023.
Leadership commitment to maintaining
robust internal controls and a proactive
cybersecurity strategy remains.
The risk is still evaluated to be within
the Group’s risk appetite and closely
monitored to drive fast responses
to changing external threats.
Target risk appetite
High
Moderate
Limited
Averse
Link to strategy
Competitiveness
Business model
Markets
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OUR RISK MANAGEMENT APPROACH CONTINUED
Target risk appetite
High
Moderate
Limited
Averse
Risk mitigation
• Robust developed trade compliance
policies and procedures, including
mandatory staff training.
• Clear governance structure for
accountability and oversight.
• Automated trade compliance software
to ensure real-time adherence to
export regulations.
• Bespoke compliance risk assessment
and Know-Your-Customers due diligence
procedures for customers, sales agents,
and other business partners.
• Proactive risk-based monitoring
on high-risk business partners.
Risk movement
The specific risk in relation to sanction
regimes and export controls has become
increasingly complex due to the fast pace
of diverse regulatory developments and
the dynamic geopolitical landscape that
encompass cross-border trade.
In 2024, the Group has devoted a
significant amount of time to strengthen
the tone at the top for geographies
considered to be high risk.
Additionally, a higher risk exposure remains
for acquired entities not integrated in the
Group ERP system and automated sanction
and export control risk screenings until
strategic digitalisation projects are
further progressed.
Link to strategy
Competitiveness
Business model
Markets
9. Trade Compliance
Link to strategy
Target risk appetite
KPIs
Penalties and fees, Revenue, EBITA
Internally monitored metrics
Penalties and other fees regarding Trade
Compliance matters, access to markets
and territories, revenue in exposed markets.
Risk description
Trade compliance risks refer to the
potential legal, financial, and reputational
consequences that arise from non-
compliance with international trade laws,
export control regulations, and sanctions.
Examples of specific risks:
• Operating in or trading with sanctioned
countries or entities could lead to severe
penalties, including fines, asset freezes,
and potential criminal charges.
• Violations of export control laws
or import restrictions, including
misclassification of goods,
underreporting values, or failure to
secure required licences, can result
in penalties or shipment delays.
• Frequent changes in trade policies, such
as tariffs, quotas, and trade agreements,
can create uncertainty and require
constant updates to compliance
strategies.
• Risks associated with suppliers,
distributors, and other third-party
intermediaries not adhering to trade laws
can implicate the Group in violations,
even if unintentional.
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OUR RISK MANAGEMENT APPROACH CONTINUED
Target risk appetite
High
Moderate
Limited
Averse
10. Organisational capacity
to execute strategy,
including demonstrating
Company cultural values
Link to strategy
Target risk appetite
KPIs
Gender diversity in leadership, Voluntary
employee turnover, Adjusted EBITA,
Adjusted EPS, ROIC
Internally monitored metrics
Gender diversity in leadership,
Voluntary Employee Turnover, Adjusted
EBITA from strategic initiatives, ROIC
on strategic initiatives.
Risk description
The Group’s corporate culture, combined
with an optimal internal structure, adequate
skills and resources, are key to ensuring the
delivery of the Group strategy. To ensure
access to adequate skills, the Group is
focused on being able to retain talent as
well as attract talent from the market.
A key focus of the Group’s corporate
culture is gender, ethnic and generational
diversity, which is seen as an important
driver to enhance performance.
Examples of specific risks:
• Inability to attract and retain top talent.
• Lack of accountability and responsibility.
• Inconsistent behaviour across the Group.
Risk mitigation
• Specific focus on People and Culture
strategy in the Board and EMT 2024
strategy workshops.
• Continuous emphasis on the Company
culture as a key enabler of performance
and driver of strategy execution.
• Range of other awareness-based
leadership training and initiatives to
support the attraction and retention
of “Generation Z” talent.
• Dedicated leadership capability
enhancement programme.
• “Tone from the Top” leadership culture.
• Developing talent, enhancing diversity
and promoting Company culture
as significant components in the
People Cycle.
• Trainee programme to develop
graduates into future leaders.
Risk movement
Throughout 2024 EMT have successfully
made organisational changes to promote
strategy execution which have confirmed
the capacity is in place to deliver the
strategy, together with the organisational
flexibility to adapt to emerging challenges.
The risk appetite was tightened to ensure
a focus on people retention and managing
any impact within acceptable levels. The
Group has high levels of people retention
and views people attraction risk as low
in the short to medium term. Therefore,
the likelihood of this risk has been reduced
and the risk score reduced.
The risk remains within the risk appetite
and is closely monitored by leadership.
Link to strategy
Competitiveness
Business model
Markets
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Sustainability
Statement
In compliance with the provisions of the Corporate
Sustainability Reporting Directive (“CSRD”),
article 29(a) of EU Directive 2013/34/EU,
including compliance with the European
Sustainability Reporting Standards (ESRS)
and the Taxonomy Regulation, Article 8
of EU Regulation 2020/852.
SUSTAINABILITY
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202464
CONSOLIDATED SUSTAINABILITY STATEMENT
RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024 — 65
Contents
Contents ......................................................................................................................................................................................................................... 65
General Information .................................................................................................................................................................................................. 73
Overview ................................................................................................................................................................................................................. 73
Application of CSRD and ESRS ....................................................................................................................................................................... 73
Categories of ESRS standards .......................................................................................................................................................................... 73
Sector-agnostic disclosures according to cross-cutting and topical standards .................................................................................... 73
Disclosures according to topical ESRS ....................................................................................................................................................... 73
Group-specific disclosures........................................................................................................................................................................... 73
CO2 and Energy intensity targets and metrics .......................................................................................................................................... 73
Health and Safety performance .................................................................................................................................................................... 74
Recyclability of spent refractories ................................................................................................................................................................ 74
Avoided Emissions .......................................................................................................................................................................................... 74
Recycling rate ................................................................................................................................................................................................. 74
Scope 3 emissions due to purchased raw materials ................................................................................................................................... 74
Scope 1 emissions due to geogenic process emissions ............................................................................................................................. 74
Supply of enabling technologies and low carbon footprint products ...................................................................................................... 74
The number of ETS certificates and ETS expenditures .............................................................................................................................. 74
Workplace safety incidents and potential incidents of forced labour in the supply chain ................................................................... 74
Reporting areas ................................................................................................................................................................................................... 74
Double materiality as the basis for our sustainability disclosures ................................................................................................................ 74
ESRS 2 General disclosures ................................................................................................................................................................................. 75
Basis for preparation .......................................................................................................................................................................................... 75
Disclosure requirement BP-1 – General basis for preparation of the Consolidated Sustainability Statements ................................ 75
Scope of consolidation ................................................................................................................................................................................. 75
Upstream and downstream value chain ...................................................................................................................................................... 75
Exemptions ..................................................................................................................................................................................................... 76
Disclosure requirement BP-2 – Disclosures in relation to specific circumstances............................................................................... 76
Time horizons ................................................................................................................................................................................................. 76
Value chain estimation .................................................................................................................................................................................. 76
Sources of estimation and outcome uncertainty ....................................................................................................................................... 76
Changes in preparation or presentation of sustainability information .................................................................................................... 76
Reporting errors in prior periods .................................................................................................................................................................. 76
Disclosures stemming from other legislation or generally accepted sustainability reporting pronouncements .............................. 77
Incorporation by reference ........................................................................................................................................................................... 77
Use of phase-in provisions in accordance with Appendix C of ESRS 1 ................................................................................................... 77
Governance .................................................................................................................................................................................................... 77
Disclosure requirement GOV-1 – The role of the administrative, management and supervisory bodies .......................................... 77
Board powers, responsibilities and representation; EMT and delegation of authority; Board composition; Board diversity ............ 77
Executive Management Team ...................................................................................................................................................................... 77
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CONSOLIDATED SUSTAINABILITY STATEMENT CONTINUED
CONSOLIDATED SUSTAINABILITY STATEMENT
As at 31 December 2024
66 — RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024
EMT role in managing and overseeing sustainability impacts, risks and opportunities ........................................................................ 77
EMT skill and experience in sustainability matters .................................................................................................................................... 78
Process for setting and monitoring sustainability targets ......................................................................................................................... 78
Corporate Sustainability Committee (“CSC”) ............................................................................................................................................ 79
CSC role in managing and overseeing sustainability impacts, risks and opportunities ....................................................................... 79
CSC skill and experience in sustainability matters ................................................................................................................................... 79
Sustainability governance structure .......................................................................................................................................................... 80
Board skills and experience ......................................................................................................................................................................... 80
Disclosure requirement GOV-2 – Information provided to, and sustainability matters addressed by the undertaking’s
administrative, management and supervisory bodies .............................................................................................................................. 80
How CSC is informed about impacts, risks and opportunities ................................................................................................................ 80
How Board considers sustainability related impacts, risks and opportunities ....................................................................................... 80
Disclosure requirement GOV-3 – Integration of sustainability-related performance in incentive schemes .................................... 81
Annual bonus .................................................................................................................................................................................................. 81
Long-term incentive plan (LTIP) .................................................................................................................................................................... 81
Disclosure requirement GOV-4 – Statement on due diligence ............................................................................................................. 82
Disclosure requirement GOV-5 – Risk management and internal controls over sustainability reporting ........................................ 82
Strategy ........................................................................................................................................................................................................... 83
Disclosure requirement SBM-1 – Strategy, business model and value chain ....................................................................................... 83
Business model .............................................................................................................................................................................................. 84
Value chain ..................................................................................................................................................................................................... 85
Significant products and services offered................................................................................................................................................... 85
Significant markets and customers served ................................................................................................................................................. 85
Banned products ........................................................................................................................................................................................... 85
Business relationships along the value chain ............................................................................................................................................ 85
Upstream business actors ............................................................................................................................................................................. 85
Disclosure requirement SBM-2 – Interests and views of stakeholders .................................................................................................. 86
Disclosure requirement SBM-3 – Material impacts, risks and opportunities and their interaction with strategy and business model
......................................................................................................................................................................................................................... 86
Material impacts, risks and opportunities and their interaction with strategy and business model .................................................... 86
Impact, risk and opportunity management ..................................................................................................................................................100
Disclosure Requirement IRO-1 – Description of the process to identify and assess material impacts, risks and opportunities....100
Impact materiality assessment ...................................................................................................................................................................100
Identification of impacts............................................................................................................................................................................... 101
Scoping and classification of individual impacts ...................................................................................................................................... 101
Assessment of significance of individual impacts .................................................................................................................................... 101
Analysis of results and materiality thresholds ........................................................................................................................................... 101
Financial materiality assessment ................................................................................................................................................................ 101
Gap analysis .................................................................................................................................................................................................. 101
Risk mapping against ESRS topics .............................................................................................................................................................. 101
Analysis of results and materiality thresholds .......................................................................................................................................... 102
Stakeholder perception and validation of Double Materiality Assessment (“DMA”) results............................................................... 102
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CONSOLIDATED SUSTAINABILITY STATEMENT CONTINUED
RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024 — 67
Results ........................................................................................................................................................................................................... 102
Disclosure requirement IRO-2 – Disclosure requirements in ESRS covered by the undertaking’s Consolidated Sustainability
Statement ..................................................................................................................................................................................................... 102
MDR – minimum disclosure requirements .............................................................................................................................................. 107
Environmental information..................................................................................................................................................................................... 108
Disclosures pursuant to Article 8 of Regulation (EU) 2020/852 (Taxonomy Regulation) .......................................................................... 108
Accounting policy ....................................................................................................................................................................................... 108
Taxonomy eligible activities of RHI Magnesita ......................................................................................................................................... 108
Manufacture of other low carbon technologies ....................................................................................................................................... 108
EAF refractories ............................................................................................................................................................................................ 108
Digital Solutions........................................................................................................................................................................................... 109
Material recovery from non-hazardous waste .......................................................................................................................................... 109
Sorting and material recovery of non-hazardous waste ......................................................................................................................... 109
Conservation and restoration of habitats, ecosystems and species ....................................................................................................... 110
KPIs ................................................................................................................................................................................................................. 110
Turnover ......................................................................................................................................................................................................... 110
Capital expenditure ...................................................................................................................................................................................... 110
Operating expenditure ................................................................................................................................................................................. 110
Avoidance of double counting ...................................................................................................................................................................... 111
Do No Significant Harm (“DNSH”) ................................................................................................................................................................. 111
DNSH to climate change adaptation ............................................................................................................................................................ 111
Activity 5.9 ...................................................................................................................................................................................................... 111
DNSH to protection and restoration of biodiversity and ecosystems ....................................................................................................... 111
Activity 5.9 ...................................................................................................................................................................................................... 111
Minimum social safeguards ........................................................................................................................................................................... 111
Proportion of turnover from products or services associated with Taxonomy-aligned economic activities – disclosure covering
year 2024 ....................................................................................................................................................................................................... 113
Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering year
2024 ................................................................................................................................................................................................................ 114
Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering year
2024 ................................................................................................................................................................................................................ 115
Scope of taxonomy-eligibility and compliance per environmental objective – disclosure covering year 2024 ............................ 116
ESRS E1 Climate change....................................................................................................................................................................................... 117
ESRS 2 General disclosures ............................................................................................................................................................................. 117
Governance ........................................................................................................................................................................................................ 117
Disclosure requirement related to ESRS 2 GOV-3 Integration of sustainability-related performance in incentive schemes ......... 117
Annual bonus ................................................................................................................................................................................................. 117
Long-term incentive plan (LTIP) ................................................................................................................................................................... 117
Disclosure requirement related to ESRS 2 SBM-3 – Material impacts, risks and opportunities and their interaction with strategy
and business model....................................................................................................................................................................................... 117
Climate strategy ............................................................................................................................................................................................. 117
Short term (2025) .......................................................................................................................................................................................... 117
Medium term (2030) ..................................................................................................................................................................................... 117
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CONSOLIDATED SUSTAINABILITY STATEMENT CONTINUED
CONSOLIDATED SUSTAINABILITY STATEMENT
As at 31 December 2024
68 — RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024
Long-term (2050) ......................................................................................................................................................................................... 117
Impact of climate-related risks on the Group’s strategy ........................................................................................................................... 118
Impact, risk and opportunity management ................................................................................................................................................... 119
Disclosure requirement related to ESRS 2 IRO-1 – Description of the processes to identify and assess material climate-related
impacts, risks and opportunities ................................................................................................................................................................. 119
Climate risks and opportunities management .......................................................................................................................................... 119
Climate-related transitional risks and opportunities ............................................................................................................................... 120
Risks ............................................................................................................................................................................................................... 120
Opportunities ................................................................................................................................................................................................. 121
Climate-related physical risks .................................................................................................................................................................... 125
Classification of climate hazards (source: Commission Delegated Regulation (EU) 2021/2139) ...................................................... 126
Disclosure requirement E1-1 – Transition plan for climate change mitigation ..................................................................................... 128
Carbon capture and utilisation .................................................................................................................................................................. 129
Alternative fuels including hydrogen and biofuels ................................................................................................................................. 129
Reducing the carbon intensity of energy ................................................................................................................................................. 129
Investment and funding .............................................................................................................................................................................. 129
Locked- in emissions ................................................................................................................................................................................... 129
Disclosure requirement E1-2 – Policies related to climate change mitigation and adaptation ........................................................ 130
Disclosure requirement E1-3 – Actions and resources in relation to climate change policies ......................................................... 130
Metrics and targets ........................................................................................................................................................................................ 131
Greenhouse gas emissions methodologies ................................................................................................................................................ 131
Disclosure requirement E1-4 – Targets related to climate change mitigation and adaptation .......................................................... 132
Targets related to climate change mitigation and adaptation Assumptions and methodologies ............................................. 134
Disclosure Requirement E1-5 – Energy consumption and mix .............................................................................................................. 135
Energy intensity based on net sales ................................................................................................................................................ 136
Connectivity of energy intensity based on net revenue with financial reporting information ................................................. 136
Disclosure requirement E1-6 – Gross scopes 1, 2, 3 and total GHG emissions .................................................................................... 137
Scope 1 emissions ......................................................................................................................................................................................... 137
Emission factors ............................................................................................................................................................................................ 137
Scope 2 emissions ........................................................................................................................................................................................ 138
Scope 3 emissions ........................................................................................................................................................................................ 138
Disaggregation of GHG emissions ..................................................................................................................................................... 141
Percentage of Scope 1 GHG emissions from regulated emission trading scheme (%) ................................................................ 141
Emissions from biogenic fuels and additives .................................................................................................................................... 141
Percentage of contractual instruments, Scope 2 GHG emissions ................................................................................................ 142
Current and future financial resources allocated to action plan (OpEx) ...................................................................................... 143
Current and future financial resources allocated to action plan ................................................................................................... 143
Revenue from refractory products that enables decarbonisation in the customer industries (e.g. EAF; ESF; BOF; DRI) ....... 143
GHG intensity per net revenue.................................................................
......................................................................................... 143
Connectivity of energy intensity based on net revenue with financial reporting information .................................................. 143
Disclosure requirement E1-7 – GHG removals and GHG mitigation projects financed through carbon credits ............................. 143
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Disclosure requirement E1-8 – Internal carbon pricing ..........................................................................................................................144
Disclosure requirement E1-9 – Anticipated financial effects from material physical and transition risks and potential climate-
related opportunities ....................................................................................................................................................................................144
ESRS E2 Pollution .................................................................................................................................................................................................144
ESRS 2 General disclosures ............................................................................................................................................................................144
Impact, risk and opportunity management ...................................................................................................................................................144
Disclosure requirement related to ESRS 2 IRO-1 – Description of the processes to identify and assess material pollution-related
impacts, risks and opportunities .................................................................................................................................................................144
Disclosure requirement E2-1 – Policies related to pollution ..................................................................................................................144
Disclosure requirement E2-2 – Actions and resources related to pollution ........................................................................................ 145
Metrics and targets ........................................................................................................................................................................................... 145
Disclosure requirement E2-3 – Targets related to pollution .................................................................................................................. 145
Disclosure requirement E2-4 – Pollution of air, water and soil .............................................................................................................. 145
Disclosure requirement E2-5 – Metrics and targets ................................................................................................................................ 145
Air pollutants methodology at RHI Magnesita .......................................................................................................................................... 145
Disclosure requirement E2-6 – Anticipated financial effects from pollution-related risks and opportunities ............................... 146
ESRS E3 Water and marine resources ................................................................................................................................................................ 147
ESRS 2 General disclosures ............................................................................................................................................................................ 147
Impact, risk and opportunity management ................................................................................................................................................... 147
Disclosure requirement related to ESRS 2 IRO-1 – Description of the processes to identify and assess material water and marine
resources-related impacts, risks and opportunities .................................................................................................................................. 147
Water usage in refractory manufacturing .................................................................................................................................................. 147
Assessment of water impact in RHI Magnesita’s value chain .................................................................................................................. 147
Water risk management in the supply chain ............................................................................................................................................. 147
Conclusion .................................................................................................................................................................................................... 147
ESRS E4 Biodiversity and ecosystems ESRS 2 General disclosures ..............................................................................................................148
Impact, risk and opportunity management ...................................................................................................................................................148
Disclosure requirement related to ESRS 2 IRO-1 – Description of the processes to identify and assess material biodiversity and
ecosystems-related impacts, risks and opportunities ..............................................................................................................................148
Contribution to direct impact drivers on biodiversity loss ...........................................................................................................................148
Impacts on species and ecosystems ..............................................................................................................................................................148
Biodiversity materiality assessment approach ..............................................................................................................................................148
Biodiversity risk management in the supply chain .......................................................................................................................................148
Stakeholder considerations and Management conclusion ........................................................................................................................ 149
ESRS E5 Resource use and circular economy ................................................................................................................................................. 149
ESRS 2 General disclosures ........................................................................................................................................................................... 149
Impact, risk and opportunity management .................................................................................................................................................. 149
Disclosure requirement related to ESRS 2 IRO-1 – Description of the processes to identify and assess material resource use and
circular economy-related impacts, risks and opportunities ................................................................................................................... 149
Disclosure requirement E5-1 – Policies related to resource use and circular economy .................................................................... 149
Disclosure requirement E5-2 – Actions and resources related to resource use and circular economy .......................................... 150
Recycling ...................................................................................................................................................................................................... 150
2024 highlights in recycling initiatives .................................................................................................................................................... 150
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CONSOLIDATED SUSTAINABILITY STATEMENT CONTINUED
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Metrics and targets .......................................................................................................................................................................................... 150
Disclosure requirement E5-3 – Targets related to resource use and circular economy .................................................................... 150
Disclosure requirement E5-4 – Resource inflows .................................................................................................................................... 151
Resource inflow .................................................................................................................................................................................... 151
Financial resources (Capex) ................................................................................................................................................................ 151
Assumptions and Methodology ......................................................................................................................................................... 151
Disclosure requirement E5-6 – Anticipated financial effects from resource use and circular economy-related impacts, risks and
opportunities ................................................................................................................................................................................................. 152
Social information .................................................................................................................................................................................................... 153
ESRS S1 Own workforce ....................................................................................................................................................................................... 153
ESRS 2 General disclosures ............................................................................................................................................................................ 153
Strategy .............................................................................................................................................................................................................. 153
Disclosure requirement related to ESRS 2 SBM-2 – Interests and views of stakeholders .................................................................. 153
Disclosure requirement related to ESRS 2 SBM-3 – Material impacts, risks and opportunities and their interaction with strategy
and business model...................................................................................................................................................................................... 153
Health and safety .............................................................................................................................................................................................. 153
Impact, risk and opportunity management ................................................................................................................................................... 153
Disclosure requirement S1-1 – Policies related to own workforce .......................................................................................................... 153
Policies ........................................................................................................................................................................................................... 153
Policies supporting workforce engagement .............................................................................................................................................. 153
All the aforementioned policies are available on the Group’s website and apply to RHI Magnesita’s workforce. The Health and
Safety Policy extends further, covering both employees and contractors. ............................................................................................ 154
Disclosure requirement S1-2 – Processes for engaging with own workforce and workers’ representatives about impacts ........... 154
Focusing on vulnerable and marginalised groups ................................................................................................................................... 154
Employee engagement initiatives .............................................................................................................................................................. 154
Disclosure requirement S1-3 – Processes to remediate negative impacts and channels for own workforce to raise concerns .... 155
Workplace risk assessments ........................................................................................................................................................................ 155
Incident management report ...................................................................................................................................................................... 155
Global standardisation for health and safety excellence ........................................................................................................................ 155
Disclosure requirement S1-4 – Taking action on material impacts on own workforce, and approaches to managing material risks
and pursuing material opportunities related to own workforce, and effectiveness of those actions ................................................. 156
Actions .............................................................................................................................................................................................................. 156
Metrics and targets ........................................................................................................................................................................................... 157
Disclosure requirement S1-5 – Targets related to managing material negative impacts, advancing positive impacts, and managing
material risks and opportunities .................................................................................................................................................................. 157
Health and safety methodologies ................................................................................................................................................................... 157
Health and safety targets ................................................................................................................................................................................. 157
Human rights ..................................................................................................................................................................................................... 158
Potential negative impact of forced labour ................................................................................................................................................ 158
Policies ........................................................................................................................................................................................................... 158
Policies supporting workforce engagement .............................................................................................................................................. 158
General approach to addressing material negative impacts ................................................................................................................... 158
Whistleblowing hotline ............................................................................................................................................................................... 158
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Channels for workforce to raise concerns ................................................................................................................................................ 159
Tracking, monitoring, and effectiveness evaluation ................................................................................................................................ 159
Protection against retaliation ..................................................................................................................................................................... 159
Actions towards preventing human rights issues, including potential incidents of forced labour .................................................... 159
Training ......................................................................................................................................................................................................... 159
Metrics and targets ...................................................................................................................................................................................... 160
Disclosure requirement S1-6 – Characteristics of RHI Magnesita employees .................................................................................... 160
Assumptions and Methodologies .............................................................................................................................................................. 160
Definition of headcount: ............................................................................................................................................................................. 160
Full-time equivalent (“FTE”) calculations: ................................................................................................................................................ 160
Inclusion criteria: ......................................................................................................................................................................................... 160
Hires and turnovers: ..................................................................................................................................................................................... 160
Turnovers by leave category: ...................................................................................................................................................................... 160
Turnover rate: ............................................................................................................................................................................................... 160
Table 3 – Employees by type of contract and gender .................................................................................................................. 162
Table 4 – Employees by type of contract and region ................................................................................................................... 163
Table 5 – Number of employee turnover ....................................................................................................................................... 163
Disclosure requirement S1-14 – Health and safety metrics ................................................................................................................... 163
Assumptions and Methodologies .................................................................................................................................................... 163
Health and safety performance ................................................................................................................................................................. 164
Disclosure requirement S1-17 – Incidents, complaints and severe human rights impacts ................................................................ 164
ESRS S2 Workers in the value chain ................................................................................................................................................................. 165
ESRS 2 General disclosures ........................................................................................................................................................................... 165
Strategy ............................................................................................................................................................................................................. 165
Disclosure requirement related to ESRS 2 SBM-2 Interests and views of stakeholders ...................................................................... 165
Disclosure requirement related to ESRS 2 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and
business model ............................................................................................................................................................................................ 165
Systemic challenges ................................................................................................................................................................................... 165
Impact, risk and opportunity management .................................................................................................................................................. 165
Disclosure requirement S2-1 – Policies related to value chain workers ............................................................................................... 165
Disclosure requirement S2-2 – Processes for engaging with value chain workers about impacts .................................................. 166
Disclosure requirement S2-3 – Processes to remediate negative impacts and channels for value chain workers to raise concerns
....................................................................................................................................................................................................................... 166
Disclosure requirement S2-4 – Taking action on material impacts on value chain workers, and approaches to managing material
risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions ............................... 166
Metrics and targets ........................................................................................................................................................................................... 167
Assumptions and Methodologies ............................................................................................................................................................... 167
Disclosure requirement S2-5 – Targets related to managing material negative impacts, advancing positive impacts, and managing
material risks and opportunities .................................................................................................................................
................................. 167
Governance information ......................................................................................................................................................................................... 168
ESRS G1 Business conduct ................................................................................................................................................................................. 168
ESRS 2 General disclosures ........................................................................................................................................................................... 168
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CONSOLIDATED SUSTAINABILITY STATEMENT
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Governance ...................................................................................................................................................................................................... 168
Disclosure requirement related to ESRS 2 GOV-1 – The role of the administrative, supervisory and management bodies ......... 168
Impact, risk and opportunity management .................................................................................................................................................. 168
Disclosure requirement related to ESRS 2 IRO-1 – Description of the processes to identify and assess material impacts, risks and
opportunities ................................................................................................................................................................................................ 168
Disclosure requirement G1-1– Business conduct policies and corporate culture .............................................................................. 168
How RHI Magnesita fosters its corporate culture ..................................................................................................................................... 168
Mechanisms for identifying, reporting and investigating concerns ...................................................................................................... 168
Disclosure requirement G1-2 – Management of relationships with suppliers .................................................................................... 169
Supply chain due diligence ....................................................................................................................................................................... 169
Supplier code of conduct ........................................................................................................................................................................... 169
Supplier assessments through EcoVadis .................................................................................................................................................. 169
Supplier on-site assessments .................................................................................................................................................................... 170
Supplier product carbon footprint ............................................................................................................................................................. 170
Supplier collaboration ................................................................................................................................................................................ 170
Disclosure requirement G1-3 – Prevention and detection of corruption or bribery ........................................................................... 170
Metrics and targets ............................................................................................................................................................................................ 171
Disclosure requirement G1-4 – Incidents of corruption or bribery ......................................................................................................... 171
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General Information
Overview
RHI Magnesita’s sustainability objectives are based on our core values. We believe that long-term financial success is only possible if we
also deliver our sustainability goals. RHI Magnesita’s purpose is to master heat, enabling global industries to build sustainable modern life.
Our advanced products are essential for our customers in the steel, cement, metals, glass, energy and chemicals industries. Through the
reliable supply of innovative refractory products and services, we enable our customers to sustainably deliver the basic materials that are
essential for modern life. We aim to be our customers’ partner of choice on their own decarbonisation journeys.
Our sustainability strategy is based on the ten Principles of the UN Global Compact (“UNGC”).
RHI Magnesita’s sustainability strategy is focused on:
• Excellent workplace Health & Safety;
• Climate change and environmental impact mitigation;
• Increased use of secondary raw materials to reduce CO
2
emissions;
• R&D investment to develop emissions avoidance, alternative fuels, and carbon capture, storage and utilisation technologies;
• Partnering with our customers to reduce their emissions through innovative refractory products or solutions contracts, including
enabling technologies such as EAF refractories;
• Sustainable procurement practices;
• Upholding diversity in the workplace;
• Building strong relationships with all stakeholders including communities, employees and governments; and
• Linking debt facilities and management compensation to sustainability performance.
Application of CSRD and ESRS
The Consolidated Sustainability Statement was prepared in accordance with the European Sustainability Reporting Standards (ESRS) as
adopted by the European Commission and compliant with the reporting requirements provided for in Article 8 of Regulation (EU) 2020/852
(“Taxonomy Regulation”). The CSRD is not yet transposed into national law in the Netherlands.
This Consolidated Sustainability Statement forms part of the Group’s management report. Certain sections are incorporated by reference
to other parts of the 2024 Annual Report and Accounts, as indicated. All material information on sustainability-related impacts, risks and
opportunities has been presented in accordance with the applicable ESRS, based on the outcome of a Double Materiality Assessment
(“DMA”).
Categories of ESRS standards
Cross cutting and topical standards are provided, in accordance with ESRS. Where material and necessary to improve understanding,
Group-specific information is also disclosed.
Sector-agnostic disclosures according to cross-cutting and topical standards
The ESRS are divided into different categories of standards. The general standards ESRS 1 General Requirements and ESRS 2 General
Disclosures apply to the sustainability aspects covered by thematic and topical standards. The preparation and presentation of this Con-
solidated Sustainability Statement is in line with the general requirements of ESRS 1. According to ESRS 2, we meet the disclosure require-
ments with regard to the information that our Group must provide at a general level with regard to all material sustainability aspects in the
reporting areas of governance, strategy, management of impacts, risks and opportunities, and key figures and objectives.
Disclosures according to topical ESRS
In addition, based on the results of our DMA, we disclose sustainability information in accordance with the thematic standards relating to
the environment, social issues and responsible corporate governance. Information on environmental, social and governance issues covered
by the ESRS whose impacts, risks and opportunities were assessed as “not material” for both our business and the ESG aspects are disregard
in accordance with ESRS 1.
Group-specific disclosures
We have identified impacts, risks, and opportunities that are not adequately covered by an ESRS standards.
CO2 and Energy intensity targets and metrics
To ensure effective sustainability management, RHI Magnesita has implemented intensity-based targets, including CO₂ intensity (CO₂
emissions per tonne of product) and energy intensity (energy consumption per tonne of product). This adaptive approach allows the Group
to respond to evolving business conditions and economic growth. Structural changes, such as mergers, acquisitions, or shifts in market
demand, can significantly influence overall emissions, making it challenging to adhere to rigid absolute targets. Intensity-based targets,
however, offer the flexibility needed to accommodate business expansion while maintaining a strong focus on emissions efficiency.
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CONSOLIDATED SUSTAINABILITY STATEMENT
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74 — RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024
Health and Safety performance
The Group reports its Lost Time Injury Frequency (“LTI F ”) per 200,000 hours worked as the key metric for its 2025 health and safety per-
formance.
The Group will use Total Recordable Injuries (“TRI”) as metric per 200,000 hours worked to monitor progress to achieve 2030 health and
safety target (TRI<1.2 per 200,000 hours worked)
Recyclability of spent refractories
The Group has established a global sourcing guideline for recycling, which serves as an internal framework for purchasing spent refractories
and incorporates recyclability as a company-specific metric. This guideline provides guidance on sourcing spent refractories from various
industries and applies across all global regions to all personnel involved in the procurement process.
Avoided Emissions
Avoided emissions resulting from optimised heat management solutions are entity specific and not covered by a specific ESRS disclosure
requirement. The Group intends to develop KPIs and disclose in future, in line with phase-in requirements.
Recycling rate
The Group uses the recycling rate metric to measure and enhance resource efficiency use and circular economy integration. The metric is
based on actual consumption of recycled material and total consumption of raw materials in refractories.
Scope 3 emissions due to purchased raw materials
The Group uses Scope 3 emissions associated with purchased raw materials as a metric to track progress in reducing its carbon footprint.
Scope 1 emissions due to geogenic process emissions
The Group uses Scope 1 emissions associated with raw material processing as a metric to monitor the geogenic emissions. It is an entity
specific metric and is not covered by a specific ESRS disclosure requirement.
Supply of enabling technologies and low carbon footprint products
The supply of enabling technologies and low carbon footprint products for customers to reduce emissions in the downstream value chain
is an entity specific opportunity and is not covered by a specific ESRS disclosure requirement.
The number of ETS certificates and ETS expenditures
The Group uses the number of ETS certificates and ETS expenditures to monitor financial impact on operating and capital expenditures
due to changes in policy and regulation. These are entity specific metrics and are not covered by a specific ESRS disclosure requirement.
Workplace safety incidents and potential incidents of forced labour in the supply chain
The Group collects and assesses supplier data as metric to monitor these topics. They are entity specific and not covered by ESRS standards.
Reporting areas
The disclosure requirements in ESRS 2, topic-related ESRS and topical ESRS are divided into the following reporting areas:
• Governance (“GOV”): the governance procedures, controls and processes for monitoring, managing and overseeing impacts, risks
and opportunities;
• Strategy (Strategy and business model, “SBM”): the interaction of the Group's strategy and business model with its material im-
pacts, risks and opportunities, including how the Group deals with these impacts, risks and opportunities;
• Impact, risk and opportunity management (“IRO”): the process(es) by which the Group identifies impacts, risks and opportunities
and assesses their materiality (see IRO-1 in Section 4.1 of ESRS 2) and addresses material sustainability aspects through concepts
and measures; and
• Metrics and targets (“MT”): the performance of the Group, including the objectives it has set and the progress made towards
achieving those objectives.
Double materiality as the basis for our sustainability disclosures
The principle of double materiality is of fundamental importance for this Consolidated Sustainability Statement. This report should help
users understand RHI Magnesita's impact on ESG aspects (inside out) and how sustainability factors influence the Group's financial position,
performance, cash flows, and access to finance or capital cost (outside in). The materiality analysis is the basis of sustainability reporting
under the ESRS. A sustainability aspect is "material" if it meets the criteria of materiality of impacts or financial materiality or both. This
means that information is considered material, even if only one perspective is met. The materiality analysis is the basis for identifying ma-
terial impacts, risks and opportunities. We explain the details of our materiality analysis in the following chapter ESRS 2 General information,
disclosure requirement IRO-1 – “Description of the procedure for identifying and assessing the material impacts, risks and opportunities“.
A detailed overview of the business model and a representation of the Group’s value chain can be found on pages 8-11, “Our business
model and value chain”, of this Annual Report.
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ESRS 2 General disclosures
Basis for preparation
Disclosure requirement BP-1 – General basis for preparation of the Consolidated Sustainability Statements
The Consolidated Sustainability Statement for this year has been prepared in accordance with Article 29a of EU Directive 2013/34/EU. This
includes compliance with the ESRS and adherence to the disclosure requirements set forth in Article 8 of EU Regulation 2020/852 (the
“Taxonomy Regulation”).
To ensure transparency and alignment with regulatory expectations, we disclose all mandatory reporting requirements and provide cross-
references to other relevant sections of the Annual Report under the principle of ‘Incorporation by Reference‘. Certain disclosures related
to strategy and corporate governance, as outlined in the cross-cutting standard ESRS 2, have been integrated into other sections of this
report - specifically, the corporate governance, risk management, and remuneration reports - where they are best contextualised alongside
related information.
Finally, as a supporter of the Task Force on Climate-related Financial Disclosures (“TCFD”), RHI Magnesita has reviewed, identified and
quantified the climate-related risks and opportunities relevant to our business.
Scope of consolidation
The scope of this report, along with the accompanying financial and sustainability statements, is fully aligned and consolidated at the RHI
Magnesita N.V. level. It encompasses the Parent Company, RHI Magnesita N.V., and all directly and indirectly controlled subsidiaries. The
sustainability statements specifically cover information related to RHI Magnesita and, where available, its main value chain and business
relationships.
Upstream and downstream value chain
The Consolidated Sustainability Statement covers the Group’s upstream and downstream value chain where impacts, risks or opportunities
are deemed to be material, for example in relation to CO
2
emissions and supplier sustainability performance. The Group manufactures and
purchases from external parties’ refractory raw materials which have a high CO
2
intensity, due to fuel-based and geogenic emissions asso-
ciated with their production. Scope 3 emissions from purchased raw materials are reported, based on estimates of likely supplier emissions
using the Group’s knowledge of the raw material production process. Downstream Scope 3 emissions including transportation are also
reported. Scope 3 emissions directly related to the use of the Group’s products by customers (i.e. direct use-phase emissions) have been
included in category 11 of Scope 3 in the Group’s reported emissions.
The emissions of the Group’s customers associated with their activities whilst using refractory products (but not directly arising from the
consumption of refractories) are significant, due to the high energy and CO
2
intensity of customer industrial processes. Based on the
Group’s calculated market share as a refractory supplier to the steel, cement, non-ferrous metals and glass sectors and using estimates for
the total global emissions of those customer industries, these customer emissions are estimated to be approximately 1.4 billion tonnes of
CO
2
eq annually. The Group’s Scope 1, Scope 2 and Scope 3 emissions amounted to 5.9 million tonnes CO
2
eq in 2024 (market based
methodology), i.e. approximately 0.4% of the combined total, if customers’ emissions are included in total reported emissions by the Group
as indirect use-phase emissions. Through GHG Protocol, ESRS recommends reporting indirect use-phase emissions from the use of sold
products when such emissions are significant. However, the Group does not include these indirect emissions in its Scope 3 inventory as it
concluded that this recommended guidance is not applicable for the Group for the following reasons:
• No guidelines exist for the refractory industry as to whether such Scope 3 emissions should be reported by refractory pro-
ducers and which methodologies for recognition and allocation of indirect use-phase emissions would be reasonable and
supportable,
• There is a significant likelihood of inaccuracy in estimations and allocations, since a thinkable methodology would be based
on top-down estimates by industry and would not take account of possible differences in the carbon footprint of the Group’s
customers versus other emitters in that industry as it is currently not possible to comprehensively gather data from customers
to obtain more accurate estimates of customer emissions, and
• RHI Magnesita has no control over these emissions which are separately reported and managed by the Group’s customers,
although the Group does offer products and services aimed at assisting its customers to reduce CO
2
emissions.
RHI Magnesita's assessment of impacts, risks, and opportunities of its upstream and downstream value chain considers factors such as the
scale and scope of impacts, stakeholder expectations, financial and reputational risks, and alignment with the Group's strategic priorities.
By evaluating the extent and severity of topics across environmental, social, and economic dimensions, the Group ensures a balanced
approach to identifying material issues. Moreover, incorporating market trends, regulatory developments, and alignment with global frame-
works such as the UN Sustainable Development Goals (“SDGs”) highlights the Group's commitment to addressing both current and future
challenges.
Where relevant, our disclosures, policies, actions and targets extend to both our upstream and downstream value chain. For example, all of
the principles contained within the Group’s Code of Conduct are also included in the Supplier Code of Conduct, which all suppliers are
expected to abide by. Similarly, RHI Magnesita’s CO
2
emissions intensity target has always included Scope 3 emissions from purchased raw
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76 — RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024
materials since it was first established in 2019. The scope of the 2030 target has now been increased to include Scope 3 emissions from
transportation, which is a downstream source. The definition of each sustainability target clearly sets out whether the upstream or down-
stream value chain is included.
Exemptions
No material information has been excluded for reasons relating to intellectual property, know-how or innovation. The exemption from dis-
closure of impending developments or matters in the course of negotiation has not been utilised.
Disclosure requirement BP-2 – Disclosures in relation to specific circumstances
Time horizons
RHI Magnesita has not deviated from the medium or long-term horizons defined by ESRS 1 section 6.4.
Value chain estimation
When disclosing metrics which include estimation of upstream or downstream value chain data, RHI Magnesita has identified the metrics
for which this is the case, described the basis for preparation, included commentary on the resulting level of accuracy and described any
possible actions that may be taken to improve accuracy in the future.
Sources of estimation and outcome uncertainty
The following data includes or is based on estimates with accompanying levels of uncertainty.
CO
2
– emissions data is calculated by reference to fuel consumption data or raw material processing quantities, multiplied by emissions
factors. Whilst the methodology has been developed over a number of years and has been subject to external review and refinement, CO
2
emissions data is by necessity based on assumptions that could be inaccurate.
Other emissions – emissions of other pollutants such as SOx or NOx are based on spot measurements taken periodically and are not con-
tinuously monitored. This could result in inaccuracies due to fluctuations in production volumes or other variables throughout the year.
Own workforce data including health and safety data – reporting of hours worked and the occurrence of health and safety incidents is
reliant on the accuracy of the Group’s systems and reporting procedures which cannot be guaranteed to be comprehensive. There is a
possibility that health and safety incidents could be concealed, in particular minor incidents.
Supply chain data – any information which is provided in relation to sustainability impacts in the Group’s upstream value chain relies on
the accuracy of data provided by an external party. Since the Group does not have direct ownership and control the accuracy of data
provided cannot be guaranteed and has a wider degree of estimation uncertainty compared to data relating to the Group’s core activities.
Changes in preparation or presentation of sustainability information
RHI Magnesita is reporting according to ESRS for the first time in respect of the year to 31 December 2024.
Reporting errors in prior periods
Notwithstanding the migration from GRI standards to ESRS, baseline adjustments for acquisitions and minor corrections to plant emissions
and energy data in 2023, there are no material reporting errors relating to prior periods that have been identified in the course of preparing
the 2024 Consolidated Sustainability Statement.
General statement on consistency of information within sustainability statement
RHI Magnesita is reporting according to ESRS for the first time in respect of the year to 31 December 2024. Whilst all reasonable efforts
have been made in the compilation of the non-financial data reported, some clerical and casting inconsistencies may exist within the
sustainability statement.
EU Taxonomy 2023 – Restatement of Financial Figures
The turnover for the economic activity “CCM 5.9 Material recovery from non-hazardous waste” has been restated as eligible under the EU
Taxonomy for 2023. The originally reported turnover of €6,058.974 million has been revised to €17,458.974 million.
Additionally, adjustments have been made to the reported OpEx and denominator OpEx within the EU Taxonomy disclosure table for the
economic activity “CCM 3.6 Manufacture of other low-carbon technologies”. The originally reported OpEx of €17,606.412 million has been
restated to €20,795.203 million, while the denominator OpEx has been revised from €151,849.101 million to €172,224.712 million.
The reason for the restatement is that maintenance costs were considered only from plants integrated in the Group’s main SAP system. This
affects OpEx reported for “CCM 3.6 Manufacture of other low-carbon technologies” as OpEx for this activity is estimated based on mainte-
nance OpEx.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202476
CONSOLIDATED SUSTAINABILITY STATEMENT CONTINUED
RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024 — 77
Disclosures stemming from other legislation or generally accepted sustainability reporting pronouncements
The Group is not subject to any other legislation or generally accepted sustainability reporting pronouncements, other than certain provi-
sions of the UK Listing Rules and the UK and Dutch Corporate Governance Codes which do not conflict with ESRS.
Incorporation by reference
Some disclosures are incorporated by reference to other parts of the Annual Report. Whenever this is the case, this is clearly indicated. We
incorporate the following metrics by reference:
• Description of business and markets served
• Integration of sustainability-related performance in incentive schemes
• Diversity in the Board of Directors and Executive Management Team
• Role, expertise and independence of Board of Management
• Integration of sustainability risk management into the overall risk management approach
• Stakeholder engagement
• Note 5 of Financial statements for the Taxonomy KPIs.
Use of phase-in provisions in accordance with Appendix C of ESRS 1
The following phase in and transitional provisions on Disclosure Requirements, as set out in ESRS 1, are excluded from the Sustainability
Statement:
• ESRS E1-9 disclosures regarding anticipated financial effects from material physical and transition risks and potential climate-
related opportunities.
• ESRS E2-6 disclosures regarding anticipated financial effects from pollution-related risks and opportunities.
• ESRS E5-6 disclosures regarding anticipated financial effects from resource use and circular economy-related impacts, risks and
opportunities
• ESRS S1-7 disclosures regarding non-employee workers.
• ESRS S1-14 88(d) and (e) disclosures regarding health and safety metrics ‘number of cases of recordable work-related ill health of
employees’ and ‘number of days lost’.
• ESRS 2 SBM-3(e) related to the anticipated financial effects of the undertaking’s material risks and opportunities on its financial
position, financial performance and cash flows over the short-, medium- and long-term.
• The transitional provision related to entity-specific disclosures based on the topical ESRS, supplemented by an appropriate set
of additional disclosures to address sustainability matters that are material to the Group in its sector.
Comparative data for 2023 has been provided where available and where provision of such data would assist in understanding trends. For
some items, comparative data is not available and, in these cases, the transitional provision to disclose comparative data has been relied
upon.
Governance
Disclosure requirement GOV-1 – The role of the administrative, management and supervisory bodies
The following Governance disclosures are incorporated by reference:
Board powers, responsibilities and representation; EMT and delegation of authority; Board composition; Board diversity
Corporate Governance Report, pages 1 74 -203.
Executive Management Team
Corporate Governance Report, page 182.
EMT role in managing and overseeing sustainability impacts, risks and opportunities
The EMT is the primary management body through which initiatives to address sustainability related impacts, risks and opportunities are
planned, implemented and monitored. In 2024 RHI Magnesita carried out its first DMA in accordance with ESRS requirements. Certain
aspects of each of the topics identified as material in the DMA process were addressed by the EMT as set out in the Group’s 2025 sustain-
ability targets, which cover CO
2
emissions, energy, recycling, safety and other emissions to air. The EMT will continue to be the primary
management body tasked with managing sustainability related impacts, risks and opportunities over the period 2025-30.
The Chief Executive Officer (“CEO”) is the most senior executive responsible for policy implementation. Policies are formulated with key
stakeholder interests in mind and align with the UN Guiding Principles on Business and Human Rights and other internationally recognized
standards.
The CEO is also responsible for the overall monitoring and management of sustainability impacts, risks and opportunities. Individual EMT
members are responsible for delivery in specific areas as follows:
77RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
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78 — RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024
EMT member
Sustainability impact, risk or opportunity
CChhiieeff FFiinnaanncciiaall OOffffiicceerr ((““CCFFOO””))
Internal CO
2
pricing
Risk and opportunity financial modelling
ETS allowance purchasing and hedging strategy
ESG rating-backed financial instruments
Tax incentive programmes
Business ethics
Sustainability risks
Modern slavery reporting compliance
CChhiieeff TTeecchhnnoollooggyy OOffffiicceerr ((““CCTTOO””))
Health and Safety
CO
2
emissions
Air emissions
Energy
Water
Waste
Biodiversity
CChhiieeff CCuussttoommeerr OOffffiicceerr ((““CCCCOO””))
Sustainable procurement
Supply chain due diligence
Supplier Scope 3 emissions
Workers in the value chain
EEVVPP PPeeooppllee,, PPrroojjeeccttss,, IInntteeggrraattiioonnss &&
R
R
e
e
c
c
y
y
c
c
l
l
i
i
n
n
g
g
Human Rights
Employee relations
Diversity
Community relations
Recycling
Circular economy
Regional management are responsible for delivery of specific regional sustainability objectives and integration of acquired businesses into
the Group’s sustainability practices.
Executive management holds an annual Sustainability Forum to share progress against targets and co-operate on the delivery of the
Group’s sustainability objectives. The CEO reviews progress against short- and long-term sustainability KPIs during the year.
Controls and procedures are applied to the management of impacts, risks and opportunities at a functional level, with each EMT member
receiving regular updates on progress towards targets in their area of responsibility.
EMT skill and experience in sustainability matters
EMT members are skilled and experienced in their individual specialisms as set out above. Since 2019 each EMT member has been tasked
with delivery of sustainability related goals and priorities and has therefore gained experience in specific areas which fall within their re-
sponsibility. The EMT has access to expertise and skills from specialist staff who are experienced in sustainability matters, from CO
2
certif-
icate trading, to measurement of CO
2
emissions in our plants, other air emissions (e.g. NOx, SOx, etc.), diversity, equity & inclusion, the use
of hydrogen mix in our energy supply and a wide range of other matters, if required.
Process for setting and monitoring sustainability targets
RHI Magnesita’s executive management and the Board considered and set sustainability targets in 2019 to be achieved by 2025, against a
2018 baseline. During 2024 the Group worked to establish new targets for 2030. Teams responsible for material sustainability topics were
tasked with setting realistic and achievable targets by 2030 in the first half of 2024. The CEO reviewed the proposed targets and they were
subsequently presented to the CSC in November 2024 for review and discussion. The CSC recommended changes to the proposed targets
which were then finalised and adopted by the Board of Directors in February 2025.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 202478
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RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024 — 79
Targets
Baseline
Year
Actual
Target Year
Health and Safety
Maintain LTIF at <. per ,
hours worked
(goal: Zero Harm, No Injuries)
. . <.
CO
e Emissions
(Scope ,, raw materials)
Reduce by % per
tonne of product
. . .
Energy Reduce by % per tonne of product . . .
Recycling
Increase use of secondary raw
materials to %
.% .% %
Sustainable Supply Chain
Enhancing supplier sustainability
management: % Spend Coverage
- % %
Progress against sustainability targets is generally measured on a monthly basis by responsible functions and year to date performance is
reviewed at every meeting of the CSC.
Targets
Baseline Year
Target Year
Health and Safety
Total recordable injuries frequency rate
(TRIFR) <. per , hours
. <.
CO
e Emissions
(Scope ,, raw
materials)
Reduce by % per
tonne of product
. .
Energy
Reducing energy consumption by % per
plant each year
n.a. n.a.
Recycling
Achieve combined recycling rate of %
.%
%
Sustainable
Supply
Chain - Social
Enhancing supplier sustainability
management: % Spend Coverage
% %
Corporate Sustainability Committee (“CSC”)
This section is incorporated by reference to the Corporate Governance Report, pages 204-205.
CSC role in managing and overseeing sustainability impacts, risks and opportunities
The CSC is the Board committee responsible for overseeing sustainability-related impacts, risks, and opportunities. In 2024, a DMA was
conducted for the first time in alignment with ESRS requirements. CSC members actively participated in the process, providing oversight
and reviewing its findings, while the final approval was granted by the Board of Directors.
The CSC monitors progress towards the Group’s sustainability targets at every meeting, using year to date information and full year forecast
outcomes. Executives responsible for delivering sustainability targets are invited to present to the CSC at least once per year.
New sustainability targets for 2030 were set in 2025 after due consideration by the CSC in November 2024, formally adopted by the Board
in February 2025.
CSC skill and experience in sustainability matters
CSC members are skilled and experienced in their individual specialisms as set out on page 177-178. Since its formation in 2019 the CSC
has been tasked with supervision of the delivery of the Group’s sustainability related goals and priorities and has therefore gained experi-
ence in specific areas relevant to those initiatives. The CSC has access to expertise and skills from specialist staff within RHI Magnesita who
79RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
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80 — RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024
are experienced in sustainability matters and undertakes site visits once per annum to broaden its specific RHI Magnesita knowledge, such
as to our Leoben pilot plant to hear directly from experts on the in-trial sorting initiatives to progress recycling progress, supporting the
decarbonisation of the industry.
Sustainability governance structure
At Board level, the above-mentioned CSC supports the Board, acting as an advisory body to deliver the long-term sustainability of the
business. The CSC monitors performance against relevant KPIs and assesses risks and opportunities associated with climate change, en-
vironmental, Health & Safety, stakeholder relations and other ESG risks. They bring their skills and awareness of risks and upcoming topics
to guide management in where to direct their efforts.
At EMT level, the CEO is accountable for driving sustainable practices within the organisation and delivering the Group’s sustainability
targets, supported by the CTO. The CTO actively engages in overseeing and integrating technologies and methodologies across various
aspects of our operations. Strategic decisions and technological initiatives contribute significantly to the achievement of the Group’s sus-
tainability targets, ensuring that innovation and R&D is aligned with our commitment to sustainability.
Reporting to the CTO, the Global Sustainability Team collaborates closely with the CEO, CTO and CSC to monitor progress against targets,
advise on regulatory developments, compile reporting materials and engage with external ratings agencies. A collaborative approach en-
sures co-ordination with key functional areas such as Health & Safety, environment, sustainable technology and decarbonisation, recycling,
finance, risk management and compliance, Group secretary and procurement. This governance framework facilitates a comprehensive and
integrated approach to sustainability.
At the operational level, plant managers and Regional Presidents are accountable for the day-to-day performance of the Group’s assets,
including delivering progress towards sustainability goals. Regional Presidents report to the Chief Customer Officer who in turn reports to
the CEO.
This governance structure combines transparency and accountability with functional expertise.
Board skills and experience
This section is incorporated by reference to the Corporate Governance Report, pages 176-181.
Disclosure requirement GOV-2 – Information provided to, and sustainability matters addressed by the undertaking’s administrative,
management and supervisory bodies
How CSC is informed about impacts, risks and opportunities
This section is incorporated by reference to the Corporate Governance Report, pages 204-205.
How Board considers sustainability related impacts, risks and opportunities
The Board is the supervisory body which considers sustainability impacts, risks and opportunities when assessing strategic decisions, such
as major transactions, and in its semi-annual assessment of principal and emerging risks. Trade-offs between potentially conflicting impacts,
risks and opportunities are considered for example, when, in pursuing an acquisition-led growth strategy the Board assesses the executive
management’s assessment of the potential impacts and opportunities in sustainability performance of each new acquisition, such as the
potential to increase the use of secondary raw materials, but also the possibility that there could be an impact on the Group’s carbon
emissions with the asset’s energy profile or age of equipment. Management provides this assessment following an extensive due diligence
process and provides a risk-based analysis based on their findings from the review of documents provided by the asset and from manage-
ment’s assessment from their visits to the target plants. Where specialist third-party support has been required in due diligence, their
findings are also included. These risks are provided to the Board with associated mitigating actions. The Board assesses the information
provided by management on the risks and opportunities in the course of a transaction in the pursuit of a broad range of objectives and
decides to proceed on the balance of the best interest for the Group and its stakeholders.
On a more routine basis, the Board are updated on at least an annual basis as part of the strategy session on the progress against the targets
set in 2019 for delivery by 2025. You can read more about these on pages 22-25. The annual budget comprises sustainability-related
spending and the Board considers this twice per annum in its agreed schedule. In every Annual Report, which is signed off by the Board,
since the targets were set, progress against the targets has been reported upon. In the course of delivering their duties as effective Directors,
(each Annual Report covers the Board performance reviews which have found them to be effective, including external assessments of the
Board) the Board have engaged with these updates and challenged management on the measurement and progress, as appropriate. This
discussion leads to actions for management to bring further updates on sustainability performance. As part of the Matters Reserved to the
Board (available on our website) and Delegation of Authority framework, the Board reserves matters to itself based on certain characteristics
and thresholds which have included sustainability-related investments and entry into ESG ratings-linked financial instruments and there-
fore management brings these items for discussion and approval. In the course of considering routine matters such as entry into contracts
with customers or suppliers, the sustainability targets and the work of the CSC within its established scope, have meant that the Board
ensures it receives detail about the effect that such a contract would have on the Group’s progress in sustainability and the impact on
performance against the aforementioned targets.
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The CSC receives updates at every meeting (its terms of reference require a minimum of three meetings per annum, see pages 204-205
for more details) on the progress against the targets set as part of its set agenda planner, agreed by the Committee, which delivers the items
required under the CSC terms of reference to be considered. The Remuneration Committee also receives an update on the progress of
incentives which, as outlined on pages 212-216, include sustainability metrics, at each of its meetings. These committees update the Board
at the meeting which follows their meeting as part of their reporting.
Sustainability specific risks are assessed separately and submitted to the principal risk assessment process via the CSC. The Board ranks
sustainability specific risks alongside other risks to the business based on the likelihood of occurrence and potential financial or reputa-
tional impact.
Material impacts, risks and opportunities addressed by the CSC, Board and EMT included all those set out in the DMA which was conducted
for the first time in 2024. In addition, during 2024, the CSC, the Board and the EMT considered the following sustainability topics in detail:
• Health and safety of own workforce;
• Recycling;
• Sustainable sourcing and modern slavery;
• Physical climate change risks;
• Sustainability governance;
• CO
2
capture and utilisation;
• Regulatory developments;
• Assurance of sustainability data;
• Energy and CO
2
markets;
• Customer, employee, investor and supplier perceptions of ESG and related products;
• Community relations;
• Organisational diversity;
• Use of renewable energy;
• Target setting and measurement;
• Capital allocation to sustainability initiatives;
• Decarbonisation strategy;
• Low carbon footprint product strategy; and
• Use of hydrogen and other alternative fuels.
Disclosure requirement GOV-3 – Integration of sustainability-related performance in incentive schemes
Given sustainability is a core element of RHI Magnesita’s strategy, and, given its relevance to Group’s sustainable growth, the Board have
been keen to ensure it is part of the incentivisation of management and for a number of years the Group’s remuneration approach has
included sustainability targets, particularly focusing on those relating to our carbon footprint.
The Group is responsive to feedback from investors and customers on such topics and incorporates their views as inputs to the Group’s
sustainability approach. The CSC supports the Board with its deliberations on sustainable initiatives, target and investments and supports
the Remuneration Committee with priorities to be incentivised.
The Remuneration Committee’s responsibilities include the development of a reward package for Executive Directors and senior managers
that supports the delivery of RHI Magnesita’s vision and strategy as a Group, and to ensure the rewards are performance-based, encourag-
ing long-term shareholder value creation, and taking account of the remuneration of the wider workforce. The Non-Executive Directors of
the Board do not receive incentive-based remuneration; their remuneration is an annual fixed fee, no share-based payments are made. Our
Employee Representative Directors are remunerated on the basis that they are employees of the Group and therefore they participate in
the incentive schemes of the Group to the extent they are eligible as employees. This topic is presented on pages 218-230 of the Remu-
neration Report.
Annual bonus
In 2024, Executive Directors’ maximum annual bonus opportunity remained at 150% of salary with performance assessed against Adjusted
EBITA (45%), operating cash flow (25%) and strategic deliverables (30%). The strategic deliverables comprised transformation projects
delivery (10%), PIFOT (10%) and increasing the use of secondary raw material (10%). Recycling, which is a key sustainability performance
metric, therefore accounts for 10% of the annual bonus. The bonus criteria are identical for all eligible employees and not just the Executive
Directors.
In 2025, recycling will again account for 10% of the annual bonus.
Long-term incentive plan (LTIP)
In 2024, the Remuneration Committee reviewed the performance measures for LTIP as it does on an annual basis and agreed to continue
to dedicate a quarter of the award to CO
2
emissions performance conditions.
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82 — RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024
The 2024 LTIP Award will therefore vest to the extent that the performance conditions of EPS (50%), ROIC (25%) and reduction of CO
2
emissions (25%) are met above a certain threshold. The performance period for these conditions is three financial years, starting in 2024,
and the Executive Directors are then subject to a further holding period of two years to further align their performance with long-term
shareholder value creation.
The 2025 LTIP Award has a 25% component linked to the Group’s target to reduce CO
2
emissions intensity by 2027.
Disclosure requirement GOV-4 – Statement on due diligence
List of information provided on the due diligence process
Core elements of due diligence
Reference in the Sustainability Statement or in the Annual Report
a) Embedding due diligence in
governance, strategy and
business
model
Risk Management pages -
Internal Controls pages -
Code Compliance pages -
Gov- Management Responsibilities pages -
Gov- Oversight of Sustainability Matters - Impacts, Risks and Opportunities pages -
Gov- Sustainability Matters addressed by Management pages -
Gov- Incentive Schemes - Remuneration Report pages -
SBM- Double Materiality Assessment
b) Engaging with affected
stakeholders in all key steps of the
due diligence
Stakeholder Engagement pages -
Internal Controls page
Gov- Sustainability Matters addressed by Management page
IRO- DMA Process page
Whistleblowing page
Board workforce engagement page
c) Identifying and assessing adverse
impacts
SBM- Double Materiality Assessment (DMA) page
SBM- DMA Results pages -
SBM- DMA Process pages -
d) Taking actions to address those
adverse impacts
Internal Controls page
E- Climate Change Actions pages -
E - Pollution control page
E- Managing impacts on Resource Use and Circular Economy page
S- Managing impacts on Own Workforce page
S- Managing impacts on Workers in the Value Chain pages -
e) Tracking the effectiveness of
these efforts and communicating
Internal Controls Page
Board effectiveness Page
Disclosure requirement GOV-5 – Risk management and internal controls over sustainability reporting
The main mitigation of strategies and controls employed by the Group to ensure the accuracy of sustainability data include the use of
reporting manuals, training for key personnel, multiple internal review processes during the preparation of sustainability information and
periodic reviews by the Group’s internal audit function to identify opportunities for improvement.
An internal audit was undertaken of the Group’s sustainability reporting processes in 2023 which concluded in September 2023 and made
the observations set out in the table below. Follow-up actions were undertaken by relevant teams in response to the observations as follows:
Observation Action Status February
Implications of acquisitions not fully
considered for global KPIs and
sustainability targets
ESG reporting included in M&A integration
process
Closed
Lack of knowledge and minor data
inaccuracy identified for samples tested
Process manual and job description updates,
training, additional reviews
Closed
Weaknesses in the technical setup of
the system to measure health and
safety KPIs
Update and improve accident reporting
software
Ongoing
Methodology to measure NOx
emissions not reliable
Consider alternative to isokinetic method
Ongoing
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Risks to comply with future legal
requirements for human rights
legislation
Assignment of new roles and responsibilities
internally in line with requirements of new
legislation
Closed
Current targets related to People &
Culture potentially not sufficient
Review diversity targets, previously focused
only on gender
Closed
1) The Isokinetic method utilises a laser-induced fluorescence (LIF) technology, which is known for its high sensitivity and specificity in detecting NOx gases. This allows for accurate
measurements even at low concentrations, improving overall monitoring precision.
The Group carried out a risk assessment in 2024 in relation to its sustainability reporting. Each area of sustainability reporting was assessed
for the likelihood of error, the possible negative impact on the Group in each case, and mitigating actions to be taken to minimise each risk.
Both likelihood and potential impact were measured on a scale of 0-5 with resulting scores multiplied together to reach an overall risk
score with a maximum score of 25. The methodology including risk impact and risk likelihood definitions used in this risk assessment were
aligned with the framework used in preparation of the Group’s general risk ledger, which is used for the assessment of principal and emerg-
ing risks.
The Group’s risk appetite for sustainability matters is as follows:
• Environment and climate – MODERATE
• Health & Safety – AVERSE
• Regulatory and compliance – AVERSE
A score of 12 is within averse appetite, potential to exceed. A score of higher than 12 would be outside of the acceptable risk appetite. The
highest scores recorded in the 2024 risk assessment were 12, for “Workers in the supply chain data reporting” and “Workers in the supply
chain health and safety data reporting”, which is within the Group’s risk appetite.
The score for each risk assessed is set out in the table below:
Risk description
Risk score
(min 0, max 25)
Inherent risk rating
Risk of error or omission in CO
2
emissions data
4
Very low
Risk of error or omission in pollution data
9
Low
Risk of error or omission in energy data
4
Very low
Risk of error or omission in recycling data
9
Low
Risk of error or omission in own workforce data
6
Low
Risk of error or omission in own workforce health and safety data
9
Low
Risk of error or omission in workers in the supply chain data
12
Medium
Risk of error or omission in workers in the supply chain health and safety data
12
Medium
The findings of the risk assessment process and internal controls are integrated into the annual process that is carried out for the purpose
of reporting sustainability data in the Group’s Annual Report and Accounts. The Global Sustainability Team, relevant functional heads and
functional reporting teams apply the methodology set out in the reporting manual for each area to ensure standardised and accurate re-
porting across the Group.
Internal audit reports and risk assessments relating to sustainability reporting are submitted to the Audit & Compliance Committee and the
CSC for consideration. These Committees hold a joint session annually for this purpose, which last took place on 25 November 2024.
Strategy
Disclosure requirement SBM-1 – Strategy, business model and value chain
RHI Magnesita’s strategy is built on three pillars, all of which are enabled by our people & culture and sustainability leadership.
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84 — RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024
The first strategic pillar is competitiveness, whereby the Group seeks to minimise its operating expenses through initiatives such as footprint
optimisation, automation digitalisation and supply chain management. Becoming more competitive through increasing efficiency often
has a positive impact on sustainability metrics, for example through the reduction in the use of energy, fuels and mineral resources. Finan-
cial sustainability achieved through maintaining a low cost, competitive positioning in the global refractory industry enables the Group to
allocate capital to longer-term sustainability investments and R&D that would not otherwise be possible.
The second strategic pillar is to seek to expand the business model, for example by offering a broader range of products and services or
growing the proportion of revenue derived from solutions contracts. Solutions contracts are based on fixed prices per tonne of customer
output, usually in the steel industry, and are typically between five and seven years in length. Over the course of a solutions contract, RHI
Magnesita will use advanced products and expertise to improve the efficiency of a customers’ operations, often resulting in reduced con-
sumption of refractories and improvements in energy efficiency. Whilst refractories may only represent up to 3% of a customer’s operating
costs, refractory usage strategies can influence a much larger proportion of costs due to the implications for energy use and general process
efficiency. The Group therefore has an important role to play in its downstream value chain, where customer efficiency gains can translate
into significant improvements in sustainability impacts, most notably in energy consumption and CO
2
emissions.
The third strategic pillar is to grow market share in geographies and products where the Group is under-represented. Since the overall
refractory market is mature and net growth in refractory consumption is relatively low, the Group seeks to grow through acquisition, target-
ing businesses in high-growth markets or segments without adding new production capacity to the market. The businesses which RHI
Magnesita acquires are often not operating at industry-leading levels of sustainability practices and once integrated into the Group it is
possible to greatly improve performance. For example, RHI Magnesita has made significant progress in advancing technologies for recy-
cling of reclaimed refractory material and achieved a recycling rate of 14.2% in 2024. Acquired companies are usually using little or no
recycled material and this represents an opportunity to increase recycling activity in the industry as a whole. For each tonne of recycled
material used, approximately 1.6 tonnes of CO
2
emissions are avoided compared to the production of virgin raw material. As RHI Magnesita
grows through acquisition, its leading sustainable business practices can be spread wider throughout the refractory industry.
Refractory production is a resource, energy and CO
2
intensive activity. Refractory producers can also play an important role in supporting
their customers to transition to more sustainable production technologies. For these reasons, and to ensure the long-term success of the
Group, the Board actively pursues a strategy of sustainability leadership in the industry. We believe that by offering more sustainable prod-
ucts to our customers we will gain an advantage in price, market share or preferred supplier status that will become increasingly important
in the future. We also believe that we must minimise the environmental and social impacts associated with our own production process, in
order to maintain our licence to operate and a strong reputation as a responsible producer, which is a minimum expectation for a wide range
of stakeholders.
Business model
RHI Magnesita is the global supplier of high-grade refractory products, systems and solutions which are critical for high-temperature pro-
cesses 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 65 main production sites, 12 recycling facilities and over 70 sales offices. The Group operates 12 raw
material sites, including 8 mines across Austria (3), in Brazil (1), in China (1), in Czech Republic (1), in Türkiye (1), in USA (1).
In the production of refractories, raw materials are blended and combined with chemical additives to be sold as mixes, or subject to further
processing into shaped refractory products. Shaped refractory bricks are pressed into different sizes and shapes depending on the specific
application, employing pressures of up to 3,200 tonnes. After pressing, shaped refractory bricks are tempered at temperatures of up to
350°C and may be further subjected to firing at 1,800°C in tunnel kilns for a number of days.
Unfired products are primarily used in the steel industry, whilst the main applications for fired products are in the cement, non-ferrous
metals, process and mineral industries.
The Group’s comprehensive product range and expertise enables it to offer solutions contracts to customers who are seeking to improve
production efficiency and reduce their costs and environmental impacts and this service offering is one of RHI Magnesita’s key differentia-
tors. Under a solutions contract RHI Magnesita is paid a fixed price per unit of customer production, initially offering a saving to the customer
versus their prior level of refractory operating expenses. Over time the Group is able to deploy more advanced products and technical
expertise to reduce refractory usage or increase productivity by other means over the five-to-seven-year life of the contract. Solutions
contracts are usually renewed upon expiry with revised productivity goals for the subsequent period.
Innovation, research and development are essential drivers of success in the refractory industry. Refractory products are highly customised
for individual customer applications, often representing many years of iterative improvements tailored to specific customer environments.
Development of new technologies requires careful testing and trials at pilot scale and in live production environments, without impacting
customer outcomes.
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Value chain
RHI Magnesita’s value chain starts with the input of refractory raw materials which are sourced from the Group’s own raw material assets or
purchased on the open market. The key raw materials produced or purchased are magnesite or dolomite based (‘basic’) or alumina-based
(‘non-basic’). The production of basic raw materials involves the mining and extraction of raw magnesite or dolomite followed by high tem-
perature processing in either rotary or shaft kilns to calcine the material produce refractory raw materials. The calcination process is pri-
marily fuelled using fossil fuels such as natural gas, fuel oil or petcoke. RHI Magnesita has no alumina-based raw material production assets.
Raw materials are increasingly sourced through the recycling of reclaimed refractories which go through a process of sorting, crushing and
washing prior to re-use.
The purchase of refractory raw materials represents the largest proportion of the Group’s cost of goods sold, followed by personnel costs,
energy, freight and other consumable items such as packaging.
The core production processes for refractory products are as follows:
• Unshaped refractory products – milling, floating, briquetting, screening and sieving;
• Shaped refractory products – moulding, pressing, drying, tempering, firing, heat treatment, finishing; and
• Isostatically pressed products – pressing, curing, machining, glazing, firing, heat treatment, assembly, finishing.
Supporting processes to the core production process include logistics, quality control, research & development and information technol-
ogy.
The Group’s products are purchased by industrial producers who require refractories to protect equipment during high temperature pro-
duction processes. At the end of the useful life of a refractory lining, the Group seeks to partner with its customers to reclaim as much
residual waste as possible for re-use in the refractory production process.
Significant products and services offered
Significant products offered by the Group are:
• Shaped refractory products;
• Unshaped refractory products;
• Other refractory products;
• Systems, sensors, machinery and digital products; and
• Raw materials.
Refractory services are also provided, either as ad hoc additions to the provision of refractory products or via a full solutions contract, ac-
cording to customer preference.
No significant new products or services were added or removed during the reporting period. Please refer to the Note 5, Segment reporting
on page 256 of this document for further details.
Significant markets and customers served
The Group’s customers are producers of steel, cement, lime, non-ferrous metals, glass, energy, chemicals and waste processors. The end
markets served by the Group’s customers are the construction, transportation, machinery, electronics and consumer goods and energy
sectors.
Banned products
None of the Group’s products are banned from use in any geography.
Business relationships along the value chain
Understanding the business ecosystem requires a comprehensive analysis of the key stakeholders and their respective roles across different
stages of the value chain. The following outlines the primary business actors involved in upstream, core, and downstream operations and
their interdependent relationships.
Upstream business actors
In the upstream segment, the Group relies on essential partners to secure resources, drive innovation, and ensure compliance. Key business
actors include:
Suppliers – Provide raw materials, components, and services necessary for production and operations.
Contractors – Deliver specialised expertise and support in areas such as infrastructure, logistics, and development.
Innovation Partners – Collaborate on research and development initiatives to enhance product and process efficiencies.
Regulators – Oversee industry compliance, ensuring adherence to legal and sustainability standards.
Employees – Contribute to operational efficiency, knowledge transfer, and corporate growth.
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Core Business Actors
At the core of business operations, RHI Magnesita engages with critical stakeholders who influence corporate strategy, innovation, and
governance. These include:
Innovation Partners – Drive technological advancements and co-create value through research and strategic alliances.
Investors/Shareholders – Provide financial capital, influence decision-making, and ensure long-term business sustainability.
Regulators – Enforce compliance with industry standards, corporate governance, and environmental policies.
Employees – Form the backbone of the organisation, driving productivity, corporate culture, and innovation.
Communities – Represent the broader societal impact of business activities, influencing corporate social responsibility (CSR) initiatives.
Downstream Business Actors
In the downstream segment, the Group engages with partners who facilitate market access, service delivery, and regulatory compliance.
These include:
Customers – Serve as the end recipients of products and services, shaping demand and market trends.
Contractors – Support the distribution, marketing, and after-sales processes to ensure operational efficiency.
Regulators – Monitor business practices, ensuring ethical, financial, and environmental accountability.
Employees – Play a crucial role in customer service, brand representation, and operational continuity.
Disclosure requirement SBM-2 – Interests and views of stakeholders
This section is incorporated by reference to “Our Stakeholders” section, pages 26-31.
Disclosure requirement SBM-3 – Material impacts, risks and opportunities and their interaction with strategy and business model
Material impacts, risks and opportunities and their interaction with strategy and business model
RHI Magnesita has conducted a comprehensive DMA in line with the ESRS framework, evaluating sustainability-related impacts, risks and
opportunities across its value chain. The impact materiality assessment identified and classified sustainability impacts, risks and opportu-
nities assessing their significance based on scale, scope, remediability, and likelihood. Simultaneously, the financial materiality assessment
mapped ESG risks and opportunities against ESRS topics, aligning them with RHI Magnesita’s risk management methodology. This assess-
ment, validated by RHI Magnesita’s audit and sustainability committees on behalf of the Board, integrates insights from internal experts and
external stakeholders. A structured validation process, incorporating stakeholder feedback, ensures that the materiality assessment re-
mains dynamic and aligned with evolving regulatory and business contexts. The whole DMA process is described in IRO-1. The DMA pro-
cess and the due diligence process may be impacted by changes over time. Therefore, the Sustainability statements and material IROs
identified may be subject to change.
RHI Magnesita assesses its sustainability risks and opportunities according to the ESRS methodology seen as the same methodology used
in preparation of the Group’s general risk ledger. For each risk and opportunity, likelihood and potential impact (i.e. financial materiality)
were measured on a scale of 1-5 with resulting scores multiplied together to reach an overall materiality score with a maximum of 25. For
impact materiality, RHI Magnesita applied the ESRS methodology, assessing scale, scope, remediability, and likelihood. Scale measures
impact magnitude, scope covers stakeholder and value chain reach, remediability evaluates mitigation feasibility, and likelihood gauges
occurrence probability. Each is rated from 1 to 6, with 6 as the highest. The assessment integrated quantitative metrics and qualitative
insights, ensuring a balanced evaluation of potential impacts based on probability, granularity and time horizon.
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ENVIRONMENT
E1 – Climate
change
Climate
change miti-
gation
Positive
impact
Core,
Down-
stream
1. Avoided emissions
through optimised
heat management
IMS policy
Positive
impact
Core
2. Saved emissions
through usage of re-
cycled raw materials
IMS policy
Negative
impact
Up-
stream,
Down-
stream
3. Scope 3 CO
2
emis-
sions from purchased
raw material, use of
sold products and
transport
IMS policy
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Negative
impact
Core
4. Scope 1 CO
2
geo-
genic process emis-
sions
IMS policy
Negative
impact
Core
5. Scope 1 CO
2
fuel
based emissions
IMS policy
Oppor-
tunity
Down-
stream
6. Increased demand
for refractory prod-
ucts that enable de-
carbonisation of cus-
tomer industries (EAF,
ESF, BOF, DRI)
IMS policy
Oppor-
tunity
Core,
down-
stream
7. Increased demand
for low carbon foot-
print refractory prod-
ucts
IMS policy
Oppor-
tunity
Core
8. Decrease in costs
or increase in revenue
through use of new
technologies to re-
duce or capture CO
2
emissions from re-
fractory production in
ETS zones
IMS policy
Risk
Core
9. Increase in operat-
ing or capital ex-
penditures due to
changes in policy and
regulation
IMS policy
Risk
Up-
stream,
Core,
down-
stream
10. Increase in oper-
ating expenditure
and reputational
damage if decarboni-
sation pathway not
delivered
IMS policy
Energy
Negative
impact
Core
11. Scope 2 CO
2
emis-
sions from energy
consumption
IMS policy
Risk
Core
12. Reputational
damage if energy re-
duction targets not
achieved
IMS policy
E2 - Pollution
Pollution of
air
Negative
impact
Core,
Down-
stream
13. Air pollution from
industrial processes
IMS policy
E5 – Resource
use and circular
economy
Resource in-
flows, in-
cluding re-
source use
Positive
impact
Up-
stream,
Core,
Down-
stream
14. Efficient use of raw
materials and re-
sources including the
use of recycled mate-
rials
IMS policy
SOCIAL
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S1 – Own work-
force
Health and
safety
Negative
impact
Core
15. Workplace safety
incidents in own
workforce
IMS policy
Forced la-
bour
Potential
negative
impact
Core
16. Incidents of forced
labour in own work-
force
Human
rights pol-
icy
Working
conditions
Risk
Core
17. Reputational dam-
age if health and
safety targets not
achieved
IMS policy
S2 – Workers in
the supply chain
Health and
safety
Negative
impact
Up-
stream
18. Workplace safety
incidents in supply
chain
Supplier
code of
conduct
Forced la-
bour
Potential
negative
impact
Up-
stream
19. Incidents of forced
labour in supply
chain
Supplier
code of
conduct
GOVERNANCE
G1 - Governance
Corruption
and bribery
1
Risk
Up-
stream,
Core,
Down-
stream
20. Fraud and cor-
ruption in various
forms
Code of
conduct,
Anti-cor-
ruption
policy
1) Corruption and bribery were not deemed to be a material impact, risk or opportunity by the Group’s DMA, but was added following stakeholder engagement.
Avoided emissions through optimised heat management
Positive impact
RHI Magnesita’s comprehensive product range and expertise enables it to offer heat management solutions contracts to customers who
are seeking to improve production efficiency and reduce their costs and environmental impacts. Heat management solutions encompass
a range of technologies and strategies designed to prevent overheating, improve energy efficiency, reduce costs, and extend the lifespan
of equipment. The Group’s customers include industrial producers in the steel, cement, metals and glass sectors with high energy usage
and associated CO
2
emissions. Improvements in refractory performance can often lead to significant energy savings and therefore
avoided CO
2
emissions. For example, refractory linings or functional products with a longer service life can extend periods of continuous
operation, improving asset utilisation for the customer, reducing the impact of downtime and energy loss during warming and cooling
phases.
The ability to deliver production efficiency gains to customers is a key focus of the Group’s strategy which requires the provision of a full
range of refractory products and services to a global customer base. RHI Magnesita has adapted its strategy to seek to increase the propor-
tion of its revenue from solutions contracts. Significant capital has been allocated to M&A in order to grow in geographies and product
segments where the Group was previously under-represented, supporting the solutions contract offering, which was expanded and re-
launched under the brand ‘4PRO’ in 2024.
The positive impact from avoided emissions occurs both in the Group’s core operations and in its downstream value chain. The Group is
able to (i) service customer needs whilst using lower volumes of refractories; and (ii) deliver efficiency gains such as energy and emissions
savings at customer sites.
RHI Magnesita intends to continue to offer heat management solutions and has a target to increase the proportion of revenue derived from
these contracts. Solutions contracts are highly valued by many customers and result in a higher proportion of repeat business since they
are usually renewed on expiry. Margins can also be higher over the full life of a contract. The Group is developing new advanced products
and services to further improve its solutions contract offering and bring further efficiency gains for its customers. Allocation of capital to
R&D spending is intended to continue the Group’s leadership position in this area.
Avoided emissions have an immediate positive impact on people and the environment through avoiding the release of CO
2
to the atmos-
phere which would otherwise occur. The positive impact of avoided emissions originates from the Group’s business model to offer heat
management solutions and results from changes to its own activities and from business relationships with its customers.
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The Group has demonstrated its capacity to address the opportunity from offering heat management solutions by increasing the proportion
of revenue derived from such contracts. The contribution from solutions contracts has recently reduced, mainly as a result of M&A, therefore
creating the opportunity to increase revenue from such contracts in the future.
Avoided emissions resulting from optimised heat management solutions are entity specific and not covered by a specific ESRS disclosure
requirement. The Group intends to develop KPIs and disclose in future in line with phase-in requirements.
Saved emissions through usage of recycled raw materials
Positive impact
RHI Magnesita is able to significantly reduce its CO
2
emissions through increasing the use of recycled raw materials. Each tonne of recy-
cled material used saves approximately 1.6 tonnes of emissions compared to the CO
2
intensive process of extracting and processing fresh
raw material. The use of recycled materials improves local raw material availability and self-sufficiency and, in some cases, can result in
cost savings compared to freshly mined material.
The Group will use the recycling rate KPI to measure and enhance resource efficiency and circular economy integration, as increasing the
use of recycled raw materials is a core part of its strategy to lead in sustainability within the refractory industry, driving significant develop-
ments in its business model.
Historically, recycling rates for refractories in the refractory industry were low (4%) due to reduced performance levels for finished products
containing reclaimed materials. RHI Magnesita developed new sorting and cleaning processes to solve this technology challenge and has
now demonstrated in real-world applications that high quantities (up to 96%) of recycled materials can be incorporated into refractory
products without compromising performance. R&D is continuing in this area, and further technical progress is expected to increase the
efficacy of recycling operations.
After proving the new technology, the Group allocated capital to acquisitions of recycling companies including the joint venture estab-
lished with Horn & Co., MIRECO in 2022 and the acquisition of Refrattari Trezzi in 2024, which have increased availability of reclaimed
material. Further acquisitions of recycling companies in other geographies are under consideration. RHI Magnesita has also invested in the
development of its own recycling facility in Mitterdorf, Austria. Achieving higher recycling rates requires developing a closer partnership
with customers to optimise the process of breaking out and collecting waste refractories at customer sites. Increased precision in sorting
and reducing the time between break out and recycling into new products leads to a higher recycling yield. The Group’s solutions contract
offering is the ideal platform to offer this partnership to customers and recycling of residual material now forms an important part of the
‘4PRO’ solutions offering. There is a significant strategic opportunity to roll out recycling activities globally.
The benefits of recycling are realised in the Group’s core activities and in its upstream and downstream value chains. In the upstream value
chain, the use of recycled raw materials displaces the quantity of refractory raw materials that must be purchased from external suppliers,
reducing Scope 3 CO
2
emissions and all other environmental impacts of extracting, processing and shipping virgin material. Within the
Group’s core activities recycled materials may sometimes be obtained at lower cost compared to purchased raw materials. Materials are
generally locally sourced, which reduces freight costs and emissions from transportation whilst shortening the supply chain, with potential
for working capital benefits. In the downstream value chain the Group’s customers derive significant waste management and circular econ-
omy benefits as refractory waste would otherwise have to be disposed of and would usually go to landfill, incurring additional costs.
RHI Magnesita has responded to the benefits of recycling by investing in the technology, infrastructure and changes to its business model
necessary to take full advantage of the opportunity. In the near-term recycling rates have been diluted by the addition of multiple new
acquisitions to the Group, with lower levels of recycling usage compared to the Group average. However, further investments in new sorting
technologies and a global roll-out of recycling are underway and are expected to deliver further benefits in the short and medium term.
In the future, use of recycled materials within the Group’s raw material processing kilns offers the potential to reduce geogenic emissions
which would otherwise incur a CO
2
allowance cost within the EU ETS framework and later CBAM which is expected to be implemented
over the period 2026-2034. Incorporating high proportions of recycled raw materials into finished refractories enables the Group to offer
lower carbon footprint refractories to its customers. This product range is expected to deliver market share gains or a pricing premium as
customers seek to address their Scope 3 emissions from refractory usage, as set out in opportunity (7) “Increased demand for low-carbon
footprint refractory products”, below. In the long-term, recycling rates have a natural ceiling since refractories are largely consumed during
use and only residual materials can be reclaimed.
For 2025, the CapEx budget for recycling is set at €6 million, prioritizing circular raw materials processing and the integration of innovative
technologies to improve operational efficiency. Beyond 2025, the focus will be on expanding in the refractory circular minerals market
outside Europe, leveraging CapEx and M&A to drive growth and market presence. RHI Magnesita will continue to invest in organic and
inorganic projects to increase its recycling activity so long as such investments are calculated to deliver an attractive return on capital
compared to other investment opportunities available to the Group. Sufficient financial and organisational capacity exists to support further
development of recycling and therefore the Group has sufficient capacity to address this opportunity.
The future potential positive impact on equity value of this opportunity is ca. €441 million.
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Recycling is covered by topic “E5 – Resource use and circular economy” and sub-topic “Resource inflows, including resource use” and
further information on recycling performance is therefore provided below in the relevant section of the Group’s Consolidated Sustainability
Statement.
Scope 3 CO
2
emissions from purchased raw material, use of sold products and transport
Negative impact
Refractory production is a CO
2
intensive activity and is a ‘hard to abate’ industry. Raw material processing generally uses fossil fuels for
ignition and burning of carbonate rock, which results in significant geogenic CO
2
emissions. These geogenic emissions are classified as
Scope 1 when resulting from the Group’s own production or Scope 3 in the case of externally purchased raw materials, occurring in the
upstream section of the value chain. RHI Magnesita purchased 50% of its raw materials usage by value in 2024 (2023: 61%), or 32% by
volume (2023: 36%). Scope 3 emissions from purchased raw material represented 35% of total Group CO
2
emissions in 2024 (2023: 37%).
In the downstream section of the value chain, certain finished refractory products may contain hydrocarbon based binders or additives or
other forms of carbon such as graphite which are oxidised during use and this results in additional Scope 3 CO
2
emissions in the downstream
value chain. Scope 3 emissions are also generated in the shipping and distribution of refractory products to customers worldwide.
The Group is aware of the relatively high CO
2
intensity of its business relationships with raw material suppliers and emissions from the
transportation of raw materials and finished goods. Such emissions are recognised to have an impact on people and the environment
through contributing to climate change over the medium and long-term and the Group has therefore sought to adapt its strategy and
business model to reduce this impact to the greatest extent as is sustainably possible.
Scope 3 emissions from purchased raw material usually arise in regions where no carbon emissions costs are currently incurred but may
attract a cost penalty in the future, for example in the case of raw materials imported into Europe after the implementation of CBAM.
The strategy and business model has been adapted to reduce Scope 3 emissions from purchased raw material by (i) replacing raw material
which would otherwise be purchased externally with recycled raw materials; (ii) prioritising raw material suppliers with lower CO
2
footprints;
(iii) engaging with raw material suppliers to help them to reduce the CO
2
footprint of their operations; and (iv) pursuing technological so-
lutions to decarbonise the Group’s own raw material production facilities which can then be utilised in favour of externally purchased raw
material from high CO
2
emitting suppliers in the future.
Scope 3 emissions from shipping and distribution are unavoidable so long as raw material and finished goods movements are required and
transport methods used by the Group (shipping, road and rail) utilise fossil fuels as a primary energy source. However, the extent of raw
material and finished goods movements can be reduced through the implementation of the Group’s ‘local for local’ production strategy,
which seeks to increase self-sufficiency of its regional hubs, reducing reliance on imports and thereby decreasing the number of freight
movements or reducing distance travelled. RHI Magnesita entered into a partnership with Kuehne + Nagel in 2023 to improve efficiency in
transportation and logistics through improved planning and bulk purchasing of freight services. The Group is also currently investing in an
upgrade of its logistics and supply chain planning systems which is expected to generate further efficiencies in this area.
Through the above responses the Group has demonstrated its capacity to act to address the impact of Scope 3 emissions and further
opportunities exist to further reduce such emissions. However, compared to other actions that the Group is able to take to address its overall
CO
2
emissions, Scope 3 emissions from purchased raw materials are one of the areas over which management has the least control and
influence since this will ultimately require the decarbonisation of suppliers who may not be willing, able or incentivised sufficiently to act.
As part of the Group’s decarbonisation commitment, RHI Magnesita has undertaken to (i) lobby governments to invest in the necessary
infrastructure to decarbonise the refractory industry and other energy intensive industries; and (ii) work with partners in the private sector
to develop new renewable energy solutions, hydrogen energy networks and carbon capture and utilisation technologies which will be
applicable to its upstream suppliers of raw materials.
To monitor this topic, the Group will use as a KPI, Scope 3 emissions associated with purchased raw materials, product use, and transport,
to track progress in reducing its carbon footprint.
Scope 3 emissions are covered by topic “E1 – Climate change” and sub-topic “Climate change mitigation” and further information is there-
fore provided below in the relevant section of the Group’s Consolidated Sustainability Statement.
Scope 1 CO
2
geogenic process emissions
Negative impact
RHI Magnesita owns and operates refractories raw material production sites worldwide, with total annual production of 1,301kt in 2024. RHI
Magnesita purchased 50% of its raw materials usage by value in 2024 (2023: 61%), or 32% by volume (2023: 36%). Scope 3 emissions
from purchased raw material represented 35% of total Group CO2 emissions in 2024 (2023: 37%). Raw material processing generally uses
fossil fuels for ignition and burning of carbonate minerals such as magnesium carbonate (magnesite) or calcium magnesium carbonate
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(dolomite), which results in significant geogenic CO
2
emissions. Approximately half of the mass of raw magnesite and dolomite prior to
burning is oxidised and emitted as CO
2
during raw material processing. These geogenic emissions are classified as Scope 1 when resulting
from the Group’s own production. They occur within the Group’s core operations and not in the upstream or downstream value chain.
Upstream emissions resulting from the same process are classified as Scope 3 emissions from purchased raw material. Scope 1 emissions
from geogenic process emissions represented 19% of total Group CO
2
emissions in 2024.
The Group is aware of the relatively high CO
2
intensity of its raw material processing operations and these emissions are recognised to have
an impact on people and the environment through contributing to climate change over the medium and long-term. RHI Magnesita has
therefore sought to adapt its strategy and business model to reduce this impact to the greatest extent as is sustainably possible.
Scope 1 emissions from geogenic process emissions incur carbon costs in the European Union, where the Group is required to purchase
certificates for CO
2
emissions over and above its free allocation. In 2024 the cost of purchasing certificates for these emissions through the
European ETS was €6million (2023: €2 million). The cost of purchasing CO₂ certificates is expected to rise in the future due to the full
implementation of the Carbon Border Adjustment Mechanism (CBAM). Currently in its transition phase, CBAM will eventually lead to the
complete removal of all free allowances, further increasing compliance costs for RHI Magnesita.
Taking into account the expected increase in the cost of Scope 1 CO
2
emissions in Europe and potentially other geographies the Group has
adapted its strategy and business model to reduce Scope 1 geogenic emissions associated with raw material processing in geographies that
are or may be subject to ETS costs.
Since the processing of virgin carbonate raw materials necessitates the emission of geogenic carbon as CO
2
, the only routes available to
reduce such emissions are to (i) develop non-carbonate raw material sources; or (ii) to capture geogenic process emissions for storage or
utilisation to prevent release to the atmosphere.
The Group is assessing possible routes for the use of non-carbonate raw material sources but has not yet identified an economically viable
production process. RHI Magnesita previously operated sea water based raw material assets in Ireland and Norway but these assets were
energy intensive and ultimately proved to be uncompetitive compared to carbonate raw material sources.
The Group is therefore conducting R&D and investing in pilot production facilities for the capture, storage and/or utilisation of geogenic
process emissions. Trials of a process to capture CO
2
emissions from rotary kilns have been completed successfully. The Group is now
participating in trials of a carbon utilisation technology pioneered by MCi Carbon, an Australia based developer of mineralisation technol-
ogy which can efficiently bind CO
2
into saleable solid carbon-negative materials, permanently removing emissions from the atmosphere.
To date, RHI Magnesita has invested a total of €7 million in MCi Carbon and during 2024 provided raw material samples to a demonstration
facility in Newcastle, Australia for testing of the process. Trial production of carbon negative materials utilising captured CO
2
is scheduled
to commence at this facility in 2025. The technology and other similar solutions may have wider implications beyond the refractory indus-
try, for example in cement production where geogenic emissions pose a similar challenge. The Group considers the MCi process to be the
most promising technology for economically reducing geogenic CO
2
emissions because it results in the production of saleable carbon
negative materials, whereas other carbon storage or sequestration methods only represent additional capital and operating expenses with
no additional revenues.
If the MCi process is successfully proven in the demonstration plant in Australia, RHI Magnesita intends to conduct a feasibility study for
the construction of new plant at its Hochfilzen, Austria raw material production site to remineralise CO
2
emissions at that site. The capital
expenditure for the construction of such a facility and impact on operating expenditures is not yet known but is expected to be material.
RHI Magnesita has sufficient capacity to continue to assess the viability of various technologies to reduce the impact of its Scope 1 geogenic
process emissions but may require external support to employ such technologies at industrial scale. In assessing the optimum financing
structure and economic viability of the MCi project, the Group would seek to reduce risk through equity partnering, public subsidy or tax
incentives and the use of specialised financing instruments which may be available for green projects. This project or any similar under-
taking would be assessed according to the Group’s existing capital allocation process and required to deliver an attractive return on capital
compared to other investment opportunities available to the Group if it is to proceed.
The Group will use Scope 1 emission metric related to raw material processing to monitor this topic.
Scope 1 geogenic process emissions are covered by topic “E1 – Climate change” and sub-topic “Climate change mitigation” and further
information is therefore provided below in the relevant section of the Group’s Consolidated Sustainability Statement.
Scope 1 CO
2
fuel-based emissions
Negative impact
RHI Magnesita uses carbon based fuels such as natural gas, oil and petcoke at its raw material and refractory production sites worldwide.
The consumption of these fuels results in Scope 1 CO
2
emissions from within the Group’s core operations and not in the upstream or down-
stream value chain. Upstream emissions resulting from the use of fuels by external raw material suppliers are classified within Scope 3
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emissions from purchased raw material. Fuel based Scope 1 CO
2
emissions from this source were 1,117kt, accounting for 18% of total Group
CO
2
emissions in 2024, with the majority of fuels being consumed at raw material production sites.
The Group is aware of the relatively high CO
2
intensity of its operations arising from the consumption of fuel and these emissions are rec-
ognised to have an impact on people and the environment through contributing to climate change over the medium and long-term. RHI
Magnesita has therefore sought to adapt its strategy and business model to reduce this impact to the greatest extent as is sustainably pos-
sible.
Scope 1 emissions arising from fuel consumption incur carbon costs in the European Union, where the Group is required to purchase cer-
tificates for CO
2
emissions over and above its free allocation, as described in impact (4) “Scope 1 CO
2
geogenic process emissions”, above.
The cost of such emissions is expected to increase significantly between 2026 and 2034 with the introduction of CBAM and with the
possible commencement of similar ETS regimes in other geographies. The Group is therefore actively seeking to adapt its strategy and
business model to reduce its fuel based emissions, to minimise this potential future financial impact.
The primary routes being assessed or utilised to reduce emissions from fuel consumption are (i) energy efficiency; (ii) fuel switches to lower
CO
2
footprint fuels e.g. natural gas; (iii) increased use of carbon neutral alternative fuels e.g. charcoal, biomass, waste; and (iv) use of green
hydrogen as a partial or total replacement for fossil fuels. Electrification has been evaluated as an alternative to the burning of fuels but
was not found to be viable with currently available technologies due to the high temperatures required in the Group’s manufacturing pro-
cesses.
The capital cost of fuel switches can be significant if the Group is required to partially or wholly fund infrastructure connections, in addition
to the cost of equipment upgrades at production sites to accept new fuels. Such capital costs could make a fuel switch project uneconomic,
even after accounting for potential savings on CO
2
emissions certificates. Operating expenditures may also be affected, either positively or
negatively. The Group has successfully implemented a fuel switch at Ponte Alta, Brazil, and is currently conducting biofuel co-firing trials
at Breitenau, Austria. The Group is also evaluating possibilities at Hochfilzen, Austria and York, USA which will depend on infrastructure
provision.
RHI Magnesita has sufficient capacity to continue to implement fuel switches and increase the use of carbon neutral fuels to reduce its
Scope 1 fuel based emissions but requires external support for the provision of the necessary infrastructure and guaranteed supply agree-
ments. Infrastructure is usually provided for multiple users and in accordance with national or regional development plans.
The Group has tested and demonstrated its readiness for the partial use of hydrogen as a fuel in certain of its processes but is wholly reliant
on external parties for the production and distribution of green hydrogen at a price which is competitive with existing alternative energy
sources.
The Group will use Scope 1 emission KPI related to fuel use to monitor this topic.
Scope 1 fuel-based emissions are covered by topic “E1 – Climate change” and sub-topic “Climate change mitigation” and further infor-
mation is therefore provided below in the relevant section of the Group’s Consolidated Sustainability Statement.
Increased demand for refractory products that enable decarbonisation of customer industries (EAF, ESF, BOF, DRI)
Opportunity
RHI Magnesita’s customers operate in high-energy and emissions-intensive industrial sectors. Refractory products and heat management
services have an important role to play in energy consumption and associated CO
2
emissions at customer sites and can have a material
impact on reducing emissions in the Group’s downstream value chain. Steel production in particular accounts for around 8% of global CO
2
emissions and steel customers represent around 70% of Group revenues.
Major advancements by our steel customers are underway in the development of technologies for manufacturing steel with low or zero
CO
2
emissions and approximately 20 new plants or trial projects are currently being developed or are under construction worldwide.
Providing refractory linings, new refractory technology and heat management services to green steel projects represents a material new
business opportunity for the Group. Consumption of magnesite-based refractories is expected to be higher in furnaces and other applica-
tions which are likely play a major role in green steel production such as Electric Arc Furnaces (“EAF”), Electro Smelter Furnaces (“ESF”)
facilities and Open Bath Furnaces (“BOF”). Direct Reduction Furnaces (“DRI”) using natural gas or hydrogen also offer a new business op-
portunity, replacing blast furnaces in ironmaking for green steel production.
Recognising this new opportunity in its downstream value chain, RHI Magnesita has adapted its strategy and business model to pursue
green steel contracts. Developing refractory solutions for new technologies in green steel requires similar capabilities to the project busi-
ness in the Industrial division and the Group is therefore well positioned to win such contracts. In 2024 three major green steel projects
were tendered and RHI Magnesita was appointed in each case, with positive financial effects for the Group in 2024 and 2025 and beyond.
The Group intends to cement its position as industry leader in the provision of refractory products and services for green steel projects and
builds a stronger reputation with each contract award. The Group’s M&A strategy has been adapted to grow capabilities which will assist
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in supplying green steel projects and the Group is willing to invest in personnel, R&D or new production facilities where necessary to satisfy
customer requirements. The successful award of three new contracts is early evidence that the Group has the capacity and capabilities to
take advantage of this new business opportunity.
The future potential positive impact on equity value of this opportunity is ca. €277million.
The supply of enabling technologies for customers to reduce emissions in the downstream value chain is an entity specific opportunity
and is not covered by a specific ESRS disclosure requirement.
Increased demand for low-carbon footprint refractory products
Opportunity
Through the use of recycled raw materials, RHI Magnesita is able to manufacture refractory products with a significantly reduced CO
2
footprint. The low CO
2
footprint product range is marketed to customers who may be seeking to reduce their Scope 3 emissions from re-
fractory usage or to demonstrate a commitment to sustainable procurement practices. The Group is not aware of any competing low CO
2
footprint refractory products on the market and this product range therefore represents an opportunity to increase revenue through market
share gain or pricing premium, subject to customer demand appetite.
In the process of developing its capabilities to increase the use of recycled raw materials, the Group successfully produced and tested
products made up to 96% recycled raw materials. Recognising this new capability and the potential for future customer demand, the
Group adapted its strategy and business model to develop its offering of low CO
2
products and to actively market them as a sustainable
alternative. The opportunity lies in the Group’s core activities where a new and potentially attractive product range may generate additional
revenues, and in the downstream value chain where the Group’s customers may benefit from a reduction in their Scope 3 emissions arising
from refractory consumption. The Group provides carbon footprint information for all of its products and highlights lower carbon footprint
alternatives to its customers.
Whilst sales of low CO
2
footprint products are growing strongly from a low base, there is not yet evidence of widespread demand from
customers, who are focusing first on reducing Scope 1 and Scope 2 emissions from their own production processes and from other raw
materials such as iron ore, which are much higher as a proportion of total emissions than those arising from refractory usage. The Group
expects demand for low CO
2
footprint products to increase in the future, in particular with the growth of green steel producers for whom
CO
2
emissions in the supply chain are expected to be a higher priority. RHI Magnesita carries out regular surveys of customer priorities,
which found in Q2 2024 that 88% of customers are interested in such products provided that there is no increase in price and 29% would
be interested provided there is only a moderate impact on price.
The continued inclusion of low CO
2
refractories in the Group’s product range does not require material new funding. The Group therefore
has the capacity to take advantage of any increase in demand for low CO
2
refractory products which may occur in the future.
The Group tracks the sales of refractory products supporting electric arc furnaces – key to lower-carbon steel production – as a KPI for
this area, reaching €528 million in 2024.
The future potential positive impact on equity value of this opportunity is c. €277 million.
The supply of low-carbon footprint refractories for customers to reduce their Scope 3 emissions from refractory consumption is an entity
specific opportunity and is not covered by a specific ESRS disclosure requirement.
Decrease in costs or increase in revenue through use of new technologies to reduce or capture CO
2
emissions from refractory produc-
tion in ETS zones
Opportunity
Carbon emission costs in Europe are set to increase significantly with the introduction of CBAM over the period from 2026-2034. Addi-
tional geographies may also implement ETS schemes and impose a cost on carbon emissions. If the Group is able to reduce CO
2
emissions
from its production process by avoiding or capturing emissions there is an opportunity to gain a cost advantage versus competitors and to
realise higher prices for finished refractories, since the cost of production for the industry as a whole will increase.
Recognising the change in cost structure for the industry that will be brought about by the introduction of CBAM, the Group has adapted
its strategy and business model to take advantage of this potential opportunity.
The primary routes by which the Group is seeking to reduce its Scope 1 CO
2
emissions in Europe are (i) fuel switches and use of alternative
fuels; (ii) use of recycled material in raw material kilns; and (iii) carbon capture and utilisation or storage. The Group is also able to reduce
the CO
2
footprint of certain finished product ranges through the use of high proportions of recycled raw materials. Using one or a number
of these methods RHI Magnesita has the capability to manufacture refractory products without incurring cost penalties associated with
CO
2
emissions, as CBAM increases the cost of such emissions. Other refractory producers may not be able to reduce CO
2
emissions since
they are not vertically integrated and do not have advanced recycling initiatives similar to RHI Magnesita. Operating on a ‘cost plus’ basis,
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competing refractory producers may have to increase prices to cover the additional costs incurred in purchasing high CO
2
intensity raw
materials that are imported into Europe in addition to any CO
2
emissions in EU-based refractory plants. As the market price for refractories
increases, RHI Magnesita should therefore be able to increase margins on its low CO
2
footprint products.
The financial benefits from this opportunity are not expected to occur in the short term or in the next reporting period but are expected to
emerge over the period 2026-2034, which is the implementation timetable for CBAM. The additional cost that would be incurred by the
Group if it does not reduce its own emissions is approximately €80 million per year for its European operations, representing the maximum
possible cost impact if the Group is not able to make any reduction in its European Scope 1 emissions. Prices for products sold within Europe
are assumed to rise in line with competitor pricing but this will not apply to c.50% of the Group’s European production which is exported
and sold in markets where no ETS or structure similar to CBAM applies. Over the long-term if CBAM continues to impose a cost of carbon
on high CO
2
emitting producers, the financial benefit from selling low CO
2
footprint products within the EU could be significant.
As set out in IROs (2), (4) and (5) above, significant capital investments may be required to fully decarbonise the Group’s operations in
Europe, in particular for any carbon capture and utilisation project which may be contemplated. The capital cost of achieving this has not
yet been calculated and such initiatives will only be approved for investment if an attractive return on capital can be realised compared to
other opportunities available to the Group. It is therefore not certain that the Group will have the capacity to fully take advantage of this
potential opportunity, which depends on as yet unproven technologies and support from public subsidy or infrastructure provision.
The opportunity to decrease costs or increase revenue through use of new technologies to reduce or capture CO
2
emissions from refractory
production in ETS zones is an entity specific opportunity and is not covered by a specific ESRS disclosure requirement.
The Group will monitor the increase of recycling rate as a KPI for this topic.
Increase in operating or capital expenditures due to changes in policy and regulation
Risk
RHI Magnesita foresees a risk to its business from the increase in operating costs due to an increase in the level or scope of carbon pricing.
Scope 1 emissions arising from fuel consumption or geogenic process emissions incur carbon costs in the European Union, where the Group
is required to purchase certificates for CO
2
emissions over and above its free allocation. The cost of such emissions is expected to increase
significantly between 2026 and 2034 (c.2030 for RHI Magnesita) with the introduction of CBAM and with the possible commencement of
similar ETS regimes in other geographies. The Group is therefore actively seeking to adapt its strategy and business model to reduce its
Scope 1 CO
2
emissions in Europe, to minimise this potential future financial impact.
Higher expected future emissions costs are a key driver behind the Group’s strategic decision to invest in CO
2
emissions reduction initiatives,
such as the use of recycling, fuel switches and alternative fuels, and carbon capture, storage and utilisation projects. The possibility to avoid
the higher future costs of emissions creates a business case for investing in such initiatives.
If the Group is unable to reduce its Scope 1 emissions in Europe, the implementation of CBAM is expected to have a negative financial
impact on the Group from 2030 onwards as free carbon allowances under the existing EU ETS are phased-out. CBAM will apply a charge
to imported raw materials and is expected to increase refractory pricing for all suppliers selling into the EU. Additionally, products manu-
factured in the EU and then exported will incur higher costs, as there are currently no compensation mechanisms for exporters who will
have paid the CO
2
costs on production within the EU.
No negative financial effects are expected in the next reporting period, 2025. The Group is in the process of developing new technologies
and projects to reduce CO
2
emissions but is not yet able to calculate the required capital expenditure or funding sources for such projects.
Emissions reduction projects will be assessed according to the Group’s existing capital allocation process and required to deliver an attrac-
tive return on capital compared to other investment opportunities available to the Group. Whilst the Group may be successful in develop-
ing new technical solutions it is not certain that there will be sufficient financial capacity available to fund large capital projects without
support from public subsidy or tax incentives, co-investors and specialised debt providers.
Without mitigation such as the use of new technologies to reduce CO
2
emissions in the production process, the financial impacts of CBAM
could result in a future negative impact on equity value ranging from €255 million to €480 million.
The Group will use as a KPI to monitor this topic, the number of ETS certificates and ensure regulatory compliance.
Scope 1 emissions are covered by topic “E1 – Climate change” and sub-topic “Climate change mitigation” and further information is there-
fore provided below in the relevant section of the Group’s Consolidated Sustainability Statement.
Increase in operating expenditure and reputational damage if decarbonisation pathway not delivered
Risk
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RHI Magnesita has published a theoretical decarbonisation pathway which sets out a potential route to eliminate CO
2
emissions in its core
operations and upstream value chain by 2060. If the Group is unable to deliver this decarbonisation pathway it could be impacted by an
increase in operating expenditures and may also suffer reputational damage.
The negative financial impacts that may arise due to higher operating expenses if RHI Magnesita is unable to reduce its CO
2
emissions and
the Group’s responses to this risk are described in risk (9) “Increase in operating or capital expenditures due to changes in policy and regu-
lation”, above.
In addition to direct financial effects, RHI Magnesita may suffer criticism from stakeholders and consequent reputational damage if it is not
able to deliver its theoretical decarbonisation pathway. The Group has adopted a theoretical decarbonisation pathway that is not aligned
with a 1.5-degree scenario as set out in the Paris agreement. A detailed assessment was carried out in 2021 and 2022 of all possible
measures to reduce CO
2
emissions based on proven technology and available financial resources. The Board concluded that whilst it may
be possible to reduce emissions in line with a ‘well below 2 degrees’ scenario, it would not be possible to set a target that is aligned with a
1.5-degree scenario as this would be dependent on the development of as-yet-unknown technologies or reliant on significant external
financial and infrastructure support which are uncertain.
As a relatively high emitter of CO
2
RHI Magnesita is aware of the potential damage to its reputation of not achieving its theoretical decar-
bonisation pathway and has therefore responded to this risk by adapting its strategy and business model and by allocating resources to
decarbonisation R&D and projects.
The key strategic measures being taken to reduce CO
2
emissions are set out in impacts (2) to (5) in the table above, and include (i) increasing
the use of recycled raw materials; (ii) energy efficiency programmes, fuel switches and the use of alternative fuels; (iii) carbon capture and
storage or utilisation projects; (iv) working with suppliers of raw materials to reduce or eliminate their CO
2
emissions and (v) transportation
efficiency gains.
The reputational risk of not achieving the theoretical decarbonisation pathway occurs within the Group’s core activities and in its upstream
value chain, where a large proportion of CO
2
emissions are accounted for by suppliers of purchased raw materials.
No negative financial effects arising from this reputational risk are expected to occur in the next reporting period, 2025. In the medium and
long-term the Group could be affected by reputational damage if it is unable to maintain positive relations with key stakeholders such as
its employees, customers, suppliers, shareholders, lenders, host governments and local communities. The specific impact would depend
on the stakeholder relationship that is affected but could include an increase in the cost of equity or debt financing, permitting issues,
market share loss or local operational disruption.
Whilst the Group may be successful in developing new technical solutions for decarbonisation it is not certain that there will be sufficient
financial capacity available to fund large capital projects without external support.
The Group uses ETS expenditure as KPI to track this topic and optimise cost efficiency in emission trading.
CO
2
emissions are covered by topic “E1 – Climate change” and sub-topic “Climate change mitigation” and further information is therefore
provided below in the relevant section of the Group’s Consolidated Sustainability Statement.
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Scope 2 CO
2
emissions from energy consumption
Negative impact
RHI Magnesita purchases electrical energy from external power producers resulting in Scope 2 CO
2
emissions. Scope 2 emissions are a
smaller proportion of the Group’s CO
2
emissions compared to Scope 1 and Scope 3, accounting for only 4% of total emissions in 2024
(2023: 4%).
The Group is aware of the relatively high CO
2
intensity of its operations and Scope 2 emissions are recognised to have an incremental
impact on people and the environment through contributing to climate change over the medium and long-term. RHI Magnesita has there-
fore sought to adapt its strategy and business model to reduce this impact to the greatest extent as is sustainably possible. Due to their
smaller scale and the ability to obtain power from clean energy sources it is easier for RHI Magnesita to reduce its Scope 2 emissions com-
pared to Scope 1 or Scope 3. Scope 2 emissions occur within the Group’s core operations.
Scope 2 emissions do not incur carbon costs in Europe or elsewhere and therefore there are no near term negative financial impacts from
an ETS perspective, including in the next financial reporting period 2025. The Group has a plan to replace its remaining non-renewable
power consumption with a combination of self-generated clean power e.g. from on-site solar installations and via power purchase agree-
ments with certified clean energy providers. Capital expenditure on this plan is expected to be minimal due to the use of external providers
who install equipment in exchange for committed power purchase contracts. Once implemented an annual operating cost saving of up to
€2 million is forecast, compared to existing power contracts. RHI Magnesita has sufficient financial and organisational capacity to address
this risk in the period 2025-2026.
The Group will use as KPI to measure and reduce Scope 2 emissions, the energy efficiency and renewable energy sourcing.
Scope 2 emissions are covered by topic “E1 – Climate change” and sub-topic “Climate change mitigation” and further information is there-
fore provided below in the relevant section of the Group’s Consolidated Sustainability Statement.
Reputational damage if energy reduction targets not achieved
Risk
RHI Magnesita has published a target to reduce energy consumption per tonne of production by 5% by 2025, compared to a baseline year
of 2018. By 2030, the Group has committed to reducing absolute energy consumption by 1% per plant each year and to increase coverage
of its plants by ISO 50001 standards to 90%. Failure to achieve some or all these targets could result in reputational damage and may
negatively impact the Group’s ESG ratings.
This risk exists within the Group’s core operations and not in its upstream or downstream value chain. There are no near or long-term major
financial impacts of missing the targets other than slightly higher operating expenditure on energy and potentially higher expenditure on
CO
2
certificates if the energy consumption in question is related to fossil fuel use in Europe.
RHI Magnesita recognises that its business model is energy intensive and has responded to this risk by adapting its strategy and business
model and by allocating resources to energy saving projects. The Group is on track to achieve the 2025 target (the 5% energy intensity
saving has already been achieved in 2024) and considers that it also has sufficient capacity to deliver the 2030 targets.
The Group will establish a KPI in alignment with phase-in requirements to enhance tracking and reporting in this area.
Energy consumption is covered by topic “E1 – Climate change” and sub-topic “Climate change mitigation” and further information is there-
fore provided below in the relevant section of the Group’s Consolidated Sustainability Statement.
Air pollution from industrial processes
Negative impact
RHI Magnesita’s raw material processing and refractory plants utilise fossil fuels including natural gas, fuel oil and petcoke. Combustion of
these fuels results in air pollution from Sulphur Dioxide (SOx) and Nitrogen Oxides (NOx). These emissions occur in the Group’s core oper-
ations and have a negative impact on people and the environment due their effects on air quality. Similar emissions are also present in the
Group’s upstream value chain at its raw material suppliers and in the downstream value chain at customer sites and in the transportation
of goods.
The Group is aware of this negative environmental impact and has taken steps to adapt its strategy and business model to reduce it. The
primary method for reducing SOx and NOx emissions is through the installation of emissions abatement equipment at sites where such
pollution occurs. Switching fuels can lead to a reduction in pollution for example by replacing fuel oil or petcoke use with natural gas.
Emissions can also be reduced indirectly by increasing the use of recycled raw materials, which avoids the need to mine and process virgin
raw materials with associated SOx and NOx emissions.
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There are no financial impacts associated with SOx and NOx emissions, either in the next reporting period or the medium to long-term, as
long as emissions are kept below legal limits in the relevant jurisdiction. However, it is possible that legal limits could be reduced in the
future.
The Group has implemented a programme of emissions abatement equipment installation with upgrades completed in China and North
America in 2021 and 2023, respectively. Over the period 2025-2030 similar installations or reductions by other means will be undertaken
in Europe and Brazil. RHI Magnesita has adequate organisational and financial capacity to address this risk and has allocated capital for
equipment over that period. Equipment installed to date has demonstrated its efficacy in reducing pollution from these sources.
The Group monitors emission levels at its production sites and will use them as a KPI to track and improve environmental performance.
Pollution from SOx and NOx emissions is covered by topic “E2 – Pollution” and sub-topic “Air pollution” and further information is therefore
provided below in the relevant section of the Group’s Consolidated Sustainability Statement.
Efficient use of raw materials and resources including the use of recycled materials
Positive impact
RHI Magnesita’s use of recycled refractory material has a positive sustainability impact on people and the environment by promoting the
efficient use of raw materials. Using recycled material prevents the consumption of resources required to extract and process fresh raw
material and reduces waste at customer sites. This positive impact occurs within the Group’s core operations and in its upstream value chain,
since quantities of externally purchased raw materials are reduced. Waste disposal and circular economy benefits are realised in the down-
stream value chain.
Seeking to increase the use of recycled raw material is an integral part of the Group’s strategy to be a sustainability leader in the refractory
industry and has led to significant developments in the business model.
As described in impact (2) “Saved emissions through usage of recycled raw materials” above, RHI Magnesita has developed proprietary
technology to utilise recycled raw materials without negatively impacting refractory performance. Investments in R&D, product develop-
ment, acquisitions and internal capital expenditures have been deployed and this has successfully delivered an increase in the recycling
rate from 3.8% in 2018 to 14.2% in 2024. A total of 364 kt of recycled material was utilised, compared to 271 kt in 2023. Without recycling,
this material would have been sourced through new mining and processing activities in 2024. The Group’s solutions contract offering is
the ideal platform and recycling of residual material now forms an important part of the ‘4PRO’ solutions offering.
Further investments in new sorting technologies and a global roll-out of recycling are underway and are expected to deliver further benefits
in the short and medium term. Capital expenditure allocated to recycling in 2025 is budgeted at €3,9million and the Group may also make
further recycling focused acquisitions, although no sum is reserved specifically for this purpose. The Group has sufficient capacity to con-
tinue to invest in recycling opportunities.
The Group uses the recycling rate as KPI to enhance its recycling efforts and drive sustainable material management.
Recycling is covered by topic “E5 – Resource use and circular economy” and sub-topic “Resource inflows, including resource use” and
further information on recycling performance is therefore provided below in the relevant section of the Group’s Consolidated Sustainability
Statement.
Workplace safety incidents in own workforce
Negative impact
Occupational injuries occurring at RHI Magnesita’s operational sites have a negative impact on affected individuals and their families. This
impact is focused on incidents which occur within the Group’s core operations and not in its upstream or downstream value chains.
The Group’s operations may also be affected by poor health and safety performance and such impacts could be both short term and long-
term in nature. Workplace safety incidents have a negative financial impact in the short term due to lost time, reduced production, lower
productivity and costs associated with compensation, investigations and remedial upgrades. Long-term impacts could arise due to higher
costs of production, reputational damage, long-dated compensation payments and impacts on key stakeholders such as difficulty in re-
cruiting or retaining employees.
Health and safety is a core value for RHI Magnesita and adaptations have been made to the strategy and the business model to reduce this
negative impact. Key initiatives aimed at structurally reduce impacts include automation, training, incident investigation, global standards,
safety culture initiatives and reviews by external experts. The Group has sufficient capacity to invest in improving its health and safety
performance and health and safety related capital expenditures are protected and prioritised within the Group’s capital allocation frame-
work.
The Group monitors health and safety performance and will use total recordable injuries (“TRI”) as KPI to track this topic.
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Workplace safety incidents are covered by topic “S1 – Own workforce” and sub-topic “Health and safety” and further information on work-
place safety is therefore provided below in the relevant section of the Group’s Consolidated Sustainability Statement.
Incidents of forced labour in own workforce
Potential negative impact
RHI Magnesita employs approximately 16,000 employees and 6,000 contractors across its main production sites globally, operating in a
diverse range of locations. While the risk of forced labour is closely managed, it remains a concern, particularly among the contractor
workforce, where the Group has less direct control over recruitment and working conditions. This risk is specifically focused on incidents
within RHI Magnesita’s core operations and does not extend to its upstream or downstream value chains.
Findings from the Double Materiality Assessment (“DMA”) indicate that the risk of forced labour is significantly higher in regions such as
BRICS, Asia, Africa, and Middle and South America, where regulatory oversight and enforcement mechanisms may be weaker. Forced la-
bour has severe consequences on individuals' quality of life, making prevention and mitigation a key priority. In contrast, regions such as
Europe, North America, Singapore, and South Korea present a significantly lower risk, supported by strong legal frameworks and govern-
ance structures, with only rare cases occurring.
Within RHI Magnesita’s operations, strict Group policies and compliance measures serve as a strong deterrent, minimising the probability
of occurrence to an individual level. However, managing and mitigating the personal and systemic impacts of forced labour remains com-
plex.
The risk of poor labour practices interacts with the Group’s strategy in the area of M&A, which is a primary growth driver for RHI Magnesita.
Through due diligence before transactions and during integration processes after completion the Group seeks to ensure that practices in
acquired businesses are in line with expected minimum standards and policies.
Failure to identify and rectify instances of forced labour within its own workforce could result in fines, enforcement action and reputational
damage. Conditions of forced labour have clear negative impacts on people but are not likely to be connected to environmental impacts.
Given the safeguards that the Group has in place, no material financial effect from this risk is expected in the next reporting period, 2025,
or in the medium to long-term. The Group has sufficient capacity to continue to address this risk in its own workforce.
The Group tracks the number of reports to the whistleblowing hotline, and it will use as a KPI for this area.
Forced labour is covered by topic “S1 – Own workforce” and sub-topic “Forced labour” and further information is therefore provided below
in the relevant section of the Group’s Consolidated Sustainability Statement.
Reputational damage if health and safety targets not achieved
Risk
RHI Magnesita employees and contractors at its main production sites and at customer sites may be exposed to safety hazards in the work-
place. The most common mechanisms of serious injury are falls, falling objects, contact with moving vehicles or industrial equipment and
material handling. The Group has a target to eliminate fatalities and to maintain a Total Recordable Injury Frequency Rate of below 1.2 per
200,000 hours worked. If these targets are not achieved the Group could be subject to reputational damage as well as fines and enforce-
ment action. Poor health and safety performance could also impact the Group’s ESG ratings with a potential negative impact for the interest
rate payable on its sustainability linked debt facilities.
This risk is focused on health and safety performance within the Group’s core operations and not in its upstream or downstream value
chains
Workplace health and safety interacts closely with the Group’s strategy and business model since refractory production in non-automated
plants is labour intensive and necessitates people working in close proximity to equipment, machinery and other potential hazards. As a
responsible employer with an aspiration to lead the refractory industry in sustainability, the Group assigns the highest priority of all sus-
tainability risks and impacts to the safety of its employees and contractors.
Health and safety risk interacts with the Group’s strategy in the area of M&A, which is a primary growth driver for RHI Magnesita. Through
due diligence before transactions and during integration processes after completion the Group seeks to ensure that health and safety
practices in acquired businesses are in line with expected minimum standards and policies.
Given the safeguards that the Group has in place, no material financial effect from this risk is expected in the next reporting period, 2025,
or in the medium to long-term. The Group has sufficient capacity to continue to address this risk in its own workforce.
The Group will develop a reputation-related KPI in line with phase-in requirements for this topic.
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Health and safety in own workforce is covered by topic “S1 – Own workforce” and sub-topic “Health and Safety” and further information is
therefore provided below in the relevant section of the Group’s Consolidated Sustainability Statement.
Workplace safety incidents in supply chain
Negative impact
RHI Magnesita utilises a broad supply chain including raw material producers, energy suppliers, freight service providers, consumables,
packaging and capital goods suppliers, amongst others. Occupational injuries occurring in the supply chain have a negative impact on
affected individuals and their families. This impact is focused on incidents which occur within the upstream value chain and not in the
Group’s core operations or downstream value chains.
Health and safety is a core value for RHI Magnesita and suppliers are expected to maintain compliance with health and safety regulations
according to the Supplier Code of Conduct. Workplace safety incidents in the supply chain are unlikely to have any financial impact on
RHI Magnesita but could result in reputational damage.
RHI Magnesita undertakes audits at supplier sites and requires participation in third party evaluations provided by Eco Vadis to ensure
supplier compliance with a range of sustainability issues, including health and safety performance. The Group has sufficient capacity to
continue addressing this negative impact in its supply chain.
The Group collects and assesses supplier data and uses as a KPI to track this topic.
Workplace safety incidents in the supply chain are covered by topic “S2 – Workers in the supply chain” and sub-topic “Health and safety”
and further information on workplace safety is therefore provided below in the relevant section of the Group’s Consolidated Sustainability
Statement.
Incidents of forced labour in supply chain
Potential negative impact
RHI Magnesita utilises a broad supply chain including raw material producers, energy suppliers, freight service providers, consumables,
packaging and capital goods suppliers, amongst others. Since RHI Magnesita does not have direct managerial control over workers in its
supply chain, there is a relatively higher risk of instances of forced labour. This risk is focused on forced labour which may occur within the
upstream value chain and not within the Group’s core operations or downstream value chain.
According to the terms of RHI Magnesita’s Supplier Code of Conduct, suppliers are expected to respect and promote human and civil rights
and refrain from using any form of forced, compulsory or child labour. Incidents of forced labour in the supply chain are unlikely to have
any financial impact on RHI Magnesita but could result in reputational damage.
RHI Magnesita undertakes audits at supplier sites and requires participation in third-party evaluations provided by Ecovadis to ensure sup-
plier compliance with a range of sustainability issues, including forced labour. The Group has sufficient capacity to continue addressing
this negative impact in its supply chain. In 2023, the Group reacted to the discovery of an incident of forced labour in its supply chain by
terminating its relationship with the supplier. No similar incidents were recorded in 2024.
The risk of poor labour practices interacts with the Group’s strategy in the area of M&A, which is a primary growth driver for RHI Magnesita.
Through due diligence before transactions and during integration processes after completion the Group seeks to ensure that practices in
acquired businesses are in line with expected minimum standards and policies.
The Group collects and assesses supplier data and uses as a KPI to track this topic.
Forced labour in the supply chain is covered by topic “S2 – Workers in the supply chain” and sub-topic “Forced labour” and further infor-
mation on workplace safety is therefore provided below in the relevant section of the Group’s Consolidated Sustainability Statement.
Fraud and corruption in various forms
Risk
RHI Magnesita operates in some geographies with inherently high corruption risks, where employees or third-party representatives may
violate anti-corruption laws. This risk could occur in the Group’s core operations or in its upstream and downstream value chains.
Fines, enforcement action and reputational damage as a result of breaches of anti-corruption laws may be significant. The Group is not
aware of any ongoing investigation which could result in a material financial impact in the next reporting period, 2025. The risk of fraud
and corruption is likely to continue to exist in both the medium and long-term but the Group has sufficient capacity to continue to address
this risk.
Fraud and corruption risk interacts with the Group’s M&A growth strategy as it seeks to grow its business in geographies and product seg-
ments in which it is under-represented. RHI Magnesita may pursue acquisitions in geographies with a higher risk of fraud and corruption.
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100 — RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024
Through due diligence before transactions and during integration processes after completion the Group seeks to ensure that practices in
acquired businesses are in line with expected minimum standards and policies.
Responses to the risk of fraud and corruption include:
• Promoting ethical values supported by strong corporate culture;
• Code of Conduct and compliance policies and procedures;
• Enhancement of global training, documentation of compliance matters and communication;
• Whistleblowing channels available to employees and external parties to report compliance concerns; and
• Range of interventions performed in conjunction with acquired businesses to assess regulatory risk and to introduce and embed
the Group’s compliance approach.
The Group tracks the number of reports to the whistleblowing hotline, and it will use as a KPI for this area.
Fraud and corruption are covered by topic “G1 – Business Ethics” and further information is therefore provided below in the relevant section
of the Group’s Consolidated Sustainability Statement.
Impact, risk and opportunity management
Disclosure Requirement IRO-1 – Description of the process to identify and assess material impacts, risks and opportunities
RHI Magnesita has assessed material sustainability related impacts, risks and opportunities according to the ESRS concept and require-
ments of double materiality. The assessment results were presented to management and subsequently reviewed by the joint meeting of
the Corporate Sustainability and Audit & Compliance Committees on behalf of the Board of Directors.
Refractory production is a hard-to-abate industry characterised by energy-intensive processes, high-temperature operations, and reliance
on fossil fuels, leading to significant carbon emissions, including process emissions from raw material calcination and fuel combustion at
raw material processing sites. The impact is exacerbated by rising global demand, particularly in emerging markets, and the inherent chal-
lenges of decarbonisation due to technological limitations (e.g., achieving high temperatures with renewable energy), long investment
cycles, and substantial transition costs. To address these emissions, the Group is actively pursuing and evaluating solutions such as carbon
capture, utilisation, and storage (“CCUS”), electrification, green hydrogen, energy efficiency enhancements, and the integration of low-
carbon materials into its operations.
To prepare for the DMA, RHI Magnesita conducted a comprehensive evaluation of its business model and activities across the value chain.
This included a detailed analysis of the granularity of impact risks and opportunities (IROs) within the Group, ensuring a thorough under-
standing of their specific implications. This process was aimed at identifying key areas of significance, refining the scope of material issues,
and aligning them with the Group’s strategic priorities. This process was guided by the list of sustainability matters outlined in the topical
ESRS and facilitated the identification of key stakeholders. Additionally, RHI Magnesita also made use of performance data, literature review,
ESG public databases, current and upcoming regulations and standards, industry sector benchmarking and external experts to support the
materiality assessment. RHI Magnesita has previously carried out materiality and risk assessments for GRI reporting and TCFD analysis.
The evaluation of potential GHG emissions has been conducted with a focus on the distinct contributions from raw material preparation
plants and refractory production facilities. This analysis accounts for variations in energy and fuel mixes across operations, as well as the
specific carbon intensity of each process. Raw material preparation plants, due to energy-intensive activities such as calcination and ma-
terial processing, have been assessed separately to highlight their unique emission profiles. Similarly, emissions from refractory production
have been analysed, with particular attention to kiln operations, fuel combustion, and electricity consumption. Additionally, the type and
sourcing of raw materials have been considered, given their significant impact on the overall emissions footprint. This approach ensures a
comprehensive understanding of source of emissions across the value chain and highlights key areas for targeted mitigation efforts.
The assessment process incorporated input and validation from key stakeholders, including subject matter experts from group functions in
health and safety, environment, equality, diversity and inclusion, community engagement, sustainable procurement, compliance, and risk
management. Additionally, contributions from the sustainability functions in corporate areas were integral to ensuring a holistic perspective.
Involvement of the risk management resources in the materiality assessment process supports the identification and further evaluation of
sustainability related impacts, risks and opportunities. There are no additional internal controls for the DMA.
Impact materiality assessment
The impact materiality assessment considered both actual and potential sustainability impacts from RHI Magnesita’s own activities and
business relationships across the upstream and downstream value chain, focusing on high-risk areas such as mining and production pro-
cesses, as well as relevant processes and influencing factors. Where applicable, industry-specific issues were also integrated into the eval-
uation to ensure a tailored approach.
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The following steps were taken for the impact materiality assessment:
• Identification of impacts;
• Scoping and classification of individual impacts;
• Assessment of significance of individual impacts;
• Analysis of results and materiality thresholds; and
• Perception and Validation of DMA Outcomes by stakeholders.
Identification of impacts
RHI Magnesita has identified its impacts across the value chain by examining sustainability matters at varying levels of granularity, including
topics, sub-topics, and sub-sub-topics. This analysis considered the direct and indirect consequences of RHI Magnesita’s operations, prod-
ucts, and services on environmental, social, and governance aspects. By aligning with the detailed structure provided by the ESRS, the
assessment captured specific nuances of each sustainability matter, ensuring a thorough understanding of the scale, scope, and depth of
RHI Magnesita’s impacts at every stage of the value chain. This approach enabled the identification of both significant adverse effects and
opportunities for positive contributions to people and environment.
Scoping and classification of individual impacts
As a next step, a detailed analysis of each identified impact, considering its classification along the value chain to pinpoint where it occurs,
and its significance was carried out. Impacts were classified as positive or negative and assessed further to determine whether they are
actual (already occurring) or potential (likely to occur in the future). Each impact was also evaluated based on its time frame - whether it is
short, medium, or long-term - and the probability of its occurrence, enabling a thorough understanding of the likelihood and urgency of
the impact. This approach ensures a comprehensive assessment of sustainability impacts across RHI Magnesita's operations and value
chain.
Assessment of significance of individual impacts
To assess the significance of impacts, RHI Magnesita followed the ESRS methodology, incorporating a comprehensive evaluation of scale,
scope, remediability, and likelihood. Scale measures the magnitude of the impact, while scope evaluates its breadth across stakeholders
and the value chain. Remediability considers the feasibility and timeframe to reverse or mitigate a negative impact, and likelihood assesses
the probability of the impact occurring. Each dimension is rated on a scale from 0 to 6, with 6 representing the highest level of impact. This
evaluation integrates both quantitative data, such as metrics and indicators, and qualitative insights, including expert opinions and stake-
holder feedback. Additionally, potential impacts are analysed with a focus on their probability of occurrence, granularity, and time horizon,
ensuring a balanced assessment.
Analysis of results and materiality thresholds
The analysis of results and materiality thresholds play a critical role in determining which issues are to be included in RHI Magnesita’s
sustainability reporting. Materiality thresholds were carefully evaluated for reasonableness to ensure a balance between comprehensive-
ness and manageability, ensuring that resources are focused on critical areas without diluting efforts across too many topics while meeting
reporting obligations effectively. Both quantitative (e.g. numerical scoring) and qualitative thresholds (e.g., legal compliance, reputational
risk) were utilised, with alignment to Group targets shaping final decisions. Different quantitative thresholds were tested to refine the results.
Financial materiality assessment
Financial materiality is evaluated based on the potential risks of negative reputational, financial, or commercial impacts on RHI Magnesita
arising from sustainability topics, as well as the opportunities linked to sustainability that could benefit RHI Magnesita. The following steps
were taken for the financial materiality:
• Gap analysis;
• Risk mapping against CSRS topics, subtopics and sub-subtopics;
• Assessment based on RHI Magnesita‘s internal risk assessment approach;
• Analysis of results and materiality thresholds; and
• Perception and Validation of DMA Outcomes by stakeholders.
Gap analysis
The gap analysis of financial materiality involves a thorough review of existing risks to assess their alignment with RHI Magnesita's strategy
and sustainability goals. This process includes identifying any emerging risks that may pose reputational, financial, or operational chal-
lenges and evaluating their potential impact on the Group. Simultaneously, the analysis explores untapped opportunities that align with
RHI Magnesita’s strategy, enabling the integration of sustainability-driven initiatives into the business strategy.
Risk mapping against ESRS topics
As part of the risk mapping process, ESG risks and opportunities were aligned with their corresponding topics within the ESRS framework.
By doing so, RHI Magnesita ensured that highly rated impacts identified in the materiality analysis are adequately reflected as risks or op-
portunities within the ESRS universe, providing a cohesive and comprehensive integration of sustainability considerations into risk man-
agement and reporting practices.
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Risk and opportunity assessment following RHI Magnesita’s risk management approach
The assessment of risks and opportunities has followed RHI Magnesita's internal risk assessment methodology, ensuring alignment with the
Group's established approach to evaluating potential impacts. The analysis incorporates a time horizon perspective, considering short-,
medium-, and long-term implications for the business. This comprehensive evaluation enables the identification and prioritisation of risks
and opportunities, ensuring that immediate concerns, emerging trends, and long-range strategic impacts are thoroughly addressed within
the sustainability context.
Analysis of results and materiality thresholds
The analysis of results and materiality thresholds is key in identifying which issues are significant enough to be included in RHI Magnesita’s
sustainability reporting. These thresholds were assessed to ensure a balance between comprehensiveness and focus, allowing resources
to be directed toward critical risks and opportunities while maintaining effective reporting. Both quantitative thresholds (e.g., numerical
scoring) and qualitative criteria (e.g., legal compliance, reputational risk) were applied, with alignment to Group targets guiding final deci-
sions. Various quantitative thresholds were tested to refine the analysis, ensuring the prioritisation of material issues. For financial materiality,
RHI Magnesita will focus on critical areas where the likelihood and impact of risks or opportunities materialising are significant. However,
not all sustainability related risks in the Consolidated Sustainability Statement are specifically highlighted in RHI Magnesita’s aggregate
risk profile.
For impact materiality, 92 matters were assessed. Of these, 12 were classified above the materiality threshold. For financial materiality, 60
matters were assessed. Of these, eight were classified above the materiality threshold and one was added as a result of the stakeholder
validation process.
Stakeholder perception and validation of Double Materiality Assessment (“DMA”) results
RHI Magnesita conducted consultations with internal and external stakeholders (employees, investors, suppliers, customers, NGOs, lenders,
members of Board) for validation and perceived materiality.
The views of RHI Magnesita’s stakeholders are integrated in the materiality assessment. RHI Magnesita’s Group functions and business areas
summarise input provided to them through their engagement with affected stakeholders, and their interaction with external sustainability
experts and users of RHI Magnesita’s Consolidated Sustainability Statement.
Results
All identified sustainability related impacts, risks and opportunities that are considered material for affected stakeholders or users of RHI
Magnesita’s Consolidated Sustainability Statement are presented in the table below, which is the basis for the scope of this Consolidated
Sustainability Statement.
A regular review of the scope of the DMA is expected, to remain responsive to the evolving regulatory environment and/or the Group goes
through significant changes in its industrial footprint (e.g. M&A)
Disclosure requirement IRO-2 – Disclosure requirements in ESRS covered by the undertaking’s Consolidated Sustainability
Statement
Environmental Information
The following index shows the disclosure requirements that were followed in preparing the sustainability statement based on the results of
the materiality assessment (see ESRS 1 Chapter 3), including the page numbers that contain the corresponding disclosures in the sustain-
ability statement.
In addition, we provide below information on data points in the ESRS 2 and the thematic ESRSs arising from other EU legislation (ESRS 2
Annex B) – as well as requirements under the thematic ESRSs that need to be taken into account when reporting on the ESRS 2 disclosure
requirements (ESRS 2 Annex C). List of data points in general and thematic standards arising from other EU legislation (ESRS 2 Annex B).
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Disclosure Requirement and
related datapoint
(1) SFDR reference
1)
(2) Pillar 3 reference
2)
(3) Benchmark Regulation
reference
3)
(4) EU Climate Law
reference
4)
Page Reference/
Relevance
ESRS 2
GOV
-1 Board’s gender diversity
paragraph 21 (d)
Indicator number 13 of
Table #1 of Annex 1
Commission Delegated
Regulation (EU) 2020/1816
5)
,
Annex II 77
ESRS 2 GOV
-1
Percentage of board members who
are independent paragraph 21 (e)
Delegated Regulation (EU)
2020/1816, Annex II 77
ESRS 2 GOV
-4
Statement on due diligence
paragraph 30
Indicator number 10 Table
#3 of Annex 1 82
ESRS 2 SBM
-1
Involvement in activities related to
fossil fuel activities paragraph 40
(d) i
Indicators number 4 Table
#1 of Annex 1
Article 449a Regulation (EU) No
575/2013; Commission
Implementing Regulation (EU)
2022/2453
6)
Table 1: Qualitative
information on Environmental
risk and Table 2: Qualitative
information on Social risk
Delegated Regulation (EU)
2020/1816, Annex II
Not material
ESRS 2 SBM
-1
Involvement in activities related to
chemical production
paragraph
40 (d) ii
Indicator number 9 Table
#2 of Annex 1
Delegated Regulation (EU)
2020/1816, Annex II Not material
ESRS 2 SBM
-1
Involvement in activities related to
controversial weapons paragraph
40 (d) iii
Indicator number 14 Table
#1 of Annex 1
Delegated Regulation (EU)
2020/1818
7)
, Article 12(1)
Delegated Regulation (EU)
2020/1816, Annex II Not material
ESRS 2 SBM
-1
Involvement in activities related to
cultivation and production of
tobacco paragraph 40 (d) iv
Delegated Regulation (EU)
2020/1818, Article 12(1)
Delegated Regulation (EU)
2020/1816, Annex II
Not material
ESRS E1
-1
Transition plan to reach climate
neutrality by 2050 paragraph 14
Regulation (EU)
2021/1119, Article 2(1)
Not material
ESRS E1
-1
Undertakings excluded from Paris
-
aligned Benchmarks paragraph 16
(g)
Article 449a; Regulation (EU) No
575/2013; Commission
Implementing Regulation (EU)
2022/2453 Template 1: Banking
book – Climate change
transition risk: Credit quality of
exposures by sector, emissions
and residual maturity
Delegated Regulation (EU)
2020/1818, Article12.1 (d) to (g),
and Article 12.2 Not material
ESRS E1
-4
GHG emission reduction targets
paragraph 34
Indicator number 4 Table
#2 of Annex 1
Article 449a Regulation (EU) No
575/2013; Commission
Implementing Regulation (EU)
2022/2453 Template 3: Banking
book – Climate change
transition risk: alignment metrics
Delegated Regulation (EU)
2020/1818, Article 6 134-135
ESRS E1
-5
Energy consumption from fossil
sources disaggregated by sources
(only high climate impact sectors)
paragraph 38
Indicator number 5 Table
#1 and Indicator n. 5 Table
#2 of Annex 1 135-136
ESRS E1
-5
Energy consumption and mix
paragraph 37 ESRS
Indicator number 5 Table
#1 of Annex 1 135
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104 — RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024
Disclosure Requirement and
related datapoint
() SFDR reference
)
() Pillar reference
)
() Benchmark Regulation
reference
)
() EU Climate Law
reference
)
Page Reference/
Relevance
ESRS E
-
Energy intensity associated with
activities in high climate impact
sectors paragraphs to ESRS
Indicator number Table
# of Annex
ESRS E
-
Gross Scope , , and Total GHG
emissions paragraph
Indicators number and
Table # of Annex
Article a; Regulation (EU) No
/; Commission
Implementing Regulation (EU)
/ Template : Banking
book – Climate change
transition risk: Credit quality of
exposures by sector, emissions
and residual maturity
Delegated Regulation (EU)
/, Article (), and () -
ESRS E
-
Gross GHG emissions intensity
paragraphs to
Indicators number Table
# of Annex
Article a Regulation (EU) No
/; Commission
Implementing Regulation (EU)
/ Template : Banking
book – Climate change
transition risk: alignment metrics
Delegated Regulation (EU)
/, Article ()
ESRS E
-
GHG removals and carbon credits
paragraph
Regulation (EU)
/, Article ()
ESRS E
-
Exposure of the benchmark
portfolio to climate
-related
physical risks paragraph
Delegated Regulation (EU)
/, Annex II
Delegated Regulation (EU)
/, Annex II
ESRS E
-
Disaggregation of
monetary
amounts by acute and chronic
physical risk paragraph (a)
ESRS E
-
Location of significant assets at
material physical risk paragraph
(c).
Article a Regulation (EU) No
/; Commission
Implementing Regulation (EU)
/ paragraphs and
; Template : Banking book –
Climate change physical risk:
Exposures subject to physical
risk.
ESRS E
-
Breakdown of the carrying value of
its real estate assets by energy
-
efficiency classes paragraph (c).
Article a Regulation (EU) No
/; Commission
Implementing Regulation (EU)
/ paragraph ;
Template :Banking book –
Climate change transition risk:
Loans collateralised by
immovable property – Energy
efficiency of the collateral Not material
ESRS E
-
Degree of exposure of the portfolio
to climate
- related opportunities
paragraph
Delegated Regulation (EU)
/, Annex II
ESRS E
-
Amount of each pollutant listed in
Annex II of the E
-PRTR Regulation
(European Pollutant Release and
Transfer Register) emitted to air,
water and soil, paragraph
Indicator number Table
# of Annex Indicator
number Table # of
Annex Indicator number
Table # of Annex
Indicator number Table
# of Annex
ESRS E
-
Water and
marine resources
paragraph
Indicator number Table
# of Annex
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Disclosure Requirement and
related datapoint
(1) SFDR reference
1)
(2) Pillar 3 reference
2)
(3) Benchmark Regulation
reference
3)
(4) EU Climate Law
reference
4)
Page Reference/
Relevance
ESRS E3
-1
Dedicated policy paragraph 13
Indicator number 8 Table
2 of Annex 1 Not material
ESRS E3
-1
Sustainable oceans and seas
paragraph 14
Indicator number 12 Table
#2 of Annex 1
Not material
ESRS E3
-4
Total water recycled and reused
paragraph 28 (c)
Indicator number 6.2
Table #2 of Annex 1
Not material
ESRS E3
-4
Total water consumption in m3 per
net revenue on own operations
paragraph 29
Indicator number 6.1
Table #2 of Annex 1 Not material
ESRS 2
– SBM-3 – E4,
paragraph 16 (a) i
Indicator number 7 Table
#1 of Annex 1 Not material
ESRS 2
– SBM-3 – E4,
paragraph 16 (b)
Indicator number 10 Table
#2 of Annex 1
Not material
ESRS 2
– SBM-3 – E4,
paragraph 16 (c)
Indicator number 14 Table
#2 of Annex 1 Not material
ESRS E4
-2
Sustainable land/agriculture
practices or policies paragraph 24
(b)
Indicator number 11 Table
#2 of Annex 1 Not material
ESRS
E4-2
Sustainable oceans/seas practices
or policies paragraph 24 (c)
Indicator number 12 Table
#2 of Annex 1 Not material
ESRS E4
-2
Policies to address deforestation
paragraph 24 (d)
Indicator number 15 Table
#2 of Annex 1 Not material
ESRS E5
-5
Non
-recycled waste paragraph 37
(d)
Indicator number 13 Table
#2 of Annex 1
Not material
ESRS E5
-5
Hazardous waste and radioactive
waste paragraph 39
Indicator number 9 Table
#1 of Annex 1
Not material
ESRS 2
-SBM3 – S1
Risk of
incidents of forced labour
paragraph 14 (f)
Indicator number 13 Table
#3 of Annex I 153
ESRS 2
-SBM3 – S1
Risk of incidents of child labour
paragraph 14 (g)
Indicator number 12 Table
#3 of Annex I Not material
ESRS S1
-1
Human rights
policy
commitments, paragraph 20
Indicator number 9 Table
#3 and Indicator number
11 Table #1 of Annex I 153
ESRS S1
-1
Due diligence policies on issues
addressed by the fundamental
International Labor Organisation
Conventions 1 to 8, paragraph 21
Delegated Regulation (EU)
2020/1816, Annex II 153
ESRS S1
-1
processes and measures for
preventing trafficking in human
beings paragraph 22
Indicator number 11 Table
#3 of Annex I 153
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CONSOLIDATED SUSTAINABILITY STATEMENT
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106 — RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024
Disclosure Requirement and
related datapoint
() SFDR reference
)
() Pillar reference
)
() Benchmark Regulation
reference
)
() EU Climate Law
reference
)
Page Reference/
Relevance
ESRS S
-
workplace accident prevention
policy or
management system
paragraph
Indicator number Table
# of Annex I
ESRS S
-
grievance/complaints handling
mechanisms paragraph (c)
Indicator number Table
# of Annex I
ESRS S
-
Number of fatalities and number
and rate of
work- related accidents
paragraph (b) and (c)
Indicator number Table
# of Annex I
Delegated Regulation (EU)
/, Annex II
ESRS S
-
Number of days lost to injuries,
accidents, fatalities or illness
paragraph (e)
Indicator number Table
# of Annex I
ESRS S
-
Unadjusted gender pay gap
paragraph (a)
Indicator number Table
# of Annex I
Delegated Regulation (EU)
/, Annex II Not material
ESRS S
-
Excessive CEO pay ratio paragraph
(b)
Indicator number Table
# of Annex I
ESRS S
-
Incidents of discrimination
paragraph (a)
Indicator number Table
# of Annex I
ESRS S
-
Non
-respect of UNGPs on
Business and Human Rights and
OECD paragraph (a)
Indicator number Table
# and Indicator n.
Table # of Annex I
Delegated Regulation (EU)
/, Annex II
Delegated Regulation (EU)
/, Art ()
ESRS
-SBM – S
Significant risk of child labour or
forced labour in the
value chain
paragraph (b)
Indicators number and
n. Table # of Annex I
Not material
ESRS S
-
Human rights policy commitments
paragraph
Indicator number Table
# and Indicator n.
Table # of Annex -
ESRS S
-
Policies related to value chain
workers paragraph
Indicator number and n.
Table # of Annex -
ESRS S
-
Non
-respect of UNGPs on
Business and Human Rights
principles and OECD guidelines
paragraph
Indicator number Table
# of Annex
Delegated Regulation (EU)
/, Annex II
Delegated Regulation (EU)
/, Art () -
ESRS S
-
Due diligence policies on issues
addressed by the fundamental
International Labor Organisation
Conventions to , paragraph
Delegated Regulation (EU)
/, Annex II -
ESRS S
-
Human rights issues and incidents
connected to its upstream and
downstream value chain
paragraph
Indicator number Table
# of Annex
-
ESRS S
-
Human rights
policy commitments
paragraph
Indicator number Table
# and Indicator n.
Table # of Annex
Not material
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024106
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RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024 — 107
Disclosure Requirement and
related datapoint
() SFDR reference
)
() Pillar reference
)
() Benchmark Regulation
reference
)
() EU Climate Law
reference
)
Page Reference/
Relevance
ESRS S
-
non
-respect of UNGPs on
Business and Human Rights, ILO
principles or and OECD guidelines
paragraph
Indicator number Table
# of Annex
Delegated Regulation (EU)
/, Annex II
Delegated Regulation (EU)
/, Art () Not material
ESRS S
-
Human rights issues and incidents
paragraph
Indicator number Table
# of Annex Not material
ESRS S
-
Policies related to consumers and
end
-users paragraph
Indicator number Table
# and Indicator n.
Table # of Annex Not material
ESRS S
-
Non
-respect of UNGPs on
Business and Human Rights and
OECD guidelines paragraph
Indicator number Table
# of Annex
Delegated Regulation (EU)
/, Annex II
Delegated Regulation (EU)
/, Art () Not material
ESRS S
-
Human rights issues and incidents
paragraph
Indicator number Table
# of Annex Not material
ESRS G
-
United Nations Convention against
Corruption paragraph (b)
Indicator number Table
# of Annex -
ESRS G
-
Protection of whistleblowers
paragraph (d)
Indicator number Table
# of Annex -
ESRS
G-
Fines for violation of anti
-
corruption and anti
-bribery laws
paragraph (a)
Indicator number Table
# of Annex
Delegated Regulation (EU)
/, Annex II
ESRS G
-
Standards of anti
- corruption and
anti
- bribery paragraph (b)
Indicator number Table
# of Annex
1) Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector
(OJ L 317, 9.12.2019, p. 1).
2) Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms
and amending Regulation (EU) No 648/2012 (Capital Requirements Regulation) (OJ L 176, 27.6.2013, p. 1).
3) Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial
contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014 (OJ L 171,
29.6.2016, p. 1).
4) Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending
Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’) (OJ L 243, 9.7.2021, p. 1).
5) Commission Delegated Regulation (EU) 2020/1816 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as regards
the explanation in the benchmark statement of how environmental, social and governance factors are taken into account in each benchmark that is made available
and published (OJ L 406, 3.12.2020, p. 1)
6) Commission Implementing Regulation (EU) 2022/2453 of 30 November 2022 amending the implementing technical standards laid down in Implementing
Regulation (EU) 2021/637 with regard to the disclosure of environmental, social and governance risks (OJ L 324, 19.12.2022, p.1).
(7) Commission Delegated Regulation (EU) 2020/1818 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council with
regard to minimum standards for EU climate transition benchmarks and for EU Paris-aligned benchmarks (OJ L 406, 3.12.2020, p. 17).
MDR – minimum disclosure requirements
RHI Magnesita’s Consolidated Sustainability Statement includes separate sections on all material sustainability topics covered by ESRS.
The chapter for each material sustainability topic includes a description of material impacts, risks and opportunities in relation to the
topic, and corresponding disclosures on governance, strategy, policies, metrics and targets.
The adopted policies, actions and targets with reference to the specific sustainability matter concerned, do not necessarily include all the
information required under relevant ESRS, hence it is disclosed as required by ESRS.
107RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
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CONSOLIDATED SUSTAINABILITY STATEMENT
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108 — RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024
Environmental information
Disclosures pursuant to Article 8 of Regulation (EU) 2020/852 (Taxonomy Regulation)
The EU Taxonomy Regulation (“EU Taxonomy”) applies in respect of the financial year to 31 December 2024 and requires the Group to
report annually on the proportion of its turnover, operating expenditure and capital expenditure attaching to economic activities that are
considered to be environmentally sustainable.
The EU Taxonomy identifies the six environmental objectives: climate change mitigation; climate change adaptation; the sustainable use
and protection of water and marine resources; the transition to a circular economy; pollution prevention and control; and the protection
and restoration of biodiversity and ecosystems. In respect of the 2024 financial year, the Group, RHI Magnesita has reviewed its activities
that qualify as eligible and aligned according to the published technical screening criteria for climate change mitigation and adaptation,
including amendments to Article 8. Additionally, RHI Magnesita has assessed the eligibility and alignment on the other four EU environ-
mental objectives according to the technical screening criteria specified in the Taxonomy Environmental Delegated Act. As no sector-
specific guidance for the refractory industry has been published yet and therefore the Group is required to use its own judgement against
the eligibility criteria. The NACE (the statistical classification of economic activities in the European Community) codes most closely de-
scribing the activities of the Group are “23.20 Manufacture of refractory products” and “08.99 Other mining and quarrying”. These NACE
codes are not listed in Annex I or Annex II of the Taxonomy Regulation, but certain activities carried out by the Group do meet the definitions
of economic activities listed in Annex I of the Regulation. As elaborated further by the Commission on Taxonomy, if the NACE code of an
economic activity is not mentioned in the Climate Delegated Act, but the economic activity corresponds to the description of the activity,
it can qualify as Taxonomy eligible.
The EU Taxonomy distinguishes between taxonomy eligibility and taxonomy alignment. An economic activity can be considered eligible
if it is listed in the annexes of Taxonomy regulation. However, in order to be considered “aligned”, further Technical Screening Criteria
(“TSC”) must be met. This requires a further assessment of the eligible activities identified. The TSC comprise Substantial Contribution plus
the Do-No-Significant-Harm criteria (“DNSH”) for each of the environmental objectives associated with the relevant business activities.
Additionally, the Minimum Social Safeguards (“MSS”) at the corporate level have to be met. The overall aim of this process is to establish
the taxonomy-eligibility and alignment.
The EU Taxonomy Alignment refers to the process of aligning the EU’s Taxonomy Regulation with existing and proposed national and in-
ternational sustainable finance initiatives.
Accounting policy
RHI Magnesita N.V. prepares consolidated financial information in accordance with IFRS accounting standards as adopted by the EU and
the financial information for turnover, operating expenditure and capital expenditure presented under the EU Taxonomy has been prepared
under the same accounting principles.
Taxonomy eligible activities of RHI Magnesita
The following RHI Magnesita’s economic activities are outlined in the annexes of EU Taxonomy Delegated Acts and therefore, are deemed
eligible:
• CCM 3.6 Manufacture of other low-carbon technologies.
• CCM 5.9 Material recovery from non-hazardous waste.
• CE 2.7 Sorting and material recovery of non-hazardous waste.
• BIO 1.1 Conservation and restoration of habitats, ecosystems, and species.
R&D supports eligible economic activities, allocated accordingly. GHG emission avoidance related to R&D is not material, and therefore,
not reported separately.
Manufacture of other low carbon technologies
The economic activity CCM 3.6 “Manufacture of other low-carbon technologies” covers the “Manufacture of technologies aimed at sub-
stantial GHG emission reductions in other sectors of the economy”.
EAF refractories
RHI Magnesita provides refractory products specifically designed for EAFs. Additionally, RHI Magnesita provides solutions and services to
its customers to reduce their GHG emissions, including digital solutions as well as advanced refractory products.
EAFs are a vital enabling technology for the reduction of CO
2
emissions in the steel industry. EAFs can be powered using electricity sourced
partially or wholly from renewable electricity and replace the BOF phase of the traditional integrated steel manufacturing process, which
pairs a blast furnace with a BOF and is highly CO
2
intensive. To replace a BOF, EAF steelmaking requires scrap steel, and a source of virgin
iron like DRI or pig iron produced from the reduction of iron ore. EAF steelmaking requires a source of scrap steel or sponge iron produced
from the reduction of iron ore.
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DRI using elevated levels of or exclusively hydrogen and is a new technology under development that seeks to eliminate CO
2
emissions
from the reduction of iron ore in blast furnaces using coke. If enough hydrogen manufactured from renewable sources can be accessed
and if a DRI furnace can be paired with an EAF for the second stage of the steelmaking process that is also powered by renewable energy,
CO
2
emissions from steel production can be largely eliminated. A key limiting factor for increased DRI production is currently the availability
of suitable iron ore, as DRI production requires highest quality iron ore pellets while blast furnaces can consume almost any kind of iron ore
facing no restrictions.
RHI Magnesita has a leading market position in EAF-specific refractories, services and solutions, in part due to the unique chemical com-
position of the Group’s raw material supply. RHI Magnesita’s refractories used in EAF production contribute to reducing CO
2
emissions at
steel plants by supporting the more sustainable electric arc furnace process, which inherently generates lower emissions compared to steel
production via blast furnace and BOF methods,
In its EU taxonomy disclosure for the year to 31 December 2022, RHI Magnesita used its own judgement to categorise the sale of EAF
refractories as both an eligible and aligned activity according to CCM 3.6 “Manufacture of other low-carbon technologies”. This assessment
was based on widely available public information from multiple sources which substantiated that the production of steel through scrap or
DRI fed Electric Arc Furnaces could result in significantly lower CO
2
emissions than the traditional integrated steelmaking process, using
blast furnaces and basic oxygen furnaces.
In 2023, the EU Commission published guidance on the implementation and interpretation of the EU Taxonomy Climate Delegated Act
which specified verification requirements for certain activities. The verification requirements in the guidance stipulate that an external ver-
ifier must provide an independent report to support compliance with alignment criteria. The Group is unable to fulfil this verification re-
quirement in respect of the 2024 financial year but intends to obtain suitable independent verification in the future.
Digital Solutions
RHI Magnesita offers digital solutions and associated physical equipment which achieve CO
2
emissions reductions through process effi-
ciencies, such as wear monitoring and gunning repairs to extend the safe working life of refractory linings. Safely extending the working life
of refractory linings can achieve significant energy savings for steel producers by reducing the number of heating and cooling cycles re-
quired per unit of steel output.
The Group also offers advanced refractory products which enable its customers to substantially reduce GHG emissions by reducing elec-
tricity consumption, improving yield and reducing oxygen consumption.
Other solutions and products which directly contribute to CO
2
emissions reductions at customers’ sites include cold setting mixes, EAF
direct purging plugs and converter inert gas purging.
Material recovery from non-hazardous waste
The activity CCM 5.9 Material recovery from non-hazardous waste covers the “construction and operation of facilities for the sorting and
processing of separately collected non-hazardous waste streams into circular raw materials involving mechanical reprocessing, except for
backfilling purposes.”
RHI Magnesita increased its Secondary Raw Material (“SRM”) input to 14.2% of raw material used in production of refractories. As part of
this effort, RHI Magnesita operates facilities for the sorting and processing of spent refractories from customers’ industries.
Circular raw materials which are mechanically processed by RHI Magnesita and transformed from waste to raw material are eligible for
consideration under the EU Taxonomy, whilst circular raw material processed by a third party and purchased externally by the Group are
non-eligible.
Sorting and material recovery of non-hazardous waste
The activity CE 2.7 “Sorting and material recovery of non-hazardous waste” covers “Construction, upgrade, and operation of facilities for
the sorting or recovery of non-hazardous waste streams into high-quality secondary raw materials using a mechanical transformation pro-
cess”.
RHI Magnesita actively collaborates in the transition to a circular economy through the sorting and material recovery of non-hazardous
waste. This encompasses the construction, upgrade, and operation of facilities for sorting or recovering non-hazardous waste streams into
high-quality secondary raw materials using mechanical transformation processes.
Across various sites, RHI Magnesita engages in sorting non-hazardous waste, recovering materials for use as secondary raw materials in its
refractory production, aligning with the EU taxonomy criteria.
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110 — RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024
Conservation and restoration of habitats, ecosystems and species
The activity BIO 1.1 “Conservation and restoration of habitats, ecosystems and species” covers in-situ conservation and restoration activities
aligned with Convention on Biological Diversity”.
RHI Magnesita is committed to the protection and restoration of biodiversity and ecosystems, specifically through the conservation and
restoration of habitats, ecosystems, and species. RHI Magnesita’s engagement in-situ conservation and restoration activities align with the
Convention on Biological Diversity’s definition and applies to its open-pit mining operations, where recovery of ecosystems and habitats is
planned and executed.
The Group operates multiple mines, where a crucial aspect of open-pit mining involves restoring ecosystems and habitats. In 2024, reculti-
vation activities occurred at seven sites.
KPIs
Share of Taxonomy-eligible revenue, operating expenditure and capital expenditure – climate change mitigation, transition to circular
economy, and protection and restoration of biodiversity and ecosystems.
Turnover
The turnover KPI is calculated as the ratio of turnover associated with taxonomy-eligible and/or aligned economic activities in the reporting
period to total turnover in that period. The total turnover of the financial year 2024 of €3.5 billion forms the denominator of the turnover
key figure and can be taken from the Consolidated Statements of Profit or Loss on page 232 of this Annual Report.
The following eligible and/or aligned activities have been identified as relevant in view of turnover:
• CCM 3.6 Manufacture of other low-carbon technologies.
• CCM 5.9 Material recovery from non-hazardous waste.
• CE 2.7 Sorting and material recovery of non-hazardous waste.
Most of our Taxonomy-eligible turnover (numerator) are reported under Activity CCM 3.6. “Manufacture of other low-carbon technologies”.
The only portion of our turnover Taxonomy-aligned is reported under Activity CCM 5.9 “Material recovery from non-hazardous waste”. A
thorough analysis of turnover KPI drivers during the reporting period considered diverse revenue sources, including customer contracts
and lease income. About 90% of materials recovered by the Group from non-hazardous waste are consumed internally. Therefore, the
2024 financials include external Turnover from material recovery in non-hazardous waste.
Capital expenditure
The capex KPI is defined as Taxonomy-eligible capex (numerator) divided by total capex (denominator), for the financial year, ended 31
December 2024.
The following eligible activities have been identified as relevant regarding the capital expenditure KPI:
• CCM 3.6 Manufacture of other low-carbon technologies.
• CCM 5.9 Material recovery from non-hazardous waste
• CE 2.7 Sorting and material recovery of non-hazardous waste.
• BIO 1.1 Conservation and restoration of habitats, ecosystems, and species.
The project descriptions of the additions of assets in the reporting year served as a basis for the necessary identification.
Taxonomy-eligible capex (numerator) is an aggregation of addition to property, plant and equipment reported under Activity CCM 5.9
“Material recovery from non-hazardous waste” and Activity CE 2.7 “Sorting and material recovery of non-hazardous waste”; and to internally
generated intangible assets reported under Activity CCM 3.6 “Manufacture of other low-carbon technologies” and BIO 1.1 “Conservation
and restoration of habitats, ecosystems, and species”. No eligible capex related to acquisitions through business combinations is reported.
There is neither a capex plan to expand RHI Magnesita’s Taxonomy-aligned economic activities nor to upgrade Taxonomy eligible economic
activities to render them Taxonomy-aligned. The total capital expenditures in line with point 1.1.2.1. Annex 1 of the Disclosure Delegated
Act equal the denominator.
Total capex consists of additions to tangible and intangible fixed assets during the financial year, before depreciation, amortisation and any
remeasurements, including those resulting from revaluations and impairments, as well as excluding changes in fair value. It includes ac-
quisitions of tangible fixed assets (IAS 16), intangible fixed assets (IAS 38), right-of-use assets (IFRS 16) and investment properties (IAS 40).
Operating expenditure
The denominator of the operating expenditure KPI shall cover direct non-capitalised costs that relate to R&D, building renovation measures,
short-term lease, maintenance and repair, and any other direct expenditures relating to the day-to-day servicing of assets of property, plant
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024110
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RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024 — 111
and equipment by the undertaking or third party to whom activities are outsourced that are necessary to ensure the continued and effective
functioning of such assets. The following eligible activities have been identified as relevant regarding the operating expenditure KPI:
• CCM 3.6 Manufacture of other low-carbon technologies.
• CCM 5.9 Material recovery from non-hazardous waste.
• CE 2.7 Sorting and material recovery of non-hazardous waste.
• BIO 1.1 Conservation and restoration of habitats, ecosystems and species.
Most of our Taxonomy-eligible OpEx (numerator) is related to assets or processes associated with taxonomy-eligible activities reported
under Activity CCM 3.6. “Manufacture of other low-carbon technologies”. We have also reported a portion of our turnover under Activity
5.9 “Material recovery from non-hazardous waste”. There is neither a capex plan to expand taxonomy-aligned activities nor related to the
purchase of output of taxonomy-aligned activities. OpEx related to activity CE 2.7 “Sorting and material recovery of non-hazardous waste
is overlapping with OpEx reported under activity CCM 5.9”. “Material recovery from non-hazardous waste” therefore, not reported. Total
applicable OpEx is in line with the Taxonomy legislation consisting of maintenance OpEx, R&D OpEx and Recultivation OpEx. Other OpEx
categories such as short-term lease are excluded as they are immaterial.
Avoidance of double counting
To avoid double counting, data sources for the various reported items are individually cross-checked to identify overlapping classifications.
Where double counting is identified, overlapping data is removed from the eligible amount.
Taxonomy aligned activities of RHI Magnesita
For the eligible economic activities of RHI Magnesita previously described, the following activity are considered aligned:
• Material recovery from non-hazardous waste.
In respect to alignment criteria, RHI Magnesita considered its activities under “Material recovery from non-hazardous waste” aligned be-
cause for each raw material recovery site, yield reports demonstrate a constant yield above 50% which fulfil the alignment criteria.
Do No Significant Harm (“DNSH”)
To fulfil the DNSH criteria for the identified taxonomy-eligible economic activities, corresponding analyses and surveys were carried out in
accordance with (EU) 2021/2139 to establish taxonomy alignment.
For the economic activity Material recovery from non-hazardous waste (5.9), the DNSH criteria to climate change adaptation and to pro-
tection and restoration of biodiversity and ecosystems need to be met.
DNSH to climate change adaptation
Activity 5.9
For the climate risk and vulnerability analysis for objective 2 “climate change adaptation”, potential climate hazards were analysed and
assessed for their risk potential in accordance with the requirements of Appendix A (EU) 2021/2139. RHI Magnesita conducted climate risk
assessment considering both physical and transitional climate risks aligned with TCFD. Four climate scenarios (representative concentra-
tion pathways 2.6, 4.5, 6.0 and 8.5) were considered based on the Intergovernmental Panel on Climate Change Fifth Assessment Report
and the International Energy Agency (“IEA”) Sustainable Development Scenario. The results of the assessment indicated that the impact
for physical risks is limited, since measures are in place to assess on a regular basis the risk of physical damage of assets. Insurance policies
are partially covering physical damaged by natural catastrophes.
DNSH to protection and restoration of biodiversity and ecosystems
Activity 5.9
The requirements for objective 6 “Biodiversity” according to Appendix D of Regulation (EU) 2021/2139 are ensured due to the legal frame-
work within the EU. For sites outside the EU, the national legal framework was analysed.
RHI Magnesita considers its mining sites as the part of the production process with the highest potential for adverse effects on biodiversity.
Therefore, the assessment focuses on mining sites. For all RHI Magnesita’s mining sites an environmental impact screening has been con-
ducted. The mining sites operate within or near IUCN category Ia, II, IV, VI and unclassified (Natura 2000) protected areas. All mining sites
fulfil general environmental protection requirements in line with legal requirements. “Material recovery from non-hazardous waste” re-
places virgin materials with secondary raw materials; thus, contributes in an effective way to reduce the environmental impact associated
with raw material extraction.
Minimum social safeguards
To ensure compliance with minimum social safeguards RHI Magnesita established a due diligence process. According to Article 8 (EU)
2020/852, the OECD Guidelines for Multinational Enterprises, the UN Guiding Principles on Business and Human Rights, including the
111RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
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112 — RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024
principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organisation on
Fundamental Principles and Rights at Work and the International Bill of Human Rights were considered by RHI Magnesita.
A Human Rights Officer has been appointed to oversee and strengthen our commitment to ethical business practices. Comprehensive
policies on global gender equality, anti-discrimination, and harassment are publicly accessible online. The Code of Conduct is available
in 11 languages and can be accessed via the Group website, intranet, and Compliance Portal.
The Anti-Slavery Statement is reviewed and published annually on the Group’s website, reinforcing our dedication to human rights. Sup-
pliers are required to comply with the principles outlined in our Supplier Code of Conduct, which mandates adherence to human rights
protection laws.
To ensure compliance with fundamental human and labour rights, RHI Magnesita has implemented robust screening processes for busi-
ness partners operating in high-risk countries. Additionally, an independent whistleblowing hotline and web-based reporting system allow
employees and third parties to report concerns anonymously. Alternative reporting channels are also available, and all cases are thoroughly
investigated by the Internal Audit, Risk, and Compliance department in collaboration with other relevant functions. Moreover, business
partners (e.g. customers, sales intermediaries and suppliers) and transactions such as mergers or acquisitions are subject to a due diligence
process. All sales agents are certified by Ethixbase360 (formerly TRACE International), a leading international organisation specialised in
third-party due diligence solutions, which is updated annually and includes a reputational screening that can detect any human rights
violations that may have occurred.
With all these measures, RHI Magnesita ensures compliance with the minimum safeguards for itself and its suppliers, and processes are
implemented to become aware of suspicious cases of human rights violations, corruption, and bribery and to be able to react accordingly.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024112
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RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024 — 113
Proportion of turnover from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2024
Financial Year
Substantial Contribution Criteria DNSH criteria (“Does Not Significantly Harm”)
Economic Activities
()
Code
()
Turnover
()
Proportion of
Turnover
()
CCM
()
CCA
()
WTR
()
CE
()
PPC
()
BIO
()
CCM
()
CCA
()
WTR
()
CE
()
PPC
()
BIO
()
Minimum
safeguards
()
Proportion of Taxonomy aligned (A..) or eligible (A..)
turn over,
year N-
()
Category enabling
activity
()
Category transitional
activity
()
Text
Currency %
Y; N;
N/EL
)
Y; N;
N/EL
)
Y; N;
N/EL
)
Y; N;
N/EL
)
Y; N;
N/EL
)
Y; N;
N/EL
)
Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A.
TAXONOMY-ELIGIBLE
ACTIVITIES
A.. Environmentally
sustainable activities
(Taxonomy-aligned)
Material recovery from non-
hazardous waste
CCM . ,, .% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y .% E
Turnover of environmentally
sustainable activities
(Taxonomy-aligned) (A.)
,,
.%
.%
.%
.%
.%
.%
.%
Y
Y
Y
Y
Y
Y
Y
.%
Of which Enabling
,,
.%
.%
.%
.%
.%
.%
.%
Y
Y
Y
Y
Y
Y
Y
.%
E
A. Taxonomy-Eligible but
not environmentally
sustainable activities (not
Taxonomy-aligned activities)
Manufacture of other low
carbon technologies
CCM . ,, .% EL N/EL N/EL N/EL N/EL N/EL .%
Sorting and material recovery
of non
-hazardous waste
CE . - .% N/EL N/EL N/EL EL N/EL N/EL .%
Conservation, including
restoration, of habitats ,
ecosystems and
species BIO . - .% N/EL N/EL N/EL N/EL N/EL EL .%
Turnover of Taxonomy-
eligible but not
environmentally sustainable
activities (not Taxonomy
-
aligned activities) (A.)
,, .% .% .% .% .% .% .% .%
A. Turnover of Taxonomy
eligible activities (A. + A.)
,, .% .% .% .% .% .% .%
B. TAXONOMY
-NON-
ELIGIBLE ACTIVITIES
Turnover of Taxonomy- non-
eligible activities (B)
,,, .%
TOTAL (A + B)
,,, .%
1)
Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective
N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective
N/EL – not eligible, Taxonomy non-eligible activity for the relevant environmental objective
2)
EL – Taxonomy-eligible activity for the relevant objective
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
113RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
114 — RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024
Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2024
Financial Year
Substantial Contribution Criteria DNSH criteria (“Does Not Significantly Harm”)
Economic Activities
()
Code
()
CapEx
()
Proportion of
CapEx
()
CCM
()
CCA
()
WTR
()
CE
()
PPC
()
BIO
()
CCM
()
CCA
()
WTR
()
CE
()
PPC
()
BIO
()
Minimum
safeguards
()
Proportion of Taxonomy aligned (A..) or eligible (A..)
CapEx,
year N-
()
Category enabling
activity
()
Category transitional
activity
()
Text
Currency %
Y; N;
N/EL
)
Y; N;
N/EL
)
Y; N;
N/EL
)
Y; N;
N/EL
)
Y; N;
N/EL
)
Y; N;
N/EL
)
Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. TAXONOMY-ELIGIBLE
ACTIVITIES
A.. Environmentally sustainable
activities (Taxonomy
-aligned)
Material recovery from non
-
hazardous waste
CCM
. ,, .% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y .% E
CapEx of environmentally
sustainable activities
(Taxonomy
-aligned) (A.) ,, .% .% .% .% .% .% .% Y Y Y Y Y Y Y .%
Of which Enabling
,, .% .% .% .% .% .% .% Y Y Y Y Y Y Y .% E
A. Taxonomy
-Eligible but not
environmentally sustainable
activities (not Taxonomy
-aligned
activities)
Manufacture of other low carbon
technologies
CCM
. , .% EL N/EL N/EL N/EL N/EL N/EL .%
Sorting and material recovery of
non
-hazardous waste CE .
- .% N/EL N/EL N/EL EL N/EL N/EL .%
Conservation, including
restoration, of habitats ,
ecosystems and species
BIO . , .% N/EL N/EL N/EL N/EL N/EL EL .%
CapEx of Taxonomy
-eligible but
not environmentally sustainable
activities (not Taxonomy
-aligned
activities) (A.)
, .% .% .% .% .% .% .% .%
A.
CapEx of Taxonomy eligible
activities (A.+A.)
,, .% .% .% .% .% .% .%
B. TAXONOMY-NON-ELIGIBLE
ACTIVITIES
CapEx of Taxonomy-non-eligible
activities (B)
,, .%
TOTAL (A + B)
,, .%
1)
Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective
N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective
N/EL – not eligible, Taxonomy non-eligible activity for the relevant environmental objective
2)
EL – Taxonomy-eligible activity for the relevant objective
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024114
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RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024 — 115
Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2024
Financial Year
Substantial Contribution Criteria DNSH criteria (“Does Not Significantly Harm”)
Economic Activities
()
Code
()
OpEx
()
Proportion of
OpEx
()
CCM
()
CCA
()
WTR
()
CE
()
PPC
()
BIO
()
CCM
()
CCA
()
WTR
()
CE
()
PPC
()
BIO
()
Minimum
safeguards
()
Proportion of Taxonomy
aligned (A..) or eligible
(A..) OpEx,
year N-
()
Category
enabling
activity
()
Category
transitional
activity
()
Text
Currency %
Y; N;
N/EL
)
Y; N;
N/EL
)
Y; N;
N/EL
)
Y; N;
N/EL
)
Y; N;
N/EL
)
Y; N;
N/EL
)
Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A.
TAXONOMY-ELIGIBLE
ACTIVITIES
A.. Environmentally sustainable
activities (Taxonomy
-aligned)
Material recovery from non
-
hazardous waste
CCM
.
,, .% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y .% E
OpEx of environmentally
sustainable activities (Taxonomy
-
aligned) (A.)
,, .% .% .% .% .% .% .% Y Y Y Y Y Y Y .%
Of which Enabling
.% .% .% .% .% .% .% Y Y Y Y Y Y Y .% E
A. Taxonomy
-Eligible but not
environmentally sustainable
activities (not Taxonomy
-aligned
activities)
Manufacture of other low carbon
technologies
CCM
.
,, .% EL N/EL N/EL N/EL N/EL N/EL .%
Sorting and material recovery of
non
-hazardous waste
CE
. - .% N/EL N/EL N/EL EL N/EL N/EL .%
Conservation, including restoration,
of habitats , ecosystems and species
BIO
. , .% N/EL N/EL N/EL N/EL N/EL EL .%
OpEx of Taxonomy
-eligible but
not environmentally sustainable
activities (not Taxonomy
-aligned
activities) (A.)
,, .% .% .% .% .% .% .% .%
A. OpEx of Taxonomy eligible
activities (A.+A.)
,, .% .% .% .% .% .% .%
B. TAXONOMY
-NON-ELIGIBLE
ACTIVITIES
OpEx of Taxonomy
-non-eligible
activities (B)
,, .%
TOTAL (A + B)
,, .%
1)
Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective
N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective
N/EL – not eligible, Taxonomy non-eligible activity for the relevant environmental objective
2)
EL – Taxonomy-eligible activity for the relevant objective
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
CONSOLIDATED SUSTAINABILITY STATEMENT CONTINUED
115RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
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116 — RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024
Scope of taxonomy-eligibility and compliance per environmental objective – disclosure covering year 2024
Proportion of turnover/Total turnover
Taxonomy-aligned
per objective
Taxonomy-eligible
per objective
CCM
0.5%
16.2%
CE
0.0% 0.0%
BIO
0.0% 0.0%
Proportion of
CapEx/Total CapEx
Taxonomy-aligned per
objective
Taxonomy-eligible
per objective
CCM
1.2% 1.5%
CE
0.0% 0.0%
BIO
0.0% 0.0%
Proportion of OpEx/Total OpEx
Taxonomy-aligned per
objective
Taxonomy-eligible
per objective
CCM
1.7% 14.5%
CE
0.0% 0.0%
BIO
0.0% 0.3%
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024116
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RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024 — 117
ESRS E1 Climate change
ESRS 2 General disclosures
Governance
Disclosure requirement related to ESRS 2 GOV-3 Integration of sustainability-related performance in incentive schemes
Sustainability related performance measures are included in the Group’s Annual Bonus and Long-Term incentive Plan.
The Board, the CSC and the Remuneration Committee recognise that the use of financial incentives for executive management and other
key functions such as sales can result in the accelerated achievement sustainability goals. RHI Magnesita has also received feedback from
consultation with shareholders that supports the inclusion of such performance measures within overall executive remuneration.
Annual bonus
In 2024, Executive Directors’ maximum annual bonus opportunity remained at 150% of salary with performance assessed against Adjusted
EBITA (45%), inventory coverage (25%) and strategic deliverables (30%). The strategic deliverables were digital projects delivery (10%),
PIFOT (10%) and increasing the use of secondary raw material (10%). Recycling, which is a key sustainability performance metric, therefore
accounts for 10% of the annual bonus. The annual bonus linked to performance is managed uniformly across the Group, with all bonus-
eligible employees receiving the same annual payout ratio as senior management, based on the achievement of the annual Group bonus
targets.
Long-term incentive plan (LTIP)
The Remuneration Committee reviewed the performance measures during the year as part of the overall Policy review and concluded that
the 2024 LTIP should continue to use EPS and CO
2
emissions performance conditions and move from TSR to ROIC.
The 2024 LTIP Award will vest to the extent that the EPS (50%), ROIC (25%) and 25% of the Long-Term Incentive Plan (LTIP) payout criteria
is linked to the Group’s target to reduce CO
2
emissions intensity against 2018 baseline year.
Disclosure requirement related to ESRS 2 SBM-3 – Material impacts, risks and opportunities and their interaction with strategy and
business model
Climate strategy
Driving down carbon emissions is a key priority for RHI Magnesita. Besides mapping out our own transition path, we would like to be a
reliable partner to our customers as they venture into a carbon-reduced economy.
The Group’s emission reduction target is a 15% reduction in CO
2
emissions intensity for Scope 1, 2 and 3 (raw materials) emissions by 2025,
compared to 2018. Our climate strategy is based on:
• reducing the carbon footprint of our raw materials, including through the increased use of circular raw materials;
• enhancing energy efficiency in our operations;
• reducing the carbon intensity of our energy sources; and
• providing innovative solutions to reduce customer emissions.
In 2024, the Group updated the modelling and analysis of climate-related transitional risks and opportunities that are foreseen to impact
the Group over short-, medium-, and long-term horizons.
Short term (2025)
For short-term risks (between 0-2 years), the Group’s first set of sustainability targets are planned within this timeframe. In addition, we are
actively monitoring emerging trends and opportunities that may require us to adjust our strategic plans. We are committed to staying agile
and adapting our plans as needed to ensure that we remain competitive in the marketplace and continue to meet our sustainability targets.
In the period to December 2024, the Group has achieved an additional reduction in CO
2
emissions intensity resulting in a 14% reduction
in CO
2
emissions intensity, compared to its base year 2018 (2023: -12%). This progress is mainly a result of recycling overperformance, but
this has been offset by slower progress on switching to alternative fuels which is now uncertain due to capex constraints and infrastructure
provision by external parties.
Medium term (2030)
For medium term risks (between 2-5 years, 2030), it is the most likely horizon for the regulatory frameworks (such as the EU Emissions
Trading System and Carbon Border Adjustment Mechanism) currently over a three-year transition period, and to be expanded to all sectors
within EU ETS in the future thus having partial effect on to RHI Magnesita’s operations due to the gradual phase out of free allocations. We
are anticipating and considering adjustments to our plant footprint.
Long-term (2050)
For the long-term risks, the Group considered the deadline that has been set by the UN and many policy-making bodies to meet decar-
bonisation goals, being the year 2050.
117RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
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118 — RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024
Time horizons for both physical and transitional risks are aligned with climate scenarios to ensure a structured and forward-looking ap-
proach to sustainability and risk management.
Each year, the Group systematically reviews and evaluates all viable measures to reduce CO
2
emissions across its operations, prioritising
proven technologies and aligning with available financial resources. While achieving emission reductions consistent with a "well below 2
degrees" scenario appears feasible, our current assessment indicates that setting a target aligned with a 1.5-degree scenario is not achiev-
able without the advancement of currently unavailable technologies or substantial external financial and infrastructure support.
We are committed to reducing our carbon footprint and we will continue to monitor the variables which support this conclusion and update
our transition plan accordingly if the Group’s own R&D activities result in the development of new technologies that could deliver a faster
reduction in CO
2
emissions that is financially achievable.
Impact of climate-related risks on the Group’s strategy
RHI Magnesita defines “substantive financial or strategic impact” as impact which is classified as “high” (score 4) or “critical” (score 5) impact.
RHI Magnesita defines the impact of a risk, including those related to climate change, on a scale of 1 (minor) to 5 (critical). Each of these five
ratings has specific definition and quantifiable indicators based on the potential to compromise the ability of RHI Magnesita in achieving
its strategic, operational, financial and compliance goals.
• A score of 1 represents minor impact on our ability to achieve these goals.
• A score of 2 represents low impact in achieving such goals.
• A score of 3 represents moderate impact (for example the potential for one strategic deliverable to be slightly delayed).
• A score of 4 represents high impact on the achievement of our goals, which might result in one objective not being achieved or
being significantly delayed.
• Finally, a score of 5 represents a critical impact on RHI Magnesita’s ability to deliver more than one goal.
With specific reference to climate-related risks, the following four quantifiable indicators are used by RHI Magnesita to define a substantive
strategic or financial impact:
• An impact that would compromise the ability of RHI Magnesita to achieve (or achieve in a timely fashion) one or more objectives
defined in the Group’s 2025 strategy, which includes climate-related targets. RHI Magnesita’s climate-related objectives include
the reduction of CO2 emissions by 15% per tonne of product – Scope 1,2 and 3 (raw materials), a 5% increase in energy efficiency
tonne of product, and the increase of secondary raw materials use to 15%.
• An impact that would compromise our ability to achieve our financial objectives by more than 15% Group budgeted EBITA.
• An impact that would compromise our ability to meet climate regulatory requirements applicable to our Group resulting in neg-
ative international media attention and/or reputational damage to RHI Magnesita.
• An impact that would create a substantial disruption to a) our plants (i.e., the inability to continue operations in more than one of
RHI Magnesita key locations across four global regional areas) and b) our ability to fulfil contracts with customers comprising a
negative impact of more than 15% Group budgeted EBITA for the year and/or c) compromise the safety of our employees.
The impact of risks and opportunities were assessed across three different time horizons. The short-term (2025) sits within our short-term
business plan, while the medium (2030) and long-term (2050) time horizons are oriented towards the broader international policy devel-
opments, including the Paris Agreement, EU Green Deal and the EU Carbon Border Adjustment Mechanism.
The Group believes and endorsed by CSC that it has the essential elements to run the climate resilience analysis. From risk identification,
ability to implement mitigation measures, high adaptive capacity, the Group has the means to reduce risk exposure and embrace the op-
portunities associated with the climate-change related developments across the different scenarios. The Group also collaborates with
governments, industry associations, universities to enhance climate mitigation and adaptation across the regions. By making use of frame-
works like TCFD, the Group discloses transparently and regularly updates stakeholders on climate-related matters.
Climate-related risk opportunities could range from disruptive regulatory developments, physical hazards for our operations or new busi-
ness opportunities, for example, to earn a Green Premium for refractories with low-carbon footprint. By monitoring market developments
and enhancing its business adaptability, innovation and planning, RHI Magnesita can maintain a strong level of climate resilience over the
short, medium and long-term across different scenarios. The Group remains committed to supporting its customers’ decarbonisation efforts
as well as actively managing our own climate-related risks and opportunities.
The Group’s resilience analysis, updated annually, assesses risks across acute and chronic physical hazards, legal factors, evolving regula-
tions, technological shifts, market dynamics, and reputational risks. Risks affecting direct operations, downstream, and upstream activities
are systematically identified through the Group’s risk management framework. The analysis incorporates four climate scenarios - RCP2.6,
RCP4.5, RCP6.0, and RCP8.5, based on the IPCC Fifth Assessment Report - to evaluate exposure under different climate conditions. Re-
sults indicate that 32 sites may be susceptible to physical climate hazards, with insurance policies in place to cover potential damage and
losses, including those caused by natural catastrophes.
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The Board actively advances initiatives that align sustainability with business success. By offering more sustainable products and solutions,
the Group strengthens its competitive position through pricing, market share, and preferred supplier status - key advantages in a low-
carbon economy. At the same time, RHI Magnesita remains committed to minimising its environmental and social impact, maintaining its
licence to operate and reputation as a responsible industry leader.
With a strategic focus on climate resilience, endorsed by CSC, RHI Magnesita is well-positioned to navigate future challenges and oppor-
tunities, ensuring long-term value creation for both the business and its stakeholders.
Impact, risk and opportunity management
Disclosure requirement related to ESRS 2 IRO-1 – Description of the processes to identify and assess material climate-related
impacts, risks and opportunities
The process to identify and assess material climate-related impacts is described in SBM-3 ESRS2. Time horizons are aligned with strategic
planning to integrate climate risks and opportunities into the Group’s business strategy. The short-term horizon focuses on immediate sus-
tainability targets and operational adjustments, while the medium-term guides investment and regulatory adaptation. The long-term hori-
zon aligns with global decarbonization goals, ensuring resilience and competitiveness.
Climate risks and opportunities management
The Group has an established risk management approach with the objective of identifying, assessing, mitigating, monitoring and reporting
uncertainties and risks that could impact the delivery of RHI Magnesita’s strategy. Since the environment and climate change represents
both strategic and operational risk to our business, they are considered as RHI Magnesita’s principal risks.
Several mitigation measures are in place to ensure that the risk is appropriately managed and within the Group’s risk appetite. The risk
management process at RHI Magnesita combines top-down, bottom-up and subject-specific risk assessments. The top-down risk assess-
ment is performed by the Executive Management Team and reviewed by the Audit & Compliance Committee, and reporting against these
risks is included in Board meetings, Executive Management Team meetings and strategic reviews. The bottom-up risk assessment is based
on operational sites that maintain ongoing risk management activity and is linked to the quality management-based governance practices.
Subject-specific risk assessments are performed for areas of emerging or important risks such as climate change. These risk assessments
are reviewed by the CEO, the Executive Management Team and the Audit & Compliance Committee.
The Corporate Sustainability Committee (“CSC”) reviews the Group’s risk appetite, tolerance and strategy in respect of corporate sustain-
ability risks and advise the Board accordingly. The CSC reviews, at least annually, periodic reports from management identifying the Group’s
material business risks within the Committee’s scope and setting out risk management strategies, controls and mitigating actions applied
to these risks.
Climate change represents both strategic and operational risks to our business. These are grouped as physical risks and transitional risks.
Physical Climate Risk refers to the potential financial and operational impacts on an organisation resulting from climate-related events.
These risks are categorised as:
Acute Risks: Sudden, extreme weather events like tornados, floods, or heatwaves.
Chronic Risks: Long-term changes in climate patterns, such as changing air temperatures, sea-level rise, or soil erosion.
These risks can disrupt operations, damage assets, increase costs, and impact supply chains, requiring proactive risk assessment and adap-
tation strategies.
Transitional climate risk refers to potential financial, operational, and strategic risks that organisations may face as economies transition
toward a low-carbon economy. These risks arise from changes in policies, regulations, market dynamics, technologies, and social attitudes
aimed at mitigating climate change. While these risks can pose challenges, they also present opportunities for innovation, competitive
advantage, and long-term resilience.
The process of identifying and assessing all Group climate-related risks and opportunities, is as follows.
Starting from the risk and opportunity universe (comprising all categories that could impact businesses in the next ten years), categories
which are not applicable to our business are excluded from the risk and opportunity analysis. Categories identified as applicable to our
Group are analysed to identify specific risks and opportunities that impact (or potentially impact) our business. These are linked to potential
root-causes and assessed for their inherent likelihood impact, and velocity. For climate-change risks and opportunities, the following cat-
egories are considered: acute and chronic physical risk, legal, current and emerging regulations, technology, market, and reputational risks.
Within each category, specific risks and opportunities impacting direct operations, downstream and upstream, are identified and assessed
based on the Group’s risk management processes.
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120 — RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024
Risk and opportunities impact is evaluated based on a scale of 1 (minor) to 5 (critical). Each rating has a specific definition based on the
impact of the risk on RHI Magnesita’s strategic, operational, financial and compliance goals.
Risks and opportunities are also rated according to their inherent likelihood on a scale of 1 (rare) to 5 (very likely) based on their probability
or expected frequency.
Once likelihood, impact and velocity of a risk have been assessed, an appropriate response is determined. This ranges from mitigating the
risk to transferring or avoiding the risk based on the level of “risk appetite” defined by the Board.
Appropriate initiatives to reduce the level of inherent risk are then identified and implemented. The level of residual likelihood and impact
after mitigation is assessed for each risk and opportunity using the scoring system above (i.e. impact on a scale of 1 “minor” to 5 “critical”
and likelihood on a scale of 1 “rare” to 5 “very likely”).
The overall level of residual risk is evaluated to ensure that it is aligned with the Group’s risk appetite and risk tolerance. Effectiveness of
mitigating measures is monitored over time and risks are reassessed at least on an annual basis and as needed in the case of significant
changes in the risk landscape.
Climate-related transitional risks and opportunities
Operating in an emissions intensive industry, it is likely that RHI Magnesita’s business model will be affected by the transition to a low-
carbon economy. As well as risks, there are significant opportunities that the Group is well positioned to benefit from.
For transitional risks, financial effects are expected due to evolving regulatory frameworks, market dynamics, and technological shifts. These
impacts may include increased costs related to carbon pricing mechanisms, investment requirements for low-carbon technologies, and
adjustments in operational strategies. The specific financial implications of these transitional risks are disclosed in the accompanying table,
providing transparency on potential cost impacts and strategic responses.
The assessment has identified EU sites needing significant efforts to align with climate-neutral goals due to regulatory changes, infrastruc-
ture limitations, and investment requirements for low-carbon technologies. Key challenges include the phase-out of free carbon allow-
ances under the EU ETS and constraints in adopting alternative fuels. The Group is exploring process optimization, renewable energy use,
and industry collaboration with policymakers and industry partners to support a viable and sustainable transition.
RHI Magnesita has updated its climate-risk modelling and analysis of climate-related transitional risks and opportunities across short-,
medium-, and long-term horizons. This update integrates key variables such as CO₂ pricing and energy costs based on IEA references.
Scenario analysis was conducted using two climate pathways: the Paris-aligned mitigation scenario (RCP 2.6), which envisions strength-
ened climate policies limiting warming to below two degrees, and the hot-house world scenario (RCP 8.5), which assumes inadequate
mitigation, leading to three to four degrees of warming. While this report is based on the Paris-aligned scenario, regulatory and market
uncertainties add complexity to quantifications.
Risks
RHI Magnesita’s main risk is the additional operating expense resulting from carbon pricing developments. The financial implications of this
risk have escalated following the implementation of the EU's Carbon Border Adjustment Mechanism (“CBAM”). This policy instrument aims
to create a level playing field for domestic producers subject to carbon pricing by imposing a carbon-based tariff on imports from countries
lacking comparable carbon pricing mechanisms. By increasing the cost of imports from such regions, CBAM mitigates competitive disad-
vantages for domestic industries, ensuring alignment with the EU's climate objectives while protecting local producers.
This mechanism would help to ensure that domestic producers and consumers are not put at an economic disadvantage by having to bear
the cost of carbon pricing, while their international competitors do not. CBAM is intended to incentivise countries to adopt similar carbon
pricing policies, thereby reducing the global greenhouse gases emissions.
CBAM is expected to have a financial impact on the Group from 2030 onwards as free carbon allowances under EU-ETS are phased-out.
This is attributed to levies on imported materials, implemented to safeguard the EU domestic business.
This is expected to increase refractory pricing for all suppliers selling into the EU. Additionally, products manufactured in the EU and then
exported will incur higher costs, as there are currently no compensation mechanisms for exporters.
The financial impacts of CBAM have been included in the Group’s updated TCFD modelling, resulting in a future impact on equity value
of circa €260 million due to the increase in operating costs because of increase in level or scope of carbon pricing. (2023: €180 million)
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024120
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Opportunities
Three opportunities were identified (i) increased demand for products that enables decarbonisation in the customer industries, e.g. EAF
refractories, and (ii) increased demand for low carbon footprint refractory products and (iii) decrease in costs or increase in revenue through
use of new technologies to reduce or capture CO
2
emissions from refractory production in ETS zones.
The steel industry is undergoing a decarbonisation process which is predicted to continue into 2050 and beyond. Long-term emissions
reduction solutions include direct reduced iron in electric arc furnaces and increased scrap steel use. This megatrend has led to an in-
creased demand for electric arc furnaces (“EAF”) and electric smelter furnaces. As global pressure to reduce carbon emissions intensifies,
RHI Magnesita is strategically positioned to capitalise on this trend. Through its vertically integrated business model, the Group secures
essential raw materials for electric arc furnace applications from its European mines in Hochfilzen and Breitenau, Austria. This integration
not only ensures a reliable and sustainable supply chain but also provides RHI Magnesita with a distinct competitive advantage. These
capabilities strengthen the Group’s standing as the preferred refractory partner in the steel industry's transition toward greener and more
sustainable operations.
RHI Magnesita maintains its industry leadership in utilising recycled minerals and recycling has been the major contributor to the Group’s
CO
2
emissions reductions to date.
Moreover, recycling also has significant waste management and circular economy benefits for Group’s customers. RHI Magnesita’s joint
venture with Horn & Co., MIRECO, combines recycling activities in Europe and increases the production, use and offering of secondary raw
materials. This results in a significant decrease in CO
2
emissions. Horn & Co., MIRECO is well positioned at the forefront of the circular
economy, providing services to customers in steel, cement, glass and other process industries.
With an estimated CO₂ reduction of 1.6 tonnes per tonne of secondary raw material used, financial benefits arise from both premium pricing
and lower production costs. However, long-term gains remain uncertain, influenced by carbon price volatility, regulatory changes, and
customer demand for low-carbon solutions. Read more on chapter ESRS E5 – “Resource Use and Circular Economy” and “Business Model”
on page 149.
The net future impact on equity value of these opportunities combined is + €515 million (2023: €388 million, 2022: +123 million; 2021:
+€352 million).
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Climate Drivers
Risk/
Opportunity
Category Impact RHI Magnesita response and strategy
Main
affected
Time Horizon
Related metrics and targets
Policy
-
Making &
Regulatory
Pressure
Increase in
operating
or capital
expenditur
es due to
changes in
policy and
regulation
Risk RHI Magnesita
foresees an
future impact
on equity value
of circa €260m
due to the
increase in
operating costs
because of
increase in level
or scope of
carbon pricing
The Group incorporates carbon
permit price projections into its
financial planning and maintains a
hedging programme to mitigate
future exposure risks.
To further enhance sustainability and
reduce emissions, we are actively
developing innovative technologies,
including carbon capture, utilisation,
and storage (CCUS). Additionally,
advancements in sorting technology
are being pursued to improve
recycling performance.
A key priority is increasing the use of
secondary raw materials, which offers
a lower carbon footprint compared to
the extraction or procurement of
virgin raw materials.
Furthermore, the Group remains
committed to ongoing investments in
fuel switching, renewable energy
adoption, and energy efficiency
measures, all of which contribute to
reducing carbon intensity across
operations.
Medium-
long-
term
We have set a 15%
emissions intensity
reduction target by
2025 on a 2018
baseline of Scope 1, 2
and 3 raw materials
emissions. By the end of
2024, our emissions
intensity was 14% lower
than the 2018 baseline.
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Climate Drivers
Risk/
Opportunity
Category Impact RHI Magnesita response and strategy
Main
affected
Time Horizon
Related metrics and targets
Techno
-
logy
Increased
cost of
capital for
investing in
recycling
technology
to achieve
CO
2
reduction
targets.
Risk RHI Magnesita
anticipates an
estimated
future impact of
approximately
€13 million on
its equity value,
driven by the
increase in the
cost of capital
required to
achieve its CO₂
reduction
targets. This
reflects the
financial
implications of
transitioning
towards lower-
carbon
operations and
compliance
with evolving
regulatory
frameworks.
The 2024 Recycling Rate reached
14.2%. By year-end, RHI Magnesita
plants had consumed 268 kt of
recycled materials and sold 96 kt of
metallurgical additives, marking a
30% volume increase compared to
2023. This led to €36 million in raw
material cost savings for refractory
finished goods and a reduction of 310
kt in CO₂ emissions.
Europe: RHI Magnesita plants
achieved a record 11.0% recycling
rate, driven by high SRM
consumption at Hochfilzen and
increased recycling in basic mixes,
MagCarbon, and dolomite bricks.
Additionally, Horn & C0., MIRECO
acquired the Italian refractory
recycling specialist Refrattari Trezzi,
expanding its production footprint in
Italy and supporting RHI Magnesita’s
decarbonisation goals.
India: Following the integration
phase of recent M&As, plants
established a stable recycling
consumption flow, delivering strong
results in Q3 and Q4 and closing the
year with a recycling rate exceeding
15.5%.
North America: Exceeded its targets
with a 12.7% recycling rate,
supported by a focused effort in the
second half of the year to boost
recycling consumption in the U.S.
Short-
term
We have a target to
increase the use of SRM
to 15% by 2025 and in
2024, the Group
achieved 14.2%
recycling rate.
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Climate Drivers
Risk/
Opportunity
Category Impact RHI Magnesita response and strategy
Main
affected
Time Horizon
Related metrics and targets
Market &
Customers
Increased
demand for
refractory
products
that enable
decarboni-
sation of
customer
industries
(EAF, ESF,
BOF, DRI).
Oppor-
tunity
RHI Magnesita
foresees a
future positive
financial impact
on equity value
of €277m,
regarding the
increased
demand from
customers for
refractory
products that
help them
reduce their
emissions is
considered low
(e.g. EAF).
RHI Magnesita is committed to
supporting its customers in
transitioning to low-carbon
production processes through our
advanced refractory products.
Currently, a significant portion of our
portfolio serves the steel and cement
industries, which together represent
approximately 80% of our business.
In the steel sector, we provide
refractory solutions that enable the
use of electric arc furnaces (EAF), a
key technology for reducing CO₂
emissions. Our market position
reflects this commitment:
RHI Magnesita holds a higher market
share in lower CO₂-emitting
applications, such as EAF, while
maintaining a comparatively lower
share in higher-emission
technologies, such as basic oxygen
furnaces (BOF) and blast furnaces.
The Group will continue to expand
its portfolio of low-energy and low-
carbon solutions, including process
optimisation, recycling services,
advanced coating technologies, and
digital innovations, to further support
our customers in achieving their
sustainability targets.
Short-
medium-
long-
term
Sales of refractory
products supporting
electric arc furnaces,
associated with the
lower carbon
production of steel, was
€528 million in 2024.
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Climate Drivers
Risk/
Opportunity
Category Impact RHI Magnesita response and strategy
Main
affected
Time Horizon
Related metrics and targets
Market &
Customers
Increased
demand for
RHI
Magnesita
products
that are
produced
with lower
carbon
footprint
and
incorpora-
tion of
carbon
expenses.
Oppor-
tunity
Higher revenue
due to
increased
demand for
low-carbon
(e.g. recycled)
refractory
products,
resulting in a
combined
future positive
impact on
equity value of
€m.
In the short term, increasing the
proportion of SRM in our products
will contribute to a reduction in
geogenic emissions from raw material
use while simultaneously enabling
the development of competitive low-
carbon product offerings.
In the long-term, the successful
implementation of carbon capture,
sequestration, and utilisation
technologies, alongside a transition
to renewable energy sources, has the
potential to enable the production of
refractory products with significantly
lower or even net-zero CO₂
emissions.
This strategy is expected to yield a
competitive advantage in terms of
pricing and market positioning,
particularly as customers place
increasing emphasis on reducing
their Scope emissions. By
proactively addressing these
sustainability concerns, the Group
can strengthen its market presence
and differentiate itself from
competitors with higher carbon
footprints.
Short-
medium-
long-
term
We have set a target of
% SRM content in
refractory products by
. We achieved
.% of secondary raw
material content in
(:.%)
Our target is to reduce
CO
intensity by % by
.
Climate-related physical risks
The Group has undertaken a comprehensive update its production sites across a broad range of physical climate hazards to cover newly
acquired sites. The analysis considered 70 sites, covering all production sites, recycling facilities and mining locations. Certain value chain
assets were included in the initial physical climate risk assessment conducted in 2021 and were not identified as being exposed to climate-
related risks. The latest assessment conducted in 2023 primarily focused on RHI Magnesita’s own operations, driven by the integration of a
significant number of newly acquired sites. These sites require immediate and focused evaluation to ensure operational resilience, business
continuity, and alignment with the Group’s risk management framework.
The assessment considered four distinct climate scenarios - RCP2.6, RCP4.5, RCP6.0, and RCP8.5 - taken from the findings of the Inter-
governmental Panel on Climate Change Fifth Assessment Report.
These scenarios project varying greenhouse gas concentration trajectories, indicating potential outcomes such as staying below a 2°C
temperature increase, reaching approximately 2°C above the modern climate baseline, a global temperature rise of about 3–4°C by 2100,
and an exceeding 4°C increase in the global average surface temperature by 2100.
The assessment focused on evaluating future exposure of RHI Magnesita sites to climate-related hazards across temperature, wind, water,
and solid matter, encompassing a total of 29 categories as recommended by Delegated Regulation EU 2021/2139, assessing the probability
of future climate conditions surpassing current baseline values.
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Classification of climate hazards (source: Commission Delegated Regulation (EU) 2021/2139)
Classification of
climate
-related
hazards
Temperature-related Wind-related Water-related Solid mass- related
Chronic
Changing temperature
(air, freshwater, marine
water)
Changing wind patterns Changing precipitation
patterns and types (rain,
hail, snow/ice)
Coastal erosion
Heat stress
Precipitation or
hydrological variability
Soil degradation
Temperature variability Ocean acidification Soil erosion
Permafrost thawing Saline intrusion Solifluction
Sea level rise
Water stress
Acute
Heat wave Cyclones, hurricanes,
typhoons
Drought Avalanche
Cold wave/frost Storms (including
blizzards, dust, and
sandstorms)
Heavy precipitation (rain,
hail, snow/ice)
Landslide
Wildfire Tornado Flood (coastal, fluvial,
pluvial, ground water)
Subsidence
Glacial lake outburst
The 2023 results highlighted that certain locations within the Group's industrial footprint are vulnerable to chronic physical climate haz-
ards, such as changes in air temperature, heat stress, and soil erosion, as well as acute risks like floods. For these sites initially flagged as
high-risk, a more detailed risk analysis was undertaken in 2024 to better understand and address these risks. As part of this process, targeted
interviews were conducted to validate the modelling results, assess whether the perceived risk aligns with the categorisation, and identify
any existing or planned adaptation measures. This approach ensures a comprehensive evaluation of site-specific vulnerabilities and sup-
ports the development of appropriate risk mitigation strategies.
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Country
Climate
Hazards
(A-Acute; C-
Chronic)
Site
Current
Risk
Assessment
(Short-term)
2030
-2050 (Medium-long-term)
RCP 2.6 RCP 4.5 RCP 6.0 RCP 8.5
Brazil
Heat stress - C Brumado Low Low High High Red flag
Sea level rise -
C Terminal Aratu Medium Red flag Red flag Red flag Red flag
Soil erosion - C Contagem Low High High
Red flag
Soil erosion - C
Coronel
Fabriciano
Low Red flag Red flag Red flag Red flag
Soil erosion - C Fazenda Funchal Medium Red flag Red flag Red flag Red flag
Soil erosion - C
Retiro Pd
Domingo
Medium Red flag Red flag Red flag
Soil erosion - C
Fazenda Serra
dos Ferreiras Low High High Red flag
Changing air
temperature - C Uberaba Low Low High High Red flag
Heat stress - C Uberaba Low Low High High Red flag
Soil erosion - C Uberaba Low High High Red flag
China
Flood (A) Chizhou Medium Red flag Red flag Red flag Red flag
Changing air
temperature - C Chongqing Low Low Medium High Red flag
Soil erosion - C Chongqing Low Red flag Red flag Red flag Red flag
Soil erosion - C Dalian Low Red flag Red flag Red flag
Germany
Flood - C Niederdollendorf Low Red flag Red flag Red flag Red flag
Flood - C Urmitz Low Red flag
India
Changing air
temperature - C Venkatapuram Low Medium Red flag Red flag Red flag
Changing air
temperature - C
Rajnandgaon Low Low High High Red flag
Soil erosion - C Jamshedpur Low High High
Red flag
Changing air
temperature - C Jamshedpur Medium Medium Red flag Red flag Red flag
Heat stress- C Jamshedpur Low No risk Medium High Red flag
Soil erosion - C Katni Low Low High High Red flag
Soil erosion - C Cuttack Low High Red flag Red flag Red flag
Soil erosion - C Dalmiapuram Low
Medium Medium Red flag
Mexico
Changing air
temperature - C Tlalnepantla Low Low High High Red flag
Switzerland
Water stress - C Pfäffikon Low Red flag
Türkiye
Water stress - C Sörmaş Low High Red flag
Water stress - C Eskisehir Low High Red flag
USA
Soil erosion - C Pevely Low High High Red flag
Changing air
temperature - C
York Low Medium Medium Medium Red flag
This comprehensive process included engaging with local experts to assess the accuracy of climate risk models and reviewing insurance
audits where available. The findings from this analysis revealed that the Group's overall exposure to physical climate risks is limited. The
rationale behind this conclusion is twofold: (i) Imminence of Risks: Many of the flagged sites, under current climate conditions, are not
perceived to face immediate threats, meaning the anticipated risks are either less severe or unlikely to materialise in the near term; (ii)
Proactive Risk Management: For sites where risks are acknowledged, effective adaptation measures have already been implemented or are
planned. These measures demonstrate the Group's proactive approach to resilience and preparedness, significantly mitigating potential
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vulnerabilities. This targeted approach underlines the Group’s commitment to continuous improvement in climate risk management and
ensures that the business remains resilient even under changing climate conditions.
Moreover, a three-year programme dedicated to the ongoing assessment of physical risks associated with the Group’s assets has been
implemented. This programme involves on-site evaluations by experts to assess preparedness for various risks, including structural condi-
tions and geographical exposure to extreme weather events such as storms, hurricanes, and earthquakes - mainly focusing on acute risks.
Newly acquired sites are seamlessly integrated into the programme to ensure a consistent risk assessment approach. Beyond climate-re-
lated hazards, this initiative also evaluates the overall physical conditions of each site and its exposure to broader operational risks, with
natural catastrophes forming just one part of a holistic risk assessment framework. Additionally, RHI Magnesita’s property, damage, and
business interruption insurance programme provides partial coverage for all production sites and key offices, offering financial protection
against physical damage and losses, particularly those arising from natural catastrophes. This integrated approach enhances resilience
and ensures systematic risk mitigation across the organisation.
No material financial impacts are anticipated from the physical climate risk assessment. Current evaluations indicate that existing mitigation
measures adequately address potential exposures, ensuring resilience against physical climate risks such as extreme weather events or
long-term environmental changes. The Group continues to monitor developments and adapt its strategies as needed to maintain opera-
tional stability.
Disclosure requirement E1-1 – Transition plan for climate change mitigation
Refractory production is a ‘hard to abate’ industry. Raw material processing generally uses fossil fuels for ignition and burning of carbonate
rock. In the burning process, around 50% of the weight of the mineral is converted into CO
2
, resulting in geogenic emissions. These geo-
genic emissions are classified as Scope 1 when originating from the Group’s own production, or Scope 3 in the case of externally purchased
raw materials. Taken together, our own geogenic emissions and those associated with the raw materials that we purchase account for over
half our total CO
2
footprint.
Significant energy is also required for firing of refractory products in the manufacturing process and further emissions are generated in the
shipping and distribution of our products to customers worldwide.
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-degree scenario but is aligned with a ‘well below 2.0 degrees’ scenario.
Currently, there are no plans to adjust the business model or strategy to align with this framework.
Actual delivery of decarbonisation pathway is uncertain due to reliance on as yet unproven technologies, infrastructure, energy sources
and the actions of suppliers and governments which are not under the control of management. RHI Magnesita’s decarbonisation commit-
ment is as follow:
• Lead the refractory industry by decarbonising our operations as fast as sustainably possible.
• Annually update our decarbonisation pathway based on technology, infrastructure and capex developments.
• Invest in the research and development of new technologies to avoid or capture CO
2
emissions.
• Offer our customers enabling technologies or solutions for their own low-carbon production technologies and low-carbon re-
fractory products to reduce their Scope 3 emissions.
• Lobby governments to invest in infrastructure to support decarbonisation.
• Work with partners in the private sector to develop new solutions for decarbonisation.
Full decarbonisation will require significant capital expenditure, starting in Europe and subsequently in all regions.
The decarbonisation pathway has been approved by the Board, the CSC and the Executive Management Team.
The first step of CO
2
emissions reduction is to be delivered through measures which can be implemented by the Group without significant
external support, including increased use of recycled raw materials, fuel switches and energy efficiency measures (see E1-4 for details on
levers and respective targets). It is estimated that these measures could deliver an absolute reduction of around one and half million tonnes
of CO
2
emissions, or 24% of the baseline total by 2035. Beyond this initial reduction, decarbonisation measures become progressively
harder to deliver. Recycling has a natural ceiling since refractories are consumed during use and only residual materials can be reclaimed,
whilst fuel switches to natural gas only offer a partial reduction. The next steps of the pathway are reliant on the provision of (i) new infra-
structure or renewable energy sources such as hydrogen by outside parties; (ii) the use of technologies which do not yet exist or are not
proven at pilot or production scale; and (iii) significant capital expenditure, which may not be possible for the Group to generate from its
existing operations, obtain from its finance providers or receive via government funding. While the Group uses in its production natural gas,
pet coke, coal and oil as fuels, it is not engaged in other fossil-fuel related economic activities. The Group is not excluded from the EU Paris-
aligned Benchmarks in accordance with Commission Delegated Regulation (EU) 2020/1818.
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The costs of emitting carbon, which could provide an incentive to accept higher capital expenditure and operating costs for the purposes
of reducing CO
2
emissions, apply in certain jurisdictions and may provide a business case for reducing emissions in those geographies.
Estimates of future potential CO
2
costs are built into the Group’s financial forecasts and planning decisions. However, the Group has a
global production and customer network and competes with other refractory producers who are not subject to additional CO
2
costs.
Carbon capture and utilisation
In 2024, further progress has been made in the evaluation of technologies for CO
2
capture at the Group’s raw material production sites.
Research of potential technology solutions includes cryogenic, chemical separation, and membrane-based techniques.
In the area of Carbon Capture and Utilisation (“CCU”), the Group has progressed its partnership with MCi Carbon to develop technologies
focused on the direct mineralisation of CO
2
from flue gases, through a process which can efficiently transform gaseous waste CO
2
into a
solid mineral. The MCi process offers opportunities for utilisation in other industries, such as the cement sector, which faces similar chal-
lenges with process emissions of CO
2
not originating from the use of fossil fuels. 2024 activity was concentrated on constructing a pilot
facility in Newcastle, Australia. Testing and development programmes with MCi Carbon are set to continue until mid-2025.
Alternative fuels including hydrogen and biofuels
Hydrogen produced using renewable energy is a promising alternative fuel for use in high temperature industrial processes such as those
undertaken by RHI Magnesita. Proof of concept has been achieved and no further significant investments are required until, and unless, an
economic source of clean hydrogen fuel becomes available.
Securing a reliable and economic supply of green hydrogen is an essential pre-cursor to large scale adoption of hydrogen use in quantities
that would make a material difference to the Group’s Scope 1 emissions.
RHI Magnesita is also exploring other non-fossil fuel options including biofuels. RHI Magnesita uses charcoal in Brazil, which is considered
as biofuels and tests are ongoing with sunflower husks.
Reducing the carbon intensity of energy
RHI Magnesita is seeking to reduce the carbon intensity of its energy sources through switching to lower intensity alternatives where pos-
sible. In Europe, plans to transition from CO
2
intensive petroleum coke to more CO
2
efficient natural gas in our plants have been postponed
due to delays in natural gas pipeline construction. Exploring biofuels as an alternative is dependent upon local availability and cost com-
petitiveness. We continue to monitor energy markets and alternative fuel sources to reduce emissions.
At the Ponte Alta raw material production site in Brazil, we have successfully switched away from petroleum coke to sustainably sourced
charcoal.
At the Group’s York plant in Pennsylvania, USA, petcoke is the primary fuel used. The Group is assessing possibilities to transition to natural
gas at this site, but no economically viable solution has yet been identified.
We continue to reduce the CO
2
intensity of purchased electricity. The Group is investigating the potential for solar generation at several
other sites. By the end of 2024, 78% of total electricity consumption was from renewable sources.
Investment and funding
The capital cost of full decarbonisation is highly uncertain but has been estimated at approximately €1 billion. Since there is no payback
outside of jurisdictions where an ETS imposes a cost of carbon emissions, there is a limit to the amount of capital that the Group can commit
to decarbonisation. In 2024 RHI Magnesita generated €225 million of free cash flow and allocates capital to M&A, organic capex, mainte-
nance and dividends to sustain and grow the business. At current levels of cash generation and considering competing demands for capital
it is unlikely that the Group would be able to fund a full decarbonisation of its operations from internally generated cash flow. External
funding may be possible to obtain in the form of subsidies or co-investment in specific projects. The Group’s transition plan is based on a
bottom-up approach to ensure feasibility and alignment with the Group’s overall business strategy and financial planning. The transition
plan does not entail any objectives or plans for aligning with Taxonomy activities as there are not Taxonomy activities for refractory produc-
tion.
Locked- in emissions
The vast majority of direct emissions at RHI Magnesita result from firing at high temperature of various kilns and geogenic emissions from
carbonate raw materials during firing. The Group has set a 2030 target to also reduce direct emissions. Remaining emissions both from
fuels and geogenic emissions are hard to abate and require carbon-neutral fuels such as hydrogen as well as carbon capture for geogenic
emissions which are in nature otherwise unavoidable. We do not expect that the locked-in emissions jeopardise the undertaking’s GHG
emission 2030 reduction target. For a comprehensive decarbonisation beyond the Group’s 2030 target locked-in emissions require a mar-
ket environment which allows the Group to pass on higher costs of carbon-neutral fuels and carbon capture and utilisation.
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Disclosure requirement E1-2 – Policies related to climate change mitigation and adaptation
RHI Magnesita has an Integrated Management System Policy (“IMS policy”) in place which addresses, among others matters, climate
change mitigation. In this policy the Group commits to tackling climate change as far as it is technically and economically feasible. The
Group strives to minimise direct and indirect CO
2
and other greenhouse gas emissions, by improving the energy efficiency of its operations
and the use of cleaner sources. RHI Magnesita's IMS policy covers the environmental policy. With this policy the Group commits to operate
all its business activities in a most sustainable way to ensure environmental protection, tackling climate change, through minimising the
environmental impacts of its operations as far as it’s technically and economically feasible. The policy applies to RHI Magnesita N.V. and
all Group companies (together referred to as “RHI Magnesita”) and employees. The scope of the IMS policy is limited to Group companies
and employees and does not extend to the upstream or downstream value chain. The Supplier Code of Conduct includes references to
environmental compliance and other sustainability priorities and is aimed at the Group’s upstream value chain. The CTO is accountable
for the implementation of the policy. The IMS policy does not refer to any third-party standard and does not consider any particular stake-
holder group. The IMS policy is published on RHI Magnesita's website. The Group's IMS policy is globally applicable and does not specifi-
cally address or exclude stakeholder groups. The Group’s current policy does not yet fully align with all ESRS disclosure requirements. An
update is underway to ensure compliance and comprehensive reporting.
RHI Magnesita’s Corporate Risk-Taking/Management Policy outlines structured processes for identifying and managing risks across the
organisation. The Risk Register includes a diverse range of risks and is not limited to specific categories such as Health & Safety or Environ-
ment. Rather than implementing separate policies for individual risks, the Group relies on this comprehensive risk framework to ensure a
consistent approach to risk management. Additionally, while the IMS Policy covers climate change mitigation and energy efficiency, it does
not explicitly address renewable energy or climate change adaptation. Climate-related risks and opportunities are, however, integrated into
the broader corporate risk management framework to ensure a holistic approach to sustainability and resilience.
Disclosure requirement E1-3 – Actions and resources in relation to climate change policies
A key action to achieve the CO
2
reduction target is to increase the use of secondary raw materials. After having achieved its 10% recycling
target the Group stepped up its ambition and the 2025 recycling target is now 15%. In 2024 the Group increased its recycling rate to 14.2%
(compared to 12.6% in 2023). Every tonne of secondary raw material used replaces virgin raw material with a CO
2
-intensity of 1.6t CO
2
per
tonne of raw material on average. Other actions are energy efficiency measures with the aim to reduce the energy intensity of RHI Magnesita
by 1% per year. In 2024 energy efficiency measures contributed to an emission reduction of around 15,000 t CO
2
. In addition, the switch
from petroleum coke to natural gas at our Hochfilzen plant will be another CO
2
reduction lever. Furthermore, the Group switches to green
electricity where feasible. As a result, most of the electricity consumption in Europe and South America is from renewable sources and in
China an increasing share of green electricity is consumed, and PV panels are installed at several plants in China and India. In China 2.2
MW PV panels were installed in 2024 in our Dalian operations. The scope of the key actions RHI Magnesita’s direct operations in all regions
is addressing is its direct Scope 1, Scope 2 market-based and Scope 3 emissions from purchased raw materials. The scope of the key actions
is direct Scope 1, Scope 2 market based and Scope 3 emissions from purchased raw materials. While the Group has set time-bound targets
to reduce its GHG-footprint, increasing the use of secondary raw materials and increasing energy efficiency are continuous actions. The
switch to natural gas at our Hochfilzen plant is planned for 2025.
The main short-term decarbonisation lever at RHI Magnesita's direct and indirect emissions is the increase of circular raw materials. Actions
to increase the share of circular raw material include improved recipes and processes which allow higher shares of circular raw materials as
well as sales activities aiming at sale of brands with higher circular raw materials share as well as investments in operations to improve the
capacity to process circular raw materials.
Investments in increased recycling capabilities are a continuous effort, and individual investments are short-term and are part of the asset
category ‘Plant Property & Equipment’.
Other short-term levers are increasing energy efficiency, switching to renewable electricity and switching to less CO
2
-intensive fuels.
The implementation of actions to achieve the Group’s 2030 CO
2
reduction target depends on annual capex in the same order of magnitude
as in the reporting year; therefore, no additional availability and allocation of resources is required.
All actions described above contribute to the policy objective to minimise direct and indirect CO
2
and other greenhouse gas emissions.
In 2024 the Group invested €7.3 million to reduce its CO
2
emissions. The Capex mainly contributes to increase the share of circular raw
materials but also includes investments to switch to more CO
2
-efficient fuels and to trial hydrogen-related production routes. Thereof,
around €3.9 million relate to recycling investments according to EU Taxonomy (EU regulation 2021/22178) Material recovery from non-
hazardous waste/sorting and material recovery of non-hazardous waste. Future financial resources are projected to remain at levels com-
parable to those in 2024.
The Capex is part of Note 19 (Property, plant and equipment) in the Financial Statements under ‘Additions’.
The Capex/OpEx reported under Taxonomy-related disclosures deviate for various reasons from the disclosures required by ESRS:
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• Not all Taxonomy-eligible activities contribute to reducing CO
2
emissions within the scope of the Group’s transition plan (e.g.
downstream indirect emissions).
• Not all Capex or OpEx reported following ESRS for achieving the Group’s transition plan are eligible or aligned with the taxonomy
activities (e.g. purchasing of green electricity or investments to switch to less CO
2
-intensive fuels).
For 2025 and beyond the Group expects similar CO
2
-target-related OpEx and Capex to implement actions along the main reduction levers.
The ability to implement the actions does not depend on specific preconditions. The Group does not use any sustainable finance instru-
ments to enable its decarbonisation action.
Metrics and targets
Greenhouse gas emissions methodologies
RHI Magnesita reports all relevant direct and indirect emissions. Reported GHG emissions considers carbon dioxide, Hydrofluorocarbons,
methane, nitrous oxide and sulphur hexafluoride.
Scope 1 GHG emissions
RHI Magnesita follows the operational control approach for consolidating data and accounts for GHG emissions or removals from opera-
tions over which it has full year operational control in the respective reporting year. Facilities partially owned without operational control
are reported under Scope 3 emissions (Investments). Facilities acquired or built by RHI Magnesita are taken into account at latest in their
first full operative calendar year, if possible, earlier.
Emissions from offices which are not part of operational sites and emissions from Group cars used offsite are not included.
For Scope 1 emissions a significance threshold of 1% of the total direct plant CO
2
emissions (Scope 1) or 1,000 t CO
2
per year is applied on
plant level.
Most relevant Scope 1 GHG sources are 1) fuel-based emissions at our production facilities from firing various types of kilns in the raw ma-
terial production and finished goods production and 2) geogenic process emissions from the raw material (MgCO
3
is calcined to MgO and
CO
2
). Other minor sources of GHG are organic additives in RHI Magnesita’s finished goods production which oxidize to CO
2
in high tem-
perature kilns and emissions from explosives as well as emissions from mobile equipment.
Potentially existing carbon sinks are forests owned by the Group but are at the moment not considered.
The base year is adapted in case of changes in the calculation method; changes in production footprint (e.g. plant divestment or mergers
and acquisitions) but also in case of an error or a number of cumulative errors that are collectively substantial. Start of a new operation or
expansion of an existing operation as well as closure of an operation or part of an operation do not lead to an update of the base year.
Scope 2 GHG emissions
RHI Magnesita follows a dual reporting approach for Scope 2 emissions reporting both market-based and location-based emissions.
Market-based emissions reporting reflects the CO
2
-intensity of purchased electricity as provided by the supplier and includes also unbun-
dled green electricity certificates. If the supplier does not provide a supplier-specific market-based emission factor, the Group aims at using
residual electricity emission factors. If neither supplier-specific emission factors nor residual electricity emission factors are available, lo-
cation-based emission factors are used as a fallback.
Location-based emissions reporting reflects the average CO
2
-intensity of electricity provided in a respective grid.
Scope 3 GHG emissions
RHI Magnesita reports indirect upstream and downstream emissions. Various approaches are used to calculate indirect emissions.
The reporting excludes the following indirect emissions:
• Emissions from offices which are not part of operational sites and emissions from Group cars used offsite.
• Other purchased goods than purchased raw materials, trading goods, packaging and those used in capital goods (e.g. auxiliary
materials).
• Emissions of customers other than those directly from use of RHI Magnesita’s products.
• Processing of sold products
• Downstream/upstream leased assets
Disclosure of reporting boundaries considered and calculation methods for estimating Scope 3 GHG emissions
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E1-6 51 AR46h
Reporting boundaries
RHI Magnesita follows the operational control approach for consolidating data and accounts for GHG emissions or removals from opera-
tions over which it has full year operational control in the respective reporting year.
Significant Scope 3 categories for RHI Magnesita exceeding 5% of the Group’s Scope 1 emissions are the following:
Scope 3 category: Calculation methods
Purchased goods and services: The indirect emissions from purchased goods and services consists of three main groups: purchased raw
materials, goods for resale and packaging. Indirect emissions of these groups are quantified by applying emission factors to the volumes
of purchased goods. For purchased raw materials emission factors are applied per raw material class. RHI Magnesita actively engages with
suppliers to use emission factors provided by suppliers. For resale goods and estimated emission factors are applied due to a lack of sup-
plier data. For packaging materials literature values are applied for calculating indirect GHG emissions.
Downstream transportation: For all transportation in the corporate ERP system all transport and distribution flows from origin to destination
are fully covered in the GHG calculation, independent if the actual transport activity was performed under the Group’s management re-
sponsibility or customer or supplier management responsibility. Transport distances are are sourced from publicly available routing plat-
forms. Literature-based CO
2
emission factors per ton-kilometre are used to calculate transport-related GHG emissions. Transportation not
covered by the corporate ERP system are extrapolated according to shipped volumes
Fuel and energy related activities: Emissions from fuel and energy related activities are calculated based on fuel-specific emission factors.
Use of sold products: Emissions from the use of sold products origin from two different sources: 1) emissions from organic additives in the
refractory product due to the high temperature during the use phase; 2) emissions from the heating up of refractory products at the cus-
tomer. Emissions from additives in refractories are calculated based on average organic content of certain refractory types and estimated
oxidation rates. Emissions from heating up of refractories at the customer are estimated based on representative energy consumption data.
Upstream transportation: Same as for downstream transportation.
Emissions of Scope 1, 2 and 3 are externally verified by LRQA (LRQA Group Limited).
CO
2
KPI methodology
MDR-M 75/77/80
The CO
2
KPI is the metric used to measure progress against the Group's 15% relative reduction target against a 2018 base year. In line with
the greenhouse gas protocol the metric is adjusted to reflect changes in the operational footprint due to mergers and acquisitions as well
as divestments. As a result, the metric does not show the impact of mergers and acquisitions and divestments on the GHG-intensity of the
Group. The KPI considers only energy consumed directly by the Group. The denominator of the KPI are tons of shipped products excluding
resale and sale of raw materials with very low GHG-intensity (raw magnesite and dolomite). The shipped volumes are corrected by inventory
changes of finished goods and GHG-intensive raw materials produced by RHI Magnesita. The metric is not externally verified. The target
did not undergo any significant change in methodology.
The KPI reflects RHI Magnesita's policy commitment to tackle climate change. The target is not a science-based target and external stake-
holders have not been consulted. The target is based on a bottom-up approach with clearly identified CO
2
reduction levers.
Disclosure requirement E1-4 – Targets related to climate change mitigation and adaptation
RHI Magnesita has set a target in 2019 to reduce its Scope 1, 2, 3 (purchased raw materials) CO
2
emissions by 15% per tonne of product until
2025. The 2018 base year serves as the reference point for the 2025 target, marking the first full year following the RHI and Magnesita
merger in 2017. The 2024 base year is set for the 2030 target, chosen for its representativeness, particularly as a relative target, which
minimises the influence of production volumes on progress. Additionally, the base year is adjusted in cases of mergers, acquisitions, or
divestments to ensure consistency in measurement.
The primary sources of Scope 1 GHG emissions for RHI Magnesita are: (1) fuel-based emissions from firing various kilns in raw material and
finished goods production, and (2) geogenic process emissions from raw materials, where MgCO₃ is calcined into MgO, releasing CO₂.
Since geogenic emissions also occur in purchased raw materials—classified as Scope 3 emissions—and account for approximately 58%
of total Scope 3 emissions, the Group has set a target covering all three emission streams. This integrated approach ensures a more com-
prehensive reduction strategy across direct and indirect emissions.
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The reference 1.5°C reduction for the target period 2024 to 2030 would be a reduction of 42% of Scope 1 and 2 emissions while the Group
targets an 9% reduction of Scope 1 and 5% reduction for Scope 2 emissions. For Scope 3 emissions a 1.5°C reduction target would require
a reduction of 42% and the Group’s targeted reduction of Scope 3 from purchased raw materials by 12%. Therefore, the Group’s CO
2
re-
duction targets are not compatible with limiting global warming to 1.5°C.
The CO
2
KPI is the metric used to measure progress against the Group's 15% relative reduction target against a 2018 base year. CO
2
intensity
has been reduced by 14% between 2018 and 2024 and therefore the Group is confident of achieving the 15% target in 2025.The scope of
the KPI is Scope 1, 2 and 3 from purchased raw materials. In line with the greenhouse gas protocol the metric is adjusted to reflect changes
in the operational footprint due to mergers and acquisitions as well as divestments. As a result, the metric does not show the impact of
mergers and acquisitions and divestments on the GHG-intensity of the Group. The denominator of the KPI are tonnes of shipped products
excluding resale and sale of raw materials with very low GHG-intensity (raw magnesite and dolomite). The shipped volumes are corrected
by inventory changes of finished goods and GHG-intensive raw materials produced by RHI Magnesita. The metric is not externally verified.
The target did not undergo any significant change in methodology.
The KPI reflects RHI Magnesita's policy commitment to tackle climate change. The target is not a science-based target, and external stake-
holders have not been consulted. The target is based on a bottom-up approach with clearly identified CO
2
reduction levers. We receive
external verification from Lloyds Registry.
In addition to the 2025 CO
2
reduction target, the Group has issued a new 2030 target. The Group targets a CO
2
reduction of 10% per
tonne of product by 2030 against a 2024 base year. The Group applies for the 2030 target the same scope and approach as for its 2025
reduction target.
The target does not consider new technologies as their economic and technical feasibility is either not given or uncertain for the target
period. Future changes in regulatory factors are not anticipated as the Group does not have indication of relevant changes for the target
period with sufficient certainty to be considered. As the target is a relative target, changes in sales volumes do not directly affect progress
against the target. The Group follows a bottom-up approach focusing on technical and economic feasibility and quantitative modelling
analysis under our Paris Aligned scenario (RCP 2.6) was considered to assess transitional climate related risks.
The Group has an integrated CO
2
reduction targets covering Scope 1, 2 and 3 from purchased raw materials emissions. Based on the re-
duction levers, the Group expects to reduce, by 2030, its Scope 1 emissions by 9%, its Scope 2 emissions by 5% and its Scope 3 raw
material emissions by 12%. Scope 2 emissions reductions are on a market-based approach. The target covers all RHI Magnesita's operations
globally and is reported as CO
2
equivalent. The target covers around 4.5 million tonnes CO
2
(75%) of total Scope 1, 2 and 3 emissions.
In addition to its CO
2
target, the Group has an energy efficiency target to improve energy use per tonne of product by 5% by 2025 against
a 2018 baseline. In line with the greenhouse gas protocol the metric is adjusted to reflect changes in the operational footprint due to mer-
gers and acquisitions as well as divestments. However, the metric does not adjust for changes in sourcing of energy intensive raw materials
from within or outside the Group. The KPI considers only energy consumed directly by the Group. The denominator of the KPI are tonnes
of shipped products excluding resale and sale of raw materials with very low GHG-intensity (raw magnesite and dolomite). The shipped
volumes are corrected by inventory changes of finished goods and GHG-intensive raw materials produced by RHI Magnesita. The metric is
neither externally verified nor assured. The target did not undergo any significant change in methodology. The 2018 baseline value is 1.91
(adjusted to reflect mergers and acquisitions).
As a successor to the 2025 energy efficiency target and as part of its ongoing commitment to resource efficiency, RHI Magnesita has es-
tablished a new energy efficiency goal. By 2030, the Group aims to improve energy efficiency by 1% per plant annually, using 2024 levels
as the baseline.
Progress toward this target is measured based on implemented projects that enhance energy efficiency at production sites, in alignment
with ISO 50001 standards. To improve traceability, the target has been adjusted from the previous 2018-2025 energy efficiency goal. In
accordance with the Greenhouse Gas Protocol, the base year is adjusted to reflect changes in the Group’s operational footprint resulting
from mergers, acquisitions, and divestments.
This metric is neither externally verified nor assured. The energy efficiency targets are not derived from conclusive scientific evidence, and
external stakeholders were not involved in their development. However, these targets support the Group’s policy of reducing direct and
indirect CO₂ and other greenhouse gas emissions by enhancing operational energy efficiency. The targets are relative and apply to all
direct energy consumption at RHI Magnesita’s production sites.
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The Group has achieved a 7% reduction of energy intensity compared to the base year; however, compared to 2023 the intensity has
increased by 2%.
Read more about the positive impact of the use of secondary raw materials on CO
2
emissions in ESRS E5.
The Group relies on several levers to achieve its CO
2
target. See table below.
Assumptions and methodologies
The levers reflect the contribution of the main measures to achieving the CO
2
reduction target. The impact of the levers is based on bot-
tom-up assessment of CO
2
reduction potential. For the 2030 target medium-term planed production volumes are applied to 2030 as for
2030 expected production volumes are not yet defined.
Lever
Expected contribution to
target
Planned savings (tCO
)
Recycling % ,
Fuel switch % ,
Reduced CO
-intensity of purchased raw materials % ,
Energy efficiency in own operations % ,
Renewable electricity % ,
Total % ,
New technologies are not considered as a significant lever given the technical and economic uncertainties associated with them for the
target period.
Targets related to climate change mitigation and adaptation
Assumptions and methodologies
The calculated reduction path in alignment with a 1.5°C path is based on the SBTi calculation tool and an absolute contraction approach
for Scope 1, 2 and 3. The Group has an intensity based target and has provided below the accompanying absolute values based on the
existing production foot-print, medium term planned production volumes and excluding future M&A.
SBTI Approach - Absolute emissions
tCO
eq
T
T vs.
Scope
,, ,, ,, ()%
Scope
, , , ()%
Scope
- raw materials ,, ,, ,, ()%
Total
,, ,, ,, ()%
RHI Magnesita approach - Absolute emissions
tCO
eq
T
T vs.
Scope
,, ,, ,, ()%
Scope
, , , ()%
Scope
- raw materials ,, ,, ,, ()%
Total
,, ,, ,, ()%
RHI Magnesita approach
- Relative emissions tCO
/t T
T vs.
Scope
. . . ()%
Scope
. . . ()%
Scope
- raw materials . . . ()%
Total
. . . ()%
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Reductions planned in own operations
GHG emissions (ktCO
eq) , ,
Energy efficiency and consumption reduction
.% .%
Fuel
switching .% .%
Use of renewable energy
.% .%
Reductions expected in value chain
Supply chain decarbonisation
.% .%
Recycling
.% .%
Disclosure Requirement E1-5 – Energy consumption and mix
RHI Magnesita operates entirely within high climate impact sectors, meaning that total revenue is fully classified as revenue from these
sectors, aligning with financial statement disclosures. The Group’s energy production includes 853 MWh from non-renewable sources and
1,250 MWh from renewable sources.
A key limitation of the 2018-2025 energy target is the challenge of identifying drivers of progress, as changes in product portfolio and
capacity utilisation can influence the metric. Additionally, the measurement of energy metrics is not externally validated beyond assurance
provider reviews.
The Group determines energy intensity based on its operations in high climate impact sectors, which include refractory production and
metallurgical processes, both characterised by energy-intensive manufacturing and resource transformation.
Assumptions and methodologies
Electricity from fossil sources is calculated on a location-based approach.
Energy consumption and mix
) Fuel
consumption from coal and coal products (MWh)
,
,
) Fuel consumption from crude oil and petroleum products (MWh)
,,
,,
) Fuel consumption from natural gas (MWh)
,,
,,
) Fuel consumption from other fossil sources (MWh)
-
-
) Consumption of purchased or acquired electricity, heat, steam, and cooling from fossil sources
(MWh)
,
,
) Total fossil energy consumption (MWh) (calculated as the sum of lines to )
,,
,,
Share of fossil sources in total energy consumption (%)
.% .%
) Consumption from nuclear sources (MWh)
,
,
Share of consumption from nuclear sources in total energy consumption (%)
.% .%
) Fuel consumption for renewable sources, including biomass (also
comprising industrial and
municipal waste of biologic origin, biogas, renewable hydrogen, etc.) (MWh)
,
,
) Consumption of purchased or acquired electricity, heat, steam, and cooling from renewable
sources (MWh)
,
,
) The consumption of self
-generated non-fuel renewable energy (MWh)
,
-
) Total renewable energy consumption (MWh) (calculated as the
sum of lines to )
,
,
Share of renewable sources in total energy consumption (%)
.%
.%
Total energy consumption (MWh) (calculated as the sum of lines , and )
,,
,,
Assumptions and methodologies:
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Electricity from renewable sources (PV) is considered in the total energy consumption. Energy from non-renewable energy generation is
not considered in the total energy consumption to avoid double reporting. Non-renewable energy generation is estimated based on fuel
inputs to electricity generators with an estimated conversion efficiency of 36%.
Disagregation of non-renewable and renewable energy production
Non
-renewable energy generation (MWh)
Renewable energy generation (MWh)
,
Assumptions and methodologies
Electricity from fossil sources is calculated on a location-based approach.
Consumption of purchased or acquired electricity, heat, steam, or cooling from fossil
sources
Electricity fossil (MWh)
,
,
Energy intensity based on net sales
Assumptions and methodologies
Total energy consumption also considers self-generated electricity from renewable sources.
Energy intensity per net revenue
% N / N-
Total energy consumption from activities in high climate impact sectors
(MWh)
,,
,, .%
Net
revenue from activities in high climate impact sectors (EUR) ,,,
,,,
(.)%
Total energy consumption from activities in high climate impact sectors
per net revenue from activities in high climate impact sectors
(MWh/Monetary unit)
.
. .%
Connectivity of energy intensity based on net revenue with financial reporting information
Connectivity of energy intensity based on net revenue with financial reporting information
Net revenue used to calculate GHG intensity
,,,
Energy efficiency target 2018-2025: 5% energy efficiency improvement
Assumptions and methodologies
Already described in E1 chapter
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E
Retrospective
Milestones and
target years
Energy efficiency
target
-:
% energy
efficiency
improvement
Base year ()
%N/N-
(absolute emission
target)
Percentage
(absolute/
relative)
Energy consumption
(MWh)
,,
,,
,, .% ,, (.)%
MWh/t
. . . .% . (.)%
Energy efficiency target: 2025-2030: 1% energy reduction per year
Assumptions and methodologies
Already described in E1 chapter
Energy efficiency target:
-: % energy
reduction per year
Retrospective
Milestones
and target
years
Base year
() %N/N-
% of base
year
Energy consumption (MWh)
,, ,
Disclosure requirement E1-6 – Gross scopes 1, 2, 3 and total GHG emissions
All Scope 1 emissions are from activities under operational control. Investments without operational control are reported as Scope 3 emis-
sions. See Consolidated Statement of Profit or Loss in the Financial Statements.
Scope 1 emissions
RHI Magnesita follows the operational control approach for consolidating data and accounts for GHG emissions or removals from opera-
tions over which it has full year operational control in the respective reporting year. Facilities partially owned without operational control
are reported under Scope 3 emissions (Investments). Facilities acquired or built by RHI Magnesita are taken into account at latest in their
first full operative calendar year, if possible, earlier.
For investees that are not fully consolidated in the financial statements of the consolidated accounting group, including associates, joint
ventures, unconsolidated subsidiaries, and contractual joint arrangements where RHI Magnesita has operational control, the following
emissions have been considered: 171 tCO₂ under Scope 1 and 252 tCO₂ under Scope 2 market-based. These figures ensure alignment with
the reporting requirements by reflecting emissions from entities and operations where operational control is exercised, even if they are not
fully consolidated in the financial statements.
Emissions from offices which are not part of operational sites and emissions from Group cars used offsite are not included.
For Scope 1 emissions a significance threshold of 1% of the total direct plant CO
2
emissions (Scope 1) or 1,000 tCO
2
per year is applied on
plant level.
Most relevant Scope 1 GHG sources are 1) fuel-based emissions at our production facilities from firing various types of kilns in the raw ma-
terial production and finished goods production and 2) geogenic process emissions from the raw material (MgCO
3
is calcined to MgO and
CO
2
). Other minor sources of GHG are organic additives in RHI Magnesita’s finished goods production which oxidize to CO
2
in high tem-
perature kilns and emissions from explosives as well as emissions from mobile equipment.
Potentially existing sinks are forests owned by the Group but are at the moment not considered.
Emission factors
For direct Scope 1 emissions, fuel emission factors are used. Where available, supplier and fuel specific emission factors are applied; oth-
erwise, generic fuel emission factors are used. For geogenic emissions from raw materials, emission factors are stoichiometrically calculated.
The emission factors used to calculate Scope 1 GHG emissions are provided as fallback emission factors, link provided below. The selection
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of these emission factors aligns with established methodologies and ensures consistency in reporting. Furthermore, no third-party calcu-
lation tools were used in the preparation of Scope 1 GHG emissions data.
RHI Magnesita applied the CO₂ emission factors for fossil fuels as published by the German Environmental Agency (Umweltbundesamt,
2016).
Scope 2 emissions
RHI Magnesita follows a dual reporting approach for Scope 2 emissions, disclosing both market-based and location-based emissions. Mar-
ket-based emissions reporting reflects the CO₂ intensity of purchased electricity as provided by the supplier and includes unbundled
green electricity certificates. If the supplier does not provide a supplier-specific market-based emission factor, the Group aims to use re-
sidual electricity emission factors. If neither supplier-specific nor residual electricity emission factors are available, location-based emis-
sion factors are applied as a fallback. Non-CO₂ GHGs are not consistently considered in market-based reporting.
For location-based Scope 2 GHG emissions, fallback emission factors are provided and explained above. Additionally, as the emission fac-
tors are derived from ecoinvent data, disclosure is not permitted. The applied location-based emission factors do not differentiate between
fossil and biogenic greenhouse gases, and non-CO₂ GHG emissions, including CH₄ and N₂O, are incorporated where available. These
factors are sourced from a third-party database, which considers all greenhouse gases except biogenic CO₂. Furthermore, no third-party
calculation tools were used in the preparation of location-based Scope 2 GHG emissions data, and therefore, there are no external refer-
ences or links to disclose regarding calculation tools. This approach ensures compliance with disclosure requirements while maintaining
methodological consistency and adherence to regulatory guidance.
Scope 3 emissions
RHI Magnesita reports indirect upstream and downstream emissions. Various approaches are used to calculate indirect emissions.
The following indirect emissions are excluded from reporting, as they remain below 5% of the Group’s Scope 1 emissions—RHI Magnesita’s
threshold for inclusion. The only exception is customers’ emissions that are not directly related to the use of RHI Magnesita’s products.
• Emissions from offices which are not part of operational sites and emissions from Group cars used offsite.
• Other purchased goods than purchased raw materials, trading goods, packaging and those used in capital goods (e.g. auxiliary
materials).
• Customer’s emissions
• Processing of sold products
• Downstream/upstream leased assets
Reporting boundaries: RHI Magnesita follows the operational control approach for consolidating data and accounts for GHG emissions or
removals from operations over which it has full year operational control in the respective reporting year. No calculation tools have been
used for this purpose.
Calculation methods for significant Scope 3 categories (exceeding 5% of the Group’s Scope 1 emissions):
Purchased goods and services: The indirect emissions from purchased goods and services consists of three main groups: purchased raw
materials, goods for resale and packaging. Indirect emissions of these groups are quantified by applying emission factors to the volumes of
purchased goods. For purchased raw materials emission factors are applied per raw material class. RHI Magnesita actively engages with
suppliers to use emission factors provided by suppliers. For resale goods and estimated emission factors are applied due to a lack of supplier
data. For packaging materials literature values are applied for calculating indirect GHG emissions. Emission factors are applied to actual
tonnages of consumed purchased goods.
The Group uses several sources for emission factors for purchased raw materials, prioritized in descending order:
1. Supplier provides emission factors of their raw materials which are then used for calculating the emission of the respective raw
material independently of the actual supplier.
2. In the case of purchased raw materials which the Group also produces on its own it uses the emission factor from own production,
if production settings are comparable (e.g., fuel use) or it adapts emission factors according to the assumed energy mix (e.g., coal
or electricity based on coal).
3. The emission factor is taken from literature or databases (e.g., ecoinvent).
4. Based on literature research and investigation the CO
2
emission factor is calculated reflecting the production process and as-
sumed energy sources of the supplier; or for other products with similar production method as products for which suppliers pro-
vided emission factors.
5. For raw materials for which none of the four approaches leads to a plausible emission factor the residual category “Others” is
created for which a generic emission factor of 1.8 tCO
2
per tonne of product is taken. The 1.8 t CO
2
were defined per expert judge-
ment as a plausible average value for refractory raw materials.
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Downstream and upstream transportation: For all transportation in the corporate ERP system all transport and distribution flows from origin
to destination are fully covered in the GHG calculation, independent if the actual transport activity was performed under the Group's man-
agement responsibility or customer or supplier management responsibility. Transport distances are sourced from publicly available routing
platforms. Literature-based CO
2
emission factors per tonne-kilometre are used to calculate transport-related GHG emissions. Transporta-
tion not covered by the corporate ERP system are extrapolated according to shipped volumes. For emissions related to transport third party
database emission factors are used.
Fuel and energy related activities: Emissions from fuel and energy related activities are calculated based on fuel-specific emission factors
and applied on fuel-specific energy consumption. For emissions related to fuel and energy related emissions, end of life treatment third
party database emission factors are used.
Use of sold products: Emissions from the use of sold products origin from two different sources: 1) emissions from organic additives in the
refractory product due to the high temperature during the use phase; 2) emissions from the heating up of refractory products at the cus-
tomer. Emissions from additives in refractories are calculated based on average organic content of certain refractory types and estimated
oxidation rates. Emissions from heating up of refractories at the customer are estimated based on representative energy consumption data.
Total emissions are calculated based on sales volumes of respective product groups.
Other Scope 3 categories:
Assumptions and methodologies
Emission factors for calculating indirect emissions from capital goods are based on literature values. For emissions related to packaging
materials, waste, and end-of-life treatment third-party database emission factors are used.
In the reporting period no significant changes in the definition of what constitutes the entity’s upstream value chain, downstream value
chain or reporting entity occurred.
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Retrospective
Milestones and target years
Base year
Comparative
(N-1) (N)
%
(N / N-1)
2018 2023 %2024/2023
2024
progress
against
base year (t
CO2/%)
2025T 2030T
Annual %
target /
Base year
Scope GHG emissions
Gross Scope 1 GHG
emissions (tCO
2
eq) 2,528,000 2,176,200 ,, 3.8% (10.6)% 2,278,800 2,050,000 1.5%
Percentage of Scope 1 GHG
emissions from regulated
emission trading schemes
(%)
24% 28% %
Scope GHG emissions
Gross location
-based
Scope 2 GHG emissions
(tCO
2
eq) 293,000 214,000 , 0.9% (26.3)%
Gross market
-based Scope
2 GHG emissions (tCO
2
eq) 239,000 115,000 , (13.9)% (58.6)% 128,900 94,000 0.8%
Significant scope GHG
emissions
Total Gross indirect
(Scope
3) GHG emissions (tCO
2
eq)
5,021,000 3,692,000 ,, (3.2)% (28.8)%
1) Purchased goods and
services 3,510,000 2,405,000 ,, (5.4)% (35.2)%
there of purchase of
raw materials 3,350,000 2,216,000 ,, (7.1)% (38.6)% 2,340,900 1,811,000 2.0%
2) Capital goods 47,000 71,000
,.
(22.5)% 17.0%
3) Fuel and energy-
related Activities (not
included in Scope1 or
Scope 2) 463,000 344,000 , 5.8% (21.4)%
4) Upstream
transportation and
distribution
457,000 386,000 , (0.8)% (16.2)%
5) Waste generated in
operations 13,000 15,000 , 20.0% 38.5%
6) Business traveling 26,000 8,000 , 75.0% (46.2)%
7) Employee commuting 17,000 20,000 , 0.0% 17.6%
8) Upstream leased assets
-
-
9) Downstream
transportation 106,000 90,000 , (1.1)% (16.0)%
10) Processing of sold
products
-
-
11) Use of sold products 369,000 341,000 , 1.5% (6.2)%
12) End-of-life treatment
of sold products 6,000 5,000 , 0.0% (16.7)%
13) Downstream leased
assets
-
-
14) Franchises
-
-
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) Investments , , 7,000 .% .%
Total GHG emissions
Total GHG emissions
(location
- based) (tCO
eq)
,, ,, 6,050,000
Total GHG emissions
(market
- based) (tCO
eq) ,, ,, 5,933,000 ,, ,, .%
Disaggregation of GHG emissions
Assumptions and methodologies
Scope 1 emissions are disaggregated into fuel-related emissions and process emissions. The biggest share of process emissions are geo-
genic emissions which result from the dissolution of carbonate minerals where CO
2
. A much smaller share of process emissions are emis-
sions from additives. The disaggregation excludes biogenic emissions.
Scope
Fuel emissions (t CO
)
,, n.a.
Process emissions (t CO
)
,, n.a.
Percentage of Scope 1 GHG emissions from regulated emission trading scheme (%)
Assumptions and methodologies
Emissions from regulated emission trading schemes cover all emissions covered the EU ETS. Other emission trading schemes do not
cover Scope 1 emissions of RHI Magnesita.
Scope :
ETS covered emissions (t
CO
)
,
%
,
%
,
%
Not ETS covered
emissions (t CO
)
,,
%
,,
%
,,
%
Emissions from biogenic fuels and additives
Assumptions and methodologies
Emissions from biogenic fuels result from the use of charcoal, biofuels for mobile equipment and from biogenic additives to products
which oxidise during the production process to CO
2
.
E- a ARc
Direct emissions from biogenic fuels and organic additives (t CO
)
,
n.a.
Assumptions and methodologies
Indirect emissions from biogenic fuels is calculated based on Ecoinvent emission factors.
E- AR j
Indirect emissions from biogenic fuels (t CO
eq)
,
n.a.
Assumptions and methodologies
Purchased electricity which is not green electricity is categorised as 'None'. All green electricity which does not rely on unbundled at-
tribute claims is categorised as 'Default delivered electricity from the grid (e.g. standard product offering by an energy supplier), sup-
ported by energy attribute certificates'. Green electricity based on an unbundled guarantee of origin (e.g. IREC certificate) is categorised
as 'Unbundled attribute claims'.
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Percentage of contractual instruments, Scope 2 GHG emissions
2024
MWh %
None (no active purchases of low carbon electricity)
202,000
34%
Default delivered electricity from the grid (e.g. standard product offering by an energy supplier),
supported by energy attribute certificates
151,000
26%
Unbundled attribute claims
237,000 40%
Green electricity products from an energy supplier (e.g. green tariffs)
-
0%
Total
590,000
100%
Percentage of GHG scope 3 calculated using primary data
Assumptions and methodologies
Emissions are categorised as based on supplier data if emissions are either directly provided by supplier (e.g. business travel) or if relevant
information (e.g. emission factors) are provided by a supplier. For purchased raw materials all raw material related emissions are catego-
rised as based on supplier data if the used emission factor is from a supplier of the raw material class but not all raw materials considered
in a raw material class are from the providing supplier.
tCO
2
Scope 3
Share of
emissions
based on
supplier data
Share of Scope
3 category
among total
Scope 3
emissions
Upstream transportation and distribution
383,000
0%
11%
Downstream transportation and distribution
89,000 0% 2%
Employee commuting
20,000
0% 1%
Purchased goods and services
2,274,000 23% 64%
T
hereof purchased raw materials
2,058,000 25% 58%
Capital goods
55,000
0% 2%
Fuel
-and-energy-related activities
364,000 0% 10%
Waste generated in operations
18,000 0% 1%
Business travel
14,000
85% 0%
Use of sold products
344,000
0%
10%
End
-of-life treatment
5,000 0% 0%
Investment
7,000
0% 0%
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024142
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RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024 — 143
Current and future financial resources allocated to action plan (OpEx)
Assumptions and methodologies
Additional cost for green electricity and R&D activities in direct relation to CO
2
emissions (e.g. R&D to increase share of secondary raw
material usage) are considered as relevant OpEx. Future financial resources are estimated based on relevant OpEx in 2024.
Green electricity:
T
Europe
,
,
SAM
,
,
China
,
,
R&D
,,
,,
Total
,,
,,
Current and future financial resources allocated to action plan
Assumptions and methodologies
The capex reported considers investments into increasing the Group's recycling rate and investments into CO
2
reduction measures such
as fuel switches or use of waste heat. Future financial resources are projected to remain at levels comparable to those in 2024.
T
CapEx (EUR)
,, n.a
OpEx (EUR)
,, ,,
Revenue from refractory products that enables decarbonisation in the customer industries (e.g. EAF; ESF; BOF; DRI)
Revenue (in EUR)
Revenue from refractory products that enables decarbonisation in the customer industries (e.g.
EAF; ESF; BOF; DRI)
n.a.
,,
The CO
2
KPI is the metric used to measure progress against the Group's 15% relative reduction target against a 2018 base year. In line with
the greenhouse gas protocol the metric is adjusted to reflect changes in the operational footprint due to mergers and acquisitions as well
as divestments. As a result, the metric does not show the impact of mergers and acquisitions and divestments on the GHG-intensity of the
Group. The KPI considers only energy consumed directly by the Group. The denominator of the KPI are tonnes of shipped products ex-
cluding resale and sale of raw materials with very low GHG-intensity (raw magnesite and dolomite). The shipped volumes are corrected by
inventory changes of finished goods and GHG-intensive raw materials produced by RHI Magnesita. The metric is not externally verified.
The target did not undergo any significant change in methodology.
The KPI reflects RHI Magnesita's policy commitment to tackle climate change. The target is not a science-based target, and external stake-
holders have not been consulted. The target is based on a bottom-up approach with clearly identified CO
2
reduction levers.
GHG intensity per net revenue
GHG intensity per net revenue
% N / N-
Total GHG emissions (location
-based) per net revenue (tCO
eq/Monetary unit) . . .%
Total GHG emissions
(market-based) per net revenue (tCO
eq/Monetary unit) . . .%
Connectivity of energy intensity based on net revenue with financial reporting information
Connectivity of energy intensity based on net revenue with financial reporting information
Net revenue used to calculate GHG intensity
,,,
Disclosure requirement E1-7 – GHG removals and GHG mitigation projects financed through carbon credits
The Group has significant CO
2
emissions within its own value chain and there are large emissions savings that can be delivered for its
customers through improved solutions contracts or other solutions. The Board therefore considers that the priority should be to allocate
capital and other resources to reducing the Group’s own CO
2
footprint and the emissions of its customers rather than investing in carbon
offset projects. The Board believes that taking this approach will deliver a faster, greater and more sustainable decrease in net CO
2
emissions
than could be delivered by allocating capital to offsets.
143RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
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Disclosure requirement E1-8 – Internal carbon pricing
RHI Magnesita has conducted a thorough evaluation of the implicit carbon pricing approach as a potential element of its sustainability
strategy. While recognising the value of such a mechanism, the Group has opted not to proceed with its adoption at this stage due to the
significant complexity involved in implementation. However, RHI Magnesita remains committed to revisiting this approach as it closely
monitors the evolution of emissions trading schemes and regulatory developments in the countries where it operates. Following this pro-
active approach, the Group remains well-positioned to adapt its strategy to align with emerging sustainability and market requirements.
Disclosure requirement E1-9 – Anticipated financial effects from material physical and transition risks and potential climate-related
opportunities
The anticipated financial effects from material transition risks and potential climate related opportunities are presented on table of climate-
related risks and opportunities on pages 122-125. There are no material physical risks.
ESRS E2 Pollution
ESRS 2 General disclosures
Impact, risk and opportunity management
Disclosure requirement related to ESRS 2 IRO-1 – Description of the processes to identify and assess material pollution-related
impacts, risks and opportunities
As part of the materiality assessment, the impacts, risks, and opportunities associated with pollution of RHI Magnesita’s production sites
were assessed in addition to operational environmental permit requirements. The environmental permit and the related programme for
monitoring emissions and impacts set the minimum requirements for the observation of environmental impacts. This holistic approach
supports the identification and prioritisation of material topics relevant to RHI Magnesita. The DMA is described on pages 100-102.
As a result, RHI Magnesita has identified that in addition to GHG emissions, RHI Magnesita’s production generates other emissions to air
and can have a negative impact on health and environment. Most of these emissions arise from industrial processes involved in raw material
preparation and refractory production.
Emissions from sources other than RHI Magnesita production sites are not included in the pollution screening. The assessment is based on
emission thresholds defined by the European Pollutant Release and Transfer Register (EC No. 166/2006) and focuses on actual pollution
related to the nature of the IRO. Upstream and downstream value chain emissions were not assessed; however, given that both involve
high-temperature processes, similar pollution impacts are expected.
RHI Magnesita adopts a compliance-driven approach to pollution management, ensuring that all operations meet or exceed the strict
environmental regulations in place. By adhering to enforceable legal standards, such as emission limits and monitoring obligations, the
Group ensures responsible management of pollutants, Production sites are required to record and report their emissions for various param-
eters into the Group's environmental ERP system, ensuring a comprehensive corporate overview of relevant pollutants. Communities were
not consulted for this specific analysis.
Disclosure requirement E2-1 – Policies related to pollution
Policies are formulated with key stakeholder interests in mind and align with the ISO and other internationally recognized standards.
Through its Integrated Management System (“IMS”) policy, RHI Magnesita is committed to minimising emissions—including both direct
and indirect CO
2
as well as other greenhouse gases—along with reducing pollution and the release of harmful substances. This effort
extends across its operations and applications at customer sites, aiming to mitigate potential negative impacts on human health, and the
environment. This policy underscores the Group's dedication to reducing the environmental impact of its activities to the extent that is
technically and economically feasible.
Based on RHI Magnesita's DMA, substances of concern and substances of very high concern are not considered to have material impacts,
risks, or opportunities for the Group. Consequently, there is no stand-alone policy addressing these substances. While the IMS policy
commits to minimising pollution, it does not explicitly include provisions for incidents and emergency situations.
The scope of the IMS policy encompasses RHI Magnesita’s direct operations as well as activities at customer sites. The CTO holds the
highest level of accountability for the policy's implementation within the organisation. The Group’s current policy does not yet fully align
with all ESRS disclosure requirements. An update is underway to ensure compliance and comprehensive reporting.
The IMS policy is integrated into the governance framework of the Group’s ISO-certified management systems and is publicly available on
the RHI Magnesita website.
Business partners (upstream and downstream) are expected to adhere to the RHI Magnesita’s Code of Conduct and Supplier Code of Con-
duct.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024144
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Disclosure requirement E2-2 – Actions and resources related to pollution
The Group adheres to all legal requirements regarding pollution control and proactively takes measures to ensure compliance. In 2024,
several targeted initiatives were implemented to reduce air pollution across the Group's global core operations.
The reported actions, all completed within the reporting year, focused primarily on mitigating dust emissions, with a particular emphasis
on minimising occupational exposure risks. These measures reflect the Group’s ongoing commitment to safeguarding health and main-
taining environmental standards.
To support these efforts, the Group allocated approximately €2.9 million in capital expenditures (CapEx) towards pollution control initia-
tives during the reporting period. Future financial resources are projected to remain at levels comparable to those in 2024.
Metrics and targets
Disclosure requirement E2-3 – Targets related to pollution
The Group has not established specific pollution-related targets, as it adheres to a compliance-driven approach. Air pollution across its
operations is subject to stringent regulatory requirements, including enforceable emission limits and mandatory monitoring obligations.
By prioritising full adherence to these legal standards, the Group ensures that emissions remain within permissible levels and that the
effectiveness of its policies and actions is consistently monitored and maintained.
Disclosure requirement E2-4 – Pollution of air, water and soil
Soil and water pollution were assessed as part of RHI Magnesita’s double materiality evaluation and were deemed immaterial to the Group’s
value chain. The assessment considered the nature of industrial processes, mining activities, existing environmental controls, and regula-
tory compliance measures, which mitigate significant risks in these areas. As a result, no material impacts, risks, or opportunities were iden-
tified related to soil and water pollution.
Main emissions to air from the production of refractory and refractory raw materials are NOx and Sox emissions. Other pollutants relevant
for certain sites are carbon monoxide (CO) and mercury (Hg). Additionally, emissions from Hydrofluorocarbons (HFCs) from air conditioning
are relevant at certain sites. Mercury and carbon monoxide emission levels are reported; however, E2-5 pollutants of high concern are not
material, as the products do not contain these pollutants.
RHI Magnesita has implemented significant actions in recent years to reduce its NOx emissions across key regions. These efforts have led
to a 43% reduction in China, a 38% reduction in North America, and a 14% reduction in Europe, (compared to 2018), resulting in an overall
substantial decrease in NOx emissions. SOx emissions also reduced over time through investment into SOx abatement technologies. Mer-
cury exceeds the reporting threshold in two sites. The unabated emissions result from hard coal or pet coke used as a fuel and show little
variation over time. CO emissions typically occur at the heating up and shut down of kilns when incomplete combustion occurs. Emissions
are quite stable over time. HFC emissions are monitored in 2024 for the first year, therefore no changes over time observed.
Pollution-related data is collected annually or for very few sites monthly via the Group environmental ERP-system. Depending on the
pollutant required information are pollutant-concentration in off gas and off gas volumes, consumption of HFCs.
Disclosure requirement E2-5 – Metrics and targets
Air pollutants methodology at RHI Magnesita
RHI Magnesita systematically monitors key air pollutants, including nitrogen oxides (NOx), sulfur oxides (SOx), carbon monoxide (CO), hy-
drofluorocarbons (HFCs), and mercury (Hg). While NOx, SOx, and CO emissions primarily result from combustion processes, mercury emis-
sions originate from its presence in certain raw materials and coal used as fuel.
Given its global operations, RHI Magnesita adheres to local regulatory standards for air pollutant monitoring. Sites in Europe comply with
EN standards, while the U.S. facility follows EPA reference methods, integrating both continuous and periodic stack testing. In China and
India, sites align with national air quality regulations, while Brazilian operations adhere to CONAMA standards, utilizing monitoring instru-
ments and methodologies comparable to those in Europe and the U.S.
Emissions are measured from off-gases of relevant production units, either continuously or on a spot basis, as specified by environmental
permits that define monitoring locations, frequency, and methodologies. Total emissions are calculated based on pollutant concentration
per cubic meter of off-gas and total annual off-gas volumes. While continuous monitoring provides real-time data, spot measurements
may fail to capture extraordinary off-gas conditions, potentially leading to under- or overestimation of emissions.
For HFC emissions, direct measurement is not feasible; instead, mass balance calculations ensure a more accurate and reliable estimation
compared to online analyzers. HFCs, commonly used in air conditioning, are accounted for by tracking all inputs and outputs, minimizing
measurement uncertainties. Where historical data is incomplete, HFC emissions are estimated based on production volumes, maintaining
consistency in reporting. RHI Magnesita follows the recommended approach for both equipment manufacturers and users who maintain
their own equipment, estimating HFC emissions based on the quantity of refrigerant purchased and used, in accordance with the GHG
145RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
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Protocol. This “Sales-Based Approach” requires data that should be available from entity purchase and service records, and tracks emis-
sions from equipment manufacturing (producers) or installation (users), operation, servicing, and disposal.
NOx emissions
t NOx
India
China
North America
,
South America
,
Europe
,
Total
,
SOx emissions
t SOx
India
China
North America
South America
Europe
Total
,
Other air pollutants emissions
t Other air pollutants
CO
,
HFC
.
Hg
.
HCl
Total
,
Disclosure requirement E2-6 – Anticipated financial effects from pollution-related risks and opportunities
The Group omits information prescribed by ESRS E2-6 – except paragraph 40b. The Group did not have any major pollution-related
incidents and deposits are only relevant for pollution of soil which is not material for the Group.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024146
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ESRS E3 Water and marine resources
ESRS 2 General disclosures
As part of its DMA, RHI Magnesita conducted a thorough evaluation of its operations, upstream and downstream value chain, and sector-
specific context to identify water-related impacts, risks, and opportunities. This assessment was guided by RHI Magnesita’s global sustain-
ability team, alongside subject matter experts in health, safety, and environmental management.
Impact, risk and opportunity management
Disclosure requirement related to ESRS 2 IRO-1 – Description of the processes to identify and assess material water and marine
resources-related impacts, risks and opportunities
Water usage in refractory manufacturing
The refractory industry primarily relies on raw materials, energy, and heat, with minimal water dependency. While certain processes such
as mixing, forming, cooling, and dust suppression require water, overall consumption remains significantly lower than in water-intensive
industries like agriculture or textiles.
Water consumption within RHI Magnesita’s operations is primarily associated with process cooling, including applications in the Rotary
Kiln, Venturi Scrubber, and Flotation systems. Additionally, water is utilised for laboratory and sanitation purposes, such as in toilets, showers,
and water coolers. Another key area of water use is dust suppression, which helps control airborne particulates in mining and production
activities, ensuring compliance with environmental standards and workplace safety regulations.
Assessment of water impact in RHI Magnesita’s value chain
RHI Magnesita has evaluated water pollution risks across its production processes and mining activities, recognising that regional and na-
tional regulations significantly influence the extent of water-related risks.
To ensure compliance with local laws and to proactively conserve resources, RHI Magnesita has conducted a water scarcity risk assessment
using the WWF Water Risk Filter, which helps identify and mitigate potential vulnerabilities.
Additionally, RHI Magnesita has an established water management approach, which includes internal measures to enhance sustainable
water use, incorporating best practices for monitoring, conservation, recycling and responsible water discharge.
Water withdrawal is monitored through the installation of water meters at usage units, with monthly readings conducted to track consump-
tion trends. Conservation measures include the implementation of water efficiency measures such regular inspections key consuming fa-
cilities and maintenance to prevent leaks and awareness campaigns to promote water-saving behaviours. To further optimize water use,
RHI Magnesita implements recycling and reuse initiatives, including the utilisation of drained underground water for beneficiation pro-
cesses and dust suppression, internal recycling in rotary kiln cooling and gas scrubbers, and rainwater harvesting from mine pits for storage
and future use. Wastewater management practices involve the establishment of rainwater harvesting pits for groundwater recharge, con-
nections to sewage treatment plants (“STPs”) and effluent treatment plants (“ETPs”) where applicable, and the use of soak pits in limited
cases. These measures collectively contribute to the sustainable management of RHI Magnesita’s water sources and consumption across
its operations.
RHI Magnesita sources its water from multiple channels, including tap water purchased from municipal utilities, groundwater extracted
from borewells and mine pits, and surface water supplied by industrial partners.
Water risk management in the supply chain
RHI Magnesita actively monitors water-related risks in its upstream supply chain, with a particular focus on raw material mining. Environ-
mental compliance of suppliers is assessed through desk-based risk evaluations and on-site audits. To date, no significant water shortages
or related risks have been identified in supplier operations.
Communities were not directly consulted in the identification of material impacts, risks, and opportunities, as RHI Magnesita maintains close
relationships with key communities through dedicated personnel at various sites. This ongoing engagement provides a comprehensive
understanding of community priorities, enabling the Group to effectively align its initiatives with local needs.
Conclusion
Given the refractory industry’s low water dependency, RHI Magnesita has determined that water-related concerns do not constitute a ma-
terial ESG issue. Following ESRS methodology for scale, scope and remediability, the overall impact score at 4 - below the materiality
threshold of 5 - confirming that water is a non-material ESG factor for RHI Magnesita. Comparative benchmarking with water-intensive
industries reinforced this conclusion.
However, the Group remains committed to ongoing monitoring, compliance, and best practices in water management, ensuring that po-
tential risks are minimised.
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ESRS E4 Biodiversity and ecosystems
ESRS 2 General disclosures
As part of its DMA, RHI Magnesita has conducted an evaluation of its biodiversity-related impacts, dependencies, risks, and opportunities.
The assessment included key mining sites located in Austria (3), China (1), USA (1), Brazil (1), and Türkiye (1). Mining activities, including land
degradation, blasting, and land use, were assessed for their impact on biodiversity, while also considering potential positive contributions.
Impact, risk and opportunity management
Disclosure requirement related to ESRS 2 IRO-1 – Description of the processes to identify and assess material biodiversity and
ecosystems-related impacts, risks and opportunities
Contribution to direct impact drivers on biodiversity loss
RHI Magnesita acknowledges that raw material extraction may contribute to biodiversity loss through land-use change and pollution. The
following mitigating measures are in place:
The Group’s mining operations occupy a small environmental footprint, with some sites utilising underground mining to reduce surface
disruption. In 2024, no additional land area was occupied by RHI Magnesita’s mines, while in 2023, land use increased by only 3%, with
rehabilitation efforts conducted in line with local regulations.
RHI Magnesita enforces stringent environmental controls to mitigate pollution from dust emissions and wastewater discharge. The raw
materials extracted are non-hazardous and do not produce acid waste runoff or significant tailings.
The Group’s activities do not introduce invasive alien species or exploit biodiversity beyond standard mineral extraction processes.
Given the refractory industry’s low water dependency, biodiversity risks associated with water use are deemed immaterial. Practices in water
management are described in ESRS E3 IRO-1.
Impacts on species and ecosystems
RHI Magnesita’s operations do not significantly affect species population size or global extinction risks. The RHI Magnesita’s approach to
mining, primarily in long-established sites, ensures that most biodiversity disturbances occurred at the initial development stage rather
than through ongoing operations. Rehabilitation programmes further mitigate residual impacts.
Additionally, RHI Magnesita’s operations do not heavily depend on ecosystem services such as pollination, water purification, or carbon
sequestration. The primary dependency remains on raw mineral extraction.
Biodiversity materiality assessment approach
RHI Magnesita conducted a biodiversity risk screening using the WWF Biodiversity Risk Filter. This analysis identified four primary drivers
of biodiversity loss relevant to the RHI Magnesita’s operations: climate change, pollution, land and water use change, and tree cover loss.
The screening highlighted water scarcity and extreme heat as potential dependencies at certain locations but did not indicate direct expo-
sure to systemic biodiversity risks.
While some mining sites are located near biodiversity-sensitive areas, the RHI Magnesita does not anticipate negative effects. This is sup-
ported by the fact that most mining sites have no specific legal requirements related to protected areas within their operating licences.
Only one site has designated maintenance duties for protected areas, which are regularly fulfilled. Additionally, RHI Magnesita consistently
undertakes land rehabilitation initiatives across its mining operations to mitigate biodiversity-related risks.
RHI Magnesita recognises the interconnection between biodiversity risks and climate risks, particularly in the context of its mining and
production operations. The Group’s latest physical climate risk assessment, conducted in 2023 and refined in 2024, has provided valuable
insights into the vulnerability of certain operational sites to chronic and acute climate hazards, such as temperature fluctuations, heat stress,
soil erosion, and flooding. These climate-related factors can indirectly influence biodiversity by altering ecosystems, disrupting natural
habitats, and impacting soil and water quality. However, the findings indicate that the Group’s overall exposure to physical climate risks
remains limited, primarily due to two key factors: the lack of immediate threats at most flagged sites and the Group’s proactive risk man-
agement approach. For details, see E1 Climate Change – Climate-related physical risks.
Despite approximately 42% of raw materials being sourced from its own mines, RHI Magnesita’s DMA found that the land-use change
impact does not meet the materiality threshold. The assessment assigned a ‘Scale’ score of 5, a ‘Scope’ score of 3, and a ‘Remediability’
score of 5, resulting in an average score of 4.33, which falls below the threshold for materiality. Consequently, while land-use change is
acknowledged as a contributing factor, it does not constitute a significant material impact within the RHI Magnesita’s operational framework.
Biodiversity risk management in the supply chain
RHI Magnesita actively assesses biodiversity-related risks within its supply chain, particularly regarding raw material procurement. Supplier
compliance is monitored through risk evaluations and on-site audits. To date, only one supplier has been identified as a potential
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environmental risk, with further assessments planned for 2025 to confirm any biodiversity-related concerns. However, given the RHI Mag-
nesita’s stringent supplier standards and the nature of procured materials, overall biodiversity risks are assessed as limited.
Stakeholder considerations and Management conclusion
External stakeholders indicated that biodiversity is a high priority for them, but RHI Magnesita’s management determined that RHI Magne-
sita’s operational footprint and biodiversity impact profile did not meet the materiality threshold compared to other sustainability impacts,
risks and opportunities. Communities were not consulted for this specific analysis.
Management’s conclusion is based on a thorough assessment of RHI Magnesita’s mining activities, which demonstrate a limited and con-
trolled nature of change in land-use annually. RHI Magnesita’s mineral extraction operations are primarily confined to existing, long-estab-
lished mining sites, with minimal expansion and a strong focus on land rehabilitation. Additionally, there are no inherent biodiversity risks
beyond localised land-use effects, as the RHI Magnesita’s mining processes do not involve hazardous materials, invasive species, or signif-
icant ecosystem dependencies. Furthermore, RHI Magnesita remains committed to mitigating environmental impacts through strict adher-
ence to regulatory requirements and proactive rehabilitation measures. It has not been concluded whether biodiversity mitigation
measures, as outlined in relevant EU directives or international standards, are necessary.
ESRS E5 Resource use and circular economy
ESRS 2 General disclosures
Impact, risk and opportunity management
Disclosure requirement related to ESRS 2 IRO-1 – Description of the processes to identify and assess material resource use and
circular economy-related impacts, risks and opportunities
As part of the materiality assessment, the impacts, risks, and opportunities associated with resource use and circular economy were as-
sessed considering that recycling is a multi-faceted element of Group strategy since it benefits our business model in several ways. There
are clear sustainability benefits from reducing our environment impact whilst assisting our customers with reducing landfill waste and
promoting the circular economy within the industry sector. The DMA is described on pages 100-102.
For the assessment, the impact of efficient use of raw materials and resources including the use of recycled materials affects mainly up-
stream and RHI Magnesita’s core operations. Communities were not directly consulted in the identification of material impacts, risks, and
opportunities, as RHI Magnesita maintains close relationships with key communities through dedicated personnel at various sites. This
ongoing engagement provides a comprehensive understanding of community priorities, enabling the Group to effectively align its initia-
tives with local needs.
Furthermore, RHI Magnesita’s DMA followed a data-driven approach, integrating impact risks and opportunities (IROs) across the value
chain. Insights industry benchmarks, and expert consultations informed the evaluation, with key stakeholders validating the findings.
RHI Magnesita maintains its industry leadership in utilising recycled minerals and recycling has been the major reduction lever to achieve
the Group’s CO
2
emissions reductions target. The reuse of one tonne of recycled refractory material prevents approximately 1.6 tonnes of
CO₂ emissions compared to virgin raw materials, making recycling the most effective short-term lever to achieve the Group’s 2025 emis-
sions intensity target. Beyond emissions reduction, recycling supports waste management and the circular economy for customers. While
refractory recycling was historically limited by lower performance levels of reclaimed materials, RHI Magnesita has successfully demon-
strated through innovative processes and operational examples that recycled materials can now be used without compromising perfor-
mance.
The 2024 Recycling Rate reached 14.2% which is on track to achieve 2025 Target as of 15%. By year-end, RHI Magnesita plants had con-
sumed 268 kt of recycled materials and sold 96 kt of metallurgical additives, marking a 30% volume increase compared to 2023. This led
to €36 million in raw material cost savings for refractory finished goods and a reduction of 310 kt in CO₂ emissions.
Disclosure requirement E5-1 – Policies related to resource use and circular economy
Through its IMS policy, RHI Magnesita strives to increase the usage of recycled materials and promote and develop the circular economy
wherever possible. This effort extends across its operations and applications at customer sites, aiming to mitigate potential negative impacts
on the environment. This policy underscores the Group's dedication to reducing the environmental impact of its activities to the extent that
is technically and economically feasible. The Group's IMS policy is globally applicable and does not specifically address or exclude stake-
holder groups.
The scope of the IMS policy encompasses RHI Magnesita’s direct operations as well as activities at customer sites, but it does not extend to
the upstream and other downstream stages of RHI Magnesita’s value chain. The CTO holds the highest level of accountability for the pol-
icy's implementation within the organisation.
No third-party standards or initiatives are respected through implementation of the policy. For setting the policy, the Group did not consult
with external stakeholders. The IMS policy is integrated into the governance framework of the Group’s ISO-certified management systems
and is publicly available on the RHI Magnesita website.
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The Group has a global sourcing guideline for recycling, which aims to provide guidance on purchasing of spent refractories and indicates
the recyclability of spent refractories of different industries. This guideline applies to all global regions and all the personnel involved in
the purchasing process of spent refractories.
Disclosure requirement E5-2 – Actions and resources related to resource use and circular economy
The Group has taken substantial steps to enhance its use of circular raw materials, aligning with its commitment to resource efficiency and
circular economy principles. In 2024, the Group invested approximately €3.9 million to expand processing, sorting, and storage capacities
at recycling sites. These investments are aimed at increasing the integration of secondary raw materials into production processes. Addi-
tionally, €2.3 million was allocated to research and development (R&D) initiatives focused on improving recycling methods and product
formulations to accommodate a higher share of circular materials. Future financial resources are projected to remain at levels comparable
to those in 2024.
The Group anticipates maintaining similar levels of spending in the future to sustain its progress in this area. Key actions include advancing
R&D to refine product recipes and investing in internal recycling operations to ensure efficient processing of circular raw materials. Since
2018, these efforts have enabled a consistent increase in the share of circular raw materials used, driven by the continuous development
of recycling capacities, R&D advancements, and strategic sales initiatives.
Recycling
To strengthen our commitment to resource efficiency and circular economy principles, the Group prioritises recycling activities as a key
component of its sustainability strategy. This involves implementing waste management systems, optimising the recovery of materials from
production processes, and ensuring the reintegration of recycled content into new products. Furthermore, the Group actively collaborates
with stakeholders across the value chain to drive resource efficiency, minimising landfill dependency, and advance cutting-edge recycling
technologies. These efforts not only reduce our environmental footprint but also support regulatory compliance and deliver long-term
operational cost efficiencies.
2024 highlights in recycling initiatives
In 2024, the Group implemented a series of targeted technological and processing initiatives, resulting in a significant increase in recycling
volumes — approximately 10,000 tonnes across regions and product lines. Key achievements include:
• Utilisation of MagCarbon leftovers: The integration of MagCarbon leftovers into raw material production processes resulted in a
notable increase of 2,600 tonnes of recycled material in Europe.
• Development of MGG brand with 50% of recycling rate: this milestone, achieved in China, added 970 tonnes of recycled material
to 2024 volumes.
• Enhanced recycling rate in MU: By increasing the recycling rate from 5% to 10% in Europe, the initiative contributed an additional
800 tonnes to overall recycling efforts
• Expansion of recycling in MU: Focused efforts in South America led to the integration of 1,390 tonnes of recycled material, sig-
nificantly advancing sustainability outcomes in the region.
RHI Magnesita is committed to advancing its recycling initiatives through both organic growth and strategic acquisitions to achieve its 2030
target of a 20% recycling rate. As part of this strategy, the Group plans to expand its recycling capabilities beyond Europe through targeted
acquisitions. While these efforts are centred on core operations, they will also impact upstream suppliers, as RHI Magnesita aims to reduce
dependency on purchased raw materials by increasing the use of secondary raw materials.
Metrics and targets
Disclosure requirement E5-3 – Targets related to resource use and circular economy
RHI Magnesita has established ambitious targets to enhance resource efficiency and circular economy efforts, focusing on increasing re-
cycling and reducing waste. The Group aims to increase the share of secondary raw materials in its products, targeting 15% by 2025 and
20% by 2030, reinforcing its commitment to integrating circular materials into production and minimising primary raw material use. This
is a relative target.
These targets apply to refractory and metallurgical product operations, covering upstream and downstream value chains within relevant
geographical boundaries. The focus on secondary raw materials directly supports the waste hierarchy’s recycling layer.
The targets are voluntary and were set in 2018, when the recycling rate was below 4%. The 15% target for 2025 serves as an interim mile-
stone toward 2030. Key considerations include recycling availability, market growth, and supply chain integration, but the targets are not
based on scientific evidence, and stakeholders were not involved in the target-setting process.
These commitments reflect RHI Magnesita’s long-term vision for sustainable resource management, contributing to reduced environmen-
tal impact while fostering innovation in recycling and waste management practices. The target metric has remained unchanged since its
introduction, ensuring consistency in measuring progress.
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Disclosure requirement E5-4 – Resource inflows
A substantial portion of the Group’s inflow consists of purchased raw materials used in refractory production, which often involve energy-
and CO
2
-intensive processing. Therefore, increasing the use of circular raw materials is a critical focus for addressing the environmental
impacts associated with resource inflows.
Refractory products cannot be reused, only recycled; therefore, overlapping categories of reuse and recycling are not applicable.
Material inflow data is primarily sourced from direct measurements, ensuring accuracy. Only very small auxiliary material items are occa-
sionally estimated, excluding production plants not covered by the ERP system, which is already disclosed as an estimate.
The main material inflows include purchased raw materials, auxiliary materials, resale items, packaging, and water. These are calculated
based on direct measurements, with minor estimations applied only when necessary.
In 2024, the total resource inflow amounted to approximately 12.3 million tonnes. Of this, around 0.5% (60,000 tonnes) was biological
material. Due to the low share of biological materials in the Group’s overall resource inflow, sustainably sourced biological materials are not
a significant component of the Group's material portfolio. All metrics are not validated by an external body.
A notable achievement in 2024 was the utilisation of 202,000 tonnes of secondary raw materials in production, representing 1.6% of total
material inflows. This demonstrates the Group’s ongoing efforts to integrate circular raw materials into its operations, thereby reducing
reliance on primary raw materials with higher environmental impacts.
The biggest share of inflow is water. In 2024 the inflow of water was around 10 million m resulting in around 80% of total material inflow.
Of these the biggest share is water from its mining operations.
To ensure accurate tracking and reporting, material inflows are recorded in the Group’s enterprise resource planning ERP system and in its
environmental IT system. For production plants not covered by the central ERP system, material volumes are estimated based on finished
goods production. The reported figures exclude inflows for capital expenditure projects and own-mined raw materials, while double count-
ing is prevented by employing a distinct recycling classification within the ERP system.
Resource inflow
Assumptions and Methodology
The Group captures in its enterprise resource planning tool the actual material inflows. Water inflow is measured on plant level and re-
ported via environmental IT system. Material inflow considers purchased raw materials, trading goods, packaging, spare parts, and auxil-
iary materials and water, excluding own-mined raw materials, and material inflow for capex projects. For plants not considered in the cen-
tral enterprise resource planning tool, volumes are estimated based on finished goods production volumes.
E- //
Resource inflows (tonnes)
.
Percentage of biological materials (ROHF/ROHS)
.%
Percentage of secondary raw materials
.%
Financial resources (Capex)
Assumptions and Methodology
The capex reported considers investments into increasing the Group's recycling rate excluding maintenance capex of recycling operations.
Recycling
Capex in € ,,
Use of
Secondary
raw
materials
(%)
.% .% .% .% .% .% .%
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Assumptions and Methodology
The recycling rate represents the total usage of circular raw materials—such as external recycling, by-products, and obsolete inven-
tory—in the production of refractory finished goods and metallurgical products.
Recycling
quantity
(tonnes)
, , , , , , ,
CO
savings due
to recycling
(tonnes)
, , , , , , ,
Disclosure requirement E5-6 – Anticipated financial effects from resource use and circular economy-related impacts, risks and
opportunities
The Group omits information prescribed by ESRS E5-6.
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Social information
ESRS S1 Own workforce
ESRS 2 General disclosures
RHI Magnesita has identified impacts, risks, and opportunities related to its own workforce through RHI Magnesita’s DMA. Details of the
Materiality Assessment can be found on pages 100-102 of this report.
Strategy
Disclosure requirement related to ESRS 2 SBM-2 – Interests and views of stakeholders
RHI Magnesita is committed to creating sustainable and shared value for its stakeholders. Engaging with stakeholders and diverse social
groups enhances mutual comprehension and supports RHI Magnesita's ability to anticipate risks and identify opportunities for value crea-
tion and deliver key aspects of the Group's strategy and sustainability approach. Read more about RHI Magnesita Stakeholder Engagement
Approach on pages 26-31 of Annual Report.
Disclosure requirement related to ESRS 2 SBM-3 – Material impacts, risks and opportunities and their interaction with strategy and
business model
Health and safety
Maintaining a safe and healthy workplace is fundamental to RHI Magnesita’s culture and mindset. The Group assigns the highest im-
portance to the health and safety of its employees and contractors. Our operations by necessity involve hazardous and higher risk activities
and maintaining high safety standards is a minimum expectation for all stakeholders.
The Group identifies and monitors its impact on own employees and contractors according to the same safety policies and standards,
aligned with ISO 45001 and Code of Conduct.
Health and safety have been identified as a material topic for RHI Magnesita under both dimensions of the DMA – Impact Materiality and
Financial Materiality. Given the inherent risks associated with its high-risk activities and the significant impact on individuals, ensuring the
health and safety of employees and contractors is not only a moral and legal responsibility but also a critical factor in maintaining opera-
tional continuity and productivity. Accidents, injuries, or health incidents can lead to downtime, legal liabilities, reputational damage, and
a decline in workforce morale. By prioritising health and safety, RHI Magnesita demonstrates its commitment to responsible operations,
aligns with stakeholder expectations, and builds trust, ultimately contributing to its long-term business continuity.
Impact, risk and opportunity management
Disclosure requirement S1-1 – Policies related to own workforce
Policies
RHI Magnesita’s Health and Safety policy is aligned with ISO 45001 covering own operations and contractors. The policy outlines RHI
Magnesita’s commitment to act proactively to prevent occupational health and safety risks, and we will continuously improve our health
and safety management systems and performance.
RHI Magnesita’s Health and Safety Policy and procedures ensure comprehensive protection for groups at risk, integrating them into existing
workplace safety measures. Temporary workers are fully covered under the Group’s Health and Safety Management System, ensuring they
receive the same protections as permanent employees. Additionally, young and inexperienced workers are subject to work limitations, pre-
venting them from engaging in high-risk activities without proper supervision and experience. All hazardous tasks undergo a thorough risk
assessment before execution, ensuring that safety controls are in place to minimise exposure to potential risks.
Policies supporting workforce engagement
RHI Magnesita’s policies establish a strong foundation for workforce engagement:
• Anti-Discrimination and Anti-Harassment Policy: aims to ensure the working environment is free from discrimination,
and any forms of harassment. It encourages reporting of discrimination and harassment through multiple confidential
channels, including HR, managers, and the Whistleblowing hotline.
• Speak Up Policy: offers employees confidential and anonymous avenues to report misconduct via web portals, dedi-
cated phone lines, or direct contact with the Internal Audit, Risk & Compliance (“IARC”) team.
• Global Gender Equality Policy: ensures fair and inclusive treatment in the workplace regardless of age, gender, marital
or civil partnership status, pregnancy, maternity, family responsibilities, political beliefs, nationality, ethnicity, religion,
disability, sexual orientation, or gender identity. This policy plays a crucial role in fostering a diverse workforce and pro-
moting an inclusive corporate culture.
Aligned with our Code of Conduct and complementary policies, including the Global Anti-Harassment Policy, the Global Gender Equality
Policy establishes clear expectations for behaviour and interactions at all levels of the organisation. By integrating these principles into our
corporate framework, RHI Magnesita reaffirms its commitment to fostering an inclusive, equitable, and respectful workplace. The policy
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applies to all individuals associated with the Group, including Board members, consultants, volunteers, contractors, trustees, candidates,
and interns.
RHI Magnesita ensures compliance and transparency through policy commitments, internal controls, supplier due diligence, and the an-
nual Modern Slavery Act (“MSA”) statement, which reports progress and is publicly available on the Group’s website.
The Code of Conduct, signed by EMT members and Regional Presidents, along with the Human Rights policy, applies to all directors,
managers, employees—regardless of position or contract type—and third parties working on behalf of or at RHI Magnesita premises.
The CEO is the most senior executive responsible for policy implementation. Policies are formulated with key stakeholder interests in mind
and align with the UN Guiding Principles on Business and Human Rights and other internationally recognized standards.
All the aforementioned policies are available on the Group’s website and apply to RHI Magnesita’s workforce. The Health and Safety
Policy extends further, covering both employees and contractors.
Disclosure requirement S1-2 – Processes for engaging with own workforce and workers’ representatives about impacts
RHI Magnesita is steadfast in its commitment to cultivating a transparent, inclusive and accountable workplace by actively engaging its
workforce and workers’ representatives to address actual and potential impacts. This commitment is underpinned by robust engagement
mechanisms, comprehensive policies, and global initiatives that prioritise workforce perspectives in decision-making processes.
Engagement takes place directly with employees and through workers' representatives, including the Works Council, in certain countries,
ensuring representation at all organisational levels.
The Global Engagement Team oversees the implementation of engagement processes, developing a global leadership framework while
enabling localised adaptations to ensure inclusivity and relevance. Engagement is conducted regularly through diverse channels, such as
quarterly Works Council meetings, regional initiatives like shop-floor discussions, and global campaigns including Disability Day and In-
ternational Women’s Day.
Digital platforms such as Workvivo and mentoring programmes involving three Board members facilitate direct leadership interaction and
enhance workforce engagement.
Commitments under the Stakeholder Dialogue Policy, Speak Up Policy and Human Rights Policy are upheld, ensuring workforce rights and
perspectives are respected. In Brazil, for instance, union collaborations enhance engagement and inclusiveness.
Engagement effectiveness is assessed through feedback from Works Council meetings, whistleblowing channels, and employee partici-
pation in diversity and inclusion initiatives. These processes lead to outcomes such as improved workplace policies and targeted action
plans.
The EVP for People, Projects, Integrations, and Recycling drives strategic priorities across workforce development, project execution, busi-
ness integrations, and recycling. The Global Engagement Team ensures effective stakeholder engagement, aligning initiatives with corpo-
rate goals. The most senior operational leader, typically the EVP, ensures engagement outcomes inform strategy, shaping policies and
driving business impact.
Focusing on vulnerable and marginalised groups
RHI Magnesita actively incorporates the perspectives of vulnerable and marginalised workforce members, such as women, migrants, and
individuals with disabilities, through targeted initiatives:
• Global Campaigns: Events like Disability Day and Female Day promote awareness and dialogue.
• Business Resource Groups: Regional groups foster inclusivity and representation.
• On-Ground Interventions: Health and safety concerns are escalated to senior leadership, with follow-up shop-floor meetings
conducted by executive management or the Board.
Employee engagement initiatives
To further strengthen its connection with employees, RHI Magnesita implements various initiatives:
• Volunteering Programmes: Empower employees to contribute to their communities.
• Brand Ambassadors: Promote corporate values and strengthen employer branding.
• Female Factor and DEI Campaigns: Highlight diversity, equity, and inclusion priorities.
• Culture Champions: Advocate for RHI Magnesita’s cultural values globally.
Read more about RHI Magnesita’s Stakeholder Engagement Approach in pages 26-31, “Our Stakeholders”.
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Disclosure requirement S1-3 – Processes to remediate negative impacts and channels for own workforce to raise concerns
Workplace risk assessments
RHI Magnesita’s business includes high-risk activities for which hazard identification and risk assessments are carried out, documented,
and shared. Following a continuous improvement approach, the Group performs risk assessments in multidisciplinary teams which include
team leaders, workplace personnel, local health and safety experts and locally assigned occupational health or occupational physician
representatives and worker representatives, depending on local legal requirements.
A “Hierarchy of Controls” approach is applied to the risk assessment process, including but not limited to:
• Assessing whether the risk can be eliminated, e.g. purchasing equipment which is not noisy.
• Implementation of engineered solutions to eliminate or reduce the risk, e.g. automated processes which reduce manual work.
• Organisational measures, such as training and auditing.
• Standard operating procedures and work instructions defined with the involvement of the team who performs the task, with illus-
trations and in local languages.
• Providing personal protective equipment according RHI Magnesita global minimum standard to employees.
• Corrective and preventive actions and further upgrades identified by the risk assessment are documented.
Incident management report
Incident management is a fundamental element of effective safety management systems, enabling leaders such as plant managers, Health
and Safety managers, department heads, and representatives from refractory services to proactively identify and address potential hazards
before they escalate into accidents. Promoting a culture that encourages the reporting of all incidents - especially near-misses and unsafe
situations - ensures thorough investigation and the implementation of preventative actions.
Any incident, regardless of its severity or the personnel involved, must be reported immediately within RHI Magnesita. All employees and
contractors are required to immediately report any “Unsafe Situation” to supervisors so that corrective actions can be put in place to avert
harm. Both “Unsafe Situation” information and a report of a near miss are flagged in RHI Magnesita’s safety reporting system for further
follow-up and analysis.
Global standardisation for health and safety excellence
Standardisation is an effective tool to improve health and safety performance. RHI Magnesita has a global Health & Safety Management
System certified by Bureau Veritas. Regular internal audits ensure that the organisation complies with relevant regulations, standards and
internal policies; it identifies potential risks, enabling proactive mitigation; provide insights and fosters a culture of ongoing improvement,
as corrective actions and lessons learned are implemented organisation wide. RHI Magnesita holds an integrated management system
covering health and safety, environmental, energy and quality. 57% of the industrial footprint holds a certification for health and safety.
The following locations achieved a successful initial certification against ISO 45001 Occupational Health & Safety Management System
in 2024:
• Magnesita Refractories Company, USA.
• RHI Magnesita India Ltd. Jamshedpur, India.
• RHI Magnesita India Refractories Limited, Dalmiapuran, India.
• RHI Magnesita India Refractories Limited, Khambhalia, India.
• RHI Magnesita India Refractories Limited, Katni, India.
Due to the ongoing expansion of the Group’s production network, the integration of other plants has also commenced. We seek to engage
with local senior management and the workforce from the beginning to ensure that our values and standards are adopted.
Health & Safety Fund (RHI Magnesita HELP – Verein zur Unterstützung von Arbeitnehmern in Notsituationen)
In 2024, RHI Magnesita HELP was launched as a dedicated programme to provide financial support to individuals and their direct family
members impacted by occupational work-related accidents or fatalities. This initiative extends beyond RHI Magnesita’s obligations as an
employer, reflecting the Group’s commitment to supporting its employees, operating communities, and business partners—including
suppliers, contractors, and customers.
The scope of HELP is broad and inclusive, ensuring assistance to those in need within our network and beyond. Private individuals world-
wide, including RHI Magnesita employees in any location or role, are invited to contribute voluntarily. Contributions are entirely optional,
and donations are managed with full compliance to regulatory requirements for fund tracking, while maintaining donor anonymity beyond
these necessities.
The HELP initiative raised €810,000 in its first year through voluntary contributions and RHI Magnesita’s matching pledge. This achieve-
ment highlights the strong culture of care and solidarity shared by our workforce and stakeholders.
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The effectiveness of actions taken is tracked in practice through the Group’s health and safety KPIs, mentioned above. By regularly moni-
toring its health and safety performance the Group ensures that its own working practices are not causing harm to its workforce.
For channels for the workforce to raise concerns, please see subsequent section “Human Rights”.
Disclosure requirement S1-4 – Taking action on material impacts on own workforce, and approaches to managing material risks and
pursuing material opportunities related to own workforce, and effectiveness of those actions
Actions
RHI Magnesita takes action to prevent the negative impact on its workforce from poor health and safety performance and to remedy the
impact of any accidents that may occur. Preventative steps include establishing standardised safe operating procedures, the provision of
personal protective equipment and safety training, designing out risks from work related tasks, carrying out risk assessments, encouraging
near miss reporting and conducting comprehensive incident investigations with detailed follow up actions. Individuals who may be injured
as a result of a workplace incident (or their families) may receive financial assistance in the form of contractual payments, insurance awards
or discretionary awards from the Group’s HELP fund initiative. The main focus of remedial action is taking steps to ensure that the factors
leading up to the incident are not repeated.
Health and safety performance is tracked very closely and is a fundamental KPI for individual plants and regional management teams,
examined on a monthly basis. At Group level the EMT, CSC and Board regularly receive reports on safety performance which includes
overall statistics as well as reports on major incidents and follow up actions if applicable. Performance is assessed using frequency rates for
lost time injuries, medical cases, total incident rate, total recordable injuries, near misses, preventive rate and health projects ratio. Improve-
ment or deterioration in these metrics provides a clear indication of the effectiveness of the actions the Group is taking to improve its health
and safety performance.
The process for identifying actions that the Group must take primarily relies on follow up actions to risk assessments, near miss reporting
and accident investigations. Accident investigations are usually undertaken by local authorities, but the Group also forms its own view of
required remedial actions. Recommendations for changes to procedures to avoid future serious injuries or fatalities are ascribed the highest
importance and applied across the Group’s global operations.
Procurement practices could impact health and safety performance, for example if equipment is of poor quality or otherwise unsafe or
personal protective equipment is not available or of sufficient quality. The Group places a high priority on the safety of its staff when making
such procurement decisions.
Sales practices at RHI Magnesita include the provision of services by RHI Magnesita employees who perform their tasks whilst physically
located at customer sites. In such circumstances the Group’s employees are in the customer’s-controlled location and exposed to safety
risks. The Group seeks to ensure that this practice does not cause or contribute to negative impacts on its workforce by holding the customer
to a high standard of safety, encouraging RHI Magnesita staff to report unsafe situations or incidents and investigating any reports of dan-
gerous conditions or incidents at such sites.
An actual or potential negative health and safety impact on its own workforce would contribute to a decision by the Group to terminate a
business relationship with a supplier or customer. For example, poor safety practices at a customer site where RHI Magnesita staff are work-
ing, or poor driving standards from freight contractors whilst on RHI Magnesita sites would not be tolerated.
In 2024 the Group incurred €9 million of health and safety related capital expenditure. Over the period 2025-30 the Group expects to
allocate a similar amount of capital each year to sustainability and health and safety related capital expenditure, excluding major decar-
bonisation projects.
Key actions taken in 2024 are a review of standards, culture and key serious injury and fatality risks in partnership with dss+, aiming to move
from a compliance-based safety approach to a deeply embedded safety mindset across all levels of the Group. dss+ has been engaged
with RHI Magnesita since April 2024. dss+ works with clients around the world to manage risk and reduce workplace injuries, operate
responsibly and sustainably, and maintain those improvements through transforming the culture and building the capability of leaders and
people. This strategic initiative is dedicated to strengthening RHI Magnesita’s safety culture, with a key focus on mitigating Serious Injuries
and Fatalities potential (SIFp) risks across all operations.
To reduce serious injury and fatality risks and strengthen RHI Magnesita safety culture, the Group will guide and develop leadership capa-
bilities at all levels by implementing a structured coaching programme within the next two years. This initiative aims to foster meaningful
changes in mindset, behaviours, and actions, ensuring leaders are equipped to drive transformation effectively and sustainably. Addition-
ally, the Group will design and implement a structured and sustainable continuous improvement approach to operational risk management.
This will enhance the organisation’s ability to identify, assess, and mitigate risks systematically, ensuring long-term resilience and opera-
tional excellence.
These actions are expected to lead to an improvement in the Group’s health and safety performance metrics over the medium term.
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Metrics and targets
Disclosure requirement S1-5 – Targets related to managing material negative impacts, advancing positive impacts, and managing
material risks and opportunities
Health and safety methodologies
The recording of health and safety incidents is achieved via a Group wide reporting system (“AccStat”) which is available to all employees
and contractors with intranet access. Any employee or contractor with access to the AccStat can submit an incident report and they are
required to do so by Group internal procedures. The number of incidents is divided by hours worked to arrive at a number of different ratios
to monitor performance. For the calculation of total hours worked the Group relies on plant level submissions and where plant level data
is not available an estimate of total hours worked is made.
Total Recordable Injury Frequency (“TRIF”) is defined as the sum of recordable medical cases (i.e. beyond first aid cases) and lost time
injuries affecting employees and contractors divided by total hours worked by those employees and contractors to arrive at a ratio of the
number of incidents per 200,000 hours worked.
Lost Time Injury Frequency (“LTIF”) is defined as the number of lost time injuries affecting employees or contractors divided by total hours
worked by those employees and contractors to arrive at a ratio of the number of incidents per 200,000 hours worked. A lost time injury is
defined as an injury which results in an individual being unable to return to work and perform their duties for their next regular shift.
Fatalities are defined as occupational fatalities affecting employees and contractors occurring as a result of a work-related incident or ex-
posure.
RHI Magnesita is required to report Recordable work-related accidents, a new ESRS metric. A Recordable work related accident is a work-
related injury or ill health that results in death, days away from work, restricted work or transfer to another job, medical treatment beyond
first aid, or loss of consciousness; or significant injury or ill health diagnosed by a physician or other licensed healthcare professional, even
if it does not result in death, days away from work, restricted work or job transfer, medical treatment beyond first aid, or loss of consciousness.
The rate of recordable work-related accidents represents the number of work-related accidents cases per one million hours worked and is
calculated as a ratio between the number of cases registered in the reporting period by the aggregated working hours in RHI Magnesita
Group and multiplied by one million.
RHI Magnesita Group does not have non-guaranteed hours employees.
Health and safety targets
RHI Magnesita has defined its health and safety targets, aligning with the SMART framework. In 2024, the Group conducted a review of
sustainability topics, including Health and Safety. This review involved defining a clear vision, identifying key challenges, and establishing
both the priorities for 2024 and the strategic targets for 2030.
RHI Magnesita has reviewed its performance and its health and safety standards with the support of dss+. The assessment focused on
serious injuries and fatalities (“SIF”) and the gaps identified results in a dedicated programme to strengthen RHI Magnesita’s safety culture.
Although the Lost Time Incident Frequency Rate (“LT IF”) improved from 0.16 in 2023 to 0.11 in 2024 - well below the 2025 target of 0.30
per 200,000 hours worked - This is a Group-specific metric that does not align with the ESRS requirement of reporting per million hours
worked. The current LTIF target, established in 2018, will remain in effect until the target period plan concludes in 2025.
RHI Magnesita remains committed to further reducing serious injuries and eliminating fatality risks. Reinforcing its dedication to Zero Harm,
No Injuries, the Group has set an ambitious goal of achieving zero fatalities and reducing the Total Recordable Injury Frequency Rate (TRIFR)
to below 1.2 per 200,000 hours worked by 2030.
The target-setting process was inclusive, actively engaging plant managers across all regions as well as employees. Feedback was col-
lected through plant visits and health and safety workshops to ensure that the targets are both ambitious and achievable. Performance is
systematically tracked using the in-house developed tool, AccStat, which is available across all sites, including newly acquired locations,
with the exception of recycling sites where the Group does not have direct operational control. A new tool is expected to be implemented
and rolled out across all sites in 2025. This advancement will further enhance data quality, management control, and the continuous
improvement of safety practices.
The target scope is global, ensuring that 100% of RHI Magnesita employees are covered by the Group’s health and safety management
system. Recognising the importance of tailoring interventions to local contexts, RHI Magnesita has also implemented regionalised health
and safety initiatives. These programmes address specific regional challenges while aligning with the Group’s global objectives, ensuring
meaningful and context-specific impacts.
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Human rights
The Group is committed to upholding international human rights principles, ensuring that all employees work under fair, ethical, and safe
conditions. Recently, RHI Magnesita has carried out the human rights risk assessment in its own operation and as part of its supplier due
diligence, the Group actively maps salient human rights risks across the countries where it operates and monitors its suppliers. Through
the DMA, the Group has identified potential negative impact of forced labour as a material topic within its operations and upstream value
chain. Additional human rights potential negative impact identified within its workforce include discrimination and harassment, as well as
health and safety concerns.
Potential negative impact of forced labour
In the regions of BRICS, the heightened risk of forced labour arises from socio-economic challenges, weak enforcement of labour laws, and
systemic vulnerabilities within the rule of law. Forced labour in these areas has profound and devastating consequences on the quality of
life of affected individuals, often trapping them in cycles of exploitation and poverty. In contrast, geographies like Europe, North America,
Singapore, and South Korea benefit from robust legal frameworks and effective governance that significantly mitigate such risks, with inci-
dents being exceedingly rare. Given the global nature of our operations and our reliance on a complex and extensive supply chain network,
our industry is inherently exposed to risks of forced labor, particularly in high-risk regions. Addressing these risks requires proactive and
rigorous measures to protect human rights and ensure the integrity of our operations.
RHI Magnesita’s strict policies play a crucial role in minimising the probability of forced labour at an individual level, addressing and over-
coming its impacts requires substantial, long-term remediation efforts. This includes dedicated resources, strategic interventions, and col-
laboration with stakeholders to ensure the sustainable resolution of such issues.
Policies
RHI Magnesita is firmly committed to upholding human rights within its workforce, ensuring alignment with international standards such
as the UN Guiding Principles on Business and Human Rights, the International Labour Organisation (“ILO”) Declaration on Fundamental
Principles and Rights at Work, and the Organisation for Economic Co-operation and Development (“OECD”) Guidelines for Multinational
Enterprises. These commitments include upholding fair labour practices, ensuring freedom of association, promoting non-discrimination,
and strictly prohibiting child labour, forced labour, and any form of modern slavery or human trafficking within our business operations and
supply chain.
RHI Magnesita is committed to adhering to international standards and, as a participant in the UN Global Compact, has pledged to integrate
its principles in the areas of human and labour rights into our business strategy and operations. Our Code of Conduct reflects these com-
mitments, ensuring compliance with human and civil rights as well as applicable labour and social laws. Respect, fairness, and equal op-
portunities are core values we demand from our employees and business partners alike.
This Code is applicable across the entire Group and is binding for all employees, regardless of their position or employment type. Addi-
tionally, our Human Rights Policy underscores our zero-tolerance approach to modern slavery and human trafficking within our business
and supply chain.
For a detailed overview of our approach throughout the value chain, please refer to Chapter S2 – Workers in the value chain of this report.
Policies supporting workforce engagement
RHI Magnesita’s policies establish a strong foundation for workforce engagement:
• Anti-Harassment Policy: Encourages reporting of discrimination and harassment through multiple confidential channels, includ-
ing HR, managers, and the Whistleblowing hotline.
• Speak Up Policy: Offers employees confidential and anonymous avenues to report misconduct via web portals, dedicated phone
lines, or direct contact with the IARC team.
General approach to addressing material negative impacts
RHI Magnesita employs a proactive and structured approach to remedying material negative impacts on its workforce. Central to this ap-
proach is the availability of multiple confidential and anonymous reporting channels that ensure accessibility and trust.
Whistleblowing hotline
RHI Magnesita Whistleblowing Hotline is a confidential platform designed to enable employees and external stakeholders to report sus-
pected misconduct, including violations of human rights or ethical standards, at any time. All compliance violations - therefore also suspi-
cions regarding slavery, forced labour and human right violations (e.g. harassment and discrimination) - can be reported (also anonymously)
both by employees and external parties in more than 50 languages via various communication channels. Indications of serious misbehav-
iour will typically be investigated by IARC, People and Culture and other appropriate departments in the organisation. There were no new
reported complaints related to forced or compulsory labour or human trafficking in the year 2024. Additionally, Group’s Speak Up policy
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provides the necessary information on how to report misconduct, unethical practice, or behaviour that goes against RHI Magnesita’s Group
values. It also outlines the key investigative principles when handling a report.
Whistleblowing channels are accessible to everyone, both internally and externally. Reported data confirm that these channels are widely
recognised and trusted as official channels for reporting.
Read more about our business conduct in G1.
Channels for workforce to raise concerns
RHI Magnesita has established robust mechanisms to enable its workforce to report potential misconduct or workplace concerns, fostering
a transparent and accountable work environment. These mechanisms include:
• Whistleblowing hotline: A global platform available to employees, third parties, and external stakeholders, ensuring anonymity
and confidentiality.
• Works Council: A primary mechanism for employees to raise concerns, established across countries to address workplace issues.
• Leadership Access Platforms: Tools such as Workvivo (an employee app) facilitate direct feedback and communication between
employees and leadership.
These channels are designed or facilitated through third-party mechanisms, ensuring independence and objectivity. Employees are made
aware of these mechanisms through training sessions, internal communication campaigns, and dedicated initiatives.
Tracking, monitoring, and effectiveness evaluation
RHI Magnesita has implemented structured processes to track and monitor reported concerns, led by the IARC team and local committees.
• Follow-ups and Timeliness: Regular follow-ups ensure issues are addressed promptly and resolutions are effective.
• Stakeholder Involvement: Feedback from employees and other stakeholders is incorporated to review and enhance reporting
systems.
• Awareness and Trust: The Group promotes awareness of its reporting mechanisms through training and engagement campaigns,
such as International Women’s Day and Disability Days. Leadership visibility and consistent communication of the Speak Up Pol-
icy further foster trust in the system.
Protection against retaliation
RHI Magnesita’s policies, including the Speak Up Policy, explicitly prohibit any form of retaliation against individuals who report concerns
in good faith. This protection extends to workers’ representatives and includes disciplinary actions against those who intentionally file false
reports.
Actions towards preventing human rights issues, including potential incidents of forced labour
RHI Magnesita aligns with ILO principles and has adopted policies to combat forced labour and trafficking, and the Group is committed to
identifying, addressing, and mitigating actual and potential negative impacts on its workforce through structured risk management, reme-
diation efforts, and continuous improvement initiatives.
When material workforce-related impacts are identified, RHI Magnesita takes immediate action to assess, remediate, and prevent recur-
rence. The IARC department is responsible to oversee Group overall risk management process, ensuring that incidents related to working
conditions, labour rights, and health and safety are reviewed. Findings are escalated through internal governance mechanisms, ensuring
timely interventions and corrective measures. Corrective actions may include enhanced monitoring, and engagement with affected em-
ployees to provide appropriate remedies. For further details, see chapter G1 – Business conduct on pages 168-169 and Our Stakeholders
section in the Annual Report on pages 26-31.
The Group continuously monitors and assesses the effectiveness of workforce-related actions through internal audits, employee surveys
and compliance reviews. Key performance indicators (KPIs) such as turnover rates, health and safety metrics, and whistleblower reports are
used to evaluate impact and drive improvements. For further information, see Internal Controls in the Annual Report on pages 51-52.
For supplier due diligence actions, see subsequent section “Supplier Assessment” and chapter S2 – “Workers in the value chain”.
Training
An e-learning module on specific business ethics topics was introduced globally in 2020, also covering same aspects of human rights,
and was refreshed in 2023. In addition, a dedicated training on the fundamentals of human rights was added to our training portfolio in the
past year. A training module on ESG-related topics for our employees responsible for procurement was also rolled out and developed in
2024, including putting stronger focus on human rights.
In 2024 particular attention continued to be given to the integration of acquired entities in respect of ethics and compliance standards. Ex-
tensive work was conducted as part of integration activities to understand the compliance culture of each new entity and work to harmonise
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their approach with Group practices. Through targeted training and upskilling programmes, the Group ensures employees are equipped
to adapt to evolving industry requirements. Strengthened due diligence and compliance monitoring reduce labour-related risks and up-
hold ethical employment standards.
Metrics and targets
In line with our commitment to transparency and accountability we have adopted a phased approach to develop entity-specific metrics.
Our efforts aim to ensure a robust and tailored framework that reflects our operational realities while driving meaningful progress.
Disclosure requirement S1-6 – Characteristics of RHI Magnesita employees
The turnover rate 2024 considering death, involuntary, voluntary and retirement as per ESRS requirement was 12.02% (including seasonal
staff).
Assumptions and Methodologies
These metrics have not been externally validated by any organisation other than the assurance provider.
Definition of headcount:
The headcount includes employees actively employed within the organisation, categorised into the following groups: employees, appren-
tices, trainees, and interns. Temporary workers, contractors, and consultants are explicitly excluded from this definition. Additionally, indi-
viduals on extended unpaid leave are not considered part of the active headcount. Headcount is the number of employees at the end of
reporting period. RHI Magnesita’s financial statements adhere to the IFRS framework, which mandates the disclosure of the average work-
force to ensure standardized and consistent reporting.
Full-time equivalent (“FTE”) calculations:
FTE is used as a standardized metric for employee contributions, adjusted for part-time arrangements. Full-time employees are assigned
an FTE value of one, while part-time employees are calculated as a fraction of one based on their actual working hours relative to the full-
time schedule.
Inclusion criteria:
Only employees who hold a signed employment contract with the Group are included in the headcount. This ensures that the data reflects
the organisation's contractual workforce accurately.
Hires and turnovers:
Employees who join or leave during the reporting period are included in the headcount as active only if they have worked for at least one
day within the period.
Turnovers by leave category:
Turnover data is segmented into specific leave categories, including death, dismissal, retirement, and voluntary departures. However, the
group "Other," which encompasses contract expirations (this includes contracts that were chosen to be renewed) and employee transfers,
is excluded to maintain clarity in turnover reporting.
Turnover rate:
“Employee turnover” is defined as the cumulative headcount of employees who have departed from the RHI Magnesita Group, whereas the
“employee turnover rate” is defined as the proportion of employees who have left the Group expressed as a percentage. To determine the
percentage of departing employees, the total is divided by the total number of employees at the end of the reporting period, which differs
from the method in Note 10 to the Financial Statements, whereas the denominator takes into account the average number of employees
during the reporting period,
Headcount is allocated to regions based on the primary legal entity location of the office where the employee is associated, irrespective of
remote working arrangements. This approach aligns headcount data with organisational and legal structures.
These assumptions ensure clarity, consistency, and precision in calculating and reporting headcount-related KPIs, enabling accurate workforce anal-
ysis and strategic decision-making.
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Table 1 – Employees by gender
Gender
Male
,
Female
,
Total Employees
,
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Table 2 – Employees by country
Country
Argentina
Austria
,
Belgium
Brazil
,
Canada
Chile
China
,
Colombia
Cyprus
Czech Republic
France
Germany
,
Hong Kong
India
,
Italy
Mexico
Netherlands
Peru
Romania
Russian Fed.
Singapore
Slovenia
South Africa
Spain
Sweden
Switzerland
Taiwan
Türkiye
Ukraine
United Arab Emirates
United Kingdom
USA
Vietnam
Total Employees
,
Table 3 – Employees by type of contract and gender
Female
Male
Other
Not reported
Total
Number of
employees (Headcount) , , ,
Number of permanent employees (Headcount)
, , ,
Number of temporary employees (Headcount)
, ,
Number of full
-time employees (Headcount) , , ,
Number of
part-time employees (Headcount)
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Table 4 – Employees by type of contract and region
Table 5 – Number of employee turnover
Number of employee turnover
Death
Dismissal (Involuntary)
Retirement
Voluntary
Total Employees
,
Disclosure requirement S1-14 – Health and safety metrics
Assumptions and Methodologies
These metrics have not been externally validated by any organisation other than the assurance provider.
Health and safety metrics
Percentage of people in its
own workforce who are covered by health and safety management system based on
legal requirements and (or) recognised standards or guidelines
%
Number of fatalities in own workforce as result of work
-related injuries and work-related ill health
Number of fatalities as result of work
-related injuries and work-related ill health of other workers working on
undertaking's sites
Number of recordable work
-related accidents for own workforce
Rate of recordable work
-related accidents for own workforce (per ,, hours worked) .
China & East
Asia
Europe, CIS
& Türkiye
India, West
Asia & Africa
North
America
South
America Total
Number of employees
(Headcount)
, , , , , ,
Number of permanent
employees (Headcount)
, , , , , ,
Number of temporary
employees (Headcount)
, ,
Number of full
-time
employees (Headcount)
, , , , , ,
Number of part
-time
employees (Headcount)
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Health and safety performance
Lost Time Injury Frequency Rate (LTIF) improved to 0.11 in 2024 (2023: 0.16) per 200.000 hours worked. Overall, there were 30 Lost Time
Injuries (LTIs) in 2024 (2023:37) within RHI Magnesita. A fatality occurred at the Breitenau mine Austria in February 2024.
A contractor had a fatal accident occurred at the Dalian plant in China in June 2024. New technical measures have been implemented
globally to prevent a repeat of the circumstances leading up to this accident.
Disclosure requirement S1-17 – Incidents, complaints and severe human rights impacts
This metric has not been externally validated by any organisation other than the assurance provider. There are no fines, penalties and
compensations for damages as a result of incidents of discrimination.
A discrimination incident is defined as direct or indirect discrimination on the basis of protected characteristics, which may include, but
are not limited to gender or gender identity, sex, ethnicity, religion or culture, disability, sexuality, age. Indirect discrimination could be
putting a criterion in place that may seem neutral, but that would practically be unfavourable for a person with a protected attribute.
Incidents, complaints and severe human rights impacts
Number of incidents of
discrimination including harassment
Number of complaints filed through channels for people in own workforce to raise concerns
Number of complaints filed to National Contact Points for OECD Multinational Enterprises
Number of severe human
rights issues and incidents connected to own workforce
Number of severe human rights issues and incidents connected to own workforce that are cases of non respect of
UN Guiding Principles and OECD Guidelines for Multinational Enterprises
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ESRS S2 Workers in the value chain
ESRS 2 General disclosures
RHI Magnesita has identified impacts, risks, and opportunities related to its workers in the value chain through RHI Magnesita’s risk man-
agement approach. Details of the materiality assessment can be found on pages 100-102 of this report.
Strategy
Disclosure requirement related to ESRS 2 SBM-2 Interests and views of stakeholders
See ESRS SBM2 for Stakeholder engagement
Disclosure requirement related to ESRS 2 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and
business model
RHI Magnesita’s diverse and global upstream supply chain presents a wide range of risks for supply chain workers. These risks vary based
on factors such as workers' country of residence and employment, gender, age, and status as migrant workers. Industry-specific factors also
play a critical role, with labour-intensive sectors like mining and manufacturing posing higher risks for occupational safety and forced la-
bour.
The Group uses a risk-based approach to identify a broad range of risks within the value chain with the use of risk indicators and assess-
ments and closely monitors suppliers at risk. To assess specific risks, such as forced labour and child labour comprehensively, the Group
conducted sector benchmarking and reviewed labour standards across regions. The Global Slavery Index was used to identify countries
with high risks of forced labour, such as India, North Korea, and Pakistan. Relevant value chain stakeholders for the Group are located in
India. In the context of health and safety as well as child labour risks, a dual approach was taken addressing country-specific factors as well
as industry- and commodity-specific considerations, particularly in labour-intensive industries. High risk areas with regards to child labour,
as stated by UNICEF and the International Labour Organisation), are Sub-Saharan Africa, Central and Southern Asia and Eastern and South-
Eastern Asia. More than two-thirds of children in child labour work within the agriculture sector, followed by Services and Industry. The
material streams and services required for RHI Magnesita have, due to the nature of the Group’s industry, little interaction with the agricul-
ture sector and its associated risks. Suppliers located within Asia are a relevant part of RHI Magnesita’s value chain. Only a few value chain
stakeholders are located in Sub-Saharan Africa.
Material impacts within the Group’s value chain were primarily identified in relation to suppliers’ employees, especially those working in
mining and production units. Occupational safety was identified as material, alongside the potential for incidents of forced labour. Partic-
ularly vulnerable worker groups with regards to these material impacts are migrant workers, young workers and women.
The Group acknowledges the complexity of ensuring transparency and compliance in a global value chain, especially in industries with
varying labour standards and safety regulations. Addressing these risks requires continued collaboration, monitoring, and the integration
of robust standards to protect workers' rights and well-being.
Read more about RHI Magnesita’s strategy and business model at ESRS 2 SBM-1.
Systemic challenges
The risks identified are often systemic and widespread, particularly regarding forced labour, where limited transparency within certain busi-
ness relationships exacerbates the challenge. Negative impacts may also arise from individual incidents, such as workplace accidents, af-
fecting the health and safety of workers in the value chain. Workers conducting physical labour or operating heavy machinery in countries
with lower safety regulations face heightened risks. Examples include insufficient safety mechanisms and inadequate training for machin-
ery operation.
Impact, risk and opportunity management
Disclosure requirement S2-1 – Policies related to value chain workers
RHI Magnesita has established a comprehensive set of policies to ensure respect for human rights and ethical practices throughout its
value chain. These include the Human Rights Policy, Supplier Code of Conduct, and Anti-Slavery Statement, which align with the require-
ments of the UK Modern Slavery Act and the California Transparency in Supply Chains Act.
The Group adheres to internationally recognized human rights standards and expects its suppliers and contractors to uphold the same
high standards. The Group’s Human Rights Policy serves as a guiding framework, consistent with the principles outlined in the United
Nations Universal Declaration of Human Rights, the United Nations Global Compact, and relevant local legislation. This policy underscores
our commitment to respecting human and labour rights, prohibiting human trafficking and slavery, and promoting safe and fair working
conditions across our operations and supply chain.
The Supplier Code of Conduct mandates that suppliers respect human rights and strictly prohibits any form of precarious work such as
human trafficking or slavery as well as child labour and forced labour. To ensure compliance, suppliers may be required to complete self-
assessment questionnaires, respond to further inquiries, and, if necessary, undergo on-site assessments or full compliance evaluations.
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Non-compliance with the Supplier Code of Conduct may result in corrective action plans or, in severe cases, termination of the business
relationship in accordance with applicable legal agreements.
As a participant in the UN Global Compact, RHI Magnesita is committed to integrating the principles of UN Guiding Principles of Business
and Human Rights into its business strategy and operations. This commitment is explicitly outlined in the Code of Conduct, which prioritises
compliance with human and civil rights, applicable labour laws, and social standards. Respectful treatment, equal opportunities, and fair-
ness are core values demanded of all employees and business partners.
RHI Magnesita actively encourages transparency and ethical practices by providing a Whistleblowing hotline. Suppliers, employees, and
stakeholders are encouraged to report any unethical or illegal behaviour, including suspicions of misconduct by employees or its suppliers.
The helpline is accessible via https://www.rhimagnesita.com/compliance-helpline/
By embedding internationally recognized human rights standards into its policies and operations, the Group ensures a robust framework to
address risks related to forced labour, human trafficking, child labour and workplace safety. These measures not only demonstrate RHI
Magnesita’s commitment to ethical business practices but also promote transparency and accountability throughout its global supply
chain.
Disclosure requirement S2-2 – Processes for engaging with value chain workers about impacts
Direct engagement with value chain workers is a key component of on-site sustainability supplier assessments, conducted annually with
selected suppliers worldwide. Negative findings or identified risks with regards to value chain workers and other established minimum
requirements trigger risk reduction and mitigation processes together with the supplier. Lacking remediation of identified risks within the
defined period will influence future decision-making processes and supplier relationships. These processes are governed by our internal
supplier on-site assessment guideline, which outlines clear procedures for addressing negative or risk-attributed findings.
The type of engagement during on-site assessments varies based on their focus. Assessments emphasizing the social pillar include direct
interviews with selected value chain workers to identify specific risks and challenges. For suppliers identified as higher risk, the social pillar
is automatically part of the assessment.
Suppliers with concerning results are required to develop a time-bound action plan to mitigate identified issues. The implementation of
these plans is monitored within a pre-defined timeframe, ensuring accountability and measurable improvements.
Governance of these processes is overseen by the Human Rights Officer, the highest function responsible for worker-related compliance
matters, who reports annually to the Board of Directors.
This structured approach ensures risks are identified, mitigated, and managed effectively, aligning with the Group’s commitment to uphold
ethical and sustainable practices across its value chain.
Disclosure requirement S2-3 – Processes to remediate negative impacts and channels for value chain workers to raise concerns
There are multiple processes on channels for value chain workers to raise concern. Direct engagement with value chain workers occurs
during our on-site sustainability supplier assessments. On an annual basis, suppliers are selected worldwide for our on-site sustainability
assessments. Results from our on-site sustainability supplier assessments as well influence our future decisions. Our internal supplier on-
site assessment guideline defines our processes in case of negative or risk attributed findings. Additionally, value chain workers can voice
risks and issues using our whistleblowing hotline.
These cases are investigated according to our “Whistleblowing hotline Guideline” which is visible to the public on our website. When
raising a concern, parties can either disclose their identity or stay anonymous. All concerns reported on the web, the mobile application,
by phone or by email will be passed on to responsible members of RHI Magnesita’s Internal Audit, Risk & Compliance team who will get
back within seven days latest to acknowledge the receipt of your report. All complaints are processed objectively and with the same level
of care and diligence by trained professionals of RHI Magnesita’s Internal Audit, Risk & Compliance team. Their identity will be kept confi-
dential throughout the process and all information pertinent to the investigation will only be shared on a need-to-know basis.
The effectiveness of actions taken is monitored through regular follow-ups and continuous assessment of supplier performance and con-
duct. The Group upholds the expectations outlined in the Supplier Code of Conduct, with a focus on workers' rights and well-being
throughout the value chain.
Read more about RHI Magnesita’s business conduct, mechanisms of investigation and supplier management in G1-1.
Disclosure requirement S2-4 – Taking action on material impacts on value chain workers, and approaches to managing material
risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions
The Group has established robust mechanisms to identify and address human rights risks in its supply chain, with country-specific risk data
internally accessible to the procurement department. This resource is integral to risk identification and forms the basis for targeted
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mitigation actions. Financial resources are allocated to managing the supply chain and material impacts and enable the supplier assess-
ments with EcoVadis and the on-site supplier assessments. The strategic target for 2025 is to assess suppliers representing 66% of spend
through EcoVadis sustainability assessments, which enhance transparency and aid in mitigating adverse impacts. These assessments pro-
vide valuable insights into suppliers' human rights policies and practices, enabling the Group to request improvements or conduct further
validation through on-site assessments when necessary.
The internal on-site assessment guidelines define clear procedures for addressing risks, categorised by severity. Severe risks, such as child
or forced labour, are explicitly outlined in our Supplier Code of Conduct. Incidents of the highest severity activate a high-priority response
process involving case creation, detailed investigation, and escalation to executive management for action planning.
In addition to EcoVadis assessments, RHI Magnesita conducts on-site sustainability assessments globally to verify compliance with the
Group’s standards. Identified risks or non-compliance issues are communicated to suppliers, who are given a defined timeframe for correc-
tive action. Progress is monitored, and follow-up assessments ensure the effective implementation of improvements.
The Supplier Code of Conduct formalises the expectations of RHI Magnesita for ethical and sustainable practices throughout the value
chain. Suppliers are contractually required to align with these standards, which include explicit protections for workers' rights. The detailed
process on the Group’s actions and processes on material impacts is described in section S2-2.
Up to date, 641 suppliers were assessed by EcoVadis, representing 55% of RHI Magnesita procurement spend. A supplier in EcoVadis is as-
sessed on four key themes: Environment (energy use, emissions, waste management, and resource efficiency), Labour & Human Rights
(working conditions, health & safety, diversity, and human rights policies), Ethics (anti-corruption, fair business practices, and data protec-
tion), and Sustainable Procurement (supplier monitoring, responsible sourcing, and supply chain transparency). The assessment evaluates
the supplier’s policies, actions, and reporting practices to determine their sustainability performance. EcoVadis assessment commitment
has been selectively made part of contracts to ensure transparency in areas with low coverage.
In 2024 one gross misconduct was identified with EcoVadis Adverse Media Alerts. The incident was with regards to child labour which was
connected to a supplier that was banned in 2023 due to similar allegations. This new misconduct enforced the continued ban of the sup-
plier.
Metrics and targets
Assumptions and Methodologies
The metrics used is based on the total spend of the Group.
For 2025, RHI Magnesita’s goal is to achieve 66% of spend assessed by EcoVadis Sustainability Assessments.
For 2030, RHI Magnesita will enhance its supplier sustainability management to cover 80% Spend Coverage.
In line with our commitment to transparency and accountability we have adopted a phased approach to develop entity-specific metrics.
Our efforts aim to ensure a robust and tailored framework that reflects our operational realities while driving meaningful progress.
Disclosure requirement S2-5 – Targets related to managing material negative impacts, advancing positive impacts, and managing
material risks and opportunities
To enhance supply chain compliance and sustainability, RHI Magnesita has committed to having 66% of its suppliers assessed by EcoVadis
by 2025 and conducting 50 on-site supplier assessments in 2024. These targets were established based on findings from previous as-
sessments and ongoing communications within the supply chain. Both targets aim to increase the transparency within the supply chain to
identify risks and opportunities on a supplier individual level. The gained transparency enables RHI Magnesita to work on the reduction of
identified negative impacts, manage material risks and advance positive impacts on value chain workers as well as the environment.
Supplier on-site assessments play a critical role in evaluating the alignment of supplier practices with Group standards. These assessments
include reviews of operational processes and direct interviews with workers to ensure adherence to ethical and safety standards. The find-
ings from our described supply chain due diligence mechanisms play an integral part of defining targets and define our focus areas. By
integrating these evaluations, RHI Magnesita reinforces its commitment to fostering transparency, improving supplier performance, and
upholding responsible sourcing practices across the value chain.
Sources:
1. International Labour Office and United Nations Children’s Fund, Child Labour: Global estimates 2020, trends and the road for-
ward, ILO and UNICEF, New York, 2021. Licence: CC BY 4.0.
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Governance information
ESRS G1 Business conduct
ESRS 2 General disclosures
Governance
Disclosure requirement related to ESRS 2 GOV-1 – The role of the administrative, supervisory and management bodies
This section is incorporated by reference to the Corporate Governance Report, pages 183-199,
Impact, risk and opportunity management
Disclosure requirement related to ESRS 2 IRO-1 – Description of the processes to identify and assess material impacts, risks and
opportunities
See SBM3 section above, pages 48-63, “Our Risk management approach”.
Disclosure requirement G1-1– Business conduct policies and corporate culture
RHI Magnesita has adopted eight policies that applies globally, covering the whole value chain, which are relevant to business conduct, as
follows:
i. Anti-Corruption Policy – mandatory policy with zero tolerance of bribery and corruption which prohibits employees from offering,
promising or granting any advantage with the objective of obtaining unlawful consideration – implemented since 2020.
ii. Anti-trust and Fair Competition Policy – mandatory compliance with all anti-trust and competition laws in all relevant jurisdictions.
Prohibits anti- competitive behaviour such as communicating with competitors concerning pricing or tenders or obtaining competitive
knowledge through illegal means. Provides guidance for dealing with possible situations and how staff should react, including proce-
dures for reporting potentially anti-competitive behaviour.
iii. Conflict of Interest Guideline – complements Code of Conduct and Anti-Corruption Policy, providing more detailed explanations for
staff as to what practical scenarios may give rise to a conflict of interest. Sets out procedure for disclosing any potential conflict of
interest for internal management.
iv. Gifts and Invitations Guideline – complements Code of Conduct and Anti-Corruption Policy, providing more detailed explanations for
staff as to when gifts and invitations should be declared and/or refused so as not to give rise to a potential conflict of interest or percep-
tion of potentially corrupt behaviour.
v. Code of Conduct – detailed document setting out standards of behaviour that are expected of employees, covering general principles
and specific guidance in all areas of business conduct.
vi. Supplier Code of Conduct – declaration for signing by all suppliers committing to minimum standards of business conduct, aligned
with the Group’s own Code of Conduct.
vii. Global Gender Equality Policy – policy establishing RHI Magnesita’s commitment to equality across all genders and how individuals
are treated in the workplace irrespective of their personal characteristics.
viii. Sanctions, Export Controls and Business Partner Due Diligence Policy
RHI Magnesita is committed to adhering to international standards and, as a participant in the UN Global Compact, has pledged to integrate
its principles in the areas of human and labour rights into our business strategy and operations. Our Code of Conduct reflects this commit-
ment, ensuring compliance with human and civil rights as well as applicable labour and social laws. Respect, fairness, and equal opportuni-
ties are core values we demand from our employees and business partners alike. The CEO is the most senior executive responsible for
policy implementation. All policies are publicly available on the Group’s website in the Policy Library section.
How RHI Magnesita fosters its corporate culture
This section is incorporated by reference to the Corporate Governance Report, pages 190-192, “Culture and Purpose”.
Mechanisms for identifying, reporting and investigating concerns
Potential concerns about ethical misconduct or any compliance matters can be reported by all stakeholders (both internal and external) to
an independently operated, confidential, and anonymous whistleblowing hotline, available in areas where the Group operates as well as
other locations, in several languages. Contact details are communicated throughout the business and are available externally on the
Group’s website. In addition to the hotline, whistleblowing reports can also be submitted via other channels, such as to a dedicated email
address. All reports are assessed by the Internal Audit, Risk & Compliance team and then addressed on a case-by-case basis.
The Audit & Compliance Committee and Board reviews this process and the reports arising from it, ensuring there are arrangements in
place for the appropriate and independent investigation of these cases and that follow-up actions to address the root causes are completed.
We regularly conduct compliance risk assessments, such as fraud risk assessments, with results presented to management and the Audit
& Compliance Committee each year. The regular risk assessments conducted at Group, regional and plant level cover Compliance risks
(including corruption risks). The plant risk assessment carried out in 2024 included 54 plants and mines (100% coverage).
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We use digital registers, workflows and employee guidelines to address, document and monitor conflicts of interest declarations, gifts and
invitations, and community investment approvals.
Business partners (e.g. customers, sales intermediaries and suppliers) and transactions such as mergers or acquisitions are subject to a
separate due diligence process. All sales agents are certified by Ethixbase360 (formerly TRACE International), a leading international or-
ganisation specialised in third-party due diligence solutions.
Our focus on human rights and labour rights includes a programme of supplier audits. In 2025, we will continue to strengthen our human
rights due diligence processes within the Group and in the supply chain. Following recent M&A activity, certain German legal entities
within the Group are now subject to the requirements of the German Supply Chain Due Diligence Act.
In compliance with this legislation, a Human Rights Officer has been appointed. The Board approves an annual statement in accordance
with the UK Modern Slavery Act 2015 and the California Transparency in Supply Chains Act.
In 2024 particular attention continued to be given to the integration of acquired entities in respect of ethics and compliance standards.
Extensive work was conducted as part of integration activities to understand the compliance culture of each new entity and work to har-
monise their approach with Group practices.
Emphasis was placed on face-to-face interaction and discussion to jointly evolve Business Ethics approaches.
We encourage anyone with ethics or compliance concerns to report them to an independently operated hotline, which is confidential and
can be used anonymously.
RHI Magnesita is firmly committed to whistleblower protection, adhering to the principle of non-retaliation and ensuring that all reports
are independently investigated with appropriate follow-up actions. The Group is subject to various legal requirements for whistleblower
protection, which vary based on national legislation. To ensure transparency and oversight, the Audit & Compliance Committee regularly
reviews data on cases submitted via the hotline and other reporting channels, as well as the outcomes of investigations. This approach
reinforces RHI Magnesita’s commitment to ethical business practices and compliance with legal and regulatory standards.
Disclosure requirement G1-2 – Management of relationships with suppliers
RHI Magnesita’s top 20 suppliers account for approximately 20% of our expenditure and the top 200 around 55%. Procurement extends
to suppliers producing refractory raw materials, energy suppliers facilitating the conversion of raw materials to finished products, transport
suppliers, and manufacturing suppliers. While contractual commitments generally do not exceed one year, the Group may enter into
longer contracts on an exceptional basis for critical raw materials and energy. Our operational focus is on capital and energy intensive
processes, especially in equipment for raw material and finished product production. Most specific raw materials are sourced from China,
resulting in a lengthy supply chain. Procurement spending in our industry equates to about two-thirds of revenue, on average.
Despite a high reliance on Chinese raw materials in the broader refractory industry, RHI Magnesita’s suppliers are predominantly situated
in the regions where its production facilities operate. Europe leads in supplier concentration, followed by China, Brazil, the USA, and India.
In our commitment to sustainable procurement, RHI Magnesita aims to integrate sustainability priorities into our procurement processes.
Supply chain due diligence
Since 2022, RHI Magnesita has established a framework for supply chain due diligence, to ensure ethical and compliant practices across
the Group’s supplier network. A comprehensive Supplier Code of Conduct outlines the standards and expectations the Group holds for all
partners in the supply chain. Supplier desktop evaluations and on-site inspections are also used to proactively identify and address any
potential risks, fostering a sustainable and resilient supply chain.
Supplier code of conduct
The Supplier Code of Conduct requires suppliers to follow the same principles as set out in RHI Magnesita’s own Code of Conduct. It is
distributed to all suppliers who are required to confirm compliance.
Supplier assessments through EcoVadis
An assessment system developed with EcoVadis is used to rate potential suppliers for sustainability impacts such as energy use, CO
2
emis-
sions and waste. The ratings resulting from this assessment form an important part of the Group’s procurement decision-making process.
The initial phase of supplier assessments was started in 2021 based on contract size and risk mapping. The process has continued in 2024,
now covering 55% of spend. Our target is to cover two-thirds of the supplier base by spend by 2025, including all suppliers delivering raw
materials with a high CO
2
intensity.
169RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
CONSOLIDATED SUSTAINABILITY STATEMENT CONTINUED
170 — RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024
Supplier on-site assessments
The Group conducts on-site assessments to evaluate suppliers based on product quality, Health & Safety and ESG aspects. RHI Magnesita
has significantly increased the number of on-site assessments from nine in 2022, to 42 in 2023 and 52 in 2024. The assessments were
conducted worldwide, including 16 in India, five in Sub-Sahara Africa and nine in China.
Supplier product carbon footprint
Since the contribution of raw material extraction and processing is the largest single source of CO
2
emissions in the refractory value chain,
the Group is seeking to increase the accuracy of its supplier CO
2
emissions data. In 2023 our specific focus with selected raw material
suppliers included raising their awareness of our data requirements and providing support on the required calculation methodology. Ac-
curate information enables the Group to prioritise suppliers with lower emissions in order to minimise Scope 3 emissions. Engagement on
the subject of emissions also demonstrates to potential suppliers that CO
2
reduction is a key priority for the Group, which is expected to
drive long-term changes in supplier behaviour and energy use.
Supplier collaboration
RHI Magnesita is committed to shaping a more resilient and sustainable supply chain. Therefore, the Group seeks collaborations with stra-
tegic suppliers to create more sustainable goods and services, with lower environmental impact. Several collaborations in 2024 resulted in
projects with positive impacts such as emission reduction in Europe and Scope 2 emission reduction in China and India and the Group is
continuing optimising transport routes to reduce emissions.
The second European Supplier Innovation Day 2024 reaffirmed that true innovation flourishes through collaboration. By fostering strong,
strategic partnerships with our valued suppliers, we accelerate the development of groundbreaking solutions and drive long-term success.
This initiative highlights the importance of early supplier involvement and a co-engineering approach, enabling the joint development of
innovative projects, methodologies, and products. Through structured collaboration, we create synergies that enhance efficiency, sustain-
ability, and competitiveness. This year, more than 20 business partners gathered to present their latest ideas and technological advance-
ments. The most innovative and promising solutions were recognised with awards, underscoring our commitment to cultivating a culture
of innovation through strong supplier partnerships.
Read more about our actions in chapter ESRS S2.
Disclosure requirement G1-3 – Prevention and detection of corruption or bribery
In 2024 we continued to embed and evolve our compliance policies and procedures. We take a zero-tolerance approach to incidents of
fraud, bribery or corruption in our business. This approach is set out in our Code of Conduct, which was updated and re-launched in 2023,
and in our Supplier Code of Conduct. The reshaped Code of Conduct with an emphasis on simple, focused messaging for key areas, in-
cluding business ethics, integrity, health and safety, anti-corruption, legal compliance, data privacy, sustainability, and conflict of interest
avoidance has been well received across the Group. All 109 governance body members and employees have been informed of the Group’s
Anti-Corruption (AC) policies and procedures. As part of compliance measures, they have completed mandatory e-learning training.
Comprehensive online training is mandatory for key compliance areas, including business ethics, data privacy, sanctions, and export con-
trols. Regular monitoring ensures completion across all office-based employees. Newly onboarded employees are required to complete
these training sessions within the first three months of employment.
During 2024 ensuring the continuity of high standards for ethics and compliance was a prominent element of the transfer of staff to
Capgemini. Specific arrangements were agreed to ensure the continuity and ongoing quality of the ethics and compliance training to be
delivered by Capgemini in 2025.
The anti-corruption and bribery training covers:
• definition and legal framework of bribery and corruption;
• consequences of non-compliance;
• identification of high-risk activities and locations;
• risks associated with cash transactions, gifts, and entertainment;
• preventative measures to mitigate bribery and corruption risks;
• proper maintenance of books and records;
• identification of politically exposed persons (PEPs); and
• adherence to Group policy on anti-corruption and bribery.
This structured approach reinforces compliance, mitigates legal and reputational risks, and strengthens ethical business practices across
the organisation and value chain.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024170
CONSOLIDATED SUSTAINABILITY STATEMENT CONTINUED
RHI MAGNESITA, ANNUAL REPORT AND ACCOUNTS 2024 — 171
The Region-wise breakdown indicates the following e-learnings completion rates for white-collar staff: Europe/ CIS/TR at 96%, China &
East Asia at 100%, Americas (North and South America) at 95%, and India & West Asia at 96%. These have improved since 2023 due to
the sustained focus of senior leadership on the Code of Conduct and the related training.
During the integration activities for M&A, training is initiated as soon as employees are integrated into the Group HR system to ensure
seamless compliance alignment.
Furthermore, all business partners have acknowledged and accepted the Group’s standard contract terms, which mandate adherence to
both RHI Magnesita’s Code of Conduct and the Supplier Code of Conduct. These documents are readily accessible via the Group’s website,
ensuring transparency and broad dissemination among business partners.
During the financial year 2024, the Group provided training to its own at-risk workers. Training is mandatory for all white-collar roles clas-
sified as at-risk functions, but the Group also provides voluntary training to other of its own workers.
Read more about the RHI Magnesita’s Risk Management Approach on pages 48-63.
Metrics and targets
Disclosure requirement G1-4 – Incidents of corruption or bribery
Assumptions and Methodologies
These metrics have not been externally validated by any organisation other than the assurance provider and they account with the num-
ber of cases reports to our compliance management system.
In 2024, the hotline and additional reporting channels generated 184 reports (versus 166 in 2023). Out of these, six cases are classified
under the category ‘Bribery & Corruption’.
The investigation into all cases is overseen by IARC department and investigations are performed in collaboration with other departments
and external legal support if necessary. For substantiated complaints, RHI Magnesita takes appropriate action to address the immediate risk
and implement preventive actions.
There have been no convictions or fines related to violations of anti-corruption and anti-bribery laws.
Read more about RHI Magnesita’s internal controls on pages 51-52.
171RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
GOVERNANCE
173 Governance at a glance
174 Chair’s introduction to
corporate governance
176 Board of Directors
182 Executive Management Team
183 Corporate Governance report
200 Nomination & Governance
Committee report
204 Corporate Sustainability
Committee report
206 Audit & Compliance Committee report
212 Remuneration Committee report
220 Annual Report on Remuneration
Our
Governance
OUR GOVERNANCE
In this section, we outline our governance practices
which underpin the functioning of our business in a
responsible and pragmatic approach, whilst fostering
innovation to deliver long-term success in the context
of a sustainable environment.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024172
GOVERNANCE AT A GLANCE
Strategy
• Purposeful approach
to capital allocation
• Growth through M&A
• Sustainability and the
Decarbonisation roadmap
• Production network
optimisation
• R&D innovation
Purpose, culture
and values
• Culture workstream in
2024 to refresh the values
• Culture is a key facilitator
of strategic decisions and
a zero-harm workplace
• Culture enables informed
decision making, e.g., in
outsourcing our shared
services
Sustainability
& Innovation
• Leverage technology and
our expertise to use capital
strategically in order innovate
• Ongoing progress with
decarbonisation through the
development of technologies
with our innovation partners
Health & Safety
• Steer the tone from the top in
safety culture with input from
dss+, our safety consultants
• Shape the safety
transformation with input
from employees at all levels
We are
the masters
of heat
Highlights in 2024
• Culture of high
performance
enabling the
business to
succeed in
challenging
conditions
• Appointment
of a new Director
with operational
expertise
to further our
operational
excellence
• Continued to
develop robust
operational
processes to build
the foundations
for the future
• Progressed our
strategy with
the decision to
acquire Resco
Group in the
United States
of America
• Board skills
and experience
shaped the
business’ actions
in its journey to
become a truly
modern company
• Improved Board
gender diversity
Priorities for 2025
• Continuing H&S
improvement and
developing a more safety
focused culture
• Ongoing execution of
business transformation
projects
• Integration of acquisitions
in order to achieve the
planned synergies as part
our focus on shareholder
value and our Return on
Invested Capital
• Leveraging technologies
to deliver efficiencies and
sustainable outcomes
Read more about our Strategy
Pages 12 & 13
Read more about Company
Purpose, culture and values
Pages 20 & 21
Read more about
Sustainability & Innovation
Page 46
Read more about Health & Safety
Page 13
173RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
CHAIR’S INTRODUCTION TO CORPORATE GOVERNANCE
In 2024, the Board has been pleased to see the results
of management’s focus on operational excellence,
the establishment of stronger financial performance,
and the development of our regional businesses.
Dear Shareholders,
On behalf of the Board, I present to you the
corporate governance report for the year
ended 31 December 2024. I have taken the
opportunity to highlight some of the key
points of this section below.
Health & Safety and our culture
We reported to you in February 2024 that
there had been two fatalities in Austria
shortly before the publication of our 2023
report. We are disappointed to report that
there was then a further fatality in Dalian,
China in June 2024. We are deeply
saddened and affected by these incidents
and management have been working hard
to foster a reformed culture which truly
holds safety at its heart in order to achieve
a zero-harm environment.
As a Board with a long history of industrial
operations we guided and supported the
executive team as they sought expert
opinions from dss+ (a leading consultancy,
focusing on safety) and developed a
long-term and sustainable action plan to
reach into every corner of our organisation
to deliver a transformation in safety. We
have wrought a change at the top of the
organisation which reflects the latest
thinking from experts in the industry.
Nonetheless we recognise that, whilst
we expect to see immediate benefits, the
sustained cultural change throughout our
organisation will take time. The Corporate
Sustainability Committee (“CSC”) has been
monitoring and supporting management
in their progress, hearing also directly from
dss+, and reporting back to the Board. They
consider the Company’s Health & Safety
KPIs at every meeting, along with the root
cause analysis and assessment of these
fatalities and serious injuries. Colleagues
and external advisors with in-depth
experience attend these meetings so that
Directors can hear from them directly, with
the chance to highlight areas of concerns
for focus. You can read more about the
CSC’s consideration of this matter on
pages 204 to 205.
In our Remuneration Committee report
last year we reported that the executive
management would, in consultation with
the Board, establish a Health & Safety
Fund to support individuals and families
affected by workplace accidents. This was
established in 2024 with a healthy level
of donations from around the globe, that
have been matched by the Company.
These funds were further supplemented by
contributions from executive management
and Non-Executive Directors, who
contributed in a similar magnitude from
their 2023 fee (you can find more details
of this on page 220). Anyone can voluntarily
donate to the fund, which many employees
have taken the opportunity to do, and the
EMT will again be donating a percentage of
their 2024 bonus. It was gladdening to hear
that the first contribution from the fund to
our community in Breitenau, Austria had
been made in early 2025 which we hope
will provide some support and comfort
for those directly affected by the tragic
accident there. We also see that this fund
plays an important role in the culture of
RHI Magnesita; colleagues feel directly
able to contribute and support those in
need and it keeps the safety culture at the
top of mind, as well providing support for
those regrettably affected by occupational
work-related accidents.
Strategy
In my Chair’s statement on pages 2 to 4,
I highlighted the difficult trading conditions
in 2024. In this context, as a Board with
extensive operational and industrial
experience, we have been extremely
pleased with the resilient business
performance which we see as being the
outcome of our focus with management,
in recent years, to improve the operational
foundations of the Company. A solid basis
is developing, from which to develop and
take advantage of market and industry
uplift as it returns.
“ We are committed to
operational excellence
for sustainable success.”
Your
Board
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024174
CHAIR’S INTRODUCTION TO CORPORATE GOVERNANCE CONTINUED
In early 2024 the Board focused on the
acquisition of the Resco Group which
involved significant analysis of the risks and
opportunities available for our wider Group,
as well as consideration of our available
capital and the expected returns. Our
conclusion, following extensive due
diligence and assessment of mitigating
actions across financial, operational and
compliance risks, was that this is a strong
strategic step for the Company, especially
given our now, quite significant experience
in integrating assets and leveraging
synergies. We were delighted to recently
be able to welcome Resco Group into the
Group following completion on 28 January
2025 and look forward to reporting to you,
our stakeholders, on our progress as we
embark on a new journey together.
Sustainability
Environmental, social and governance
(“ESG”) and sustainability matters continue
to be central to our future success, and
we have been discussing the risks and
opportunities arising from this topic,
as well as how best to allocate capital
in a way which manages the Company the
best for its shareholders, recognising that
in our industry, it will take technological
innovation for us to be able to decarbonise.
The CSC supports the Board with its
deliberations on sustainable initiatives
and investments, and supports the
Remuneration Committee with priorities
to be incentivised and the measurement of
these. Sustainable development continues
to be key for our strategic success and
management is focusing on building a
resilient and responsible business foundation,
creating value for all stakeholders,
particularly shareholders.
We consulted shareholders
representing
>80%
of voting rights and we were
pleased to have their broad
support for the new Remuneration
Policy, which was adopted with
an overwhelming majority at
the May 2024 AGM
We were pleased to be shortlisted once
again by the Chartered Governance
Institute of UK & Ireland for our Sustainability
disclosure in our 2023 report. Our first
Sustainability Statement, which is in
compliance with the EU’s Corporate
Sustainability Reporting Directive,
can be found on pages 64 to 172.
Stakeholders
The Board sought opportunities throughout
the year to hear directly from stakeholders.
We were delighted to meet customers in
India and also meet with employee cultural
champions. Our Executive Directors met
regularly with shareholders, all
shareholders are invited to join us for our
Annual General Meeting, and, of course,
we heard from those shareholders
represented on our Board. Each interaction
was a valuable opportunity to hear the
opinions of our stakeholders. You can read
more about our stakeholder engagement,
and how our understanding of stakeholder
expectations feeds into our decision
making, on pages 26 to 31.
The Board in 2024
Katarina Lindström was formally appointed
by shareholders as an Independent NED
at the AGM in May 2024 and has been an
excellent fit for our Board and management
team, both culturally and in terms of the
experience and skills she brings in operations
outside of refractories. We have had a
stable year as a Board, and also with our
EMT, finding we are strengthened by the
continuing experience and engagement
with our management team.
The Nomination & Governance Committee
has continued to keep under review the
profile of skills and experience, as well the
diversity considerations that are important
to us and our key stakeholders. We remain
open to feedback from our shareholders on
the composition of the Board, as agents of
their capital.
The Board was delighted to see more of our
global network, particularly assets recently
acquired, where we could interact face to
face with employees, observing cultures
at different locations, and we were able
to see and clearly understand the outcome
of Board decisions. The main Board visit in
2024 was to our India, West Asia & Africa
region, visiting a number of plants, in
Rajgangpur and Bhiwadi, as well as the
region’s head office and service centre,
and a visit to our customers, Tata Steel, in
Jamshedpur. Certain Directors also made
individual trips to other locations in the year.
You can read more about this on page 189.
Governance
The report of our compliance in respect
of each of the UK Corporate Governance
Code 2018 (the “UKCGC”), which applied
to the year under review, and the Dutch
Corporate Governance Code 2022 (the
“DCGC”), (together “the Codes”) can be
found on page 197. The updated UKCGC,
published by the UK Financial Reporting
Council in January 2024, began applying
to us from 1 January 2025 and the Audit &
Compliance Committee have already been
focusing on Provision 29 (applicable from
1 January 2026) and the Group’s progress
in order to comply with the material internal
controls statement required in our 2026
report. In the meantime we have
considered the outcomes focus which is
part of the new UKCGC and made efforts
to develop this in our reporting, ready for
2025’s report.
I would like to conclude this introduction
to our Governance report by thanking
my Board colleagues for their continuing
support of both me and our Executive Team
through their valuable contributions,
observations and guidance. We continue
to face challenging and unpredictable
times, but I am confident that the Board is
well-placed to provide the right leadership
and guidance to enable the whole
RHI Magnesita team to respond effectively
to the upcoming challenges and
opportunities of 2025.
Herbert Cordt
Chair of the Board of Directors
175RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
BOARD OF DIRECTORS
Your Board,
with the vision and
experience to deliver
sustainable success
For more information, such as
education, please see our website
Herbert Cordt
N
Chair
John Ramsay
A
N
Senior Independent Director
and Deputy Chair
Stefan Borgas
Chief Executive Officer
Ian Botha
Chief Financial Officer
Stanislaus Prinz zu Sayn-
S
Wittgenstein-Berleburg
Non-Independent
Non-Executive Director
David Schlaff
Non-Independent
Non-Executive Director
Wolfgang Ruttenstorfer
A
Non-Independent
Non-Executive Director
Nationality: Austrian Nationality: British Nationality: German Nationality: British/South African Nationality: German Nationality: Austrian Nationality: Austrian
Gender: Male Gender: Male Gender: Male Gender: Male Gender: Male Gender: Male Gender: Male
Year of birth: 1947 Year of birth: 1957 Year of birth: 1964 Year of birth: 1971 Year of birth: 1965 Year of birth: 1978 Year of birth: 1950
Date of appointment:
20 June 2017
Date of appointment:
6 October 2017
Date of appointment:
20 June 2017
Date of appointment:
6 June 2019
Date of appointment:
6 October 2017
Date of appointment:
6 October 2017
Date of appointment:
20 June 2017
Herbert brings a wealth of
experience to his role as Chair,
including corporate financing,
international business and
industrial company
management. He is well-versed
and attentive to matters of
geopolitics and their impact on
a global business, ensuring that
RHI Magnesita is prepared and
alert to the risks and
opportunities which arise.
He was initially appointed as
Vice-Chair of the Supervisory
Board of RHI AG in 2007, going
on to be Chair from 2010.
John is an experienced
non-executive in listed
companies, bringing to the
Board his knowledge and
awareness of shareholder
interests and market practice.
He has held senior financial
executive roles across the
world and his knowledge
in accounting and finance
provides valuable practical
experience to help
management navigate the
risks and analyse business
performance effectively.
Stefan’s career has focused
on business transformations,
with a track record of leading
positive change in process
industries from chemicals,
plastics and biotech to mining,
minerals and fertilisers. He
continues to drive for change
in the refractory industry as
CEO of RHI Magnesita with
his charismatic leadership that
motivates and challenges his
management team to perform
to their utmost. His broad
experience worldwide brings
extensive knowledge in
business management in
an environment of constant
change, while empowering
people to achieve exceptional,
sustainable results.
Ian has extensive financial
and commercial leadership
experience with multinational
mining, metals and industrial
businesses. He has a track
record of driving financial
and business performance
improvement and broad
experience in strategy, M&A,
investor relations and
governance. Ian enjoyed a
successful career with FTSE
listed Anglo American plc for
over 20 years, including as
Finance Director of Anglo
American Platinum.
Stanislaus has deployed
industrial knowledge,
combined with financial detail,
throughout his career, and with
his experience as a senior
executive in the energy
industry, has brought first-hand
understanding of sustainability
matters in an industrial setting
as well as process design
experience in the context of
large IT projects. Outside of
RHI Magnesita, he focuses on
private equity work in a German
mid-cap environment and also
engages in a broad range of asset
management activities in a family
office environment. He was a
member of the Supervisory
Board at RHI AG from 2001 and
served as a member of its Audit
Committee from 2007.
David has key management
and supervisory experience
in international financial and
industrial institutions. He brings
a full appreciation of the
Group’s stakeholders to the
Board and is keen to ensure
that the Group meets its social
responsibilities. A longstanding
board member (he was a
member of the Supervisory
Board at RHI AG from 2010),
he has a deep understanding
of the refractory industry, its
customers and market
participants, and consequently
the operations of RHI Magnesita.
Wolfgang started his
professional career in oil and
gas at OMV, where he became
CEO and then Chairman of the
Management Board. He has
held numerous supervisory
board roles, including as
Chairman, in industries
such as telecommunications,
real estate, healthcare and
insurance. Wolfgang also
served as Secretary of State
in the Austrian Federal Ministry
of Finance. His varied career
brings a wide range of strategic
and business management
experience. Wolfgang was
a member of the Supervisory
Board of RHI AG from 2012
to 2017.
Current external
appointments
Watermill Group Boston
(Advisor), Cooper & Turner
Group (Advisory Board
Member), CORDT & PARTNER
Management- und
Finanzierungsconsulting
GesmbH (Managing Partner)
and Georgetown University’s
School of Foreign Service for
its MSFS Program (Advisory
Board Member).
Current external
appointments
DSM-Firmenich AG
(Non-Executive Director),
Croda International plc
(Non-Executive Director-
standing down 1 March 2025)
and Babcock International plc
(Non-Executive Director).
Current external
appointments
Afyren SAS (Chair) and borgas
advisory GmbH (owner).
Current external
appointments
None.
Current external
appointments
STUV Holding GmbH (CEO),
STUV Beteiligungs GmbH (CEO).
Current external
appointments
M-Tel Holding GmbH (Chief
Investment Officer and Joint
Managing Director).
Current external
appointments
Erne Group GmbH (Supervisory
Board member).
Key to committees
N
Nomination & Governance Committee
A
Audit & Compliance Committee
S
Corporate Sustainability Committee
R
Remuneration Committee
Chair of Committee
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024176
BOARD OF DIRECTORS CONTINUED
Herbert Cordt
N
Chair
John Ramsay
A
N
Senior Independent Director
and Deputy Chair
Stefan Borgas
Chief Executive Officer
Ian Botha
Chief Financial Officer
Stanislaus Prinz zu Sayn-
S
Wittgenstein-Berleburg
Non-Independent
Non-Executive Director
David Schlaff
Non-Independent
Non-Executive Director
Wolfgang Ruttenstorfer
A
Non-Independent
Non-Executive Director
Nationality: Austrian Nationality: British Nationality: German Nationality: British/South African Nationality: German Nationality: Austrian Nationality: Austrian
Gender: Male Gender: Male Gender: Male Gender: Male Gender: Male Gender: Male Gender: Male
Year of birth: 1947 Year of birth: 1957 Year of birth: 1964 Year of birth: 1971 Year of birth: 1965 Year of birth: 1978 Year of birth: 1950
Date of appointment:
20 June 2017
Date of appointment:
6 October 2017
Date of appointment:
20 June 2017
Date of appointment:
6 June 2019
Date of appointment:
6 October 2017
Date of appointment:
6 October 2017
Date of appointment:
20 June 2017
Herbert brings a wealth of
experience to his role as Chair,
including corporate financing,
international business and
industrial company
management. He is well-versed
and attentive to matters of
geopolitics and their impact on
a global business, ensuring that
RHI Magnesita is prepared and
alert to the risks and
opportunities which arise.
He was initially appointed as
Vice-Chair of the Supervisory
Board of RHI AG in 2007, going
on to be Chair from 2010.
John is an experienced
non-executive in listed
companies, bringing to the
Board his knowledge and
awareness of shareholder
interests and market practice.
He has held senior financial
executive roles across the
world and his knowledge
in accounting and finance
provides valuable practical
experience to help
management navigate the
risks and analyse business
performance effectively.
Stefan’s career has focused
on business transformations,
with a track record of leading
positive change in process
industries from chemicals,
plastics and biotech to mining,
minerals and fertilisers. He
continues to drive for change
in the refractory industry as
CEO of RHI Magnesita with
his charismatic leadership that
motivates and challenges his
management team to perform
to their utmost. His broad
experience worldwide brings
extensive knowledge in
business management in
an environment of constant
change, while empowering
people to achieve exceptional,
sustainable results.
Ian has extensive financial
and commercial leadership
experience with multinational
mining, metals and industrial
businesses. He has a track
record of driving financial
and business performance
improvement and broad
experience in strategy, M&A,
investor relations and
governance. Ian enjoyed a
successful career with FTSE
listed Anglo American plc for
over 20 years, including as
Finance Director of Anglo
American Platinum.
Stanislaus has deployed
industrial knowledge,
combined with financial detail,
throughout his career, and with
his experience as a senior
executive in the energy
industry, has brought first-hand
understanding of sustainability
matters in an industrial setting
as well as process design
experience in the context of
large IT projects. Outside of
RHI Magnesita, he focuses on
private equity work in a German
mid-cap environment and also
engages in a broad range of asset
management activities in a family
office environment. He was a
member of the Supervisory
Board at RHI AG from 2001 and
served as a member of its Audit
Committee from 2007.
David has key management
and supervisory experience
in international financial and
industrial institutions. He brings
a full appreciation of the
Group’s stakeholders to the
Board and is keen to ensure
that the Group meets its social
responsibilities. A longstanding
board member (he was a
member of the Supervisory
Board at RHI AG from 2010),
he has a deep understanding
of the refractory industry, its
customers and market
participants, and consequently
the operations of RHI Magnesita.
Wolfgang started his
professional career in oil and
gas at OMV, where he became
CEO and then Chairman of the
Management Board. He has
held numerous supervisory
board roles, including as
Chairman, in industries
such as telecommunications,
real estate, healthcare and
insurance. Wolfgang also
served as Secretary of State
in the Austrian Federal Ministry
of Finance. His varied career
brings a wide range of strategic
and business management
experience. Wolfgang was
a member of the Supervisory
Board of RHI AG from 2012
to 2017.
Current external
appointments
Watermill Group Boston
(Advisor), Cooper & Turner
Group (Advisory Board
Member), CORDT & PARTNER
Management- und
Finanzierungsconsulting
GesmbH (Managing Partner)
and Georgetown University’s
School of Foreign Service for
its MSFS Program (Advisory
Board Member).
Current external
appointments
DSM-Firmenich AG
(Non-Executive Director),
Croda International plc
(Non-Executive Director-
standing down 1 March 2025)
and Babcock International plc
(Non-Executive Director).
Current external
appointments
Afyren SAS (Chair) and borgas
advisory GmbH (owner).
Current external
appointments
None.
Current external
appointments
STUV Holding GmbH (CEO),
STUV Beteiligungs GmbH (CEO).
Current external
appointments
M-Tel Holding GmbH (Chief
Investment Officer and Joint
Managing Director).
Current external
appointments
Erne Group GmbH (Supervisory
Board member).
Key to committees
N
Nomination & Governance Committee
A
Audit & Compliance Committee
S
Corporate Sustainability Committee
R
Remuneration Committee
Chair of Committee
177RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
BOARD OF DIRECTORS CONTINUED
Janet Ashdown
S
R
Independent Non-Executive
Director
Janice “Jann” Brown
A
R
Independent Non-Executive
Director
Karl Sevelda
R
N
Independent Non-Executive
Director
Marie-Hélène Ametsreiter
S
Independent Non-Executive
Director
Anna Katarina Lindström
Independent Non-Executive
Director
Karin Garcia
Employee Representative
Director
Martin Kowatsch
Employee Representative
Director
Michael Schwarz
Employee Representative
Director
Nationality: British Nationality: British Nationality: Austrian Nationality: Austrian Nationality: Swedish Nationality: Spanish Nationality: Austrian Nationality: German
Gender: Female Gender: Female Gender: Male Gender: Female Gender: Female Gender: Female Gender: Male Gender: Male
Year of birth: 1959 Year of birth: 1955 Year of birth: 1950 Year of birth: 1970 Year of birth: 1965 Year of birth: 1970 Year of birth: 1972 Year of birth: 1966
Date of appointment:
6 June 2019
Date of appointment:
10 June 2021
Date of appointment:
6 October 2017
Date of appointment:
10 June 2021
Date of appointment:
2 May 2024
Date of appointment:
9 December 2021
Date of appointment:
14 December 2021
Date of appointment:
8 December 2017
Janet’s distinguished career in
the energy sector has provided
her with significant skills across
a business’ value chain, in
general management, and in
environmental and sustainability
matters. Her training as an
engineer allows her to fully
appreciate the challenges
of operating an industrial
business. Janet also has a wide
range of board and committee
experience as a non-executive
director in both public bodies
and listed entities, and has over
ten years’ experience of chairing
remuneration committees.
Jann is an experienced
financial professional who has
primarily focused her career in
the energy sector but also in
engineering services,
manufacturing and investment
management. As a result of
these roles, Jann has extensive
international business
experience, particularly in India
and the Middle East. Her listed
company board experience,
both as an executive and a
non-executive, brings an
awareness of the importance
of governance, culture and
strong ethics.
Karl progressed to CEO of
Raiffeisen Bank International
AG after being Deputy CEO
and undertaking management
roles in the Raiffeisen Bank
where he was responsible
for corporate customers and
corporate, trade and export
finance worldwide. Prior to this,
he held several senior
management positions in
Creditanstalt-Bankverein
where he focused on corporate
and export finance.
Additionally, he has held the
position of Secretary to the
Federal Minister for Trade
and Industry of Austria.
Marie-Hélène has extensive
skills and experience in
sustainability, digitisation and
automation, particularly across
Europe’s industrial sector,
supporting key areas of RHI
Magnesita’s strategy. Through
her role in venture capital, she
brings knowledge on the latest
trends in climate and industrial
technology, as well as of how
to create high-functioning,
innovating teams.
Katarina has her foundation
in Operations and, over her
extensive international career,
has led the transformation of
operations and the value-chain
at executive and board level,
always structuring
organisations in a lean and
efficient manner. She relishes
pragmatic and proactive
problem solving with focus on
continuous improvements both
structurally and incrementally.
She had a long international
career at Volvo Group, Munters
AB in Sweden and Hempel A/S
in Denmark.
Karin studied at the University
of Oviedo and finished her
degree in computer science
in 1994, specialising in systems
support. She started with the
Group in 1997, first working in
the commercial execution team
and then transferring to the IT
on-site support in Oviedo
as a Regional Site Service
Coordinator where she
continues to work as a Senior
Site Coordinator. Karin was
appointed as an Employee
Representative Director by
the Spanish Works Council.
Martin has been with the Group
since 1987 and is Chair of the
Group Works Council, as well
as the Chair of the Works
Council at the Flagship Digital
Plant in Radenthein. He is a
trained industrial electrician,
and has completed a one-year
Chamber of Labour/trade union
training. He successfully
completed a Master’s degree
programme in Education and
Group Dynamics. Martin was
appointed as an Employee
Representative Director by
the Austrian Works Council.
Michael has been with the
Group since 1983 and is a
member of the Works Council
at RHI Magnesita Deutschland
AG. Michael was appointed as
an Employee Representative
Director by the German
Works Council, first in 2017
and then reappointed in 2021.
Current external
appointments
Nuclear Decommissioning
Authority UK (Senior
Independent Director and Chair
of Safety and Sustainability),
Victrex plc (Non-Executive
Director, Chair of Remuneration)
and Stolt-Nielsen Limited
(Non-Executive Director).
Current external
appointments
ICAS Foundation (Trustee
and board member).
Current external
appointments
Liechtensteinische Landesbank
AG (Non-Executive Director),
and Custos Privatstiftung (Chair).
Current external
appointments
Greyparrot.ai Ltd
(Non-Executive Director),
Speedinvest Deutschland
GmbH (Managing Director),
Erste Bank der österreichischen
Sparkassen AG (Supervisory
Board member)
Current external
appointments
Swedish Royal Engineering
Academy (Elected member).
Current external
appointments
None.
Current external
appointments
None.
Current external
appointments
None.
Key to committees
N
Nomination & Governance Committee
A
Audit & Compliance Committee
S
Corporate Sustainability Committee
R
Remuneration Committee
Chair of Committee
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024178
BOARD OF DIRECTORS CONTINUED
Janet Ashdown
S
R
Independent Non-Executive
Director
Janice “Jann” Brown
A
R
Independent Non-Executive
Director
Karl Sevelda
R
N
Independent Non-Executive
Director
Marie-Hélène Ametsreiter
S
Independent Non-Executive
Director
Anna Katarina Lindström
Independent Non-Executive
Director
Karin Garcia
Employee Representative
Director
Martin Kowatsch
Employee Representative
Director
Michael Schwarz
Employee Representative
Director
Nationality: British Nationality: British Nationality: Austrian Nationality: Austrian Nationality: Swedish Nationality: Spanish Nationality: Austrian Nationality: German
Gender: Female Gender: Female Gender: Male Gender: Female Gender: Female Gender: Female Gender: Male Gender: Male
Year of birth: 1959 Year of birth: 1955 Year of birth: 1950 Year of birth: 1970 Year of birth: 1965 Year of birth: 1970 Year of birth: 1972 Year of birth: 1966
Date of appointment:
6 June 2019
Date of appointment:
10 June 2021
Date of appointment:
6 October 2017
Date of appointment:
10 June 2021
Date of appointment:
2 May 2024
Date of appointment:
9 December 2021
Date of appointment:
14 December 2021
Date of appointment:
8 December 2017
Janet’s distinguished career in
the energy sector has provided
her with significant skills across
a business’ value chain, in
general management, and in
environmental and sustainability
matters. Her training as an
engineer allows her to fully
appreciate the challenges
of operating an industrial
business. Janet also has a wide
range of board and committee
experience as a non-executive
director in both public bodies
and listed entities, and has over
ten years’ experience of chairing
remuneration committees.
Jann is an experienced
financial professional who has
primarily focused her career in
the energy sector but also in
engineering services,
manufacturing and investment
management. As a result of
these roles, Jann has extensive
international business
experience, particularly in India
and the Middle East. Her listed
company board experience,
both as an executive and a
non-executive, brings an
awareness of the importance
of governance, culture and
strong ethics.
Karl progressed to CEO of
Raiffeisen Bank International
AG after being Deputy CEO
and undertaking management
roles in the Raiffeisen Bank
where he was responsible
for corporate customers and
corporate, trade and export
finance worldwide. Prior to this,
he held several senior
management positions in
Creditanstalt-Bankverein
where he focused on corporate
and export finance.
Additionally, he has held the
position of Secretary to the
Federal Minister for Trade
and Industry of Austria.
Marie-Hélène has extensive
skills and experience in
sustainability, digitisation and
automation, particularly across
Europe’s industrial sector,
supporting key areas of RHI
Magnesita’s strategy. Through
her role in venture capital, she
brings knowledge on the latest
trends in climate and industrial
technology, as well as of how
to create high-functioning,
innovating teams.
Katarina has her foundation
in Operations and, over her
extensive international career,
has led the transformation of
operations and the value-chain
at executive and board level,
always structuring
organisations in a lean and
efficient manner. She relishes
pragmatic and proactive
problem solving with focus on
continuous improvements both
structurally and incrementally.
She had a long international
career at Volvo Group, Munters
AB in Sweden and Hempel A/S
in Denmark.
Karin studied at the University
of Oviedo and finished her
degree in computer science
in 1994, specialising in systems
support. She started with the
Group in 1997, first working in
the commercial execution team
and then transferring to the IT
on-site support in Oviedo
as a Regional Site Service
Coordinator where she
continues to work as a Senior
Site Coordinator. Karin was
appointed as an Employee
Representative Director by
the Spanish Works Council.
Martin has been with the Group
since 1987 and is Chair of the
Group Works Council, as well
as the Chair of the Works
Council at the Flagship Digital
Plant in Radenthein. He is a
trained industrial electrician,
and has completed a one-year
Chamber of Labour/trade union
training. He successfully
completed a Master’s degree
programme in Education and
Group Dynamics. Martin was
appointed as an Employee
Representative Director by
the Austrian Works Council.
Michael has been with the
Group since 1983 and is a
member of the Works Council
at RHI Magnesita Deutschland
AG. Michael was appointed as
an Employee Representative
Director by the German
Works Council, first in 2017
and then reappointed in 2021.
Current external
appointments
Nuclear Decommissioning
Authority UK (Senior
Independent Director and Chair
of Safety and Sustainability),
Victrex plc (Non-Executive
Director, Chair of Remuneration)
and Stolt-Nielsen Limited
(Non-Executive Director).
Current external
appointments
ICAS Foundation (Trustee
and board member).
Current external
appointments
Liechtensteinische Landesbank
AG (Non-Executive Director),
and Custos Privatstiftung (Chair).
Current external
appointments
Greyparrot.ai Ltd
(Non-Executive Director),
Speedinvest Deutschland
GmbH (Managing Director),
Erste Bank der österreichischen
Sparkassen AG (Supervisory
Board member)
Current external
appointments
Swedish Royal Engineering
Academy (Elected member).
Current external
appointments
None.
Current external
appointments
None.
Current external
appointments
None.
Key to committees
N
Nomination & Governance Committee
A
Audit & Compliance Committee
S
Corporate Sustainability Committee
R
Remuneration Committee
Chair of Committee
179RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
A stable Board
for long-term performance
Board composition
The Board is composed of 15 Directors, which includes the
Non-Executive Chair, two Executive Directors, three ERDs and
nine NEDs.
In Rhône Capital’s Partial Offer document of May 2023, which
communicated their intention to reach 29.9% share of the
Company, Rhône Capital indicated their intention to seek Board
representation, although to date, no such representation has
been agreed. The Board looks forward to constructive dialogue,
and the fresh perspective they will no doubt contribute as
major shareholders.
At the date of this Annual Report, the Board is composed as follows:
Name Position
Expiry/
reappointment date3
Herbert Cordt Chair 2025 AGM
John Ramsay Deputy Chair and Senior
Independent Director
2025 AGM
Stefan Borgas Executive Director (CEO) 2025 AGM
Ian Botha Executive Director (CFO) 2025 AGM
Janet Ashdown Independent
Non-Executive Director
2025 AGM
David Schlaff Non-Independent
Non-Executive Director
2025 AGM
Stanislaus Prinz zu Sayn-
Wittgenstein-Berleburg
Non-Independent
Non-Executive Director
2025 AGM
Jann Brown Independent
Non-Executive Director
2025 AGM
Karl Sevelda Independent
Non-Executive Director
2025 AGM
Marie-Hélène Ametsreiter Independent
Non-Executive Director
2025 AGM
Wolfgang Ruttenstorfer Non-Independent
Non-Executive Director
2025 AGM
Katarina Lindström Independent
Non-Executive Director
2027 AGM
Karin Garcia Employee Representative
Director
9 December 2025
Martin Kowatsch Employee Representative
Director
14 December 2025
Michael Schwarz Employee Representative
Director
9 December 2025
1. Herbert Cordt is considered Independent under the DCGC but is not
deemed to be independent on appointment under the criteria of the UKCGC
on the grounds of his length of service (including time served on the
Supervisory Board of RHI AG).
2. Wolfgang Ruttenstorfer is considered Independent under the DCGC
and Non-Independent under the criteria of the UKCGC.
3. Non-Executive Directors are reappointed at each AGM. Their letters
of appointment cover an appointment term of three years.
4. Employee Representative Directors are employees of the Group and
not considered independent under either of the UKCGC or DCGC.
Board attendance
Board attendance 2024
Total
attended3
Total
meetings1
Herbert Cordt 9 9
John Ramsay 9 9
Stefan Borgas 9 9
Ian Botha 9 9
Janet Ashdown 9 9
David Schlaff 9 9
Stanislaus Prinz zu Sayn-Wittgenstein-Berleburg 9 9
Jann Brown 9 9
Karl Sevelda 9 9
Marie-Hélène Ametsreiter 9 9
Katarina Lindström 9 9
Wolfgang Ruttenstorfer 9 9
Karin Garcia 9 9
Martin Kowatsch 9 9
Michael Schwarz 9 9
1. In the year, two Board sub-committees were held to approve matters
specifically delegated by the Board in accordance with Article 17.5 of the
Company’s Articles of Association. These are not included in the table above.
2. Katarina Lindström attended meetings up to and including the AGM on 2 May
2024 as an observer, being a Board Nominated Independent Non-Executive
Director until her appointment.
3. As outlined on page 185, Dutch law allows for proxies to be appointed where
Directors are unable to attend.
Committee membership and meeting attendance
Member
Attendance
in 20241
Member
since
Nomination & Governance Committee
Herbert Cordt (Chair) 3/3 October 2017
John Ramsay 3/3 October 2020
Karl Sevelda 3/3 June 2021
Corporate Sustainability Committee
Janet Ashdown (Chair) 3/3 June 2019
Marie-Hélène Ametsreiter 3/3 June 2021
Stanislaus Prinz zu Sayn-Wittgenstein 3/3 November 2022
Audit & Compliance Committee
John Ramsay (Chair) 5/5 October 2017
Jann Brown 5/5 June 2021
Wolfgang Ruttenstorfer 5/5 October 2017
Remuneration Committee
Janet Ashdown (Chair) 4/4 October 2020
Karl Sevelda 4/4 October 2017
Jann Brown 4/4 December 2022
1. The annual joint meeting of the Corporate Sustainability Committee and
Audit & Compliance Committee was held in November 2024, in addition
to the above meetings.
BOARD COMPOSITION
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024180
As described in the Corporate
Governance report, these statistics
do not include the Employee
Representative Directors.
Directors by length
of tenure
0–3 8%
3–5 17%
5–9 42%
9+ 33%
Directors by ethnicity
White 87%
Prefer not to say 13%
Directors by age
40–49 8%
50–59 34%
60–69 33%
70–80 25%
Directors by nationality
Austrian 42%
British 25%
German 17%
Swedish 8%
South African/British 8%
Board gender diversity
Male 67%
Female 33%
Board independence1
Independent 55%
Not independent 45%
1. As calculated by reference to the
UK Corporate Governance Code,
at the date of this report. Does not
include Employee Representative
Directors.
Independence
When assessing independence under
the UKCGC, the Board has included time
served by that Director on the board of RHI
AG prior to the merger with Magnesita in
2017. On this basis, Wolfgang Ruttenstorfer
exceeds nine years of service. None of the
other criteria in Provision 10 of the UKCGC
apply to him, and the Board remains
comfortable that he provides strong,
independent challenge to management,
particularly on financial business cases,
balance sheet management and
risk assessments.
Given their longstanding service and also
their connections to major shareholders,
David Schlaff and Stanislaus Prinz zu
Sayn-Wittgenstein-Berleburg are also
not considered to be Independent
Non-Executive Directors.
Additionally, per previous reports, as
European corporate law requires that a
significant portion of the Board be ERDs,
the Board feels it is appropriate to follow
the process of calculating independence
as it is undertaken in the relevant jurisdiction.
Which is to say that only Directors who can
be appointed by shareholders are counted
in the calculations on this page and ERDs
are excluded.
Accordingly, including Katarina Lindström
who was elected at the 2024 AGM, the
Board has six out of 11 eligible Directors,
who are deemed independent (as set out
in the table on the previous page), thereby
constituting a Board that is composed of
at least half NEDs (excluding the Chair)
considered by the Board to be independent
for the purposes of the UKCGC. Under the
criteria of the DCGC, the current Board can
be considered as 67% independent.
The Board has considered the
independence of the NEDs, including any
potential conflicts of interest. Each of these
Directors has also confirmed that there is
no reason why they should not continue to
be considered independent. In the opinion
of the Board, the DCGC independence
requirements referred to in the best
practice provisions 2.1.7 to 2.1.9 have been
fulfilled. You can find the details of which
Directors are deemed to be independent or
non-independent in the table on page 180.
Skills and experience
The Nomination & Governance Committee
seeks to ensure the right balance of skills,
knowledge and experience on the Board,
taking account of the business model,
long-term strategy and the sectors and
geographic locations in which the Group
operates. The Board is structured so that the
following experience and capabilities are
adequately represented across the Board:
• knowledge and understanding of the
business and products of the Company
and its subsidiaries, the markets and
geographies in which the Company and
its subsidiaries operate, in particular the
trends and future developments of these
markets and geographies;
• an international background and
geopolitical exposure;
• broad Board experience, including
knowledge of corporate governance
issues at main Board level as appropriate
for the Company with reference to its
size and international spread of activities;
• understanding of ESG, corporate social
responsibility and sustainability matters,
particularly decarbonisation and other
areas of focus as per the Company’s
commitment to the UN Sustainable
Development Goals (“SDGs”);
• practical experience in, and relating
to, financing and accounting and/or
experience in relation to IFRS, as well
as in the areas of risk management and
internal controls;
• understanding of the markets where
the Company is active, in particular
emerging markets;
• expertise in science, technology and
innovation, as well as practical experience
in operations, manufacturing and logistics;
• experience and understanding of human
resources and remuneration-related
matters; and
• personal qualities such as impartiality,
integrity, tolerance of other points of
view, ability to challenge constructively
and act critically and independently.
The Nomination & Governance Committee
considers that all of these aspects are well
represented across the Board, whilst
continuing to keep Board composition
under review. The Board is committed to
encouraging diversity to deliver long-term
sustainable success for the Company and
will continue to pursue its programme in
this regard. You can read about Board
diversity in the Nomination & Governance
Committee report on pages 201.
BOARD COMPOSITION CONTINUED
181RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Executives
responsible
for strategic
execution
The EMT combines broad experience
and complementary skill sets
Gustavo Franco
Chief Customer Officer
Rajah Jayendran
Chief Technology Officer
Simone Oremovic
Executive Vice President,
People, Projects, Integrations
& Recycling
Ticiana Kobel
Executive Vice President,
Legal & Digital Transformation
Gustavo joined Magnesita
in 2001. During the first years
of his career, he progressed
through various technical and
sales managerial roles in South
and North America, resulting in
an extensive understanding of
the refractory industry and the
market forces within it. He has
deep familiarity with customers
of RHI Magnesita and brings a
tactical as well as strategic view
to his executive role. In 2017 he
led the go to market integration
of RHI and Magnesita. He was
appointed Chief Sales Officer
in 2019 and since 2022 the
Regional Presidents,
responsible for the regional
P&Ls, along with Procurement
& Supply Chain organisation,
have reported to him in his role
as Chief Customer Officer.
Rajah has worked in senior
operational and strategic
development roles at
multinational companies
across China, Singapore and
Switzerland, where he gained
deep operational management
and industrial knowledge,
as well as extensive M&A
experience. Over his executive
career he has also developed
skills pertaining to renewable
solutions and operational
performance improvement.
In 2018, Rajah became a key
team member at RHI Magnesita,
and in October 2021, he joined
the EMT. Rajah brings a detailed
knowledge of the Company’s
global operations and expertise
in production efficiencies to
his role.
Simone joined the Group in an
executive capacity in November
2017. She started her career
at General Electric where her
main focus was on leadership
and talent management, and
has held leading roles in
telecommunications,
pharmaceutical and
technology firms. She has 25
years of experience developing
people and culture across
global industries which she
has brought to her role, and
is a certified Six Sigma Master
Black Belt, which she deploys
to drive dynamic transformation
at RHI Magnesita.
Ticiana has extensive legal
experience in a wide range
of global businesses, such
as SR Technics Group and
Bühler Group, leading legal
departments in manufacturing,
aviation, technology, the
service sector and engineering
industries. In these roles she
was in charge of crucial projects,
such as complex strategic
procurement, spin-offs, sales
and acquisitions, IT matters,
and corporate governance
issues. She has also assisted
with the design and
implementation of compliance
functions, mergers and
acquisitions, and partnerships.
Stefan Borgas
Chief Executive Officer
Ian Botha
Chief Financial Officer
EXECUTIVE MANAGEMENT TEAM
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024182
Governance supporting
responsible growth
Corporate governance structure
RHI Magnesita Board
Chief
Executive
Officer
Executive
Management
Team
Corporate
Sustainability
Committee
Audit &
Compliance
Committee
Nomination &
Governance
Committee
Remuneration
Committee
Board powers,
responsibilities
and representation
The Board is collectively responsible
for the leadership and management of
the Company and its business. Its role is to
establish the strategy, purpose and values
to ensure the Group’s long-term and
sustainable success. The Board assesses
the strategic risks it is willing to take in
pursuit of this strategy, ensures sufficient
resources, and measures the performance
of the management team against agreed
objectives, aligned with the strategy. The
Board ensures that appropriate controls
and systems are in place to manage risk
and considers the Company culture and
practices, reviewing alignment with the
purpose, values and strategy.
The Board Rules and Matters Reserved
to the Board, which are available on the
Company’s website, set out those matters
that are reserved for the Board to consider,
including, among other items, overall
responsibility for strategy and
management, major acquisitions and
investments, structure and capital, financial
reporting and controls, and corporate
governance. You can read more about the
matters considered by the Board in 2024
on pages 186 to 188.
The Board has delegated certain
responsibilities to Committees of the
Board, which are outlined in the respective
Committee Terms of Reference, available on
the Company’s website, and summarised
in their individual reports on pages 200 to
216. The Committee Chairs provide reports
to the subsequent Board meeting on the
matters discussed and resolved upon in
the Committee meetings.
Each Board Committee has considered the
required matters from the respective Terms
of Reference in 2024 and has met the
requisite number of times. The composition
of the Committees, the number of meetings,
attendance at those meetings and key items
discussed can be found in each Committee
Report on pages 200 to 216.
Pursuant to the Articles of Association, the
Board may, if it elects to do so, assign duties
and powers to individual Directors and/or
committees that are composed of two
or more Directors, with the day-to-day
management of the Company entrusted
to the Executive Directors. Both Executive
Directors and NEDs must perform such
duties as are assigned to them pursuant
to the Articles of Association and the Board
Rules or a resolution of the Board. Each
Director has a duty towards the Company
to properly perform the duties assigned to
them. Tasks that have not been specifically
allocated to a specific Director fall within
the power of the Board as a whole.
The Directors share responsibility for all
decisions and acts of the Board, and for
the acts of each individual member of the
Board, regardless of the allocation of tasks.
Furthermore, each Director has a duty
to act in the corporate interests of the
Company and its business. Under Dutch
law, corporate interest extends to the
interests of all stakeholders of the Company,
such as shareholders, creditors, employees
and other stakeholders. You can read more
about our stakeholder engagement on
pages 26 to 31.
CORPORATE GOVERNANCE REPORT
183RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
The Board as a whole is entitled to
represent the Company. Additionally,
(i) the CEO and the Chair, (ii) the Senior
Independent Director (SID) and Deputy
Chair and the Chair and (iii) two Executive
Directors, acting jointly, are also authorised
to represent the Company. Pursuant to the
Articles of Association, the Board may
appoint officers who are authorised to
represent the Company within the limits
of the specific powers delegated to them.
You can find our Articles of Association
and the role profiles of the above roles
on our website.
The Board has delegated responsibility for
day-to-day management of the Company
to the CEO and the EMT. There is a clear
separation of responsibilities between
the Board and the EMT, and the main
responsibilities of the EMT are to assist
the Board with its oversight of strategy,
which involves making strategic
recommendations to the Board, being
accountable for implementing the Board’s
decisions, and being responsible for
directing and overseeing the Company’s
operations, investments, resources, and
delivering the Company’s purpose and
value to stakeholders.
Individual roles
Roles of Chair, SID and Deputy
Chair, and CEO
The roles of Chair, SID and Deputy Chair,
and CEO have been formally recorded
by the Board. All of these documents can
be found on the Company’s website.
The composition of the Board has been
structured such that no one individual can
dominate the decision-making processes
of the Board.
Non-Executive roles
The Employee Representative,
Non-Independent and Independent
NEDs engage with the business of the
Board from different perspectives, enabling
multifaceted scrutiny to be applied to the
Board’s decision-making, ensuring that
the viewpoints of the Company’s key
stakeholders are represented. All Directors
are required to exercise their independent
judgement and act in the best interests
of the Company, taking into account the
interests of its stakeholders, in their
decision making.
Non-Independent Non-Executive
Director roles
Herbert Cordt, Stanislaus Prinz zu Sayn-
Wittgenstein-Berleburg, David Schlaff and
Wolfgang Ruttenstorfer are not considered
independent under the UKCGC, for a
combination of reasons including length of
service (including time served with RHI AG
prior to the merger in 2017 with Magnesita)
and connections to significant
shareholdings of the Company. However,
because of that experience, they contribute
strongly to the Board’s culture and
character, adding valuable insight gained
through experience of the markets in which
the Group operates and corporate memory.
They can constructively challenge the
Executive Directors and scrutinise the
performance of management in meeting
their objectives with the benefit of historical
experience of the operations and industry
of the business. Stanislaus Prinz zu
Sayn-Wittgenstein-Berleburg and David
Schlaff can provide an investor perspective
to the management team and challenge
them accordingly. The detail of all the
Directors’ independence and the detail
of compliance with the criteria of each
Code can be found above and on
pages 180, 181 and 197.
The Chair’s other significant commitments
are set out in the following table:
Name of company Function
CORDT & PARTNER
Management- und Finanzierungs
consulting GesmbH.
Managing
Partner
Watermill Group Boston Advisory Board
member
Georgetown University’s
School of Foreign Service
for its MSFS Program
Advisory Board
member
Cooper & Turner Group Advisory Board
member
Executive Directors
In accordance with Dutch law, an Executive
Director may not be allocated the tasks of:
(i) serving as Chair; (ii) participating in the
adoption of resolutions (including any
deliberations in respect of such resolutions)
related to the remuneration of Executive
Directors or instructing an auditor to audit
the Company’s annual accounts if the
General Meeting fails to do so; or
(iii) nominating Directors for appointment.
The role of an Executive Director is,
amongst other things, to bring commercial
and internal perspectives to the boardroom.
The Executive Directors, being the CEO
and CFO, are responsible for the leadership
and management of the Company
according to the strategic direction
set by the Board.
Company Secretary
Sally Caswell was appointed by the Board
as Company Secretary in January 2020.
All Directors have access to the advice and
services of the Company Secretary, whose
responsibilities include ensuring that Board
procedures are followed, assisting the
Chair in relation to corporate governance
matters and, in conjunction with the EVP
Legal, ensuring the compliance of the
Company with legal and regulatory
requirements.
Board and Committee structure
The Company has a one-tier board
structure, with a Board consisting of both
Executive Directors and NEDs (collectively
the “Directors” or the “Board”). As at the date
of this Annual Report, the provisions of Dutch
law that are commonly referred to as the
“large company regime” (structuurregime)
do not apply to the Company.
The Board has four Board Committees
to ensure a strong governance framework
for decision making and assessment of
performance against the Company’s
strategy: the Audit & Compliance
Committee, the Remuneration Committee,
the Corporate Sustainability Committee, and
the Nomination & Governance Committee.
Each Committee receives support from
the Company Secretary. The Terms of
Reference of these Committees can be
found on our website and the reports of
each Committee, including membership
and attendance at meetings in 2024,
can be found on pages 200 to 216.
EMT and delegation of authority
The Board has documented the matters
reserved for its approval, including
approvals of major expenditure,
investments, and key policies. This provides
clarity to the Board, and the organisation as
a whole, to enable effective delegation of
authority. The EMT then work within this
delegation of authority, as approved by the
Board, and set out parameters for the rest
of the organisation to work within.
CORPORATE GOVERNANCE REPORT CONTINUED
1. A dual role held by one individual, John Ramsay.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024184
The EMT comprises senior managers
reporting to the CEO who are accountable
for the key functions in the business. The
CFO and CEO are part of the EMT. There are
meetings held, on a minimum of a monthly
basis, to discuss key business performance
indicators, to drive operational performance
and to agree strategic initiatives to be
proposed to the Board. The EMT members
attend each Board meeting, giving reports
on both standing items and ad hoc
initiatives. Individual EMT members
are responsible for inputs to the Board
Committees and leading the organisation
in meeting objectives as set out by the
Executive Directors and NEDs of the Board.
As part of this, they meet and discuss
matters one on one with the Chairs
of the Board Committees.
Board operation
The Board meets regularly throughout
the year at Board and Committee sessions,
which are usually spread over two days, in
person in Vienna. Board meetings can also
be convened as deemed necessary by the
Chair or the SID and Deputy Chair.
In the meetings, the Chair takes care to
ensure that each Director has opportunity
to comment and be heard, whilst enabling
an orderly flow and healthy discussion.
At the end of each Board meeting, the
NEDs generally meet, without the Executive
Directors and management, to enable an
open and frank exchange of views and
assessment of performance. Further details
on the Board performance review are
available on page 201.
The Chair and other NEDs hold regular
informal, individual, meetings with the
Executive Directors and other senior
managers in the business, providing the
opportunity to raise questions and cover
points of interest, which contributes to
the development of both the NEDs and
the management.
Board papers are circulated in advance
of meetings, using a secure web-based
portal, to allow Directors sufficient time to
consider the content prior to the meeting.
The Chair is assisted in this responsibility
by the Company Secretary and CEO.
The management team continues to take
feedback from the Board via the review
process on how papers and presentations
can be improved to assist the flow of the
meeting, as well as direct feedback either
in the meeting or in an informal way outside
of meetings. An information room within the
portal provides access to useful information,
including corporate governance reference
materials, analyst reports, and Company
finance, treasury, and strategy information.
The Board takes the views of its key
stakeholder groups into account when
challenging management, and in its
discussions and decision making. Inputs
to this process include the Company’s Net
Promoter Score, the ERDs’ views, regular
Investor Relations reports, analyst coverage
and views of the two Non-Independent
NEDs who represent shareholders.
The Board recognises the importance of
balancing stakeholder views, whilst acting
in the best interests of the Company. In the
event of a decision which has a potentially
negative impact on a specific stakeholder
group, efforts are made to mitigate these.
As an example, in the event of an
organisational restructure, which does
not benefit certain employees, a detailed
communications strategy is designed to
explain the decision and employees are
treated in a respectful and generous
manner. This aligns with the Company
values to be open in decision making and
accountable for actions taken.
Board attendance
Six Board meetings were scheduled in
2024 (2023: seven). An additional three ad
hoc meetings were required in the year for
time-critical decisions such as approval of
M&A and the closure of the Mainzlar plant.
These ad hoc meetings took place in a
hybrid or entirely virtual setting and were
naturally shorter meetings, given their
focused agendas.
Where meetings are called on short notice,
it is not always possible for them to be at
a time suitable for all Directors to attend.
As per Dutch law and the Board Rules,
Directors can nominate, in writing, a proxy,
and prior to the meeting the Director will
have the opportunity to provide any
comments to their proxy or the Chair of
the meeting. They will receive a briefing
following the meeting on key points
discussed and any votes taken.
Only in exceptional circumstances would
Directors not attend Board and Committee
meetings. Whilst the attendance level of
our NEDs has consistently been high, the
Nomination & Governance Committee was
cognisant of feedback received that the
time previously stated in the NEDs’ letters
of appointment of 25 to 30 days per annum
was no longer sufficient to meet the
Company’s requirements. This was
addressed in 2024 accordingly and letters
of appointment have been updated. All of
our NEDs are comfortable they have the
availability to meet this revised time
commitment to fulfil their duties and the
Nomination & Governance Committee
considered the time required of NEDs
as part of its regular programme.
For further information
See page 200
CORPORATE GOVERNANCE REPORT CONTINUED
185RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Group strategy and
long-term sustainable
value creation/preservation
• Conducted the annual two-day strategy
meeting session with members of the
EMT and senior management team to
assess the current strategy and ensure
it was fit for purpose. As part of these
discussions, the Board received briefings
from external economists to assist with
their understanding of the global
outlook and macroeconomic trends and
how these could be expected to impact
RHI Magnesita.
• Management presented its Strategy
Implementation report, using KPIs to
illustrate how the strategy was being
implemented. The Non-Executive
Directors provided challenge to
management about the direction and
emphasis of the strategy and suggested
areas for focus and refinement based on
their experience from being executives
themselves and their experience from
their other appointments.
• The Board reviewed data on the
achievement of the 2025 strategic
goals; the CSC also reviews and
assesses the sustainability strategic
goals at each meeting and the
Remuneration Committee considers
how to incentivise behaviours to reach
the strategic outcomes which requires
detail on the current achievement.
Key areas of Board focus
and activity in 2024
Amongst other matters, the Board focused
on the following areas in the year:
• Participated in a risk management
workshop, discussing risks aligned
with the strategic opportunities, how
the Group was benchmarked against
its peers, alerting management to
potential pitfalls and agreeing changes
to risk appetite.
• Received reports throughout the year
outlining potential business development
opportunities as they arose, including
strategic M&A.
• Discussed the post-integration position
of a number of assets, with reference
to the original business plan, the returns
on investment and the impact of the
acquired assets on the Group’s footprint
and supply chains.
• Approved the Resco Group acquisition
with reference to the Company’s
strategic intent and the balance sheet
capacity. The Board focused on the
synergies to be leveraged, which will
support a sustainable business model,
the success factors for integration,
and any risks to be mitigated. They
considered the ability to achieve shorter
supply chains and improve customer
outcomes. The similarity of cultures
between the two entities was especially
considered as a success factor.
• Considered geopolitical and
macroeconomic trends and factors,
particularly those impacting employees,
costs of production, delivery to
customers and the implementation
of the strategy.
• Discussed the Company’s raw materials
strategy, the approach to secondary raw
materials and the strategy for provision
of products and services to customers.
See pages 12 and 13 for more detail on our
Strategy and our progress.
You can read more about how the NEDs
ensure the incentives are aligned with the
Strategic pillars on page 215.
People, succession
and leadership
• Board composition, diversity, and the
skills and experience desired to guide
and challenge the EMT.
• Considered the capability and capacity
of various EMT and senior management
members, as well as the talent pipeline,
and EMT succession plans.
• Considered the 2023 Board
performance review and the actions
relating to the review, including progress
against the actions identified in the year.
• Agreed the scope and approach of the
2024 Board review.
• Reviewed and approved the bonus
for 2023 performance and the
remuneration of the Chair, Executive
Directors and EMT.
• Approved the LTIP 2021 award vesting,
the conditions of the LTIP 2024 and its
grant to participants, and the Annual
Bonus 2024 targets.
• Heard management’s proposals for
changes to the network and outsourcing
of services, giving feedback and advice
on the communication approach to
ensure fairness and transparency
to employees.
• Discussed resourcing levels, employee
engagement, morale and wellbeing,
particularly in the context of various
significant internal projects.
• Received presentations on organisational
diversity and agreed the focus areas for
improvement to drive greater gender
diversity. Gave direct feedback to
Regional Presidents on action required
to improve gender diversity.
• In approving acquisitions, considered
the talent profile of new assets and the
approach in integration to retaining and
motivating those talents to ensure
synergies would be achieved, recognising
the importance of people in reaching
the strategic aims. This was seen in
action on the visit to India.
• Considered various deep dive reports
from Regional Presidents on the current
position of their regions and the priorities
for employees there.
See pages 20 and 21 for more detail
on our people.
CORPORATE GOVERNANCE REPORT CONTINUED
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024186
Financial performance
• Approved the annual budget for 2024.
• Reviewed and approved the Group’s
full-year 2023 and half-year 2024
results, as well as the 2023 Annual
Report, including ensuring that it was
fair, balanced and understandable, and
confirming that the Group was a going
concern. As part of this, the Board
considered the external auditor’s reports
and the key matters raised.
• Approved the quarterly interim trading
statements on recommendation from
the Audit & Compliance Committee.
• Received regular financial updates
covering revenue, gearing, working
capital, margins, costs, performance
year-to-date and outlook on a
monthly basis.
• Reviewed the Group’s debt, capital,
and funding arrangements, particularly
in respect of ensuring the ability to take
advantage of any opportunities as they
arise, such as the Resco acquisition.
• Approved entry into various financing
instruments and loans to service the
Group’s debt profile.
• Reviewed liquidity, cash flow and
scenario planning, particularly with
reference to macro factors such as
inflation and labour costs.
• Approved the partial impairment of
the Brazilian Contagem project upon
the recommendation from the Audit
& Compliance Committee, based
on management’s assessment of the
financial reporting requirements and
in line with the Company’s Delegation
of Authority.
• Considered analysis of capital allocation
and payment of dividends, including
the approval of the interim dividend at
H1 2024 and recommendation of the full
year 2023 dividend to shareholders, and
how to drive more value for shareholders
from the asset base.
• Considered disclosures to the market
and noted the work of the Disclosure
Committee to continually monitor
matters at hand.
• The Group’s tax position in various
locations was considered and the activity
by management to manage it.
Operational performance
& Risk management
• Reviewed the root causes of fatalities
in 2024, hearing directly from experts
and the regional president on the
investigative findings and their proposed
support for the workforce. Considered
improvements to operational processes
to avoid the risk of serious injury or
fatality in future.
• Approved the outsourcing of the Group’s
shared services to Capgemini.
• Received updates at each meeting
on operational performance, reported
against regular and consistent KPIs,
including any impacts to customers,
and current Health & Safety levels.
• Considered reviews of completed
projects, which included lessons learned
by management for use in future
projects and planning.
• Considered individual plant
performance, as appropriate, and, with
reference to the Company’s strategy,
noted capacity at certain plants and
the consequent actions required.
• Approved the closure of Mainzlar plant
in Germany, and the associated social
plan and employee engagement.
• Received reports on the end-to-end
value chain and customer segmentation.
• Appraised the principal risks, mitigating
actions and controls around operational
performance.
• Approved entry into certain contracts,
both with customers and suppliers,
as required under the Delegation
of Authority.
• Continued to receive updates at each
meeting of the management’s approach
to a new Enterprise Resource Planning
(“ERP”) system, hearing from third-party
consultants, and as part of their oversight,
Directors shared their experiences of
such change projects.
See pages 51 and 52 for more details on risk
management and internal control framework.
Legal and
compliance matters
• Received regular updates on
whistleblowing, including an annual
review of the process confirming
its effectiveness.
• Approved the refreshed whistleblowing
policy on recommendation from the
Audit & Compliance Committee.
• Received updates on the Group’s
compliance and cyber security
programmes.
• Considered compliance reports, and
also received a benchmarking report
on the number of compliance cases
compared with peers.
• Considered trade sanctions and the
evolving situation as part of the risk
assessment process.
• Considered and approved the revised
Delegation of Authority.
• As part of due diligence for the
acquisition of Resco Group, received
the legal assessment of the risks and
structure of the deal.
CORPORATE GOVERNANCE REPORT CONTINUED
187RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Technical innovation
and sustainability
• Received updates on the development
of low-carbon products and market
developments in carbon capture
and storage.
• Received reports on sustainable
recycling and digital initiatives designed
to meet customer expectations and
develop the Company’s offering.
• Considered future strategy, partnerships
with external parties, and processes
to encourage innovation.
• Approved the change in climate risk
appetite to moderate.
See the Sustainability Statement for more
details on our decarbonisation initiatives.
Markets and sales
• Received presentations at every Board
meeting from the Chief Customer
Officer, hearing about key customer
developments and initiatives from the
pricing and sales teams.
• The Strategy team, along with EMT,
presented on developments in key
markets in each region, structural trends
and their analysis of the demand profile
and structural value-leakage.
• Discussed with management the
strategic market and the sizing of market
shares across the regions.
• Received updates at each meeting
on sales performance, market share
and progress against sales initiatives,
particularly with reference to customers.
• Heard from management about the
introduction and formulation of 4PRO,
a holistic approach to high-performance
refractory applications, based on
closer collaboration with customers
and enabling pursuit of sustainability
objectives and circular economy initiatives.
See pages 18 and 19 for more detail
on our markets
CORPORATE GOVERNANCE REPORT CONTINUED
Stakeholder engagement
and governance
• Approved the Notice and business of the
AGM, including the appointment of the
external auditor.
• Received input from the ERDs with their
views on various proposals and initiatives
presented by management.
• Considered the Company culture and
its influence across a variety of topics.
• Received reports on investor
engagement, including verbatim
feedback and the discussions held.
• Approved the annual statement for
the Modern Slavery Act and California
Transparency in Supply Chains Act.
• Received reports on customer satisfaction
levels, including Net Promoter Scores
and feedback from customers.
• Remuneration Committee considered
the workforce remuneration and
operation of various bonus schemes in
the organisation designed to incentivise
good behaviours.
• Received regular updates on corporate
governance and other matters from the
Company Secretary, particularly on
changes to the UK Listing Rules.
See our Stakeholder Report for more details
on pages 26 to 31.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024188
CORPORATE GOVERNANCE REPORT CONTINUED
Board
site visits
One Board session per annum,
typically over a week in April, is
held at a location other than the
Vienna headquarters. In April
2024, the Board travelled to the
India, West Asia & Africa region
where they visited three plants,
starting at Bhiwadi, then
moving to Jamshedpur, a
recently acquired plant, where
they also had the opportunity
to visit a customer plant, seeing
how RHI Magnesita interacts
and supports our customers on
site, and concluded the visit in
Rajgangpur, also recently
acquired.
Throughout the visit they met
colleagues at all levels and
could discuss topics such as
human resource management,
shared service centre practices
corporate communications,
internal audit, risk and
compliance, supply chain
management, capex
investments, and spent
substantial time with the
Regional Leadership Team,
hearing about their challenges,
priorities and plans.
At the sites, Board members
met employees involved in a
variety of different tasks from
mining, Health & Safety, plant
management, lean process
management, quality
assessment, supply chain
management, production,
capex investments as well as
works council representatives.
They also met cultural
appreciate the dynamics of
the region and have first-hand
experience of stakeholder
priorities. In April 2025, the
Board’s intention is to visit the
China region and understand
more about the market forces
and geopolitical dynamics.
Other site visits by certain
Directors took place throughout
2024 and reports were provided
to the rest of the Board at the
following Board meetings to
share learnings and perspectives
from the experiences:
• One NED travelled again to
India to support and facilitate
workshops on female
empowerment and safety,
emphasising the seriousness
of the topic at the highest
level of the Group.
• Three NEDs visited
Rotterdam for supply chain
and procurement deep dives
with the Group’s specialists.
• The CEO met with the
President of Estonia to
discuss ESG matters.
• NEDs with specific experience
in digital initiatives and ERP
implementation projects
took time to directly discuss
with management, suggesting
useful perspectives and
routes for progress to deliver
outcomes for employees
and customers.
• Directors, including the
CSC, visited the recycling
site at Siegen, Germany,
to hear progress as well
as understanding the culture
of the workforce of our Joint
Venture there.
champions and had the
opportunity to observe working
practices, with a focus on Health
& Safety, addressing workers in
town halls about the importance
of following the required safety
practices and processes to
deliver improved performance
and delivering a culture which
allowed for concerns to be
raised and challenges to unsafe
practices. The Non-Executive
Directors of RHI Magnesita India
Ltd met the Group Board and
could discuss relevant shared
topics and NEDs could share
their impressions of the region.
Feedback on the overall trip
was very positive and the
experience was extremely
valuable for the Board to
189RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Customer
focus
Innovative
We live innovation to create
value for our customers, by
being bold and providing
the best digital and
sustainable solutions.
Performing
Our high performance is rooted
in accountability and responsibility.
We are a reliable partner that
decides and delivers based
on our customers' needs.
Pragmatic
We act pragmatically
to enable fast and simple
collaboration across functions
and regions to serve
our customers best.
Open
Our open mindset and
transparent way of working is
flanked by a diverse, respectful
and friendly business
environment, where we care
about our customers
and colleagues.
Culture and purpose
Cultural values support the Company purpose,
underpinning the Company’s engagement with
stakeholders, demonstrating the Company’s place
within our wider environment and society.
The Board took all available opportunities
in 2024 to engage with colleagues in
the business in order to observe and
understand the culture within the Company.
The Directors use the tools and inputs
described in this section to assess culture
and monitor progress and outcomes
towards the stated desired culture.
Culture remains an integral element
of Board discussions and assessment of
successful outcomes, and the Board and
its Committees use many sources to assess
culture. Given that culture can arguably
best be described as “the way we do things
around here”, it is difficult to use quantitative
metrics that accurately communicate the
culture to the Board.
Nonetheless, inputs used by the Directors
to measure culture include whistleblowing
reports, Code of Conduct compliance
reports, talent assessment and succession
planning, Health & Safety reports,
responses to Internal Audit reports and the
corresponding outstanding actions, and
workforce remuneration. Policies reserved
for Board approval include the Code of
Conduct and the whistleblowing policy,
being foundational tools through which
to deliver the desired culture.
Directors engage regularly and directly
with senior management, which enables
their assessment of management culture,
being that which sets the tone from
the top of the organisation, in more
intangible ways. When receiving
presentations in meetings, the Board uses
these opportunities to seek input from
management, asking direct questions,
particularly of those at the levels below
EMT, focusing on how a team operated or
a region approached problems to broaden
their understanding. Observations of the
relationship and interaction between the
EMT and their reports can also inform the
understanding of cultural tone from the
top. Directors’ private meetings with
individual employees, the mentoring
sessions with identified talents and inputs
from third parties, for example dss+ on
safety leadership, will also assist with their
perception of the organisation’s culture and
whether it is the intended and desired
culture (as outlined below).
You can read more about RHI Magnesita’s
strategic framework, delivered by our culture
on page 20 and 21.
CORPORATE GOVERNANCE REPORT CONTINUED
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024190
The Matters Reserved to the Board include
monitoring Group culture and workforce
policies and practices to ensure these are
aligned with the purpose, values and
strategy of the Group, and seeking
assurance that management have taken
corrective action where this is not the case.
In 2024, the Directors have discussed with
management what corrective action has
been proposed to improve culture in
response to reports from compliance
investigations and to improve health and
safety culture following serious incidents
and the fatalities (which are reported in
our H&S statistics on page 22). This has
included: revised processes, including Life
Saving rules and operational improvements
to develop better safety leadership at all
levels; direct engagement with individual
regional leaders to communicate
expectations and assess their safety
appreciation; and open and transparent
communication from EMT members with
the global senior leadership team to prompt
reflection and consideration of individuals’
actions and their contribution to the
corporate culture. Directors emphasised to
the EMT the importance of communicating
the empathy they feel around safety
to ensure, and enhance, the successful
delivery of a zero-harm environment.
In early 2024, the EMT embarked on
a programme to assess the Company’s
culture, purpose and vision, through a series
of workshops led by the Cultural Champions
which heard from over 3,000 colleagues
across all regions at different levels in the
organisation. The Board also provided input
into the refreshment of the values, and
these will be relaunched in 2025.
Given the significant transformational
projects and ongoing safety transformation
work, management and the Board were
prompted to consider how culture
contributed to root causes of issues and
how culture would contribute as part of the
solution. The CSC specifically considers
behaviour and culture as being key tools
to deliver successful Health & Safety
campaigns and continues to guide
management in recognising the behaviours
which contribute to unsafe situations. On
business-critical projects, the EMT ensured
the Board had face time with colleagues
working directly on key matters who could
communicate and demonstrate the culture
of the Company, as well as how this
facilitated relationships with external
parties such as key consultancy partners.
The Board met cultural champions in India,
and the Board’s interaction with the local
Regional President and his team gave
helpful context to their understanding of
the local culture as well as the remaining
journey to a strong and consistent culture,
given the Company continues to grow
through acquisitions.
Culture continues to be a central part of
performance evaluations for employees
whereby they assessed the extent to which
they are living the values, are a cultural
influencer or are promoting the culture.
Given the multiple global locations of
operations, local culture is also discussed
by the Board when considering the impact
and likely success of initiatives, particularly
when planning the integration of newly
acquired businesses. In the most serious
of cases, breaches of the Code of Conduct
and failure to abide by the cultural values
has led to dismissal. The Internal Audit
reports to the Audit & Compliance
Committee demonstrate that organisational
culture is a key factor in achieving
compliant behaviours which protect the
business and its employees from potential
harm. Where there are improvements to
be made, culture is a focus to enable
successful implementation.
When considering key strategic decisions,
and in 2024 this included the acquisition
of Resco Group and the transfer of the
organisation’s shared services to
Capgemini, the Board closely considered
the cultural fit between these organisations
and RHI Magnesita to assess the likely
success of the proposals from management.
The Board heard specific details from
management based on, multiple personal
interactions, on workforce policies and
approaches, and also engagement with
external parties who had interacted with
the specific organisation. When assessing
the risks of the strategic decision in
question, management had recognised
culture and leadership style as part of
the execution factors and decided on
mitigating actions accordingly. The cultural
fit, combined with the additional mitigating
actions, supported the Board’s decisions
to proceed and has set management
up to deliver successful outcomes.
The Board continues to consider how best
to effectively measure and assess culture
at Board level. The key cultural themes
(page 190) determine the actions of the
Company and specifically feed into
performance reviews across the Group,
succession planning and risk management.
The Board looks forward to the EMT’s
delivery of refreshed cultural values,
as outlined on page 20, in 2025.
CORPORATE GOVERNANCE REPORT CONTINUED
191RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Whistleblowing
Potential concerns about ethical
misconduct or any compliance matters
can be reported by all stakeholders (both
internal and external) to an independently
operated, confidential, and anonymous
whistleblowing hotline, available in areas
where the Company operates as well as
other locations, in several languages.
Contact details are advertised and are
available externally on the Company’s
website. In addition to the hotline,
whistleblowing reports can also be
submitted via other channels, such as
to a dedicated email address. All reports
are assessed by the Internal Audit, Risk
& Compliance team and then addressed
on a case-by-case basis.
The Group’s whistleblowing policy (the
“Reporting and Investigation of Misconduct
Policy”) was reviewed in the course of 2024
for Board approval with changes required
under various EU laws, particularly the
German Supply Chain Act 2023. The Audit
& Compliance Committee and Board
reviews the whistleblowing processes
and the reports arising from it, ensuring
there are arrangements in place for the
appropriate and independent investigation
of these cases and that follow-up actions
to address the root causes are completed.
The Directors remain fully comfortable
that this process has worked effectively
throughout 2024.
Board workforce engagement
RHI Magnesita’s governance structure has
always included ERDs, being a requirement
from the merger between RHI AG and
Magnesita in 2017 and reflects the
approach in continental Europe,
particularly the DACH region. The ERDs,
currently Michael Schwarz, Karin Garcia,
and Martin Kowatsch, have been appointed
by their respective works councils in line
with the Company’s Articles of Association,
and, with experience of the frontline of
operations, seek to directly represent the
views of the workforce at the highest level
of the Company.
The Board welcomes the different
viewpoints they provide, bringing increased
opportunity for challenge of the executive
management, and holding them to account
from a different perspective, being that
of the workforce who are on the ground.
The ERDs can attest to the impact of the
executives’ actions within the business
and contribute to the Board accordingly.
Not only do the ERDs have the ability to
challenge management, but they can also
contribute to the NEDs’ view of management
and understanding of the Company culture,
strengthening the independence the
NEDs have, through providing a broader
knowledge of the Company.
In 2024 this has enabled better outcomes
for employees and the business through
cooperation and constructive challenge
by ERDs of management’s plan and actions
to outsource the shared services to
Capgemini, leading to a smoother journey
and improvements for employees in line
with the Company’s values of being open
and respectful. Discussions to close
Mainzlar were also improved in quality
through constructive engagement with
ERDs, leading to a very strong social plan
for affected employees which recognised
the uncertainty of the decision making
process and the impact on the community.
The information and discussions at Board
meetings helps the ERDs’ support of
the workforce and provides a mutually
beneficial link between colleagues
and the Board.
The effectiveness of this approach to
workforce engagement is considered from
time to time by the Directors.
You can read more about our stakeholder
engagement on pages 26 to 31.
CORPORATE GOVERNANCE REPORT CONTINUED
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024192
Board effectiveness
Board performance review
The findings of the 2023 Board review
were that the Board continued to operate
effectively and that there was positive
progress and improvement from prior years
in dynamics, strategic focus and identified
areas for improvement which can be found
on page 201 in the Nomination &
Governance Committee report.
The 2024 review will be undertaken in Q1
2025 and will be reported on in our 2025
Annual Report. The details of the review
and the outcome of 2023’s review can
be found on page 201 in the Nomination
& Governance Committee report.
Time commitment
On appointment, and each subsequent
year, NEDs are asked to assess if they have
sufficient time to devote to the Company’s
affairs. The Nomination & Governance
Committee considers, and, where thought
fit, approves, any additional external
commitments, and the Board is advised of
any changes. You can read more about the
process to consider and approve external
appointments on page 201. In early 2024
the Board considered the sustained
increased time required by the Company
from the NEDs and the Nomination &
Governance Committee agreed that the
time stated in the letters of appointment
should be adjusted. You can read more
on this on page 200.
The Board is satisfied that, having
considered the demands of the external
appointments of each NED and the time
requirements from the Company, all NEDs
standing for re-election at the upcoming
AGM are contributing effectively to the
operation of the Board.
Information and support
for Directors
There is an established procedure for
Directors to seek independent professional
advice in the furtherance of their duties
if they consider this necessary.
The Company maintains Directors’ and
Officers’ liability insurance, which provides
appropriate cover for legal action brought
against its Directors. In line with Dutch best
practice and corporate law, at each AGM
there is a resolution to release the Directors
from liability for the exercise of their
respective duties during the financial year.
Training sessions were delivered to the
Board Directors throughout 2024 on topics
such as macroeconomic and geopolitical
factors, and how they would impact on
the business and markets. They received
briefings from specialists in matters such
as developments in global trade patterns,
geopolitics and population demographics,
Artificial Intelligence, cost of capital and
associated trends, sustainability
innovations and regional developments in
decarbonisation through ultra-high-voltage
electricity transmission. These briefings
prompted effective consideration of
management’s scenario planning and
modelling and steered the course of
management actions.
In order to build and increase the NEDs’
appreciation and understanding of the
Group’s people, businesses, and markets,
senior managers meet throughout the year
with NEDs, individually or as a group, to
brief them and answer questions they may
have on certain points. Additional informal
information-sharing sessions took place
on areas such as the digital transformation
work, pricing approaches, specific budget
matters and M&A progress, which have
helped NEDs to develop in knowledge
and understanding to be able to assess
the proposals by management.
The Company Secretary circulates relevant
training resources and briefings on topics
such as Artificial Intelligence, cyber security,
risk analysis and corporate governance
matters. Directors also maintain their own
individual training schedule based on their
known needs and interests.
CORPORATE GOVERNANCE REPORT CONTINUED
193RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Recruitment
and induction
Board appointment
Per the Articles of Association, Directors,
excluding ERDs, are appointed by the
General Meeting by majority vote, regardless
of represented capital. The Board nominates
candidates for these appointments.
A Director may also be appointed by the
General Meeting through a resolution that
achieves an absolute majority of votes,
representing over one-third of the
Company’s issued capital.
NEDs (excluding ERDs) are nominated for
a three-year term, subject to satisfactory
performance and annual reappointment by
the General Meeting. ERDs are appointed
for a term not exceeding four years. Each
Director’s term (excluding ERDs) concludes
at the AGM in the year following their
appointment. Directors may be reappointed
for unlimited terms, with the Board
considering NEDs (excluding ERDs) for a
third term based on Board independence,
stakeholder views, and relevant Corporate
Governance Codes.
The General Meeting may suspend
or remove a Director at any time through
a resolution, as outlined in the Articles
of Association.
Induction
Upon joining the Board, new Directors
are offered a comprehensive and tailored
induction programme covering the value
chain, with visits to key sites and meetings
with senior managers and other colleagues
or advisers as required. New members
to Committees are provided with the
opportunity for a full and detailed
induction, even if they are existing
members of the Board.
In advance of her formal appointment as a
NED at the 2024 AGM, Katarina Lindström
undertook an induction programme which
covered the Company’s strategy, the
details of the products it makes and where,
key market factors, the details of the
Operations department, supply chain
processes, recent M&A and strategic
considerations, finance, and balance sheet
management. She was fully briefed by
each EMT member about their area, the
priorities and challenges and key team
members. She also met with the Company
Secretary to discuss duties of a Director
of a dual-listed company, disclosure
requirements and corporate governance
matters pertinent to the Company as well
as Board processes and procedures.
Katarina has attended a number of the
Committees to continue to broaden her
understanding of the Group and Board
processes. Furthermore she undertook
a comprehensive site visit to the Group’s
plants and mines in Austria with the CTO
and has had meetings with specialist
colleagues to understand RHI Magnesita
processes relating to product development,
supply chain and operations.
Conflicts of interest
Dutch law prohibits a director from
participating in Board discussions and
decisions if they have a direct or indirect
personal interest conflicting with the
Company’s interests. Pursuant to the
Articles of Association and Board Rules,
the Board mandates that each Director
declares any personal conflict of interest
to the other Directors. At the start of each
Board meeting, Directors are reminded to
declare any potential conflicts. There are
no transactions to report under best
practice provision 2.7.4 DCGC.
CORPORATE GOVERNANCE REPORT CONTINUED
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024194
Share capital and
shareholdings
Capital structure and rights of
shareholders and depositary
interest holders
The Company has one class of shares:
ordinary shares. As of 31 December 2024,
the issued capital comprised 49,477,705
ordinary shares, each carrying one vote.
Shares held by the Company carry no
voting rights. Depositary interests, issued
with the Company’s cooperation, are
settled electronically through CREST,
with beneficial ownership held by the
depositary interest holders and legal title
by Euroclear Nederland.
General Meetings are announced on the
Company’s website and via regulatory news
service (RNS), with registered shareholders
and depositary interest holders notified
42 days in advance. All shareholders and
depositary interest holders can attend
General Meetings; they must register
to exercise their meeting rights and can
attend in person, vote by proxy, or grant
a power of attorney.
Resolutions require an absolute majority
of votes to succeed, without a quorum
unless specified otherwise. Shareholders
or depositary interest holders representing
at least 3% of the issued capital can propose
agenda items, within legal boundaries.
The General Meeting can resolve to amend
the Articles of Association upon the
Board’s proposal.
Dutch law sets the record date for voting
rights and shareholder meeting participation
28 days before the meeting. Shareholders
and depositary interest holders registered
on this date can exercise their rights, even
if they sell their shares afterwards.
There are no restrictions on voting and
profit rights, no securities with special
control rights, and no restrictions on the
transfer of shares or depositary receipts.
Major shareholdings
The Dutch Financial Supervision Act
mandates that institutions and individuals
with a (potential) capital and/or voting
interest of 3% or more in the Company
disclose their interests to the Dutch
Authority for the Financial Markets (“AFM”).
Filings must be updated only if interests
cross the 3% or subsequent 5% thresholds.
These disclosures are processed by the AFM
and made publicly available at www.afm.nl.
The table of shareholdings includes interests
registered with the AFM as of 24 February
2025, or the most recent information
provided directly by shareholders.
The percentages exclude the Company’s
treasury shares.
The stated interests may not reflect
current holdings, as they are based on
the number of shares owned at the time
of notification and are not adjusted for
any subsequent transactions.
In May 2023, Rhône Capital, through
Ignite Luxembourg Holdings S.à r.l., initiated
a Partial Offer for Shares and became a
major shareholder of the Company on
13 December 2023, holding just under 20%
of the Company’s shares. Since then they
notified of an increase to their shareholding
in summer 2024 and are next required to
update authorities when the threshold
of 25% is reached.
Shareholder Number of shares
Total % of issued and
outstanding capital
MSP Stiftung 13,333,340 28.25%
Rhône Capital L.L.C. 9,900,868 20.98%
FMR LLC 2,737,126 5.80%
E. Prinzessin zu Sayn-Wittgenstein-Berleburg 2,214,537 4.69%
K.A. Winterstein 2,088,461 4.42%
FEWI Beteiligungsgesellschaft mbH 1,891,292 4.01%
1. These percentages have been calculated using the number of shares notified by the relevant shareholder
to the AFM or the Company and the current issued and outstanding share capital of the Company (and
therefore excluding treasury shares). It is noted that for purposes of the Dutch Financial Supervision Act,
the calculation must be made on the basis of the issued share capital, and therefore including treasury
shares, and hence the AFM’s register will refer to other percentages.
2. Per the AFM register these shares are held directly by MSP Stiftung. MSP Stiftung is a foundation under
Liechtenstein law, whose founder is Mag. Martin Schlaff, a related party connected to David Schlaff.
3. Per the AFM register, these shares are held via Ignite Luxembourg Holdings S.à r.l.
4. Per the AFM register, 2,542,126 shares are held via Fidelity Management & Research Company LLC, FIAM
LLC, Fidelity Institutional Asset Management Trust Company, Fidelity Management Trust Company, and
FMR Investment Management (UK) Limited, and 195,000 shares are held via Fidelity Management &
Research Company LLC.
5. Ms. E. Prinzessin zu Sayn-Wittgenstein-Berleburg, is a related party to the Company as the spouse
of Stanislaus Prinz zu Sayn-Wittgenstein-Berleburg, a Non-Executive Director. According to the AFM
register, 2,088,461 of these shares are held indirectly via Chestnut Beteiligungsgesellschaft mbH
(Chestnut). According to information received by the Company, the additional shares were acquired after
the AFM filing was made and did not require further notification. Ms. E. Sayn-Wittgenstein made an
agreement with Mr. K. A. Winterstein which allows Chestnut to exercise the voting rights of Silver
Beteiligungsgesellschaft mbH (Silver) in the Company. Ms. Sayn-Wittgenstein and Mr. K.A. Winterstein
share a family relationship.
6. According to the AFM register, the shares are held indirectly via Silver. The Company has been
informed that Mr. Winterstein and Ms. Sayn-Wittgenstein made an agreement which allows Chestnut
to exercise the voting rights of Silver in the Company. Ms. Sayn-Wittgenstein and Mr. Winterstein share
a family relationship.
7. The Company has been informed that FEWI Beteiligungsgesellschaft mbH is owned
by Ms. Sayn-Wittgenstein and Mr Winterstein in equal proportions.
8. The Company currently holds 2,280,436 (4.61%) of its own shares in Treasury as a result of the buybacks
undertaken during the period 2019 to 2021. Shares held in Treasury cannot be voted.
CORPORATE GOVERNANCE REPORT CONTINUED
195RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Transactions with
majority shareholders
There have been no transactions between
the Company and MSP Stiftung, or between
the Company and Rhône Capital within the
meaning of best practice provision 2.7.5 of
the DCGC. Since there are no other legal
or natural persons who hold at least 10%
of the shares in the capital of the Company,
no declaration in accordance with best
practice provision 2.7.5 of the DCGC has
to be published.
Share authorities
Shares may be issued by a General
Meeting or the Board if designated by the
General Meeting, as outlined in the Articles
of Association. The Company must report
each share issuance to the Dutch Trade
Register on a quarterly basis.
The Board generally seeks approval
for issuing and repurchasing shares
at each AGM, with resolutions available
on our website. The last share buybacks
occurred in 2021 and the 2024 AGM
authority remains at 10% of issued capital,
excluding shares held in Treasury.
As of 31 December 2024, the Company
held 2,281,769 ordinary shares in Treasury,
representing 4.61% of issued share capital.
The Company updates when there are
changes to this number by way of a Total
Voting Rights RNS, made available on the
Company’s website and by updates to the
AFM in Netherlands when the Company’s
holding crosses the regulatory thresholds.
These shares may be used for Long-Term
Incentive Plan (LTIP) awards or cancelled,
subject to shareholder approval. More details
are available in the Remuneration Report.
In 2024, the Board reviewed the
Company’s capital allocation, which
included analysis of historic share buybacks
and the allocation of capital to dividends.
Whilst there have been no buybacks since
2021, the Board continues to keep under
review share buyback programmes
and/or tender offers to enhance shareholder
returns, considering market conditions and
capital allocation priorities.
Shares may be issued by a General
Meeting or the Board if designated by the
General Meeting, as outlined in the Articles
of Association. The Company must report
each share issuance to the Dutch Trade
Register on a quarterly basis.
Stock Exchange Listings
The Company 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).
The Company has a secondary listing on
the Vienna Stock Exchange (Wiener Börse)
in the prime market sector. This has
increased the Company’s visibility and
accessibility to its Austrian and European
investor base and does not have an impact
on the Company’s listing in London.
As the Company already declares
compliance with a Corporate Governance
Code in an EU Member State, the DCGC,
it is not required to report compliance with
the Austrian Corporate Governance Code.
The Company’s compliance with the
ongoing obligations of the Wiener Börse
can be found on the Company’s website
and within this report.
Outline of anti-takeover measures
No anti-takeover measures have been
implemented. The Company acquired
a secondary listing in 2019 on the Wiener
Börse to extend regulatory protections to
its shareholders, which could have been
lost as a result of the UK’s exit from the EU.
Austria has become the Company’s sole
host member state, and the Netherlands
continues to be the Company’s home
member state.
The main effect of this is that the Company
notifies disclosures, such as share dealing,
to each of the three authorities in the UK,
the Netherlands and Austria. The Company
complies with the relevant corporate and
listing regulations across all three
jurisdictions. The Company’s governance
structure continues to be primarily derived
from its primary listing status in the UK,
although there are minor areas in which
regulations in other jurisdictions take
precedence.
CORPORATE GOVERNANCE REPORT CONTINUED
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024196
Code compliance
Compliance with the Dutch
Corporate Governance Code 2022
(“DCGC”) and the UK Corporate
Governance Code 2018 (“UKCGC”)
The Board has applied the principles of,
complies with and intends to continue to
comply with the provisions of both the DCGC
and the UKCGC, save in respect of the
exceptions outlined below accompanied
by our explanations.
The Company does not comply with
Provisions 9, 19 and 24, and reports partial
compliance with Provisions 15, 40 and 41 of
the UKCGC. The Company does not comply
with best practice provision 2.2.2. of the
DCGC but is comfortable it is in compliance
with the remainder of the DCGC.
You can find the DCGC at www.mccg.nl
and the UKCGC at www.frc.org.uk.
Following publication by the UK Financial
Reporting Council in January 2024 of an
updated UK Corporate Governance Code,
the Board has been preparing for
implementation and will report on its
application of the updated Code in next
year’s report.
Deviations from the UK Corporate
Governance Code in 2024
Provision 9 and 19
Provision 9 states that the Chair of the Board
should be independent on appointment.
The Chair was not considered independent
on appointment, having served for more
than nine years (including time on the Board
of RHI AG prior to the merger with
Magnesita) by the time he became Chair.
The Chair’s length of service also means the
Company is not compliant with Provision 19.
The Board continues to see the value
that Herbert Cordt brings to the Company,
being most notably continuity of corporate
memory, which contextualises, and drives
focus on, operational performance
improvements through detailed
organisational and business knowledge.
Provision 15
Provision 15 states that the Board should
give prior approval to additional external
appointments. Given the size of the Board
and schedule of meetings, the Board has
delegated authority to the Nomination
& Governance Committee to approve the
additional external appointments of its
Directors. The Nomination & Governance
Committee considers proposed
appointments, with the support of the
Company Secretary, to assess for conflicts
of interest and overboarding. The Board
is comfortable this provides oversight and
governance, whilst providing a flexible and
responsive approach for our Directors.
Provision 24
Provision 24 envisages that all members
of an Audit Committee will be independent
Non-Executive Directors. Wolfgang
Ruttenstorfer is not deemed to be
independent under the criteria outlined
in the UKCGC, as a result of his time on
the Board, which includes his role on the
RHI AG Supervisory Board from 2012.
However, the Board considers that
Wolfgang is independent in character and
judgement and that it continues to benefit
greatly from his financial experience, the
continuity he provides, his challenge to
management using experience from the
past, his detailed consideration of business
cases, and ingrained understanding of
the refractory business. He contributes
diligently and wisely to the Audit &
Compliance Committee, and as such,
Wolfgang will continue to be a member
of the Committee.
Provisions 40 and 41
Since the introduction of the current UKCGC
in 2018, the Company has taken steps in
order to be able to report compliance with
the principles and provisions relating to
remuneration. Following the publication
of FRC guidance in 2021 titled, “Improving
the quality of ‘comply or explain’ reporting”,
we report partial compliance with
Provisions 40 and 41, giving explanation
in the following paragraphs.
The Company benefits from employee
representation on the Board, and the Board
annually approves executive remuneration
on the recommendation of the Remuneration
Committee. This provides a mechanism
for our Employee Representative Directors
(“ERDs”) to understand and engage on behalf
of the workforce regarding the alignment of
executive remuneration with wider Company
pay policy and to provide feedback. As part
of their induction, the ERDs met with the
Chair of the Remuneration Committee,
which gave background to executive
remuneration and outlined the key matters
the Board are required to decide upon in
respect of remuneration.
Our remuneration policies and practices,
including our approach to salary increases
and annual bonus structure, are aligned
throughout the business. Given this
alignment, and the extant mechanism for
engagement with the ERDs, the Board is
comfortable with the existing approach and
does not consider it necessary to provide
any additional forms of engagement with
the workforce to explain how executive
remuneration aligns with wider Company
pay policy. The Remuneration Committee
will continue to keep this under review.
Deviations from the Dutch
Corporate Governance Code
in 2024
Best practice provision 2.2.2 of the
DCGC recommends that, on a one-tier
board, a Non-Executive Director should
be appointed for a period of four years.
The appointment of the NEDs (other than
ERDs) has been made on the basis of
nominations for three-year terms, subject
to performance and annual re-election at
the AGM, which is consistent with UK listed
company practice. The Board feels that it
does not compromise the spirit of the
DCGC provision.
CORPORATE GOVERNANCE REPORT CONTINUED
197RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
UK Listing Rules and Disclosure & Transparency information
Certain information is required to be published by the UK Listing Rule, LR 6.6.1 R,
and UK DTR 4.1.11 and this information can be found in the Annual Report & Accounts
as set out in the table (below):
Item Location in this Annual Report
1. Interest capitalised Refer to Note 18
2. Publication of unaudited financial information N/A
3. Details of long-term incentive schemes Pages 214 - 230
4. Waiver of emoluments by a Director Page 223
5. Waiver of future emoluments by a Director N/A
6. Non pre-emptive issues of equity for cash N/A
7. Item (6) in relation to major subsidiary undertakings N/A
8. Parent participation in a placing by a listed subsidiary N/A
9. Contracts of significance N/A
10. Provision of services by a controlling shareholder N/A
11. Shareholder waiver of dividends N/A
12. Shareholder waiver of future dividends N/A
13. Agreements with controlling shareholders N/A
14. Information on any branches of the issuer Pages 302 and 308
15. Own shares N/A
16. Financial instruments per 4.1.11 DTR Refer to Note 36
1. Details of a non-remunerated service agreement with a related party and significant shareholder
can be found under Note 41.
Corporate governance declaration
In complying with the requirements of the
DCGC, the Company publishes this
corporate governance statement including
information relating to its compliance with
the DCGC, including a further explanation
of the Company’s Board Diversity Policy
and the way in which it is implemented in
practice. The information required to be
included in this statement (which also
fulfils UK reporting requirements) can be
found in the following sections and pages
of this Annual Report and are deemed to be
included and repeated in this statement:
• the information concerning compliance
with the DCGC can be found on
page 197;
• the information concerning the main
features of the Company’s internal
risk management and control systems
relating to the financial reporting process
can be found on pages 51 and 52;
• the information regarding the
functioning of the General Meeting
and its main authorities, and the rights
of the Company’s shareholders and
holders of depositary interests in respect
of shares in the Company and how they
can be exercised can be found on
pages 195, 196 and 311;
• the information regarding the
composition and functioning of the
Board and its Committees can be found
on pages 180 to 181;
• the Board Diversity Policy with regard
to the composition of the Board and its
Committees, can be found on page 201;
• the information concerning the disclosure
of the following items, where they exist,
may be found on pages 183 to 198:
• participations in the Company for
which a disclosure obligation exists;
• special control rights attached to
shares and the name of the person
entitled to such rights;
• any limitation of voting rights,
deadlines for exercising voting rights
and the issue of depository interests
for shares with the cooperation of
the Company;
• the regulations in respect of
the appointment and dismissal
of Executive Directors and NEDs
and amendments to the Articles
of Association;
• the powers of the Board, in particular
to issue shares and to acquire own
shares by the Company; and
• the number of shares without voting
rights and the number of shares that
do not give any, or only a limited, right
to share in the profits or reserves of
the Company, with an indication of
the powers which they confer.
CORPORATE GOVERNANCE REPORT CONTINUED
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024198
Statement of Directors’
responsibilities
The Directors are responsible for
preparing the Company’s Annual Report.
The Company’s Annual Report comprises,
among others, the Strategic Report, the
Governance Report, and the Consolidated
and Company Financial Statements.
The information reported in the Strategic
Report and the Governance Report
together represent the Directors’ Report
(‘Bestuurverslag’) within the meaning
of article 2:391 of the Dutch Civil Code.
The Directors are responsible for preparing
the Annual Report for each financial year
in accordance with applicable law and
regulations, including in accordance with
IFRS Accounting Standards as adopted
in the European Union and the provisions
of Book 9 of Part 2 of the Dutch Civil Code.
The Directors must not approve the Annual
Report unless they are satisfied that it gives
a true and fair view of the state of affairs of
the Company and its consolidated Group
companies, and of the profit or loss of the
Group for that period. In preparing the
Annual Report, the Directors are required to:
a) select suitable accounting policies
and then apply them consistently;
b) make judgements and accounting
estimates that are reasonable
and prudent;
c) state whether applicable IFRS
Accounting Standards as adopted by
the European Union and the relevant
provisions of the Dutch Civil Code have
been followed, subject to any material
departures disclosed and explained
in the Annual Report; and
d) prepare the Annual Report on the going
concern basis, unless it is inappropriate
to presume that the Company will
continue in business.
The Directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the
Company’s transactions and disclose,
with reasonable accuracy at any time,
the financial position of the Company and
the Group, and enable them to ensure that
the Annual Report complies with applicable
law and, as regards the Consolidated
Financial Statements, the IAS Regulation.
They are also responsible for safeguarding
the assets of the Company and the Group
and hence for taking reasonable steps for
the prevention and detection of fraud and
other irregularities.
Each of the Directors, whose names
and functions are listed on page 310
confirm that, to the best of their knowledge:
• the Company’s Financial Statements
and the Consolidated Financial
Statements, which have been prepared
in accordance with IFRS Accounting
Standards as adopted by the European
Union and the relevant provisions of
the Dutch Civil Code, give a true and
fair view of the assets, liabilities, financial
position and profit or loss of the Group;
• the Annual Report gives a true and fair
view on the situation on the balance sheet
date, the development and performance
of the business and the position of the
Company and its consolidated Group
companies and includes a description
of the principal risks and uncertainties
that they face; and
• having taken all matters considered by
the Board and brought to the attention
of the Board during the financial year
into account, the Directors consider
that the Annual Report, taken as a whole
is fair, balanced and understandable.
The Directors believe that the
disclosures set out in the Annual Report
provide the information necessary for
shareholders to assess the Company’s
position, performance, business model
and strategy.
After conducting a review of management’s
analysis, the Directors have reasonable
expectation that the Group has adequate
resources to continue in operational
existence for the foreseeable future and
for the period of at least twelve months
from the date of approval of the financial
statements. For this reason, the Directors
consider it appropriate to adopt the going
concern basis in preparing the Company’s
Financial Statements and the Consolidated
Financial Statements. Directors are also
required to provide a broader assessment
of viability over a longer period which can be
found on page 53 (the “Viability statement”)
of the integrated report and accounts.
After consideration of the above matters,
the Board approved and signed on
26 February 2025 as follows:
The Company Financial Statements on
pages 300 to 301, and the Consolidated
Financial Statements on page 232 to 237.
There are no special events that should
be taken into account for these Company
Financial Statements and Consolidated
Financial Statements.
CORPORATE GOVERNANCE REPORT CONTINUED
199RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
NOMINATION & GOVERNANCE COMMITTEE REPORT
Committee purpose, roles
and responsibilities
The Committee’s purpose is to oversee
the Company’s corporate governance
arrangements and ensure that the Company
has the competencies and depth of skills
within the Board and senior executives to
meet the demands and aspirations of a
global business, supporting the development
of the Group’s strategy, whilst paying
particular attention to independence and
diversity. The Company Secretary acts
as Secretary to the Committee.
The Committee considers and keeps under
review the structure, size and composition
(including the skills, knowledge, experience
and diversity) of the Board and its
Committees, recommending any changes
to the Board. Any recruitment of new
Directors is led by the Committee.
Succession planning, involving discussions
with Board members, is a key part of
identifying the character and timing of
future roles on the Board. The Committee
reviews the time dedicated by the NEDs
in the course of a year and on behalf of the
Board, considers any proposed external
appointments, ensuring that sufficient
time is given by the NEDs to RHI Magnesita.
The Committee reviews the corporate
governance of the Company and its
compliance level with the UK and Dutch
Corporate Governance Codes.
More detail on the duties of the Committee
can be found in its Terms of Reference
on the corporate governance section
of our website.
Activities in 2024
The Committee considered the following
matters in 2024:
Governance
The Company reports against two corporate
governance codes, in the Netherlands and
the UK, and there are an increasing number
of matters for consideration in respect of
corporate governance. The Committee
continues to receive the details of the
Company’s compliance with the DCGC,
given the first year of application was 2023,
and the Committee may revisit aspects as
it deems necessary to improve disclosure.
The Committee and the Board have
considered the updated UK Corporate
Governance Code and, in the same way as
with the DCGC, the Committee has been
overseeing the Company’s actions to apply
the updated UKGC in the best interests of
the Company and evidence compliance,
on behalf of the Board.
The Committee received a briefing on
the revised UK Listing Rules and updated
UK Corporate Governance Code and
considered how these may affect the
Company’s future approach to disclosure.
NED role scope and time
commitment review
As reported in our 2023 report, in early
2024 the Committee undertook a detailed
review of the scope and time required of
the NEDs by the Group and resolved to
update the appointment letters to reflect
the expanded business and governance
since listing as well as sustained increase
of scope and time required owing to factors
including ongoing macroeconomic
volatility, increased M&A activity, increasing
the complexity of Company operations,
risk assessment and customer offering,
requiring careful oversight. These themes
have continued into 2024, most notably
with our acquisition of Resco Group.
In respect of 2024, the Committee
considered, as it does annually, the time
required from the NEDs to fulfil their duties
satisfactorily, which covers meetings,
required preparation time and any
additional time spent outside of meetings
in discussion with management. Under
the updated time now required in the NEDs’
appointment terms, no NED has raised
significant concerns in respect of 2024.
On recommendation from the Committee,
the Board is comfortable that none of the
Directors standing for re-election in the
2025 AGM are compromised in the time
they can dedicate to the Company.
Herbert Cordt
Chair of the Committee
“ We continue to monitor and
assess Board composition
within the setting of our
business priorities, the
expectations of our
stakeholders, and future
economic challenges.”
Committee members
and meeting attendance
Member
Attendance
in 2024
Member
since
Herbert Cordt
(Chair) 3/3 October 2017
John Ramsay 3/3 October 2020
Karl Sevelda 3/3 June 2021
Effective consideration of
the required governance,
knowledge, skills and attributes
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024200
NOMINATION & GOVERNANCE COMMITTEE REPORT CONTINUED
External appointments
The Committee reviews external
appointments held or proposed to be held
by Directors, referencing the views of
shareholders about the number and type
of appointments which can feasibly be held
by a Director and any potential for conflicts
of interest.
In 2024 the Committee considered
Marie-Hélène Ametsreiter’s appointment
to Erste Bank der österreichischen
Sparkassen AG (“Erste Bank”). As part of
its considerations the Committee reviewed
the relationship between the Group and
Erste Bank, seeking expert input from
relevant colleagues in RHI Magnesita,
and in light of Marie-Hélène’s other
appointments, assessed whether it was felt
she could continue to commit the required
time to RHI Magnesita.
Following due consideration of all
these aspects, the Committee was very
comfortable that Marie-Hélène would
continue to be able to meet her duties
to the Company and that there were no
conflicts of interest or aspects of a material
business relationship that would impinge
on either entities’ corporate governance.
Board performance review
In respect of 2023, in Q1 2024 the Board
completed a questionnaire covering
dynamics, performance of the Board and
its Committees, overall support provided
to the Directors, self-assessment of their
individual performance, and strategic
focus areas. The EMT also gave feedback
on their relationship and perception of
the Board’s performance.
The findings from this internal review were
that there was increased trust and improved
dynamics between the Board and EMT,
being a natural outcome of working
together over an extended period of time
and weathering challenges together, as
well as the result of recommended actions
from prior reviews. Relations between Board
members were felt to be constructive,
with opinions treated respectfully.
Business priorities were felt to be largely
aligned between the Board and EMT,
enabling the Company to be steered
effectively in coordinated fashion. The
Board’s composition in terms of skills and
balance was positively perceived, although
it was acknowledged it would need to be
considered afresh once more is known
about Rhône Capital’s communicated
expectations. Board members felt that
culture was well considered in discussions,
enabling better decision outcomes. Areas
identified for further improvement included
ensuring that management’s time and
resources were safeguarded to ensure
priorities could be delivered, whilst
ensuring the NEDs received the information
necessary to fulfil their duties to the
Company. As in many boards, the tailoring
of agendas, meeting logistics, and the
supporting papers to enable strategic
discussion could be improved. Generally
though the quality of Board papers and
discussion were generally felt to be of
a very high standard.
For the 2024 review, Directors will
undertake individual interviews with the
SID & Deputy Chair, supported by the
Company Secretary. The outcome will
be considered in April 2025.
Board diversity
Diversity is considered regularly, both
at Board level and within the organisation.
The focus has, and continues to be, on
gender diversity at the Board. Any future
appointments to the Board will identify
candidates by referring to the primary
factors of the skill and experience
needed by the Company at the time, the
expectation of shareholders, and the
benefits of diversity.
The Board Diversity Policy (available
here on our website) outlines an aspiration
of 45% female representation within the
Board, and also takes account of diversity
represented through an individual’s
background and ethnicity. This policy
is being implemented, when there are
opportunities arising from vacancies, by
tasking executive search firms to ensure
diverse candidates are found and ensuring
strong female representation on shortlists.
Following the Board’s focus on the
importance and benefits of gender diversity
in recent years, we are pleased to report
that, of the collective Board Committee
positions, 42% are held by women and
two of the Board’s Committees have a
female chair, Janet Ashdown. Committee
composition is considered carefully by
the Committee and extant Company
commitments, experience and skills are
considered when making changes.
Organisational diversity
Achieving the desired female representation
within senior management (being EMT and
their direct reports) in a sustained manner
has been challenging. As of 31 December
2024, the female representation in this
group was at 26%. The CSC considers
organisational diversity as part of its scope
and heard from the responsible People &
Culture leader on the action plan to reach
the strategic goal of 33% by 2025, and the
challenge expected to achieve it. Whilst it
remains a core consideration in succession
planning, and there have been various
successful initiatives ongoing in the
organisation such as executive-sponsored
female mentoring schemes and an increase
in female representation in the trainee
intake, insufficient progress has been made
to reach 33%.
Female Board members have mentored
young female leaders as part of a Group
wide mentoring programme which started
in January 2024. As part of this, they
supported the mentors throughout by
sharing experiences of mentoring, the
benefits it brings and ensuring colleagues
understood the focus and support that the
Board gives to such an initiative to develop
diversity. You can read about further steps
taken by the Group to improve diversity in
senior management and the organisation
as a whole on page 13.
The Committee and the Board will continue
to support the Company’s approach in
facilitating people development, ensuring
that talent, regardless of, amongst other
diversity characteristics, age, gender and
background, enjoys career progression
within the Group. Diversity of nationality,
culture and ethnicity are all important
factors to engender diversity of thought.
The Group operates in c.50 countries and,
at the time of writing, 11 nationalities are
represented in the senior management
team. Decisions are made in the Group
by groups of people who come from truly
different backgrounds and bring diverse
perspectives to the table. We are proud
that our regionalised structure is a natural
facilitator and foundation for diversity.
The Committee believes that the diversity
of nationalities and culture represented
amongst the Board, EMT and senior
management provides a diverse and global
perspective. More details on the Group’s
diversity and inclusion work can be found
on pages 20 and 21.
201RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
NOMINATION & GOVERNANCE COMMITTEE REPORT CONTINUED
Diversity Reporting
The Company has reported its diversity
data, namely on gender and ethnic diversity
in senior leadership, as follows in 2024:
• to the Sociaal-Economische Raad, as
required by Dutch law. As at 31 December
2024, there was 26% female leadership,
in a population of 50, of which 13 were
women and 37 were men;
• to the UK’s Parker Review whereby the
Company has continued to report the
data it holds on the EMT and the Board
of Directors to the Parker Review. The
Parker Review has confirmed that its
focus is on senior management working
in the UK. The Group does not have any
employees in this category in the UK
so has not reported any targets or
data accordingly; and
• UK’s FTSE Women Leaders Review and
against the UK’s Listing Rules on Diversity,
6.6.6R(9) to (11). In respect of both of
these data submissions, the Company’s
reported data (below and right) shows
the position as at our reference date
of 31 October 2024. This position was
unchanged as at 31 December 2024.
The two male Executive Directors are
included under the Board reporting.
As discussed in the Governance report,
the ERDs are appointed by the workforce,
and neither the Board nor shareholders play
any role in these appointments. Therefore,
the Board’s view is that it is inappropriate
to include the ERDs in any calculation of
Board diversity, unless stipulated by law.
UK Listing Rule target Company’s position Comment
At least 40% of the board
are women.
33%
(Target not yet met)
Our aspiration is to achieve 45% female representation, recognising that
it requires a careful and measured approach to accommodate Board attrition,
whilst maintaining the existing profile of desired skills and experience. Every
appointment to the Board since listing has been of a female candidate, reflecting
the commitment of the Company to finding suitably diverse candidates.
After a peak of 38% in 2022, resignations from the Board has meant this number
has decreased and the Committee will continue to focus on the benefits of
diversity when the next vacancy arises in order to reach the 45% aspiration.
At least one of the senior
board positions (Chair, Chief
Executive Officer (CEO),
Senior Independent Director
(SID) or Chief Financial
Officer (CFO)) is a woman.
0
(Target not yet met)
This is an area that, currently, would require sudden and significant change
and cannot be immediately implemented without disruption to the organisation.
The intention is to take this into consideration as part of succession planning.
We note that Janet Ashdown holds a position of particular seniority and
responsibility, as Chair of both the Corporate Sustainability Committee and
the Remuneration Committee.
At least one member of
the board is from a minority
ethnic background (which
is defined by reference to
categories recommended
by the UK Office for
National Statistics).
0
(Target not yet met)
The Board continues to take ethnic diversity into account when considering
appointments, as per its Diversity Policy, whilst noting it will continue to consider
diversity of the Board and the Company as a whole, based on our global footprint
and operations, in a way which is best aligned with our growth agenda. Being an
international company, we naturally reflect many different nationalities in the
Board and senior management. This is a valuable input to ensure different
cultures are represented within decision makers, warding against groupthink.
The Company has reported to the UK Government’s Parker Review in 2024.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024202
NOMINATION & GOVERNANCE COMMITTEE REPORT CONTINUED
Table 1: Reporting table on sex/gender representation
Number of
Board members
Percentage of
the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
Men 10 67% 4 2 50%
Women 5 33% 0 2 50%
Not specified/prefer not to say
Table 2: Reporting table on ethnicity representation
Number of
Board members
Percentage of
the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
White British or other White
(including minority - white groups) 13 87% 4 3 75%
Mixed/Multiple Ethnic Groups
Asian/Asian British 1 25%
Black/African/Caribbean/Black British
Other ethnic groups
Not specified/Prefer not to say 2 13%
Notes on data collection and the tables:
1. Data collection of the Board and the EMT was undertaken in 2022 and is undertaken subsequently when there are joiners.
2. The Board and EMT were provided with the categories above and asked to advise how they identified. This personal data has been collected once and it will
be up to the individuals to advise of any changes.
3. The two Executive Directors are included in the Board figures and not in the executive management column.
Succession planning
EMT succession planning
The Board Directors monitor the
development of the EMT and Regional
Presidents to ensure that there is a diverse
supply of senior executives and potential
future Executive Directors with appropriate
skills and experience. Individual Committees
play their role in this, for example the Audit
& Compliance Committee receives a report
on the Global Finance talent profile which
considers succession planning, and informal
interaction between Directors and senior
management aids the identification of
development focus areas.
Part of succession planning involves
assessing the skills and experience in
the organisation with an indication of
individuals’ expected time to develop to
the next level, and requirements in order
to achieve that progression, such as
experience of a different business function
or additional training. Diversity and cultural
fit is an established part of succession
planning, and management are encouraged
to incorporate measures to further generate
a diverse pipeline as well as develop the
desired culture.
Board succession planning
and composition
The Committee considers succession
planning for key roles on an ongoing basis,
by way of immediate and orderly succession.
The development of internal candidates
for executive roles is considered by the
Committee and the Board, along with the
wider assessment of talent and resources to
enable consideration of succession planning
in the organisation. Mapping of the skills
and experience needed for the roles is used
to consider the profile of candidates, their
level of readiness and areas for progression.
This is discussed with the EVP of People &
Culture to ensure the individuals receive
support and development accordingly.
On an ongoing basis, the Committee
considers the tenure of Directors with
reference to the retirement and resignation
profile, which can be found on the
Company website. In thinking about future
recruitment to the Board, the Committee
continues to monitor Directors’ skills and
experiences, as well as diversity, to
engender constructive debate and a varied
mix of ideas. The Board profile is published
on the Company website.
The membership of Board Committees can
be found on page 180. In 2024, there have
been no changes to Board Committee
composition. The Committee, in
conjunction with the Committee Chairs,
continues to keep the composition of the
Committees under review with reference
to the skills and expertise needed to reflect
the challenges that the Company faces.
Herbert Cordt
Chair of the Nomination & Governance
Committee
203RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Janet Ashdown
Chair of the Committee
“ The Committee promotes
a culture of sustainability
within the Group, in order to
deliver better performance
and sustained success”
Committee members
and meeting attendance
Member
Attendance
in 20241
Member
since
Janet Ashdown
(Chair) 3/3 June 2019
Marie-Hélène
Ametsreiter 3/3 June 2021
Stanislaus Prinz zu
Sayn-Wittgenstein 3/3 October 2022
1. The annual joint meeting of the Corporate
Sustainability Committee and Audit & Compliance
Committee was held in November 2024 in
addition to the above meetings.
CORPORATE SUSTAINABILITY COMMITTEE REPORT
Committee purpose, roles
and responsibilities
The Committee supports and advises
the Board, aiming to ensure the long-term
sustainability of the business and its
positive impact on communities where the
Group operates. The Committee promotes
a culture of sustainability within the Group,
in order to deliver better performance and
sustained success. It oversees risk
management related to Environmental,
Social and Governance (“ESG”) topics
including but not limited to health and
safety, environment, and socio-economic
development on behalf of the Board,
striving to minimise the Company’s
negative impacts on people and the
environment and to deliver benefits
for its various stakeholders.
More detail can be found in the Committee’s
Terms of Reference available here.
The Committee and executive
management together play a key role in
steering organisational initiatives towards
sustainable practices. The Chief Executive
Officer (“CEO”) assumes a central role,
owning the ESG agenda. The CEO has
responsibility for the implementation and
execution of the Company’s sustainability
strategy and is supported in this by the
Chief Technology Officer (“CTO”).
Activities in 2024
Health & Safety
Reviewed the root causes of two
fatalities in 2024 and the outcomes of the
investigations and actions of management
to improve safety.
Reviewed the dss+ Safety Culture
Assessment, including verbatim feedback
from shop-floor colleagues and assessment
of safety leadership.
Considered the dss+ recommendations
for improvements, setting a high priority
to engaging the entire workforce to improve
health and safety, particularly at newly
acquired sites. You can read more about
the dss+ work on page 29.
Discussed with management the new
organisational structure for Health & Safety
and where responsibility lies in the Group,
in the context of the regional structure.
Monitored RHI Magnesita’s Health & Safety
KPIs against the prior year, considering the
new proposed KPIs and shift to leading
from lagging indicators.
Monitored performance at operational
sites of both employees and contractors,
including a visit to recycling sites in
Weitefeld and Siegen, Germany, where
safety was a focus topic for discussion.
Environment
Reviewed progress against Sustainability
targets, including the CO emissions
intensity reduction targets.
Received reports on the Group’s
investment in and cooperation with MCi
Carbon, a technology provider specialising
in the mineralisation of CO emissions.
Noted the refreshed organisational approach
to recycling in the Group and the new project
set up to deliver structural and sustained
change to deliver strong outcomes.
Regularly reviewed progress in the Group’s
use of secondary raw materials, including
the status of recycling rates and
partnerships in various regions, particularly
considering the challenges of maintaining
progress with new assets acquired since
2021 and the higher target rate since the
early achievement of the original 10%
target in 2022.
A new roadmap for
Health & Safety
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024204
CORPORATE SUSTAINABILITY COMMITTEE REPORT CONTINUED
Received reports on innovative processing
techniques to enhance quality and recovery
in order to continue progress and achieve
the 15% target by 2025.
Undertook a site visit to the recycling joint
venture with Mireco to see these processing
techniques in action and understand more
about the developments in automated and
laser sorting and the commercial benefits
for customers, as well as RHI Magnesita.
On this visit the Committee discussed the
strategic outlook for further development
in this area and how further progress
could be made.
Communities
Noted the new reporting lines for
management of community relations.
Received an overview of RHI Magnesita’s
community relations investment across
regions and activity to develop and
maintain good local relationships.
Observed the intended areas of future spend,
as well as updates on local partnerships.
Noted management’s proposal to align
Group community spending targets with
the Indian regulatory requirements of 1%
of net profit over an average of the prior
three years.
Diversity, Equity & Inclusion
Received an overview of the status of
gender diversity within the organisation
and management’s actions to reach the
goal of 33% women in leadership positions
by 2025.
Received a report on the strategy
for Diversity, Equity & Inclusion in the
organisation and the initiatives to achieve
greater representation.
Sustainable Procurement
Received an overview of RHI Magnesita
supply chain due diligence that includes
the country-specific risk assessment tool,
EcoVadis supplier assessments, and on-site
supplier ESG audits and risk mitigation efforts.
Reviewed the EcoVadis Supplier
Assessment spend coverage, product
carbon footprint (“PCF”) data and the
planned approach in 2025.
Reviewed, endorsed and recommended for
the Board’s approval, the Modern Slavery
and California Transparency in Supply
Chains Act statement.
Sustainability Risks
Reviewed RHI Magnesita’s sustainability
risk assessment for 2024, noting the areas
of focus and the increased risks arising from
recent acquisitions which require some
time to meet the standards required, and
the insufficient safety standards in the base
business, evidenced by recent fatalities.
Considered the process for Double
Materiality Assessment assisted by EY
Denkstatt and the findings, as well as being
participants in this process to define the
risks and their materiality to the Group.
Governance
Received details on the new organisational
set up and approach for management of
ESG topics within RHI Magnesita.
Continued to consider legal obligations
and various reporting frameworks such as
the German Supply Chain Act, EU Corporate
Sustainability Reporting Directive (“CSRD”),
EU Taxonomy, Corporate Sustainability Due
Diligence Directive (“CSDDD”), especially
noting the relevant actions of management
to manage the Group’s compliance in an
effective and efficient manner.
Participated in the Double Materiality
Assessment and approved the Sustainability
Statement produced by management in
accordance with the European Sustainability
Reporting Standards (“ESRS”). As part of
the process to compile and approve this
report, the CSC shares the concerns raised
by management, as noted on page 7,
that the outcome of ESRS does not appear
to bring sufficient benefits for users of
sustainability data, when compared to the
considerable additional time and financial
burden imposed by the new regulations,
as expected to be implemented in the
Netherlands during 2025 with possible
retroactive application.
The CSC hopes that a constructive
feedback process can be carried out in 2025
to make improvements to the new reporting
standards, as indicated by the European
Commission’s ‘Competitiveness Compass’
and proposed Omnibus Directive. The CSC
supports management’s intention to actively
consult with the EU on these topics.
Received the Double Materiality findings,
prepared in accordance with ESRS, and
considered the 2030 Sustainability Targets.
Interacted regularly with the CEO, CTO,
Head of Investor Relations and Sustainability,
and other members of senior management
outside of formal meetings to engage on
matters arising, steer and guide activity and
ensure relevant topics were considered.
Noted the relevant output from the Board
performance review of 2023 to consider
improvements to the Committee and
particularly its reporting into the Board,
as well as consideration of the role the
Committee plays in safety performance.
Joint Committee meetings
As in prior years, the Committee held a
joint meeting with the Audit & Compliance
Committee to consider matters of overlap
in scope (the “Joint Committee”). The Joint
Committee was provided with an update on
risks and the materiality assessment per the
EU’s CSRD, as well as a regulatory update
covering key areas of ESG legislation which
would affect disclosure requirements and
sustainability data collection and analysis.
The Joint Committee approved
management’s recommendation to appoint
PricewaterhouseCoopers Accountants N.V.
to perform the limited assurance review of
the Group’s Sustainability Statement
in 2024.
External ESG ratings
The Committee acknowledged
RHI Magnesita’s strong ESG ratings
provided by independent analysts.
CDP: A-
EcoVadis: Gold
MSCI: AA
Sustainalytics: medium-risk exposure
Janet Ashdown
Chair of the Committee
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AUDIT & COMPLIANCE COMMITTEE REPORT
John Ramsay
Chair of the Committee
“ Guidance and oversight
to help management
develop more robust
internal controls”
Committee members
and meeting attendance
Member
Attendance
in 20241
Member
since
John Ramsay
(Chair) 5/5 October 2017
Jann Brown 5/5 June 2021
Wolfgang
Ruttenstorfer 5/5 October 2017
1. The annual joint meeting of the Corporate
Sustainability Committee and Audit & Compliance
Committee was held in November 2024,
in addition to the above meetings.
Committee purpose, roles
and responsibilities
The Committee monitors the effectiveness
of the Group’s corporate reporting, systems
of internal control and risk management
and the integrity and quality of the Group’s
external and internal audit processes.
The Committee’s key responsibilities
include but are not limited to:
Financial reporting
• advising the Board on whether, taken as
a whole, the reported financial information
is fair, balanced, and understandable
and provides the information necessary
for shareholders to assess RHI
Magnesita’s position and performance,
business model and strategy;
• reviewing the potential impact on
the consolidated financial statements
of the implementation of the Company’s
strategy, climate change and energy
transition work; and
• reviewing and discussing with
management the appropriateness
of judgements involving estimates,
the application of accounting principles
and associated disclosure requirements.
Risk management and internal control
• advising the Board on the Group’s
overall risk appetite, tolerance, current
risk exposures and future risk mitigation
strategy; and
• evaluating and advising the Board on
the effectiveness of the system of risk
management and internal control.
Internal audit
• monitoring the functioning and quality
of the Internal Audit department;
• reviewing and approving the annual
Internal Audit work plan and taking
note of the findings and considerations
of the Internal Audits;
• supervising compliance with
recommendations and observations
of the internal auditors; and
• assessing annually Internal Audit’s
performance and effectiveness.
Compliance and governance
• overseeing compliance with applicable
legal and regulatory requirements,
including monitoring ethics and
compliance risks;
• monitoring the changes in different
jurisdictions as they applied to the
scope of the Committee, with particular
attention paid to the new UKCGC
effective for reporting periods from
1 January 2024; and
• reviewing the adequacy and effectiveness
of the Group’s Compliance function.
External audit
• considering the annual external audit
plan, approving related remuneration,
including fees for audit and non-audit
services;
• assessing the performance, qualifications,
effectiveness and independence of the
external auditor and the audit process,
including assessing the quality of
the audit;
• supervising compliance with
recommendations and observations
of the external auditors; and
• recommending the appointment of the
external auditor to the Board for annual
approval at the AGM.
Financial management
• advising the Board on the appropriateness
of management’s approach to capital
allocation; and
• reviewing, in order to recommend to the
Board, material funding proposals from
management, along with consideration
of the Group’s liquidity profile and
debt levels.
Audit & Compliance
Committee report
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024206
Activities during the year
Financial reporting
Financial disclosures
The Committee reviewed the half-year and
annual financial statements and particularly
challenged management in relation to:
• integrity of the Group’s financial
reporting process;
• compliance with the relevant legal
and financial reporting standards;
• application of significant judgements
and estimates; and
• balance and clarity of disclosures.
As part of its review, the Committee received
regular updates from management and the
external auditor in relation to accounting
judgements and estimates, including those
relating to recoverability of asset carrying
values, provisions and uncertain tax
treatments. This enabled the Committee
to challenge the outcomes and ensure
management had duly considered the
relevant aspects.
Furthermore, the Committee received
an update as to how management have
improved compliance with the European
Single Electronic Format (“ESEF”)
requirements in 2024.
Alternative performance measures
RHI Magnesita uses APMs to provide greater
insights into its financial and operating
results and provide readers with a more
understandable and comparable view
on underlying performance.
The Committee regularly considers the
APMs used in RHI Magnesita’s reporting,
the reconciliations to IFRS financial
statements and explanations for changes
from the previous quarter. The Committee
reviews the overall presentation of APMs
with management to ensure they are not
given undue prominence in relation to
IFRS financial measures. Adjusting items
proposed by management and challenges
management to ensure that they are
applied consistently and continue to be
relevant to improve readers understanding
of underlying business performance.
Fair, balanced and understandable
The Group’s Annual Report and Accounts
should be fair, balanced, understandable
and provide the information necessary for
shareholders to assess the Group’s position,
performance, business model and strategy.
The Committee and the Board are satisfied
that the 2024 Annual Report and Accounts
meets this requirement, with appropriate
weight having been applied to both
positive and negative developments
throughout the year.
To arrive at this conclusion, the Committee
critically assessed drafts of the 2024 Annual
Report and financial statements and sought
insight from management on their drafting
process in order to agree that it was
appropriate and ensured that the relevant
requirements were met. This process
included starting from a well-established
base, engaging multiple and varied experts
across the business, obtaining feedback
from a number of different external
providers who could give an independent
and critical assessment and improvements
from prior year including the application of
new segmental reporting disclosures and
presentation of upcoming changes in IFRS.
The Committee gave detailed and
helpful input, bringing the perspective
of stakeholders and readers of this report.
They reviewed the consistency of the
narrative disclosures with the financial
statements, as well as reviewing the
adequacy and appropriateness of the
independent assurances received on the
accuracy of the information, both financial
and non-financial.
Compliance
Compliance programme
The Committee reviewed the annual
compliance programme, seeking to ensure
that it remained effective and fit for purpose,
as well as challenging management to
ensure that adequate resources, capabilities
and training are applied to the Compliance
Programme. This involved considering the
quantum of compliance work and whether
other teams in the Company could assist
with matters which were along the ordinary
course of business, to ensure the expertise
of the Compliance team could add more
value to the organisation.
In 2024 the Committee placed particular
emphasis on the application of trade
compliance legislation across the Group.
The Committee discussed investigations
of cases involving alleged ethics and
compliance breaches. The Committee
challenged management’s findings in such
cases to satisfy itself that a rigorous process
had been followed, and that appropriate
disciplinary action had been taken where
necessary and management had embedded
learnings into RHI Magnesita’s systems
and controls.
Whistleblowing programme
The whistleblowing programme, which is
monitored by the Committee and overseen
by the Board of Directors, is designed to
enable employees, customers, suppliers,
managers, or other stakeholders to raise
concerns on a confidential basis where
conduct is deemed to be in violation of
our Code of Conduct or contrary to the
Group’s values.
The Committee considered the revised
policy for responding to whistleblowers
which had been updated by management
to take account of various changes in EU
law. Upon recommendation to the Board,
the revised policy has been adopted across
the Group.
The Committee made enquiries of
management in relation to the reports
received through the whistleblowing
channels in order to conclude its
effectiveness during 2024. They discussed
with management specifics of whistleblow
reports received and the significant increase
in reported cases in the year. The
Committee enquired into the root causes
for this increase, which was understood to
be largely a result of individual grievances
in relation to local employment conditions,
their work environment or their relationship
with their line manager. For the cases with
broader relevance the Committee sought
clarity on the root causes, the links to Group
culture and ensured appropriate actions by
management to address the root causes.
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Examples of how accounting judgements and estimates were considered and addressed
Significant financial
judgements and areas
of estimation How the Committee addressed these judgements and areas of estimation
Determination
of operating and
reportable segments
The Committee was presented with management’s updated assessment of the operating segments which
was revised in connection with the maturity of the regional structures over the last 18 months. Management
applied judgement in considering the key features that the Chief Operating Decision Maker, i.e. the CEO,
regularly reviews to evaluate performance. In the view of management, performance and allocation of
resources continue to be mostly driven by customer industry and product groups as opposed to geography.
Consequently, management considers that customer industries form the basis for operating segments and
in review, management expanded the reportable segments to five reportable segments in 2024.
The Committee challenged management’s judgement in determining product group as the driving indicator
for operating segments and considered how it assisted the business in its monitoring.
Conclusion: The Committee was satisfied with management’s explanations and agreed with the new
reportable segments.
Carrying value of
property, plant and
equipment (“PP&E”)
The Committee reviewed the assessment prepared by management on certain assets. In particular,
management presented a detailed overview of the assessment of the impairment indicators of a project
in South America.
The Committee questioned management about the timing of the identification of the impairment and the
assumptions that were used to calculate the recoverability of the asset.
Conclusion: The Committee concurred with management’s assessment and ensured there was adequate
disclosure of this judgement in the Annual Report and Accounts.
Fair valuation of
financial instruments
acquired during
business combination
In a number of the recently acquired businesses, the Group recognised financial liabilities in connection
with the put option over the outstanding equity shares. These financial liabilities are required to be fair valued
at each reporting date. The valuation of the financial liabilities is based on unobservable inputs i.e. business
plan of the acquired business. Management applied judgement to assess the expected performance of the
underlying businesses and presented the most recent valuations to the Committee.
Conclusion: The Committee concluded that the judgements and the stress-testing scenarios and
assumptions are appropriate and adequate.
Goodwill Management provided the Committee with an update on the goodwill impairment review that is performed
annually. Management makes use of various estimates and assumptions in determining the cash flow forecasts
used in the impairment testing for goodwill, including terminal value, inflation, and discount rates.
Conclusion: The Committee concurred with management’s assessment and ensured there was an adequate
disclosure of this judgement in the Annual Report and Accounts.
Accounting for Digital
transformation
software
Management explained the accounting for the different digital solutions that the Group is in the process
of implementing. These include, amongst others, the new ERP system and integrated supply chain solution
which are delivered via a Software as a Service. As the Group does not control the software application the
costs are expensed as incurred, in line with accounting standards.
Conclusion: The Committee sought further detail explanation on specific cases and concurred with
management on the approach.
Adjusted items Management excludes certain non-operating items from the results performance because those items
do not reflect the underlying performance of the business. In 2024, management have excluded from EBITA
costs associated with the digital transformation programme, the partial impairment of non-current assets,
restructuring costs and M&A related costs. Similarly, management have also excluded income relating
to the disposal of a Joint Venture in China, the sale of other property and the recovery of loans acquired
on a business combination.
Conclusion: The Committee challenged the rationale for the exclusion of digital transformation costs
from Adjusted EBITA and sought further understanding of certain of the above mentioned adjustments.
The Committee agreed with the conclusions reached by management that the adjustments and clear
disclosure and explanation in the Annual Report was consistent with prior year approaches and accounting
standards, and represented a balanced picture of underlying business performance.
Revenue recognition
on certain contracts
In 2024, management conducted an analysis due to the Red Sea crisis which had concluded on a
reassessment of the timing of transfer of control for shipments delivered by sea freight with third party carriers.
Control is from 2024 determined to transfer as soon as the third-party carrier has issued the shipping
document, if any, that allows the customer to redirect or otherwise control the shipped refractory products.
Conclusion: The Committee challenged the basis for the change and considered whether the amount
was material in prior year and it concluded it supported management’s approach.
AUDIT & COMPLIANCE COMMITTEE REPORT CONTINUED
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024208
Risk management
How risk management was assessed
The Internal Audit, Risk & Compliance team
provides key assurance to the Committee on
the Group’s governance, risk management
and internal controls. Throughout the year,
the Committee discussed reports on risk
management and challenged management
on whether risks had been sufficiently
considered and whether appropriate risk
mitigation measures had been implemented.
Management took onboard the comments
and adjusted assessments as necessary.
The Committee also received reports
providing an overview of compliance
activities and management’s assessment
of the effectiveness of the programme
to manage risks relating to ethics and
regulatory compliance in the Group’s
business activities. The Committee also
discussed findings from investigations
of cases where ethics and compliance
concerns were highlighted. The Committee
discussed management’s findings in such
cases to satisfy itself that a rigorous process
had been followed, that appropriate
disciplinary action had been taken, where
necessary, and that management had
taken forward the learnings to embed into
RHI Magnesita’s systems and controls.
Internal control
Management is enhancing the underlying
activities relating to internal control to
ensure that the Group is ready to apply
Provision 29 of the new UK Corporate
Governance Code with effect from 2026.
Specifically, a risk assessment exercise for
financial and non-financial information was
performed in 2024, as well as reviewing
the control design over financial reporting.
Management then implemented a tool to
track the operation of internal controls and
have established a separate team to
perform testing of the key controls over
financial reporting in 2024 (‘second line’
of defence). This will be further embedded
in 2025 and developed to encompass
material non-financial controls.
In order to monitor the effectiveness
of the procedures for internal control
over financial reporting, compliance
and operational activities, the Committee
reviews reports on risks and controls,
including the annual assessment of the
system of risk management and internal
control, which comprised a number of
inputs from ISO certification, information
security monitoring and supplier audits,
assisted by external providers. It also
included the outcomes from the Group
management representation letter process,
which involves each EMT member and
Regional President and their direct reports
conducting a structured internal assessment
of compliance with internal controls, legal
and ethical requirements.
The Committee discussed a number of areas
where further strengthening of internal
control can be achieved, and you can read
more about these on pages 51 to 52.
Internal audit
Reviewing the results of Internal Audit
work and the 2024 plan
The Committee reviewed the effectiveness
and resources of the Internal Audit
department and concluded that the
Internal Audit function is effective and has
adequate resources. The Committee gave
particular focus to the assessment of the
independence of Internal Audit within the
combined departmental model of Internal
Audit, Risk & Compliance, especially given
the change to responsibilities of the head
of department, as referred to in more detail
on page 51.
The Committee recognised the range of
findings from Internal Audit work, which
demonstrated the required level of Internal
Audit independence, and the overall high
quality of the audit work performed.
The Committee satisfied itself that
the 2024 internal audit plan was on
track and discussed areas where control
improvement opportunities had been
identified, particularly enquiring into the
root causes and the embedding of internal
control improvements. The Committee also
reviewed progress in completion of agreed
management actions recommended in
Internal Audit Reports.
The Committee reviewed the proposed
2025 Internal Audit plan. The Committee
raised a series of challenges to the plan,
focusing on any impact to Internal Audit
quality and independence and, after
receiving appropriate assurances and
supplementary information including the
scope of the work in relation to Group risks,
the Committee approved the 2025 Internal
Audit plan.
External audit
PricewaterhouseCoopers Accountants N.V.
(“PwC”) have been the External Auditor
since 2017 when RHI Magnesita N.V was
incorporated in the Netherlands following
the merger of RHI with Magnesita.
How the Committee assessed audit risk
and audit effectiveness
PwC set out its audit plan for 2024,
identifying significant audit risks to be
addressed during the course of the audit.
These included the risks that:
• assumptions used to estimate the
impairment of goodwill are not reasonable;
• assumptions used to estimate the fair
value of consideration transferred in
a business combination are not
appropriate/reasonable;
• assumptions used in the valuation of tax
contingencies in various jurisdictions are
not reasonable;
• risk of fraud due to management bias in
sustainability reporting (specific to the
engagement on Limited Assurance in
respect of the Sustainability Statement);
• management override of controls; and
• risk of fraud in revenue recognition.
The Committee reviewed and discussed
the external audit plan and evaluated
whether the planned materiality levels
and proposed resources to execute the
audit plan were consistent with the scope
of the audit. The Committee asked PwC
for confirmation of the scope of their audit
and to assure the Committee that sufficient
coverage across the Group’s international
footprint was achieved, especially given
the Group’s recent level of acquisitions.
As part of its oversight of the external
auditor, the Committee annually assesses
the performance and effectiveness of the
external auditor and the audit process.
This includes assessing the fulfilment of
the agreed audit plan and variations from
it, how the auditor handled key judgements,
and the auditor’s response to the Committee
questions. The external auditor was asked
to explain the risks to audit quality and how
they took action to mitigate these risks.
These actions were focused on audit quality
governance in PwC, audit team resourcing,
continuity and coaching were discussed and
explained. In the course of 2024, the external
auditor gave transparent and pro-active
updates on matters pertaining to the
Global PwC business, such as findings from
the Dutch regulator, the AFM, and impacts
from findings on the audit firm in China.
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After each year end teams who have
engaged with the auditor are asked to give
feedback on the audit process to improve
the effectiveness of both management
and the external auditor. The Committee
receives a summary of recommendations
for improvement to financial reporting
processes or internal controls,
management’s response to those
recommendations and progress made
against prior year recommendations.
In the course of the Committee meetings
throughout the year, the Committee is
able to observe relationships between
management and the external auditor
and can gain a sense of the working
environment and culture of the teams.
The Committee considers the approach
and mindset of the external audit team
through observing how they challenge
aspects of the Group’s internal controls,
and how they respond to queries and
feedback from the Committee, Directors and
management themselves. The Committee
also considers, as part of the discussions
both in meetings and around topics outside
of formal meeting engagement, the depth
of knowledge of the external auditors and
their understanding of the business of
RHI Magnesita, as well as the read across
and broader knowledge they can bring
from their depth and breadth of experience
with industrial manufacturing companies.
The Committee observed challenge
by the external auditor of management
on matters relating to treatment of carbon
off-sets, impairment of non-current assets,
segregation of duties, and goodwill. In each
case the challenge was considered, and
a resolution on the approach was found
which, the Committee feels, improved
the standard of reporting to the Company’s
stakeholders and will be taken forward
to improve management’s processes.
The actions suggested by the external
auditor are tracked by the Internal Audit
function and progressed with leadership
from the EMT.
How the Committee assessed
the audit fees
The Committee reviews the fee structure,
resourcing, and terms of engagement for
the external auditor once a year. In addition,
it reviews the non-audit services that the
auditor provides to the Group half-yearly.
As part of this review, the Committee
considers the size of the Group, the number
and location of subsidiaries, the complexity
of the businesses being audited with respect
to products, customers and regulation,
and their own experience of auditor fees
at different companies.
In 2024, additional fees were incurred
with PwC, arising from their engagement
to provide limited assurance under CSRD.
How the auditor’s independence
and objectivity were assessed
The Committee considers the
reappointment of the external auditor each
year in order to make a recommendation
to the Board. The Committee assesses
the independence and objectivity of the
external auditor on an ongoing basis, taking
into account various aspects such as the
assurances provided by the external auditor
and the level of non-audit fees, input from
the management on their perception of
the working relationship, private meetings
with the external auditor, as well as regular
check-ins between the Chair of the
Committee and the lead audit partner.
Furthermore, the external auditor is required
to rotate the lead partner every five years
and other senior staff every five to seven
years. The lead partner, Antoine Westerman,
was appointed to the audit in 2022.
The Committee reviews updates to the
Company’s external auditor independence
policy as they arise from related standards
and regulatory requirements. A report of
compliance is provided annually. In 2024
the Committee questioned the external
auditor on its ability to conduct the Group
audit in China following the restriction
imposed by Chinese authorities in China.
The external auditor confirmed that PwC
China has a restriction in connection with
statutory audit activities in China and not in
relation to Group audit reporting activities.
Recommendation to reappoint
In consideration of all the above, the
Committee agreed to recommend the
reappointment of the external auditor to
the Board for inclusion as an item at the
2025 AGM.
Audit tender
Under Dutch law, firm rotation is required
after 10 years of service. PwC’s expected
last year of audit service is the year ending
31 December 2026. The Committee
commenced competitive audit tender
process during 2024 in order to ensure
sufficient time for an orderly transition in
the course of 2026. The Company invited
large accounting firms and ‘challenger’
firms to participate in the tender to ensure
fair competition amongst audit service
providers. It is expected that the tender
activities will be completed by end of 2025
and the Committee is ensuring the tender
is conducted in accordance with the FRC’s
Audit Committees and the External Audit:
Minimum Standard.
Other matters:
Tax
Management provided the Committee with
general updates on the Group’s tax position
and more specifically on (i) the first year
of OECD Global Minimum Tax (‘Pillar 2’)
reporting in 2024, (ii) the successful
negotiation of certain tax benefits with the
Minas Gerais State (in Brazil) tax authorities,
and (iii) the non-standard interpretation
of the OECD transfer pricing rules by the
Brazilian tax authorities, highlighting the
risk of double taxation for the Group.
Information security risks
The Committee continued to focus
on information security risks, particularly
as specified in the DCGC. Cyber and
information security risk is included as one
of the Group’s principal risks on pages 54 to
63. The Committee received presentations
on the emerging risks and the associated
internal controls. The Committee focused
attention on the changes in the security
controls. The Committee was also informed
of RHI Magnesita’s approach to assess and
mitigate emerging risks from the usage of
Artificial Intelligence, alongside the
ongoing activities to further increase
cyber-security awareness in the Group to
implement cyber-secure behaviour.
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RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024210
Treasury and Pensions
The Committee receives regular overview
of the Group’s capital structure and
liquidity planning, as well as the Group’s
risk management and hedging strategies
for interest rates, foreign exchange, and
commodities exposures. The Committee
reviewed the results and the proposed
strategies and agreed that the current
Treasury Policy remains appropriate and
with suitable delegation of authority levels.
The Committee was also presented with
the annual Insurance and Pensions
performance review and strategy outlook.
The Committee noted that the Group’s
captive insurance company continued to
perform as expected and deliver significant
financial benefit. The Committee also noted
that management was undertaking an
updated analysis of legacy Defined Benefit
Pension liabilities, including funding status
and options for further external transfer of
liabilities, and would report findings back
to the Committee during 2025.
Site visit during the year
In April 2024, the Directors of the Board
conducted a week-long visit to sites in India
and a Committee meeting took place in the
course of the trip. Key areas of discussion
during the site visit included Indian
corporate governance and listing regime,
the status of various compliance initiatives,
regional P&L oversight, revenue ambitions
for the region, the structure and culture of
the local finance team, and the initiatives
they were focusing on such as return on
invested capital, and the synergies realised
on recent assets acquired. The Committee
benefitted from meeting the listed Indian
entity audit committee members, Regional
President, the recently appointed Regional
CFO and key members of the regional
leadership team, as well as stakeholders
from the wider employee population and
customers of the Group. More details on the
Board site visit are provided on page 189.
Regulatory & Governance developments
Following the publication of the UK
Corporate Governance Code 2024,
management have been regularly updating
the Committee on the progress and timeline
to address the material internal control
effectiveness review under Provision 29
and the Committee has given guidance
on what they expect to see, with respect to
the business’s main areas of risk and based
on their engagement with the FRC on the
new Code.
The Committee continued to consider
legal obligations and various reporting
frameworks in particular the Corporate
Sustainability Reporting Directive (“CSRD”),
especially noting the status of adoption in
various EU member states, and the relevant
actions of management to manage the
Group’s compliance in an effective and
efficient manner. The Committee challenge
management on the number and materiality
of data points to establish a streamlined
reporting process for future periods.
The Committee received an update on
the Company’s assessment of the impact
of the EU’s Network and Information
Security Directive (NIS 2), a currently draft
regulation, which is aimed at enhancing
cyber-security and ensuring that all key
services are safeguarded against evolving
digital threats and vulnerabilities. Whilst
the Group is not directly affected by NIS 2 it
is anticipated there may be necessary
changes to meet the expectations of
customers, being part of their supply chain.
Management advised of the workstream
to build a NIS 2 compatible reference
structure which maps these existing
controls, so any requests can be answered
quickly and thoroughly. Management
agreed to include this in the scope of the
annual external audit.
Disclosure Committee
The Disclosure Committee, chaired by
the CFO, ensures compliance with the EU
Market Abuse Regime. It shares the minutes
and matters considered with the Committee
on an ongoing basis to provide transparency
of matters considered by the management
to keep the Company compliant with its
disclosure requirements.
Committee performance
As part of the overall Board performance
review of 2023, it was noted that the
Committee performed strongly, through
substantial discussions, debates and
challenges. It had worked well and
effectively, supporting the Board in its
oversight with a focused remit and excellent
quality of discussion. For the future, it was
considered that the Committee could focus
its oversight on the risks of the ongoing key
strategic transformational projects and
on strengthening interactions with the
Corporate Sustainability Committee
particularly in respect the supervision
and reporting of non-financial metrics.
As outlined on page 201, the 2024 review
is ongoing at the time of publication of
this report and will be reported on in full
next year.
Contact with regulators
The Committee, and the Board, noted
the letter received from the AFM, the Dutch
regulator, outlining their recommendations
to Dutch companies to comply with the
EU’s CSRD. As mentioned below, the
Committee considered certain regulatory
aspects of sustainability reporting as part
of a joint committee meeting with the CSC,
in order to assess the risk and impact to the
Company. For more detail on the Company’s
assurance and compliance with CSRD,
please see the Sustainability Statement.
The Committee also considered findings by
the AFM from a review of PwC’s audit work
for improvements to tagging of the Annual
Report & Accounts per the European
Single Electronic Format regulations and
noted the planned improvements.
Joint Committee meetings
As in prior years, the Committee held
a joint meeting with the CSC (the “Joint
Committee”) to consider shared scope
matters. The Joint Committee was provided
with an update on risks and the materiality
assessment per the EU’s Corporate
Sustainability Reporting Directive, as well
as a regulatory update covering key areas
of ESG legislation which would affect
disclosure requirements and sustainability
data collection and analysis.
The Joint Committee approved
management’s recommendation to appoint
PwC to perform the limited assurance
review of the Group’s Sustainability
Statement in 2024.
John Ramsay
Chair, Audit & Compliance Committee
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REMUNERATION COMMITTEE REPORT
Janet Ashdown
Chair of the Committee
“ Management are
incentivised to improve
the business’s long-term
foundations to deliver
sustainable success
for our shareholders.”
Committee members
and meeting attendance
Member
Attendance
in 2024
Member
since
Janet Ashdown
(Chair) 4/4 October 2020
Karl Sevelda 4/4 October 2017
Jann Brown 4/4 December 2022
Remuneration
Committee report
Current Committee membership
and operation
All Committee members are Independent
NEDs within the meaning of the UK and
Dutch Corporate Governance Codes.
The Company Secretary is the secretary
to the Committee. Other individuals, such
as the Chair of the Board, the CFO, the
EMT member responsible for People,
and external professional advisers may
be invited to attend meetings as and when
appropriate, whilst ensuring no individual
is involved in discussions regarding their
own remuneration. The Committee meets
at least three times a year and at such other
times as the Chair of the Committee shall
require or as the Board may direct.
Committee purpose, roles
and responsibilities
The Committee’s purpose is to develop
a reward package for Executive Directors,
Executive Management (EMT) and senior
managers that supports the delivery of
our vision and strategy as a Group, and to
ensure the rewards are performance based,
encourage long-term shareholder value
creation, and take account of the
remuneration of the whole workforce.
In addition, the Committee also reviews
and sets the fee for the Chair of the Board.
You can find the Committee Terms
of Reference here on our website.
Activities in 2024
The Committee met four times in 2024,
and its activities included:
• Consideration and approval of the
outturn of the Annual Bonus 2023.
• Consideration and approval of the
vesting of the Long Term Incentive Plan
(LTIP) 2021.
• Oversight of the Company performance
against targets of in-flight LTIP awards.
• Review and determination of the 2024
Annual Bonus and LTIP performance
conditions and targets.
• Review of the remuneration of the
Executive Directors, EMT, and senior
management within the context of
workforce remuneration, roles
performed, Company and individual
performance and the external market.
• Review of the fee for the Chair of
the Board.
• Overview of Directors’ shareholdings
and report on compliance with share
ownership guidelines.
• Consideration of any changes arising
to the Committee governance from
the revised UK and Dutch Corporate
Governance codes.
• Consideration of market practice
and new proxy agency remuneration
guidelines and principles and how
this might apply to RHI Magnesita.
• Review of shareholder feedback and
finalisation of the Remuneration Policy
for 2024-2027, which was approved
by shareholders at the 2024 AGM.
• Overview of the incentivisation and
remuneration of the Group’s wider
workforce, considering its alignment
with Company strategy.
• Review of the tender for remuneration
advice services and consideration of the
recommendation of the tender panel.
• Appointment of Willis Towers Watson
(“WTW”) as the new advisors to the
Committee.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024212
REMUNERATION COMMITTEE REPORT CONTINUED
Dear Shareholders,
On behalf of the Board, I present our 2024
Directors’ Remuneration Report. This report
includes my letter to the shareholders and
our Annual Report on Remuneration for
the year ending 31 December 2024.
RHI Magnesita’s performance
during 2024
RHI Magnesita has performed well to
deliver robust financial performance, along
with progress on key strategic initiatives,
despite the difficult conditions in our key
end markets which has ultimately impacted
the ability of the Group to deliver against
certain financial metrics. The Group is
benefitting from strategic investments
made to reduce the cost base and cost
of manufacturing, together with improved
planning and careful management of
Group assets through ongoing difficult
market conditions. The Directors of the
Board commend the EMT for their
operational focus and the significant work
undertaken to improve the foundations of
the business through initiatives to improve
H&S performance, plant operational
processes and the preparatory work to
upgrade ERP systems. This work is ongoing
and is designed to improve the business’s
long-term foundations to deliver
sustainable success for our shareholders
and meet our customer expectations and
needs. You can read more about this in
the Chair’s Statement on pages 2 to 4.
Despite the difficult trading environment
the Group recorded an Adjusted EBITDA
of €543 million, revenues of €3,487 million
and Adjusted operating cash flows of
€419 million for FY 2024. These financial
results have enabled the proposal for
a full-year dividend payment of €1.80 per
share in respect of FY 2024. It has been
within this context that the Committee has
considered the incentives outcomes and
overall remuneration for 2024. The ongoing,
challenging outlook for 2025 to 2027
has been considered when setting the
performance conditions and targets for
the 2025 annual bonus and LTIP awards.
Executive Directors’ remuneration
2024
Set out below is an overview of remuneration
for 2024 with further details available in the
Annual Report on Remuneration.
Salary and benefits
Executive Director salaries increased
by 6% from January 2024, below the
year-on-year salary increase for the wider
Austrian workforce of an average of 7%.
Annual bonus plan
Our Executive Directors’ maximum annual
bonus opportunity remained at 150% of
salary with performance assessed against
Adjusted EBITA (45%), Adjusted operating
cash flow (“OCF”) (25%) and Strategic
Initiatives (30%). As noted above,
management delivered solid results in
challenging market conditions, meeting
the OCF target and most of the targets
under the Strategic Initiatives metric. Our
EBITA performance was robust, particularly
given headwinds over the course of the year.
Under the 2024 Annual Bonus, management
were incentivised to deliver cash generation
through OCF, which replaced inventory
coverage, and OCF has been exemplary,
supporting the longer-term growth in value
of the business, in alignment with
shareholder interests.
Exceptional progress was also made
against our strategic objectives; after
achieving the 2025 target of 10% for the
use of secondary raw materials in 2023,
management have continued to exceed
the target for the use of secondary raw
materials and are on track to meet the
revised 15% target in 2025. We are proud
to lead the way in the refractory industry
in this arena and see it as a key strategic
deliverable for the business to develop
future solutions which are aligned to the
Group’s sustainability strategy and deliver
financial performance. PIFOT was
introduced as a strategic initiative in 2023
and since then there has been strong focus
and improvement to the maximum level
of the target range. The other strategic
initiative in the 2024 Annual Bonus relates
to the measurement of defined significant
strategic projects. The measurement was
defined via a scorecard which is part of
the internal steering and tracking of the
projects, and covers alignment to scope,
delivery on time and cost management.
Whilst this strategic initiative was not
delivered to the target it was met in excess
of the threshold and the Committee sees
this performance as reflective of the
difficulty of delivering such complex and
transformational projects and the stretch
which has been embedded in the targets.
Further details of the performance against
the 2024 targets can be found on page 223.
As referred to earlier in this Annual Report
there have been two fatalities in the
business in 2024, one in February and one
in June. We were extremely saddened by
these, especially given the immediate work
which had commenced in early 2024 to
improve the Group’s H&S standards and
performance. The investigations of each
incident with local authorities and RHI
Magnesita’s own specialist review, with
support from dss+ (a leading consultancy,
focusing on safety), found that the business
had not been at fault, nonetheless
immediate steps were taken to implement
different protective technologies to prevent
such situations being able to occur again.
The resolve of management and the Board
to see a material upgrade in the business’s
H&S has never been firmer. This work has
continued apace with significant
involvement from the CEO and his team to
embed it throughout the organisation. You
can read more about this work on page 29.
In our 2023 report, we advised that the
Committee would consider such events
when deciding on remuneration outcomes
and we reported the establishment of a
Health & Safety Fund to which the EMT
contributed a portion of their bonus.
The Committee and the EMT have agreed
that 2% of the formulaic bonus outcome for
2024 will be contributed to the Health &
Safety Fund. This amount will be deducted
prior to payment of bonuses and added
to the fund. The level contributed reflects
the nature of the accidents in 2024 which
were outside of the scope of management
to influence and which occurred despite
the work done since 2023 and despite
investigations finding that there were
effective controls in place. You can read
more about the Health & Safety Fund
on page 5.
The Committee reviewed the formulaic
outcome of the annual bonus and noted
the strong performance achieved during
the year, despite the extremely challenging
economic environment and as such,
recommended to the Board that bonuses
should be paid with no adjustments, aside
from the contribution to the Health & Safety
Fund described above, at 63% of maximum.
213RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Long-Term Incentive Plan (“LTIP”)
The 2021 LTIP Award vested on 18 March
2024 at 62% of maximum. The metrics
were adjusted earnings per share (“EPS”)
(50%), total shareholder return (“TSR”)
(25%) and use of secondary raw material
(“SRM”) (25%). The outturn against SRM was
at maximum vesting of 100% (measured
against performance to 31 December 2023)
whilst the EPS metric vested at 74%
(measured against performance to
31 December 2023). The TSR element
was tested shortly following the end of
the performance period on 14 March 2024,
with zero vesting of this element.
The 2022 LTIP Award was assessed against
Adjusted EPS (50%), absolute TSR (25%)
and the reduction of CO emissions against
2018 baseline (CO) (25%). The EPS and
CO targets were measured over three
financial years to 31 December 2024,
whereas the TSR performance period will
end on the third anniversary of the date
of grant in March 2025.
In respect of EPS performance, the Group
achieved € 15.21 p/s against a target of
€ 16.50 p/s and thus 23% of this portion
vested. The Group achieved a significant
reduction in CO emissions per tonne
against the 2018 baseline and thus this
portion vested at 100% of maximum.
It is anticipated that the TSR vesting level
will be c.6% of the total award. The actual
TSR performance and the corresponding
vesting level will be disclosed in the 2025
Directors’ Remuneration Report. Overall,
on an indicative formulaic basis, the 2022
LTIP award is projected to vest at c.54.25%
of maximum.
The Committee carefully reviewed
the overall formulaic vesting outcome of
both the 2021 and 2022 LTIP awards in the
context of the Group’s underlying financial
performance and the experience of
shareholders, including share price and
TSR performance. The Committee was
also mindful of our commitment to take into
account the potential for ‘windfall gains’ in
relation to the final vesting outcome.
When determining this, the Committee
considered a number of internal and
external reference points, including the
nil vesting of the TSR portion of the 2021
award, the share price used to determine
previous LTIP awards, and macroeconomic
factors influencing the Group’s share price.
After careful consideration, the Committee
determined that the formulaic outcome
of both the 2021 and 2022 awards was
fair and appropriate in the context of
overarching business performance and
the shareholder experience. The
Committee is comfortable that the Policy
operated as intended during the year and
that there were no deviations from the
Policy or decision making process required
for any exceptional circumstances.
Implementation of the
Remuneration Policy for 2025
Base salaries
The base salaries of the CEO and CFO
have been increased by 3% with effect from
1 January 2025. This is below the average
employee salary increase in Austria of 4.8%.
Annual Bonus 2025
The maximum bonus opportunity for 2025
is unchanged at 150% of salary for Executive
Directors. The targets for the Annual Bonus
are set out on page 229 to the extent they
are not commercially sensitive.
In line with the approach in 2024, the
Annual Bonus for 2025 will continue to
be based on the same metrics albeit with
slightly more weighting given to strategic
initiatives, given their fundamental value
to the baseline operations and reduction of
costs, establishing the Group’s performance
for the future. As such, the Annual Bonus
performance areas and their weighting are
adjusted EBITA (40%), strategic initiatives
(35%) and OCF (25%).
The Committee continues to see adjusted
EBITA as a critical performance measure
for the profitability of the Group, without
which delivery of the RHI Magnesita
strategy would not be possible. OCF
remains a key measure for the business
as generating cash flows enable dividend
payments and investment in business
improvements and/or expansion.
The strategic element of the Annual Bonus
in 2025 will be focused on use of Secondary
Raw Materials, as RHI Magnesita enters the
final year in which to meet its target of 15%
by 2025. Management have consistently
performed well against this target and it
remains a key strategic pillar to deliver
the desired commercial performance.
The 2023 and 2024 Annual Bonuses have
included PIFOT which the Committee has
been pleased to see has delivered a c.15%
improvement from 2022’s baseline resulting
in clear improvements for our customer
outcomes and our cost management. With
this improvement, which is embedded now
in business processes, the Committee sees
the benefit in ensuring management’s
focus is directed to other areas, and has
given greater weighting to the key strategic
initiatives which were included in 2024
Annual Bonus. As mentioned earlier in this
letter, these are enablers for the Group’s
future success.
2025 LTIP
The CEO and CFO’s LTIP awards for 2025
remain unchanged at 200% and 150%
of salary, respectively. The performance
conditions for the LTIP awards are set out
on pages 223 to 225.
When setting the 2025 LTIP performance
targets, the Committee decided to continue
with the same performance conditions as
in 2024 to ensure consistency and progress
over long-term measures.
In respect of the CO emission reduction
targets, given its importance to the Group,
it was agreed to re-baseline this metric
to the emissions of FY 2024 to align with
the Group’s published 2030 targets and
refocus performance on a more immediate
time-horizon in order to reach the planned
10% intensity reduction from 2024’s
baseline by 2030. The 2027 LTIP target
reflects the expectation that reductions
in emissions will be more substantial in
the later years of this range, influenced by
external factors such as local government
initiatives and R&D developments, with
groundwork required by management
over this performance period to deliver
the longer-term goal. The Committee
also considered that the landscape for the
calculation of CO emissions has changed
substantially since 2018, given M&A and
network footprint changes, making the
methodology quite complex over a range
of six years.
REMUNERATION COMMITTEE REPORT CONTINUED
1. The 2023 Remuneration Report provided
indicative vesting.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024214
How our remuneration practices and performance measures support our strategy
Metrics
Strategic Pillar –
Market
Leadership
Strategic Pillar –
Enhance
Business Model
Strategic Pillar –
Execute Cost
Reductions Explanation of measurement or location in this Annual Report of the explanation
Element of reward: Bonus
Profit
See page 325 for Adjusted EBITA. This metric is currently used.
Adjusted Operating
Cash Flow
Adjusted operating cash flow is calculated by taking adjusted
EBITDA plus changes in working capital and in other assets/
liabilities minus capex spend. This metric is currently used.
Use of Secondary
Raw Materials
See page 23. This metric is currently used.
Strategic initiatives
This metric is currently used and comprises various initiatives
which change over time and currently cover digitalisation,
operational improvement, and complexity reduction.
Details of these are provided on pages 16 and 17.
One is PIFOT – a measure which checks the delivery against
customer promise and internal process adherence. It measures
two dimensions in one metric i.e., shipping as per our ex-work
date on-time and in full and execution of the customer order
fulfilment process as per the process against a customer sales
order line). It is calculated as (Number of sales order lines with
deliveries issued in full or before confirmed customer ex-work
date) ÷ (Total sales order lines), as well as the use of secondary
raw materials and reducing conversion costs.
Element of reward: LTIP
Earnings Per Share
See page 325. This metric is currently used.
Total Shareholder
Return
A measure of share price appreciation plus dividends. This is
calculated by the change in the Net Return Index for a company
(as calculated by reference to Datastream or such other
independent financial information provider) expressed as a
percentage over the Performance Period calculated by reference
to an agreed formula based on a two month average at the
commencement and end of the three-year performance period.
This metric is currently used.
ROIC
See page 326. For the LTIP 2024 performance condition,
as outlined above, this will be taken as an average of 2025
and 2026. This metric is currently used.
Use of Secondary
Raw Materials
See page 23. This metric was used in the 2021 LTIP before
it became an annual bonus metric.
Reduction of
CO emissions
See page 22. This metric is currently used.
Read more about our strategy
Pages 12 & 13
REMUNERATION COMMITTEE REPORT CONTINUED
215RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
As with the 2024 award, the EPS targets
set as part of the 2025 award are stretching
and require improvement at all levels of
vesting and require strong improvement
in the macro environment and business
performance by 2027.
ROIC targets set for the 2024 award have
shown themselves to be stretching and
management are working to meet their
commitment to these, which is to some
extent outside of the control-span of
internal factors, whilst managing
substantial business transformation.
The Committee have therefore set the
ROIC targets for 2025 at the same level
as 2024 in respect of the average ROIC
for the last two years of the three-year
performance period (being 2026 and
2027) to reflect this challenge. These
targets require significant stretch for
vesting across the range of targets over
a period of significant uncertainty in the
global macroeconomic outlook which
is expected to impact the Group’s ROIC.
The threshold vesting point of 10.2%
is above the 2024 ROIC of 9.8%.
The performance period considers the
projected growth rates in many of our
markets and stretches across an outlook
of prolonged depressed raw material prices
which will impact the Group backward
integration margin and thus the ROIC.
The targets set will continue management’s
focus on returns from all invested capital
from M&A, expended in the period from
2021 to early 2025, and other factors in
their control such as cost savings from
efficiencies to set the business up for future
success. You can read more about the
business outlook on page 43.
Investors should note that the Committee
has the discretion to adjust the formulaic
outcome of incentives and that, as part
of its considerations, in determining
whether it should exercise discretion,
the Committee will have regard, among
other matters, to the Group’s TSR over
the performance period of these awards.
Assurance of non-financial metrics
The Committee is comfortable that the
non-financial targets in the LTIP and the
annual bonus are material and stretching
for the business and underpin the business’s
strategy in delivering commercial outcomes
in the long-term through a reduction of
costs and an increase in options for
customers to reduce their impact on the
environment. In deciding upon the targets,
we receive data on the progress in these
areas to date and the expected development
in the coming years to reach the overall
strategy. As Chair of both the Remuneration
Committee and the Corporate Sustainability
Committee, there is sufficient connection
between the two committees to ensure
oversight and alignment of progress of the
sustainability activities. The targets set are
quantifiable, based on regularly reported
operational and management information
and CO emissions intensity in the target
scope are assured by an independent third
party. Furthermore, RHI Magnesita has
ensured third-party assurance of its
sustainability data over 2022 and 2023,
receiving a certificate of limited assurance
from Deloitte Austria. In compliance with
the Corporate Sustainability Reporting
Directive, PwC has provided limited
assurance on our Sustainability Statement
for 2024, thus, as a Committee we feel
very comfortable with the oversight and
assurance on these KPIs as well as their
alignment to the Group’s strategic approach.
Engagement with the workforce
The Board keeps up to date with the
current views of our workforce through
a combination of engagement methods
across multiple channels at different levels
of our organisation. These include
townhalls, webcasts and direct engagement
as part of site visits and meetings. In 2024,
the Board visited several plants and offices
in India in April 2024, as well as other visits
to the Netherlands, Germany, Türkiye and
Austria, where Directors took the
opportunity to engage with employees
across the Company on a number of topics
relevant to our strategy and business
operations. The Board also met with the
incoming trainees in November 2024 and
enjoyed the opportunity to hear about their
motivations for joining the Group and
aspirations. Jann Brown and I were also
delighted to play a part in the launch
of RHI Magnesita’s global mentoring
programme to develop female talent in the
organisation in 2024 and will continue to be
a part of this programme with other Directors.
You can read more about employee
engagement on pages 28 to 30.
Basis of presentation
This Remuneration Report is presented
on the basis that RHI Magnesita has
compliance obligations across three main
corporate regulatory geographies, UK,
Netherlands and Austria and, recognising
transparency of reporting, includes certain
voluntary disclosures for example, those
that apply to UK incorporated companies
and which are followed by RHI Magnesita,
where practicable, to align to market
practice. You can read more about our
Corporate Governance compliance with the
UK and Dutch corporate governance codes
on page 197. This letter on pages 213 to 216
and the Annual Report on Remuneration
on pages 220 to 230 will be presented
for approval as an advisory vote at our
May 2025 AGM.
Our conversations with
our shareholders
Ahead of the 2024 AGM, I engaged
with our largest shareholders as well as
Institutional Shareholder Services, the UK
Investment Association and Glass Lewis,
to understand their views on our proposed
new Policy and its implementation in
FY 2024. Based on the feedback received,
and the votes cast of 97.22% at the 2024
AGM, we can see shareholders were
supportive of the changes proposed
and I am grateful for their engagement.
As outlined in the Corporate Governance
report on pages 183 to 199, we are reporting
partial compliance with Provisions 40 and 41
of the UK Corporate Governance Code
on Remuneration. We explain our partial
compliance in the Corporate Governance
report and will continue to keep our
practices under review in respect of these
provisions. Shareholders will note we have
addressed compliance with Provision 36
as part of our Policy review and the
introduction of a post-employment
shareholding Policy.
We hope you find this report informative
and we remain open to dialogue with you
on remuneration matters. At the 2025
AGM, shareholders will be asked to vote
on the Directors’ Remuneration Report
and I hope that the Committee will have
your support. On behalf of the Committee,
I would like to thank shareholders for their
input and engagement in the year, and we
welcome any comments you may have on
this report.
Janet Ashdown
Chair, Remuneration Committee
REMUNERATION COMMITTEE REPORT CONTINUED
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024216
REMUNERATION COMMITTEE REPORT CONTINUED
Operation of policy
At a glance: Operation of Remuneration Policy for the financial year ending 31 December 2024
Policy element Implementation
Annual Base salary from
1 January 2024
CEO – €1,211,200
CFO – €708,000
% increase from prior year 6%
Retirement allowance Allowance of 15% of base salary
Annual bonus Up to 150% of base salary
Annual bonus metrics Adjusted EBITA (45%), Adjusted operating cash flow (25%) and strategic initiatives (30%).
The strategic initiatives were equally weighted across PIFOT improvement, Use of SRM and
the performance of critical business projects.
Amount paid for threshold
performance
25% of maximum annual bonus
Amount paid for target
performance
50% of maximum annual bonus
Actual bonus result for 2024
performance
61% of maximum (€1,211,945 for the CEO and €656,411 for the CFO).
Payment of bonus in shares 50% of annual bonus in excess of target after tax is used by the Executive Directors to acquire shares
that are held for a minimum of three years.
LTIP award CEO – 200% of salary
CFO – 150% of salary
LTIP metrics 50% of the award: Adjusted EPS (cumulative for the three-year performance period)
25% of the award: ROIC (average of the final two years of the award, 2025 and 2026)
25% of the award: Reduce CO emissions per tonne
Payment for threshold
performance
25%
2022 LTIP vesting 54.25% of maximum vesting
Performance and post-vesting
holding periods
Three years and two years respectively
Malus and clawback Malus applies to the period prior to vesting for LTIP awards and payment of the annual bonus.
Clawback applies to cash bonus and LTIP awards for a period of three years following the date
of vesting and three years following any cash payment.
Dividends on vested awards Participants are eligible for dividend equivalents on performance shares awarded under the LTIP.
Shareholding requirement 200% of base salary to be met within five years
Shareholding as % of salary
at 2024 year-end
CEO – 351%
CFO – 292%
1. Salary increases are 6% rounded down to the nearest 100.
2. The performance period for the TSR element of the award was not complete at the time of writing and so the level of vesting provided is estimated.
The actual vesting level will be provided in the 2025 Directors’ Remuneration Report.
3. 2% of formulaic outcome of the 2024 bonus was contributed to the Health & Safety Fund. Prior to the contribution, the bonus outturn for 2024 was 63%
of maximum (€1,145,862 and €669,807 respectively).
217RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Customer
focus
Innovative
We live innovation to create
value for our customers, by
being bold and providing
the best digital and
sustainable solutions.
Performing
Our high performance is rooted
in accountability and responsibility.
We are a reliable partner that
decides and delivers based
on our customers' needs.
Pragmatic
We act pragmatically
to enable fast and simple
collaboration across functions
and regions to serve
our customers best.
Open
Our open mindset and
transparent way of working is
flanked by a diverse, respectful
and friendly business
environment, where we care
about our customers
and colleagues.
Directors’
Remuneration
Policy
RHI Magnesita’s Directors’ Remuneration
Policy was presented to shareholders at
the May 2024 AGM and was approved
by shareholders with 97.22%. The Policy
is effective from 1 January 2024 and will
operate for the three-year period to
1 January 2027. You can find the Directors’
Remuneration Policy (“the Policy”) on
our website. No changes have been made
to the Policy since its approval.
Decision making process
for determination, review and
implementation of the Policy
The Committee follows the process set
out below when reviewing the Policy
and its operation:
• The Committee reviews the Policy
and operation of Policy, in light of the
business and remuneration strategy,
to ensure it continues to support and
is aligned to business and remuneration
strategy and considers whether any
changes are required.
• The Committee considers market and
governance developments (including
the UK and Dutch Corporate
Governance Codes and regulations)
as well as wider pay context, such as pay
ratios and Group reward arrangements.
• The Committee considers the guidelines
of shareholder representative bodies and
proxy agencies and investor expectations.
• The Committee consults with
shareholders and considers their
feedback as well as those of the
workforce as a result of review by our
Employee Representative Directors.
Alignment of the Policy to
RHI Magnesita’s values, mission,
and long-term value creation
The Policy is aligned to and supports our
cultural values which are set out below:
RHI Magnesita views itself as the driving
force of the refractory industry, taking
innovation to 1200°C and beyond. Achieving
our mission requires high-performing
senior management and the Policy is
designed to motivate them to perform to
a high standard and reach the stretching
goals set. In addition, the remuneration
arrangements for the Executive Directors
contribute to long-term value creation by:
• providing a fair and appropriate level of
fixed remuneration that does not result
in overreliance on variable pay and
undue risk-taking, thereby encouraging
the executives to focus on sustained
long-term value creation;
• providing a balance of short- and
long-term incentives to ensure there is
focus on short-term objectives that will
over time build to create long-term value
creation as well as long-term goals;
DIRECTORS’ REMUNERATION POLICY
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024218
Maximum
with share
price
increase
€7,063,558
€5,816,058
€3,632,933
€1,449,808
100% 40%
26%
34%
25% 21%
32% 26%
43% 35%
18%
MaximumTargetMinimum Maximum
with share
price
increase
€3,585,083
€3,038,183
€1,944,383
€850,583
100% 44%
28%
28%
28% 24%
36% 31%
36% 31%
15%
MaximumTargetMinimum
• requiring executives to acquire
and retain shares in the Company;
• offering long-term incentives where
the reward is delivered in shares which
aligns executives to shareholder interests
and value, as well as the performance
of the Company over the longer term;
• requiring performance measures in our
long-term incentives to be measured
over the longer term and for shares
to be held post-vesting for a further
two-year period; and
• incorporating metrics focused on
long-term shareholder value, such as
return on invested capital and reduction
of both our and our customers’ carbon
emissions through the increased use
of secondary raw materials.
Remuneration scenarios
for Executive Directors
The Policy provides that a significant
proportion of remuneration is determined
by Group performance. The graph below
illustrates how the total pay opportunities
vary under four different performance
scenarios: minimum, target, maximum
and maximum assuming a share price
appreciation of 50% for the LTIP award
during the performance period.
Assumptions
Minimum: Fixed pay only (base salary,
pension and benefits, excluding
relocation benefits).
Target: Fixed pay plus 50% of 2024
maximum annual bonus opportunity
for the CEO and CFO with 50% vesting
of the 2024 LTIP award.
Maximum: Fixed pay plus maximum annual
bonus opportunity and 100% vesting of
2024 LTIP award.
Maximum with share price increase:
Fixed pay plus maximum annual bonus
opportunity and 100% vesting of 2024
LTIP award with an assumed share price
appreciation of 50% for the LTIP award
during the performance period.
As required under the Dutch Corporate
Governance Code, scenario analysis was
carried out as part of the formulation of
the Policy and to establish that the Policy
results in appropriate and fair levels of
remuneration, including that the level
and ratio of fixed to variable pay does
not encourage inappropriate risk-taking
or over-reliance on variable pay while
ensuring there is sufficient alignment
to investors, the long-term performance
of the Company and development of the
market value of the shares of the Company.
Malus & Clawback
The Committee may, at any time within
three years from the date of LTIP awards
vesting or payments under the annual
bonus plan, determine that malus or
clawback provisions may apply. Malus
enables the Committee to reduce bonus or
share awards (including to nil) before they
vest. Clawback enables the Committee to
reclaim shares acquired from share awards
and/or bonuses paid including the cash
value of shares and dividends.
The Committee can also operate clawback
through the reduction, including to nil,
of other awards held by the individual
before they vest or bonus before it is paid.
The provisions apply in the following
circumstances: (i) material misstatement of
the Company’s financial results; (ii) an error
in calculating the level of grant or level
of vesting or payment; (iii) a failure of risk
management including the liquidation of
the Group; (iv) if the participant has been
guilty of fraud or gross misconduct, or the
Company has been brought into disrepute.
The malus/clawback provisions as set out
above do not limit Article 2:135 of the Dutch
Civil Code.
In 2024, there was no application of any
malus and clawback provisions for the
executive directors.
DIRECTORS’ REMUNERATION POLICY CONTINUED
Stefan Borgas
(CEO)
Ian Botha
(CFO)
Fixed Pay
Annual Bonus
LTIP
LTIP value with 50% share price
increase
Fixed Pay
Annual Bonus
LTIP
LTIP value with 50% share price
increase
219RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Annual Report on Remuneration
The following section provides details of how the Company’s Directors were paid during the financial year to 31 December 2024.
As a Dutch incorporated and UK and Austrian dual-listed company RHI Magnesita is required to comply with UK, Dutch and Austrian
disclosure and reporting requirements, including the UK and Dutch Corporate Governance Codes. Our Remuneration Report is therefore
presented on this basis and, recognising transparency of reporting, includes certain additional voluntary disclosures for example, those
that apply to UK incorporated companies and which are followed by RHI Magnesita where practicable to align to market practice.
The Committee, together with the Board, has determined to provide certain voluntary disclosures recognising the importance of
transparency of reporting and investor expectations as a UK listed company to comply with the UK Directors’ Remuneration Reporting
Regulations. This Annual Report is compiled on this basis.
The Remuneration Committee members (Janet Ashdown, Karl Sevelda and Jann Brown), activities and meetings during the year are
set out on page 212, along with the Committee’s purpose, roles and responsibilities and are thereby included in this part of the report
by reference.
Single total figure table (audited)
The following table shows a single total figure of remuneration in respect of qualifying services for the 2024 financial year for each
Executive and Non-Executive Director of the Company, together with comparative figures for 2023.
Director
Salary/fees Taxable benefits Bonus
LTIP Pension Total remuneration Total fixed remuneration Total variable remuneration
2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023
Executive Directors
Stefan Borgas €1,211,200 €1,142,700 €15,183 €15,008 €1,122,945 €1,628,348
€1,733,107 €1,281,947 €181,679 €171,405 €4,264,114 €4,239,408 €1,408,062 €1,329,113 €2,856,052 €2,910,295
Ian Botha €708,000 €668,000 €12,003 €308 €656,411 €951,900 €759,802 €562,052 €106,199 €100,200 €2,242,415 €2,282,460 €826,202 €768,508 €1,416,213 €1,513,952
Non-Executive Directors
Herbert Cordt £318,458 £261,700 - - - -
- - - - £318,458 £261,700 £318,458 £261,700 - -
John Ramsay £232,673 £133,100 - - - - - - - - £232,673 £133,100 £232,673 £133,100 - -
Janet Ashdown £132,043 £118,300 - - - - - - - - £132,043 £118,300 £132,043 £118,300 - -
David Schlaff £83,073 £77,100 - - - - - - - - £83,073 £77,100 £83,073 £77,100 - -
Stanislaus Prinz zu Sayn-Wittgenstein-Berleburg £92,513 £82,900 - - - - - - - - £92,513 £82,900 £92,513 £82,900 - -
Jann Brown £102,633 £94,700 - - - - - - - - £102,633 £94,700 £102,633 £94,700 - -
Karl Sevelda £98,708 £91,700 - - - - - - - - £98,708 £91,700 £98,708 £91,700 - -
Marie-Hélène Ametsreiter £98,782 £88,700 - - - - - - - - £98,782 £88,700 £98,782 £88,700 - -
Katarina Lindström £85,000 £19,275 - - - - - - - - £85,000 £19,275 £85,000 £19,275 - -
Wolfgang Ruttenstorfer £92,852 £85,900 - - - - - - - - £92,852 £85,900 £92,852 £85,900 - -
Michael Schwarz - - - - - - - - - - - - - - - -
Karin Garcia - - - - - - - - - - - - - - - -
Martin Kowatsch - - - - - - - - - - - - - - - -
1. All amounts are disclosed in the currencies in which the relevant elements of pay are set. Actual payment may be made in the currency where the recipient
resides using the exchange rate at the time of payment.
2. Benefits in 2024 for Stefan Borgas comprise benefits of tax advice, private health insurance and car benefits. The benefits for Ian Botha included a car benefit
and insured benefits.
3. Pension figures represent the 15% of salary cash allowance received by Executive Directors.
4. The increase in share price between grant and vesting is £6.24. As a result, the value attributable to share price appreciation based is £ 279,302 (€ 335,252)
for Stefan Borgas and £ 122,448 (€ 146,976) for Ian Botha. Further details are set out on page 225. Value of shares based on a three-month average share price
of £32.14 (€38.72) to 31 December 2024 and an exchange rate of 0.83. Grant share price was £25.90 (€31.23) with an exchange rate of 0.83.
5. The 2021 LTIP Award vested on 18 March 2024 at a closing price of £35.12 (€41.17). The grant share price was £48,28 and so there was a decrease in share price
between grant and vesting of £13.16. As the share price at the time of grant is higher than the estimated share price on vesting, none of the value is attributable
to share price appreciation. Further details are set out on page 223.
6. Katarina Lindström was nominated by the Board as a Non-Executive Director to be proposed to shareholders at the AGM 2024. She was nominated with effect
from 30 September 2023 and received a pro-rated fee for 2023 from that date.
7. Employee Representative Directors do not receive additional remuneration for this role as they are remunerated as employees of the Group.
8. 2% of the 2024 bonus outcome was forgone by the CEO and CFO and paid into a Health & Safety fund, therefore the amount shown reflects the amount paid
to the CEO and CFO.
9. Fees for 2024 take into account the contribution to the H&S fund as disclosed in the 2023 DRR and as agreed with the respective Directors.
No loans, advances or guarantees have been provided to any Director.
ANNUAL REPORT ON REMUNERATION
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024220
Annual Report on Remuneration
The following section provides details of how the Company’s Directors were paid during the financial year to 31 December 2024.
As a Dutch incorporated and UK and Austrian dual-listed company RHI Magnesita is required to comply with UK, Dutch and Austrian
disclosure and reporting requirements, including the UK and Dutch Corporate Governance Codes. Our Remuneration Report is therefore
presented on this basis and, recognising transparency of reporting, includes certain additional voluntary disclosures for example, those
that apply to UK incorporated companies and which are followed by RHI Magnesita where practicable to align to market practice.
The Committee, together with the Board, has determined to provide certain voluntary disclosures recognising the importance of
transparency of reporting and investor expectations as a UK listed company to comply with the UK Directors’ Remuneration Reporting
Regulations. This Annual Report is compiled on this basis.
The Remuneration Committee members (Janet Ashdown, Karl Sevelda and Jann Brown), activities and meetings during the year are
set out on page 212, along with the Committee’s purpose, roles and responsibilities and are thereby included in this part of the report
by reference.
Single total figure table (audited)
The following table shows a single total figure of remuneration in respect of qualifying services for the 2024 financial year for each
Executive and Non-Executive Director of the Company, together with comparative figures for 2023.
Director
Salary/fees Taxable benefits Bonus
LTIP Pension Total remuneration Total fixed remuneration Total variable remuneration
2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023
Executive Directors
Stefan Borgas €1,211,200 €1,142,700 €15,183 €15,008 €1,122,945 €1,628,348
€1,733,107 €1,281,947 €181,679 €171,405 €4,264,114 €4,239,408 €1,408,062 €1,329,113 €2,856,052 €2,910,295
Ian Botha €708,000 €668,000 €12,003 €308 €656,411 €951,900 €759,802 €562,052 €106,199 €100,200 €2,242,415 €2,282,460 €826,202 €768,508 €1,416,213 €1,513,952
Non-Executive Directors
Herbert Cordt £318,458 £261,700 - - - -
- - - - £318,458 £261,700 £318,458 £261,700 - -
John Ramsay £232,673 £133,100 - - - - - - - - £232,673 £133,100 £232,673 £133,100 - -
Janet Ashdown £132,043 £118,300 - - - - - - - - £132,043 £118,300 £132,043 £118,300 - -
David Schlaff £83,073 £77,100 - - - - - - - - £83,073 £77,100 £83,073 £77,100 - -
Stanislaus Prinz zu Sayn-Wittgenstein-Berleburg £92,513 £82,900 - - - - - - - - £92,513 £82,900 £92,513 £82,900 - -
Jann Brown £102,633 £94,700 - - - - - - - - £102,633 £94,700 £102,633 £94,700 - -
Karl Sevelda £98,708 £91,700 - - - - - - - - £98,708 £91,700 £98,708 £91,700 - -
Marie-Hélène Ametsreiter £98,782 £88,700 - - - - - - - - £98,782 £88,700 £98,782 £88,700 - -
Katarina Lindström £85,000 £19,275 - - - - - - - - £85,000 £19,275 £85,000 £19,275 - -
Wolfgang Ruttenstorfer £92,852 £85,900 - - - - - - - - £92,852 £85,900 £92,852 £85,900 - -
Michael Schwarz - - - - - - - - - - - - - - - -
Karin Garcia - - - - - - - - - - - - - - - -
Martin Kowatsch - - - - - - - - - - - - - - - -
1. All amounts are disclosed in the currencies in which the relevant elements of pay are set. Actual payment may be made in the currency where the recipient
resides using the exchange rate at the time of payment.
2. Benefits in 2024 for Stefan Borgas comprise benefits of tax advice, private health insurance and car benefits. The benefits for Ian Botha included a car benefit
and insured benefits.
3. Pension figures represent the 15% of salary cash allowance received by Executive Directors.
4. The increase in share price between grant and vesting is £6.24. As a result, the value attributable to share price appreciation based is £ 279,302 (€ 335,252)
for Stefan Borgas and £ 122,448 (€ 146,976) for Ian Botha. Further details are set out on page 225. Value of shares based on a three-month average share price
of £32.14 (€38.72) to 31 December 2024 and an exchange rate of 0.83. Grant share price was £25.90 (€31.23) with an exchange rate of 0.83.
5. The 2021 LTIP Award vested on 18 March 2024 at a closing price of £35.12 (€41.17). The grant share price was £48,28 and so there was a decrease in share price
between grant and vesting of £13.16. As the share price at the time of grant is higher than the estimated share price on vesting, none of the value is attributable
to share price appreciation. Further details are set out on page 223.
6. Katarina Lindström was nominated by the Board as a Non-Executive Director to be proposed to shareholders at the AGM 2024. She was nominated with effect
from 30 September 2023 and received a pro-rated fee for 2023 from that date.
7. Employee Representative Directors do not receive additional remuneration for this role as they are remunerated as employees of the Group.
8. 2% of the 2024 bonus outcome was forgone by the CEO and CFO and paid into a Health & Safety fund, therefore the amount shown reflects the amount paid
to the CEO and CFO.
9. Fees for 2024 take into account the contribution to the H&S fund as disclosed in the 2023 DRR and as agreed with the respective Directors.
No loans, advances or guarantees have been provided to any Director.
ANNUAL REPORT ON REMUNERATION CONTINUED
221RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Other arrangements
No remuneration has been granted and allocated by subsidiaries or other companies whose financials are consolidated by RHI Magnesita,
since all members of the Board are paid directly by RHI Magnesita NV. No personal loans have been granted to the members of the Board
and no guarantees or the like have been granted in favour of any of the members of the Board. No severance payments were granted to
members of the Board in 2024 and no variable remuneration has been clawed back.
Statement of Directors’ shareholding and share interests (audited)
Under the share ownership requirements set out in the Directors’ Remuneration Policy, the Executive Directors are normally required
to build and maintain over five years a shareholding equivalent to at least 200% of salary.
At the 2024 year-end, the Executive Directors each held shares in the Company as detailed below. Shares are valued using the
Company’s closing market share price on 30 December 2024 of £32.60 (converted to Euro using FX rate of 0,82 to = €39,39).
The table below shows how each Director complies with the shareholding guidelines on 31 December 2024:
Shares
held at
31 December
2023
Shares
held at
31 December
2024
Shares
held by
connected
persons
Options
Shareholding
requirement
(% of salary)
Current
shareholding
(% of salary)
Requirement
met?
Unvested
and not
subject to
performance
conditions
Unvested
and subject
to
performance
conditions
Vested but
unexercised
Exercised
during the
year
Executive Directors
Stefan Borgas 74,392 108,125 1,150 - 205,296 - 30,000 200% 351% Yes
Ian Botha 40,623 52,469 - - 90,005 - 12,435 200% 292% Yes
Non-Executive
Directors
Herbert Cordt 350,000 350,000 - - - - - N/A N/A N/A
John Ramsay 4,890 4,890 - - - - - N/A N/A N/A
Janet Ashdown - - - - - - - N/A N/A N/A
David Schlaff - - - - - - - N/A N/A N/A
Stanislaus Prinz zu
Sayn-Wittgenstein
-Berleburg 3,160,183 3,160,183 - - - - - N/A N/A N/A
Jann Brown - - - - - N/A N/A N/A
Karl Sevelda 2,000 2,000 - - - - - N/A N/A N/A
Marie-Hélène
Ametsreiter - - - - - - - N/A N/A N/A
Sigalia Heifetz - - - - - - - N/A N/A N/A
Wolfgang Ruttenstorfer - - - - - - - N/A N/A N/A
Karin Garcia - - - - - - - N/A N/A N/A
Martin Kowatsch 1,223 1,223 - - - - - N/A N/A N/A
Michael Schwarz - - - - - - - N/A N/A N/A
1. Shareholding determined using an FX rate of 0.82 for £ to € on 31 December 2024. This is then used to assess whether the shareholding requirement has been met.
2. Includes shareholdings of connected persons.
3. According to the latest disclosures by the shareholder in the AFM register, 13,333,340 shares are held directly by MSP Stiftung. MSP Stiftung is a foundation
under Liechtenstein law, whose founder is Mag. Martin Schlaff a related party connected to David Schlaff.
4. According to the AFM register, Ms. E. Prinzessin zu Sayn-Wittgenstein Berleburg, who is a related party and person connected to Stanislaus Prinz zu
Sayn-Wittgenstein Berleburg, holds these shares indirectly via Chestnut Beteiligungsgesellschaft mbH (“Chestnut”) and via partial ownership of FEWI
Beteiligungsgesellschaft mbH (“FEWI”). She holds a further holding of 126,076 shares held directly which is included in the above number. Furthermore, per the
disclosures on page 195 she has an agreement with Mr. K.A. Winterstein which allows Chestnut to exercise the voting rights of Silver Beteiligungsgesellschaft
mbH (“Silver”) in the Company.
5. There are no unvested scheme interests in the form of shares.
6. Value realised by Stefan Borgas in the year from exercising awards granted under the LTIP 2021 was £1,053,600 (€1,235,100), based on a share price at the
exercise date of £35.12 (€41.17), which was lower than the share price at the grant date of £41.38 (€48.28). Similarly, Ian Botha realised £479,458 (€562,052)
from exercising awards under the LTIP 2021, also based on a share price of £35.12 (€41.17) at the time of exercise.
7. Unvested options and subject to performance conditions includes the inflight LTIP awards.
There were no changes in the Directors’ shareholdings and share interests between the end of the year and 26 February 2025,
being the latest possible date for the finalisation of this report.
ANNUAL REPORT ON REMUNERATION CONTINUED
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024222
Short-term incentives for Executive Directors
2024 Annual bonus performance against targets (audited)
The targets set for the annual bonus and performance against them are set out below.
Goal 2024
% KPI pay-out
Pay-out
Weighting
Threshold
(25% of
maximum)
Target
(50% of
maximum)
Max
(100% of
maximum)
Actual
performance
Pay-out
(% of max)
Pay-out
(% of salary) CEO CFO
Adjusted EBITA €m (excluding
2024 completed M&As) 45% 399 430 461 407 31% 20.9% €252,602 €147,657
Operating cash flow €m 25% 324 345 366 387 100% 37.5% €454,200 €265,500
Strategic Initiatives 30%
Big 6 Scorecard 10% 75% 90% 100% 85% 42% 6.3% €75,700 €44,250
Recycling - use of SRM 10% 12.2% 12.9% 13.3% 14.2% 100% 15.0% €181,680 €106,200
PIFOT 10% €22m 12.9% 83.0% 87.7% 100% 15.0% €181,680 €106,200
Sub-total 100% 63% 94.6% €1,145,862 €669,807
Safety fund deduction (2%) 61% 92.7% €22,917 €13,396
Bonus paid to Executive Directors
after 2% payment to Health &
Safety fund €1,122,945 €656,411
1. Adjusted EBITA has been adjusted for FX as the bonus is determined on a constant currency basis.
2. The maximum CEO and CFO annual bonus in 2024 was 150% of salary.
The bonus earned is in excess of target and therefore the Executive Directors are required to acquire shares in the Company with
50% of the amount paid in excess of target (after tax) which will be held for a minimum period of three years, in line with the Policy.
No further performance conditions apply.
Pensions and benefits (audited)
Benefits in 2024 for Stefan Borgas comprise benefits of tax advice, private health insurance and car benefits. The benefits for Ian Botha
included a car benefit and insurance benefits.
Pension figures represent the 15% of salary cash allowance received by Executive Directors.
Long Term Incentives of Executive Directors
LTIP 2021 award (with vesting based on the performance periods ending 31 December 2023 (audited))
The satisfaction of the Company’s LTIP awards to date have been completed using the shares the Company holds in treasury.
You can find the details of these on page 195.
Executive Grant date Vest date
Number of
shares granted
Number of
shares to vest
Number of
dividend
equivalents
2
Total value
1
Stefan Borgas 15 March 2021 18 March 2024 43,579 27,018 4,119 €1,281,947
Ian Botha 15 March 2021 18 March 2024 19,107 11,846 1,806 €562,052
1. The value is based on the closing share price of 18 March 2024 on this date (£35.12) converted to €41.17.
2. Dividend equivalents is based on the number of dividends earned to 14 March 2024.
As disclosed in last year’s report the performance period for the TSR element of the 2021 LTIP award ended on 14 March 2024 with
the vesting outcome of the 2021 awards determined on 18 March 2024. The table below sets out the performance targets and final level
of vesting.
Performance measure Weighting
Threshold
1
(25% vesting)
Intermediate
1
(75% of vesting)
Maximum
1
(100% vesting) Performance period
2
Performance
Vesting as a % of
max
Absolute TSR 25% 13% TSR growth
over the 3 years
20% TSR growth
over the 3 years
25% TSR growth
over the years
15 March 2021 to 14
March 2024
9.3% 0%
Adjusted EPS 50% €12.0/share €14.5/share €16.9/share 1 January 2021 to
31 December 2023
€14.4/share 74%
SRM 25% 6.5% 7.5% 8.0% 12.6% 100%
1. Awards vest on a straight-line basis between threshold, intermediate and maximum.
2. For the TSR element, performance was assessed for a period of three years to 14 March 2024, being three years from the date of grant.
ANNUAL REPORT ON REMUNERATION CONTINUED
223RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
LTIP 2022 award (with vesting based on the performance periods (substantially) ending during the financial year ending
31 December 2024 (audited)
Performance against targets and vesting of LTIP awards granted on 8 March 2022 which are due to vest in 2025 is set out below:
Executive Grant date Vest date
Number of
shares granted
Number of
shares to vest
Number of
dividend
equivalents
1
Total
estimated value
2
Stefan Borgas 8 March 2022 7 March 2025 70,372 38,177 6,583 € 1,733,107
Ian Botha 8 March 2022 7 March 2025 30,852 16,737 2,886 € 759,802
1. The estimated number of dividend equivalents is based on the number of dividends earned to 31 December 2024.
2. Value of shares based on a three-month average share price of £32.14 to 31 December 2024 and an exchange rate of 0.83 (based on the exchange rate
on 30 December 2024).
Performance against targets and vesting of the LTIP awards granted on 8 March 2022 which are due to vest in 2025 is set out below.
Performance measure Weighting
Threshold
3
(25% vesting)
Intermediate
3
(75% of vesting)
Maximum
3
(100% vesting)
Performance
period
2
Performance
Vesting as a % of
max
TSR 25% 15% 22% 27% and
above
8 March 2022 to
7 March 2025
15% 6.3%
Adjusted EPS (cumulative
for the three-year
performance period)
50% €14.3 €16.5 €19.3 1 January 2022 to
31 December
2024
€15.2 23%
Reduce CO emissions
against 2018
25% -11.5% -12.5% -13.0% -14.4% 25%
1. Measured from the date of grant to third anniversary with a two-month average before each date.
2. The targets for the EPS and CO
Reduction were assessed against performance to 31 December 2024. For the TSR element, performance is assessed for a
period of three years to 7 March 2025, three years from grant. The estimated outcome under the TSR element based on TSR performance to 26 January 2025.
The actual TSR and vesting level will be provided in the 2025 Remuneration Report.
3. Awards vest on a straight-line basis between threshold, intermediate and maximum.
4. A two-year post vesting holding period applies.
2023 LTIP awards
4
Performance targets
Performance measure Weighting
Threshold
(25% vesting)
Intermediate
(75% of vesting)
Maximum
(100% vesting) Performance period
TSR 25% 15% 22% 27% and
above
6 March 2024 to
6 March 2026
Adjusted EPS (cumulative for the
three-year performance period)
50% €11.9 €12.7 €13.4 1 January 2024 to
31 December 2025
Reduce CO emissions against 2018 25% -11.0% -11.5% -12.0%
1. Measured from the date of grant to third anniversary with a two-month average before each date.
2. Measured over the three financial years to 31 December 2025.
3. Awards vest on a straight-line basis between threshold, intermediate and maximum.
4. A two-year post vesting holding period applies.
2024 LTIP awards made during the financial year ending 31 December 2024 (audited)
During the year, the CEO and CFO received LTIP awards as set out below.
Executive Scheme Basis of award Date of award
Percentage
of salary
award
Share price
used €
1
Face value
€000
Percentage
vesting at
threshold
performance
Number of
shares
End of
performance period
3
Stefan Borgas LTIP Annual award 7 March 2024 200% 41.7685 2,422,4 25% 57,995 6 March 2027
Ian Botha LTIP Annual award 7 March 2024 150% 41.7685 1,062,0 25% 25,425 6 March 2027
1. The face value of the awards was calculated using the average closing price for the five trading days prior to the award being granted being £35.75 converted to €
(using average FX rate over the same five-day period of £0.86 to €1 = €41.77).
2. Awards are structured as nil cost options.
3. In line with the Policy, a two-year holding period applies after the date of vesting.
ANNUAL REPORT ON REMUNERATION CONTINUED
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024224
2024 LTIP awards Performance targets (audited)
Performance measure Weighting
Threshold
(25% vesting)
Intermediate
(75% of vesting)
Maximum
(100% vesting) Performance period
ROIC 25% 10.2% 10.9% 12.0% 1 January 2024 to
31 December 2026
Adjusted EPS (cumulative for the
three-year performance period)
50% €14.6 €15.1 €15.4
Reduce CO emissions per tonne against 2018 25% -15.2% -15.5% -15.8%
1. Awards vest on a straight-line basis between threshold, intermediate and maximum.
2. Two-year post-vesting holding period applies.
Directors’ interests in RHI Magnesita’s LTIP
The table below details outstanding share awards, including the annual LTIP awards granted to the CEO and CFO during 2024.
Scheme Award Date
Share price
used to grant
the award
€
Share awards
held at
1 January
2024
Awarded
during
the year
Vested
during
the year
Dividend
equivalents
awarded
during
the year
Exercised
during
the year
Lapsed
during
the year
Share awards
held at
31 December
2024 Vesting date
Stefan
Borgas
Performance
shares
15 March
2021 48.28 43,579 30,000 4,119 30,000 16,561 -
15 March
2024
Performance
shares
8 March
2022 31.23 70,372 70,372
8 March
2025
Performance
shares
6 March
2023 29.71 76,929 76,929
6 March
2026
Performance
shares
7 March
2024 41.77 57,995 57,995
7 March
2027
Ian
Botha
Performance
shares
15 March
2021 48.28 19,107 13,652 1,806 13,652 7,261 -
15 March
2024
Performance
shares
8 March
2022 31.23 30,852 30,852
8 March
2025
Performance
shares
6 March
2023 29.71 33,728 33,728
6 March
2026
Performance
shares
7 March
2024 41.77 25,425 25,425
7 March
2027
1. Award levels were calculated using the average closing price for the five trading days prior to the award being granted being £41.38 converted to €
(using average FX rate over the same five-day period of £0.86 to €1 = € 48.28).
2. Award levels were calculated using the average closing price for the five trading days prior to the award being granted being £25.90 converted to €
(using average FX rate over the same five-day period of £0.83 to €1 = € 31.23).
3. Award levels were calculated using the average closing price for the five trading days prior to the LTIP award being granted being £26.24 converted to €
(using average FX rate over the same five days period of £0.86 to €1 = €29.71).
4. Award levels were calculated using the average closing price for the five trading days prior to the LTIP award being granted being £35.75 converted to €
(using average FX rate over the same five days period of £0.86 to €1 = €41.77).
5. Dividend equivalents awarded during the year (see pages 223 and 224) for more details.
Review of past performance and CEO remuneration table
Share price performance
Shares are valued using the Company’s closing market share price on 30 December 2024 of £32.60 (converted to Euro using FX rate
of 0.82 to = €39.39). (2023: £34.60). During 2024, the shares traded in the range of £30.65 to £37.85.
ANNUAL REPORT ON REMUNERATION CONTINUED
225RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
RHI Magnesita total shareholder return
The graph below compares the Total Shareholder Return of the Company with the FTSE 350 Index from Admission date of 27 October 2017
to 31 December 2024. This is considered an appropriate comparator for RHI Magnesita because it is a constituent of the index.
180
160
140
120
100
80
60
40 31/12/17 31/12/18 31/12/19 31/12/20 31/12/21 31/12/22 31/12/23 31/12/24
RHI Magnesita FTSE 350
Remuneration of the CEO
2017 2018 2019 2020 2021 2022 2023 2024
Single figure of total
remuneration
Stefan Borgas €476,981 €2,073,350 €1,490,427 €1,892,862 €1,584,758 €3,286,216 €4,239,408 €4,264,114
Annual bonus payout
as % of maximum
,
Stefan Borgas 83% 88% 39% 50% 24% 42% 95% 61%
Long-term incentive vesting
rates as % of maximum
Stefan Borgas N/A N/A N/A 0% 0% 50% 62% 54%
1. The 2017 Single figure of Total Remuneration relates to the period 27 October 2017 to 31 December 2017.
2. The 2017 Annual bonus payout as a % of maximum relates to bonus targets set prior to the merger of the two companies that now form RHI Magnesita NV.
3. The percentage of maximum shown for the 2020 Annual bonus is the amount paid to the CEO. The formulaic bonus outcome was 100% of maximum. However,
the bonus was capped at 50% of maximum due to the impact of the pandemic.
4. A long-term incentive plan was introduced when the Company was formed in October 2017. The first 2018 LTIP award was eligible to vest in 2021.
5. The formulaic outcome under the 2023 bonus was 100% of maximum. However, 5% of the bonus was paid to a Health & Safety fund with 95% of maximum paid
to the CEO.
6. The formulaic outcome under the 2024 bonus was 63% of maximum. However, 2% of the bonus was paid to a Health & Safety fund with 61% of maximum paid
to the CEO.
ANNUAL REPORT ON REMUNERATION CONTINUED
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024226
Pay ratios
The Dutch Corporate Governance Code recommended from the financial year 2018, and the UK Directors’ Reporting Regulations
required from 2019, that the Committee report pay ratios, including changes from the prior year as part of its determination of executive
pay and wider executive remuneration decisions. The total employee remuneration figure used for the ratio below is for all employees in
all Group companies and includes countries with significantly lower levels of pay than Europe and the United States. RHI Magnesita only
has around 150 employees in the UK and falls below the required threshold for UK pay ratio reporting requirements. As UK employees
represent less than 1% of RHI Magnesita’s employees, the Committee considers that the above approach is appropriate in these
circumstances.
A significant proportion of the ’Executive Directors’ remuneration is delivered through incentives, annual bonus and LTIP, where awards
are linked to company performance and share price movement over the longer term. This means that the pay ratio will depend on the
incentive outcome.
The table below shows the pay ratio in respect of each year from 2018 to 2024:
Pay ratio 2024 2023
,
2022 2021 2020 2019 2018
CEO 85:1 85:1 70:1 21:1 41:1 34:1 49:1
CFO 45:1 46:1 47:1 13:1 25:1 16:1 N/A
1. The ratios for 2023 have been updated based on the value of the 2021 LTIP award at vesting (see page 223 for more details).
2. The CEO and CFO pay ratio increased from 2022. This is predominantly due to the vesting of the LTIP and a higher bonus outturn.
3. Pay ratio is lower due to not achieving target bonus KPIs.
4. The pay ratio rose due to the increase in base salary for the CEO and CFO in 2020.
5. CFO pay ratio is lower as Ian Botha joined the Company on 1 April 2019; with the full salary and bonus, the ratio would be 21:1.
6. The pay ratio for CEO has increased in 2023, due to the incentive outturns in 2024. Executive Directors receive higher levels of variable pay opportunity than
other employees to reflect their roles in the business.
Relative importance of spend on pay
The following table sets out the change in distributions to shareholders by way of dividend and overall spend on pay in the financial year
ended 31 December 2023 compared with the financial year ended 31 December 2024.
2024
€ million
2023
€ million
Percentage
change
Total gross employee pay 805.3 747. 3 7.8%
Dividends 87.3 7 7.7 12.0%
ANNUAL REPORT ON REMUNERATION CONTINUED
227RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Directors and employee remuneration over time
The table below shows the Directors’ total remuneration year-on-year change (on a full-time equivalent basis) and includes comparators
of Company performance and average FTE remuneration.
Year
Total
Remuneration in
FY 2024
Change %
2023 to 2024
Change %
2022 to 2023
Change %
2021 to 2022
Change %
2020 to 2021
Change %
2019 to 2020
Change % from
2018 to 2019
Executive Directors
Stefan Borgas €4,264,114 0,6% 27,5% 90.3% (16.3)% 27.0% (28.1)%
Ian Botha €2,242,415 (1.8)% 0,03% 124.1% (16.5)% N/A N/A
Non-Executive Directors
Herbert Cordt £318,458 21.7% 4.0% 4.4% 6.1% 3.2% -
John Ramsay £232,673 74.8% 3.8% 4.3% 31.9% 12.9% 6.4%
Janet Ashdown £132,043 11.6% 3.8% 9.1% 19.9% N/A N/A
David Schlaff £83,073 7.7% 3.9% 4.4% 6.0% 3.2% -
Stanislaus Prinz zu Sayn-
Wittgenstein-Berleburg £92,513 11.6% 11.0% 5.1% 6.0% 3.2% -
Jann Brown £102,633 8.4% 3.5% N/A N/A - -
Karl Sevelda £98,708 7.6% 3.5% 7.6% 10.0% 3.2% -
Marie-Héléne Ametsreiter £98,782 11.4% 5.1% N/A N/A - -
Katarina Lindström £85,000 N/A N/A - - - -
Wolfgang Ruttenstorfer £92,852 8.1% 3.9% 4.3% 6.0% 3.2% -
Karin Garcia - - - - - -
Martin Kowatsch - - - - - -
Michael Schwarz - - - - - -
Company performance
Adjusted EPS €5.3 6.8% 3.4% 6.6% 36.0% (41.1)% 4.8%
Adjusted operating cash flow
in € million €386 (6.9)% 167.0% 165.7% (18.7)% 1.7% (23.0)%
Average remuneration (on a
full-time equivalent basis)
Employees of the Company €92,203 -1.6% 15.6% 8.7% -3.4% 7.7% 4.1%
1. For notes on the change from 2018 to 2019, please see the 2019 Annual Report, for the change from 2019 to 2020 the 2020 Annual Report, 2020 to 2021 the
2021 Annual Report, 2021 to 2022 the 2022 Annual Report and 2023 the 2023 Annual Report.
2. Where the incumbent did not serve for the full year, the calculation has not been made as it is unrepresentative.
3. Stanislaus Prinz zu Sayn-Wittgenstein-Berleburg was appointed as a member of the Corporate Sustainability Committee in November 2022. Jann Brown was
appointed as a member of the Remuneration Committee in December 2022. As a result, the total fees paid increased YoY.
4. Employee Representative Directors do not receive remuneration for that role as they are remunerated as employees of the Group.
5. The group of RHI Magnesita’s employees covers the Parent Company, namely all employees within the Austrian subsidiaries.
6. Katarina Lindström was nominated by the Board as an Independent Non-Executive Director with effect from 30 September 2023 and received a pro-rated fee
from that date.
ANNUAL REPORT ON REMUNERATION CONTINUED
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024228
Payments for loss of office and to past directors (audited)
There were no payments to past directors or for loss of office.
2025 remuneration
Set out below is how the Directors’ Remuneration Policy will be implemented during 2025.
Salaries and fees for 2025
Directors’ salaries and fees (on a full-time equivalent basis)
The Executive Directors’ salaries will be increased from 1 January 2025 by 3%. This compares to the increase to the wider workforce
in Austria of an average of 4.8%.
2025 2024 Change YoY
Executives
Stefan Borgas €1,247,500 €1,211,200 €36,300
Ian Botha €729,200 €708,000 €21,200
Non-Executives
Chair of the Board (inclusive of all Committee fees) £325,000 £325,000 £0
Non-Executive Directors £85,000 £85,000 £0
Deputy Chair & Senior Independent Director £120,000 £120,000 £0
Chairs of Audit & Compliance, Remuneration, Nomination & Governance
(unless held by the Chair of the Board) and Corporate Sustainability Committees £25,000 £25,000 £0
Membership of the Audit & Compliance,
Corporate Sustainability and Remuneration Committees £10,000 £10,000 £0
Membership of the Nomination & Governance Committee £6,000 £6,000 £0
The Company does not contribute to defined benefit pension schemes on behalf of Executive Directors or Non-Executive Directors.
No Director has a prospective entitlement under a defined benefit scheme.
Annual bonus 2025
The maximum bonus opportunity for 2025 is unchanged at 150% of salary. In line with the 2024 bonus, the 2025 bonus will be based on
Adjusted EBITA (40%) and strategic objectives (35%). The remainder of the bonus will be subject to Adjusted operating cash flow (25%).
Both the CEO and the CFO are required to use 50% of any bonus earned in excess of target (net of tax) to acquire shares in the Company
that will be held for a minimum of three years.
Performance criteria 2025 2024
Adjusted EBITA 40% 45%
Adjusted operating cash flow 25% 25%
Strategic Initiatives
1
Strategic projects 25% 10%
PIFOT - 10%
Use of SRM 10% 10%
1. The specific targets relating to the 2025 bonus have not been disclosed at this stage as they are considered by the Committee to be commercially sensitive,
and it is not considered in the interests of shareholders to disclose further details on a prospective basis. Details will be provided on a retrospective basis in next
year’s Annual Report on Remuneration.
Pensions and benefits 2025
Benefits in 2025 for Stefan Borgas will comprise benefits of tax advice, private health insurance and car benefits. The benefits for Ian Botha
will include a car benefit and insurance benefits.
Pension figures represent the 15% of salary cash allowance received by Executive Directors.
ANNUAL REPORT ON REMUNERATION CONTINUED
229RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
2025 LTIP awards
The CEO will be granted an LTIP award over shares with a value at grant of 200% and the CFO will be granted an LTIP award over shares
with a value at grant of 150% of salary. As set out in the Committee Chair’s statement on pages 213 to 216 the Committee reviewed the
performance measures during the year as part of the overall Policy review and concluded that the 2024 LTIP should continue to use
ROIC, EPS and CO emissions performance conditions. The measures and the targets are set out below.
Performance measure Weighting
Threshold
(25% vesting)
1
Intermediate
(75% of vesting)
1
Maximum
(100% vesting)
1
Performance period
ROIC 25% 10.2% 10.9% 12.0% 1 January 2025 to
31 December 2027
Adjusted EPS (cumulative for the three-year
performance period)
2
50% €15.7 €16.4 €16.9
Reduce CO emissions per tonne against 2018 25% -2.2% -2.6% -3.0%
1. Awards vest on a straight-line basis between threshold, intermediate and maximum.
2. Two-year post vesting holding period applies.
Advisers
Korn Ferry (“KF”) provided valuable support to the Committee up until July 2024. KF’s fees for advising the Committee during 2024
amounted to £29,000, based on the time spent providing their services. The Committee was satisfied that the controls implemented
by KF were sufficient to prevent any potential conflicts of interest.
In July 2024, the Committee decided to engage a new adviser to bring fresh insights and ideas, reflecting the Company’s evolution
and aligning more closely with its current needs and goals. After careful consideration, Willis Towers Watson (“WTW”), a signatory to
the UK Remuneration Consultants Group’s Code of Conduct, was appointed. WTW’s selection followed a thorough proposal process,
demonstrating their expertise in executive remuneration. The Committee will review WTW’s appointment annually.
WTW advises the Committee on executive and senior management remuneration in order to bring up to date market practice on
incentivisation across a range of geographies to deliver the corporate strategy, bringing an informed, external viewpoint on management’s
proposals. The have also reviewed and advised on the remuneration report. In 2024, WTW’s fees for advice to the Committee were
£31,000 based on the time spent providing their services. The Committee remains confident that WTW’s established controls effectively
mitigate any risk of conflicts of interest. WTW provided no other services to RHI Magnesita during the year 2024.
Statement of voting at AGM
The Committee considers a number of inputs from shareholders to guide its decisions on the review and implementation of Policy.
This includes the outcomes of Remuneration resolutions put to shareholders shown as follows:
Resolutions at the 2024 AGM Votes for % of votes cast Votes against % of votes cast
Total votes
validly cast
Total votes cast
as a % of the
relevant shares
in issue
Number of
votes withheld
2 May 2024
Advisory vote on the 2023 Directors’
Remuneration Report (excluding the
Directors’ Remuneration Policy) 37,532,647 99.06 358,034 0.94 37,891,031 80.38 350
Binding vote on Directors’ Remuneration
Policy 36,838,330 97.22 1,052,351 2.78 37,891,031 80.38 350
For the 2024 AGM, the total voting rights of the Company on the day on which shareholders had to be on the register in order to
be eligible to vote was 47,137,206. A “Vote withheld” is not a vote in law and is not counted in the calculation of the % of shares voted
“For” or “Against” a resolution.
This report was reviewed and approved by the Board on 26 February 2025 and signed on its behalf by order of the Board.
Janet Ashdown
Chair of the Remuneration Committee
ANNUAL REPORT ON REMUNERATION CONTINUED
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024230
OUR FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
232 Consolidated Statement of Profit or Loss
233 Consolidated Statement
of Comprehensive Income
234 Consolidated Statement of Financial Position
235 Consolidated Statement of Cash Flows
236 Consolidated Statement of Changes in Equity
238 Notes to the Consolidated Financial
Statements 2024
300 Company Financial Statements
of RHI Magnesita N.V.
302 Notes to the Company Financial
Statements 2024
OTHER INFORMATION
312 Independent Auditor’s report
322 Limited assurance report of
the independent auditor on the
consolidated sustainability statement
325 Alternative performance measures (“APMs”)
327 Glossary
329 Shareholder information
Our
Financial
Statements
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
231RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
Continued |
Consolidated Financial Statements 2024 | ||||
Consolidated Financial Statements 2024 Continued |
Consolidated Financial Statements 2024
Consolidated Statement of Profit or Loss
for the year ended 31 December 2024
for the year ended 31 December 2024
in € million | Note | 2024 | 2023 |
Revenue | (5) | ||
Cost of sales | (5) | ( | ( |
Gross profit | |||
Selling and marketing expenses | ( | ( | |
General and administrative expenses | ( | ( | |
Restructuring | (6) | ( | ( |
Other income | (7) | ||
Other expenses | (8) | ( | ( |
EBIT | |||
Interest income | (11) | ||
Interest expenses on borrowings | ( | ( | |
Net income/(expense) on foreign exchange effects | (12) | ( | |
Other net financial expenses | (13) | ( | ( |
Net finance costs | ( | ( | |
Profit before income tax | |||
Income tax | (14) | ( | ( |
Profit after income tax | |||
RHI Magnesita N.V. shareholders | |||
Non-controlling interests | (26) | ||
in € | |||
Earnings per share - basic | (15) | ||
Earnings per share - diluted | (15) |
Consolidated Financial Statements 2024 | ||||
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2024
for the year ended 31 December 2024
in € million | Note | 2024 | 2023 |
Profit after income tax | |||
Currency translation differences | |||
Unrealised results from currency translation | ( | ( | |
Deferred taxes thereon | (14) | ||
Reclassification to profit or loss | ( | ||
Cash flow hedges and costs of hedging | |||
Unrealised fair value changes | (35) | ( | |
Reclassification to profit or loss | ( | ( | |
Deferred taxes thereon | (14) | ( | |
Remeasurement of investments in debt instruments | |||
Unrealised fair value changes | ( | ||
Reclassification to profit or loss | |||
Items that may be reclassified to profit or loss in later periods | ( | ( | |
Remeasurement of defined benefit plans | |||
Remeasurement of defined benefit plans | (29) | ( | |
Deferred taxes thereon | (14) | ( | |
Items that are not reclassified to profit or loss in later periods | ( | ||
Other comprehensive (loss)/income after income tax | ( | ( | |
Total comprehensive income | |||
RHI Magnesita N.V. shareholders | |||
Non-controlling interests | (26) | ( |
Consolidated Financial Statements 2024 Continued |
Consolidated Statement of Financial Position
as at 31 December 2024
as at 31 December 2024
in € million | Note | 31.12.2024 | 31.12.2023 |
ASSETS | |||
Non-current assets | |||
Goodwill | (17) | ||
Other intangible assets | (18) | ||
Property, plant and equipment | (19) | ||
Investments in joint ventures and associates | |||
Other financial assets | (34) | ||
Other assets | (20) | ||
Deferred tax assets | (14) | ||
Current assets | |||
Inventories | (21) | ||
Trade and other receivables | (22) | ||
Income tax receivables | (14) | ||
Other financial assets | (34) | ||
Cash and cash equivalents | (23) | ||
EQUITY AND LIABILITIES | |||
Equity | |||
Share capital | (24) | ||
Group reserves | (25) | ||
Equity attributable to shareholders of RHI Magnesita N.V. | |||
Non-controlling interests | (26) | ||
Non-current liabilities | |||
Borrowings | (27) | ||
Other financial liabilities | (28) | ||
Deferred tax liabilities | (14) | ||
Net employee defined benefit liabilities | (29) | ||
Provisions | (30) | ||
Other liabilities | |||
Current liabilities | |||
Borrowings | (27) | ||
Other financial liabilities | (28) | ||
Trade payables and other liabilities | (31) | ||
Income tax liabilities | (14) | ||
Provisions | (30) | ||
Consolidated Financial Statements 2024 | ||||
Consolidated Statement of Cash Flows
for the year ended 31 December 2024
for the year ended 31 December 2024
in € million | Note | 2024 | 2023 |
Cash generated from operations | (32) | ||
Income tax paid less refunds | ( | ( | |
Net cash flow from operating activities | |||
Investments in property, plant and equipment and intangible assets | ( | ( | |
Investments in subsidiaries net of cash acquired | ( | ( | |
Cash inflows from the sale of property, plant and equipment | |||
(Cash outflows) from investments in financial assets | ( | ( | |
Cash inflows from the sale of financial assets | |||
Dividends received from non-consolidated entities | |||
Investment subsidies received | |||
Prepayments related to the acquisition of Resco Group | ( | ||
Interest received | |||
Net cash used in investing activities | ( | ( | |
Payment for share issue costs in subsidiary | ( | ||
Proceeds from share issue in subsidiary | |||
Acquisition of non-controlling interests | ( | ( | |
Dividends paid to RHI Magnesita N.V. shareholders | ( | ( | |
Dividend paid to non-controlling interests | ( | ( | |
Proceeds from long-term financing | |||
Repayments of long-term financing | ( | ( | |
Changes in current borrowings and financial liabilities to associates | ( | ( | |
Interest payments | ( | ( | |
Repayment of lease obligations | ( | ( | |
Interest payments from lease obligations | ( | ( | |
Net cash (used in)/provided by financing activities | (33) | ( | |
Change in cash and cash equivalents | ( | ||
Cash and cash equivalents at beginning of period | |||
Reclassification of Cash and Cash equivalents | (23) | ( | |
Foreign exchange impact | ( | ||
Cash and cash equivalents at end of period | (23) |
— 180 | |
Consolidated Statement of Changes in Equity
for the year ended 31 December 2024
for the year ended 31 December 2024
Group reserves | |||||||||||
Accumulated other comprehensive income | |||||||||||
in € million | Share capital | Treasury shares | Additional paid-in capital | Mandatory reserve | Retained earnings | Cash flow hedges and costs of hedging | Defined benefit plans | Currency translation | Equity attributable to shareholders of RHI Magnesita N.V. | Non-controlling interests | Total equity |
Note | (24) | (25) | (25) | (25) | (25) | (25) | (25) | (25) | (26) | ||
31.12.2023 | ( | ( | ( | ||||||||
Profit after income tax | |||||||||||
Currency translation differences | ( | ( | ( | ||||||||
Cash flow hedges and costs of hedging | |||||||||||
Defined benefit plans | |||||||||||
Other comprehensive income after income tax | ( | ( | ( | ||||||||
Total comprehensive income | ( | ||||||||||
Dividends | ( | ( | ( | ( | |||||||
Share transfer/vested LTIP | ( | ||||||||||
Other changes1) | ( | ( | |||||||||
Share-based payment expenses | |||||||||||
Hedging gains and losses included in the initial cost of inventory purchased in the reporting period | ( | ( | ( | ||||||||
( | ( | ( | ( | ( | |||||||
31.12.2024 | ( | ( | ( | ||||||||
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.
181 — | |
Group reserves | |||||||||||
Accumulated other comprehensive income | |||||||||||
in € million | Share capital | Treasury shares | Additional paid-in capital | Mandatory reserve | Retained earnings | Cash flow hedges | Defined benefit plans | Currency translation | Equity attributable to shareholders of RHI Magnesita N.V. | Non-controlling interests | Total equity |
Note | (24) | (25) | (25) | (25) | (25) | (25) | (25) | (25) | (26) | ||
31.12.2022 | ( | ( | ( | ||||||||
Profit after income tax | |||||||||||
Currency translation differences | ( | ( | ( | ( | |||||||
Cash flow hedges | ( | ( | ( | ||||||||
Defined benefit plans | ( | ( | ( | ||||||||
Other comprehensive income after income tax | ( | ( | ( | ( | ( | ( | |||||
Total comprehensive income | ( | ( | ( | ( | |||||||
Hedging gains and losses and costs of hedging transferred to the carrying value of inventory purchased during the year | |||||||||||
Dividends | ( | ( | ( | ( | |||||||
Share transfer/vested LTIP | ( | ||||||||||
Additions to consolidated companies and change of non-controlling interests without a change of control | |||||||||||
Change of non-controlling interests without a change of control | |||||||||||
Change of non-controlling interests without a change of control | ( | ||||||||||
Change of non-controlling interests without a change of control | ( | ( | ( | ( | |||||||
Hyperinflation adjustment | |||||||||||
Other changes1) | ( | ( | ( | ||||||||
Share-based payment expenses | |||||||||||
31.12.2023 | ( | ( | ( | ||||||||
1) Mainly relating to the recognition of the financial liability and derecognition of the non-controlling interests related to the acquisition of Jinan New Emei, the recognition of the non-controlling interests related to the acquisition of Seven Refractories Group as well as P-D Group and the impacts of the fair value changes resulting from the completion of purchase price allocation related to the acquisition of Sörmaş.
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
Notes to the Consolidated Financial Statements 2024
1. Authorisation of Consolidated Financial Statements and Statement of Compliance with the IFRS Accounting Standards
The Consolidated Financial Statements of RHI Magnesita N.V. public limited company incorporated under the laws of the Netherlands (naamloze vennootschap), having its official seat (statutaire zetel) in Arnhem, the Netherlands Kranichberggasse 6, 1120 Vienna, Austria
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 (FVPL) or Other Comprehensive Income (FVOCI) and financial liabilities measured at FVPL, 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 certain improvements in presentation. These improvements include:
● Presentation of defined employee benefit liabilities in the Consolidated Statement of Financial Position in a single line item labelled ‘net employee defined benefit liabilities’. Previously, these were presented in separate line items, namely ‘provisions for pensions’ and ‘other personnel provisions’.
● Presentation of the effects of translating the financial statements of foreign operations and subsidiaries with a functional currency other than the Euro into the Group’s presentation currency in the Consolidated Statement of Comprehensive Income in a single line item. Previously, these were presented in separate line items, namely ‘unrealised results from currency translation’ and ‘unrealised results from net investment hedge and foreign operations’.
● Purchased emission rights which represent the permission to emit specified tons of carbon dioxide (CO2) in a specified time period have been reclassified to Inventories in the Consolidated Statement of Financial Position. Previously, these were presented as trade and other current receivables. Due to this reclassification the comparative figure for inventories increased by €5 million and the comparative figure for trade and other current receivables decreased by the same amount.
● Realised gains and losses from settled foreign currency forward contracts have been reclassified to the cash flow from operating activities in the Consolidated Statement of Cash Flows. Previously, these were presented as part of the cash flow from financing activities. Due to this reclassification, the comparative figure for cash flow from financing activities decreased by €5 million and the comparative figure for cash flow from operating activities increased by the same amount.
● The number of reportable segments increased from two to five and the disclosures were extended to match the new segment reporting structure. Refer to Note (5) for further details.
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 Urmitz AG & Co. KG (Mülheim-Kärlich), 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.
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.
Notes to the Consolidated Financial Statements 2024 | ||||
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 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 Group’s shareholders.
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 304 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 a range of 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 financial debt covenant of the Group’s principal borrowing facilities. Further mitigating actions within management control would be undertaken in such scenarios, including but not limited to: working capital and SG&A reduction, deferring capital expenditure, or reducing or cancelling the dividend, but these were not incorporated in the downside modelling.
The Directors have also considered the Group’s current liquidity and available facilities. As of 31 December 2024, the Consolidated Statement of Financial Position reflects cash and cash equivalents of €576 million (2023: €704 million). In addition, the Group has access to a €600 million (2023: €600 million) Revolving Credit Facility (RCF), which is currently undrawn and not relied upon for the purpose of the going concern assessment. In 2024 and the previous reporting period, the Group complied with the financial covenant of the Group’s principal borrowing facilities (refer to Note (27)).
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 2024.
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 2024. Except for the amendments to IAS 7 and IFRS 7 including new disclosure requirements for the Group’s existing liabilities related to supplier finance arrangements and their effects on the Group’s liabilities, cash flows and exposure to liquidity risk, management assessed that the application of these has not had a material impact on the Consolidated Financial Statements for 2024. Refer to Note (31) for the new disclosures on the Group’s existing supplier finance arrangements.
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 newly issued 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 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. European Union endorsement is still pending.
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).
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
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 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 standard will be determined once this review has been completed. In particular the classification of expenses and income to the five P&L categories and the introduction of (new) subtotals will require 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 they can be reconciled to the most comparable IFRS 18 specific total or subtotal. 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.
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 FVPL. Fair value changes resulting from the remeasurement of the financial liability are reflected 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 reflected 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.
Notes to the Consolidated Financial Statements 2024 | ||||
Significant judgement: Control over Horn & Co Minerals Recovery At the end of the reporting period, the Group holds a 55.0% interest in Horn & Co Minerals Recovery (“Mireco”). The Group assessed its respective shareholding rights and power to control in terms of the purchase agreements, founding documents of Mireco and relevant corporate laws. Based on this assessment, the Group determined that it controls Mireco and consolidated it from the date of control. The Group exercises control over Mireco as it has the power to steer the relevant activities of the business and can use this power to affect the variable returns that it is exposed to. In determining that the Group controls Mireco, judgement is applied which takes into account the Group’s voting rights, management representation and the governance structure of Mireco. Control is achieved above all through the Group’s voting rights and the resulting influence on directing the relevant activities of the business. |
Goodwill and Other 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.
Other intangible assets
Mining rights
Mining rights were recognised in the course of the purchase price allocation for former Magnesita Group and are 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.
Customer relationships
Customer relationships arise from the acquisition of business 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.
Development costs
Research costs are expensed in the year incurred and included in general and administrative 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 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 recognised in cost of sales.
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.
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
The useful lives of the Group’s main classes of intangible assets are:
Customer relationships | 6 to 20 years |
Internally generated intangible assets | 4 to 18 years |
Other intangible assets | 4 to 65 years |
The useful economic lives of intangible assets are reviewed regularly and adjusted if necessary.
The carrying values of other 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 and intangible assets with indefinite useful life.
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 2.95% (2023: 3.07%) 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, land and buildings | 8 to 60 years |
Technical equipment and machinery | 8 to 50 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 and intangible assets with indefinite useful life.
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. |
Notes to the Consolidated Financial Statements 2024 | ||||
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 other 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.
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 recoverable amounts 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. For further details on impairment tests for CGUs which include goodwill, refer to Note (17). |
Property, plant and equipment and other intangibles
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. These CGUs, which are combined in two strategic business units, Steel and Industrial, reflect the market presence and appearance and drive cash inflows. The organisational structures of the Group reflect these units. In addition to the joint management and control of the business activities in each unit, the sales know-how, the knowledge of the long-standing customer relationships or knowledge of the customer’s production facilities and processes further support these units. Product knowledge is manifested in the application-oriented knowledge of chemical, physical and thermal properties of RHI Magnesita products. The services offered extend over the life cycle of products at the customer’s plant, from the appropriate installation and support of optimal operations to environmentally sound disposal with the customer or sustainable reuse in the Group’s production process. These factors determine cash inflow to a significant extent and consequently form the basis for the CGU structures.
The CGUs of the Steel business correspond to the operating segments Linings and Flow Control. These two CGUs are determined according to the production stages in the process of steel production. Each operating segment included in the Industrial business unit (Cement &Lime, Non-Ferrous Metals, Glass and Industrial Applications) corresponds to a separate CGU. All raw material producing facilities are combined in one CGU named Minerals. The new segment reporting structure, which is disclosed in Note (5), has not changed the composition or number of the Group’s CGUs.
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
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 2025 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 customers’ industries and expert assumptions, including forecasts about the regional growth of steel production and the output of the non-steel 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 other 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 judgement: Identification of impairment indicators related to individual assets and CGUs without goodwill Management reviewed individual assets and CGUs without goodwill 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 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 impairment losses at the level of individual assets totalling € 42 million. Refer to Notes (6), (8), (18) and (19) for details. |
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.
Notes to the Consolidated Financial Statements 2024 | ||||
Significant judgement: Presentation of cash flows related to investments in and divestments of special national government bonds The Group maintains business operations in Argentina. In 2019, the Argentinian Central Bank imposed several foreign exchange restrictions on import payments, essentially preventing the Argentinian subsidiary’s ability to honour its payment obligations to suppliers outside of Argentina in the usual manner. Given a change in legislation in December 2023, Argentinian companies are now allowed to settle their previously restricted import payment obligations by purchasing U.S. dollar-denominated securities issued by the Central Bank of Argentina, also called BOPREAL bonds, which can be held to maturity, transferred or sold in the secondary market. In 2024 the Group has invested €19 million in these BOPREAL bonds all of which have been sold or transferred before the reporting date. The cash proceeds realised from the sales, amounting to €13 million, were used to settle intercompany and third-party trade liabilities. The cash flows arising from the investment in and divestment of the BOPREAL bonds are presented within the investing category in the Consolidated Statement of Cash Flows. Judgement is applied in determining that this presentation is appropriate, by taking into account the IFRS Accounting Standard requirements to classify cash flows and the fact that each of the above transactions is a separate unit of account. |
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 current liabilities
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
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 forfaiting and other supplier finance arrangements. Supplier finance arrangements give suppliers the option to receive early payment by selling their receivables to a financial institution at a discount. The Group settles the invoice by paying the financial institution in line with the payment terms according to the supplier finance arrangements. These settlements are presented in the operating category within the Consolidated Statement of Cash Flows. Liabilities subject to supplier chain finance arrangements continue to be classified as trade payables since they 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.
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.
Significant Judgement: Own use exemption on gas and power forward purchase and physical delivery CO2-certificate forward contracts Due to the reduction of free CO2 emission certificates and the expected increase in CO2 market prices, the Group hedges the associated price risk by use of physical delivery forward purchases for own use. The Group also enters into fixed price and quantity forward gas and power contracts to secure 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, power or CO2 emission certificates. 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, electricity or CO2 emission certificates 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.
Notes to the Consolidated Financial Statements 2024 | ||||
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.
In 2024, some of the inputs and assumptions used in the net realisable value calculation in relation to reduced recoverability were revised resulting in lower impairments on inventories. This constitutes a change in an accounting estimate that led to a reduction in the cost of sales of €11 million and a corresponding increase in inventories in 2024 compared to the previous calculation. The impact of this change on future periods cannot be estimated reliably.
Purchased emission allowances 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 allowances based on the tons of CO2 emitted is recorded as expense in the cost of sales.
Those allowances 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 CO2 emissions emitted exceed the emission cap under the free of charge and purchased emission allowances, the Group recognises a provision calculated based on the deficit of emission allowances and measured at the market price of emission allowances 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.
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
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.
Notes to the Consolidated Financial Statements 2024 | ||||
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.
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
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 (23.0% if the temporary difference reverses in 2025 or later). Deferred tax assets and liabilities of the Group’s Brazilian subsidiaries are measured at 34.0%.
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 treatments and recognition of deferred tax assets Management makes judgements in relation to the recognition of 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 estimates: Recognition of deferred tax assets Income tax expense is based on the tax laws applicable in the individual countries. Due to their complexity, the tax items presented may be subject to different interpretations by local tax authorities. When determining the amount of the deferred tax assets to be recognised, mainly relating to tax losses, an estimate is required of future taxable income which is influenced by factors such as prices, gross profit margins and interest rates. A 10% change in the future taxable profit from the assumption made on the reporting date within the planning period defined for the accounting and measurement of deferred taxes would not result in a significant change in the carrying amount of deferred tax assets on recognised tax losses, over a 12-month period from the date of these Consolidated Financial Statements. 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. Consistent with this principle, in previous reporting periods, control of refractory products subject to a CFR (‘Cost and Freight’) or CIF (‘Cost, Insurance and Freight’) shipping agreement was determined to transfer upon arrival of the cargo at the port of destination. A thorough analysis conducted by management in 2024 due to the Red Sea crisis led to a reassessment of the timing of transfer of control for shipments delivered by sea freight with third party carriers. Accordingly, from 2024, control is determined to transfer as soon as the third-party carrier has issued the shipping document, if any, that allows the customer to redirect or otherwise control the shipped refractory products. As a result of this revised accounting policy, which is applied prospectively due to the immaterial impact on the comparative figures, the Group's revenue and gross profit increased by €42 million and €10 million respectively in 2024 .
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.
Notes to the Consolidated Financial Statements 2024 | ||||
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 in the reportable segment Steel 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 charges on production equipment, amortisation charges of intangible assets 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 and marketing expenses
This item includes personnel expenses for the sales staff as well as depreciation charges and other operating expenses related to the market and sales processes.
General and administrative expenses
General and administrative expenses primarily consist of personnel expenses for the administrative functions, legal and other consulting costs, expenses for research and non-capitalisable development costs.
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).
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
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 in 2024 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:
31.12.2024 | 31.12.2023 | |
Price level | 7,694.01 | 3,533.19 |
Index movement (in %) | 118 | 211 |
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 in case of a net investment hedge the foreign operation is disposed, the currency translation differences previously recognised in OCI are reclassified to the Consolidated Statement of Profit or Loss.
Notes to the Consolidated Financial Statements 2024 | ||||
The Euro exchange rates of the currencies of the Group’s significant operations are shown in the following table:
Closing rate | Average rate1) | ||||
Currencies | 1 € = | 31.12.2024 | 31.12.2023 | 2024 | 2023 |
Brazilian Real | BRL | 6.46 | 5.37 | 5.79 | 5.42 |
Canadian Dollar | CAD | 1.50 | 1.46 | 1.48 | 1.46 |
Chinese Renminbi Yuan | CNY | 7.61 | 7.87 | 7.79 | 7.65 |
Indian Rupee | INR | 89.11 | 92.58 | 90.68 | 89.20 |
US Dollar | USD | 1.04 | 1.11 | 1.09 | 1.08 |
1) Arithmetic mean of the monthly closing rates.
4. Climate change and energy transition
In 2019 the Group announced its commitment to reduce Scope 1, 2 and 3 (raw materials) CO2 emissions intensity by 15% by 2025, compared to a 2018 baseline. The Group has adopted a theoretical decarbonisation pathway that is not aligned with a 1.5-degree scenario as set out in the Paris agreement. 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 2024.
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 allowances is to be replaced by the Carbon Border Adjustment Mechanism (‘CBAM’), with all free CO2 emission allowances 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 CO2 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 is equal to the long-term rate of growth in steel/cement and/or inflation (depending on the country and business involved) and in any case no higher than the average long-term growth rate of the reference market. The Group has also taken account of the long-term impact of climate change, in particular by considering in the estimation of the terminal value a long-term growth rate in line with the change in steel/cement demand in 2030-2050 based on the specific characteristics of the businesses involved.
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
The expected CO2 emission costs are considered in the 2025 budget and in the Long-Term Plan, insofar as CO2 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 CO2 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 CO2 emission allowances is not included.
In absence of any mitigating action by management, the gross profit could reduce by 31% from 2030, on average across the EU assets, of which 24% would be offset in regions outside the EU in a scenario where the impact of a production shift from Europe to regions outside Europe due to additional carbon tax is analysed in isolation. This scenario would not cause impairment losses for the respective CGUs in their current state due to sufficient headroom.
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 2025. 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 eight 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 discount rate used to measure asset restoration provisions is between 8-37 years term, in line with available government bond 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.
Deferred tax assets
In jurisdictions where new or additional climate change related legislation is enacted, our taxable profits could be affected thereby impacting the recoverability of deferred tax assets. It is expected that sufficient deferred tax liabilities and forecasted taxable profits are available for recovery of the deferred tax assets recognised at 31 December 2024. The assessment of deferred taxes is described in Note (14). For certain deferred tax assets recognised in Brazil, the period extends beyond five years. Currently, no legislation is in place in Brazil that could limit the timing and /, or the extent of the recognised deferred tax assets.
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 €1,383 million (31.12.2023: €1,512 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 foreseeable due to sufficient headroom.
5. Segment reporting
The Group's business activities are organised according to the customer industries it serves and by region based on the Group's sales markets. Customer industries are defined as Steel, Cement & Lime, Non-Ferrous Metals, and Process Industries which comprises several customer industries addressing industrial applications. The regions comprise EU & CIS and Türkiye, North America, South America, China & East Asia and India, West Asia & Africa. The management structure including the internal reporting to the Executive Management Team follows this two-dimensional organisation and provides for distinct responsibilities for the customer industry related functions and regional functions.
The customer industry forms the basis for determining the Group’s operating and reportable segments. Each customer industry is assigned to one reportable segment. In addition, the business activities subsumed into the organisational unit Minerals are designated as a further reportable segment. The Group therefore has five reportable segments.
Notes to the Consolidated Financial Statements 2024 | ||||
The Steel reportable segment aggregates two operating segments, namely Steel Linings and Steel Flow Control, which are named after the two most important product lines. In determining that aggregation is appropriate, judgement is applied which considers the economic characteristics of these operating segments which include a similar nature of products, customers, production processes and long-term average gross margins. The Steel reportable segment provides refractory products with a lifetime ranging from hours to several months, services and technologies that are essential for steel production and the steel-processing industry. The Steel Linings product line comprises refractory bricks in various shapes and chemical compositions, as well as mixes and castables lining the customers’ furnaces, ladles, and converters. The Steel Flow Control refractory products are used primarily in the final stages of the steel production process and include specialised refractory products and systems including slide gate systems, plates and submerged entry nozzles. In addition to refractory products, the Steel reportable segment delivers 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 offered to customers, including systems, sensors, machinery and digital products.
The Cement & Lime reportable operating segment provides refractory products with a lifetime of one year, services and technologies that are essential to produce cement and lime.
The Non-Ferrous Metals reportable operating segment provides refractory products with a lifetime ranging from one year to ten years, services and technologies that are essential to produce base metals and ferroalloys for the production from primary (ores, concentrates) or secondary (recycling) raw materials.
The Process Industries reportable segment, with its two operating segments Glass and Industrial Applications, provides refractory products with a lifetime ranging from one to twenty years, services and technologies for customers operating in the Glass, Environment, Energy, Chemicals, Foundry and Aluminium Industries.
The refractory products offered to customers in the Cement & Lime, Non-Ferrous Metals and Process Industries reportable segments include refractory bricks in various shapes and chemical compositions, as well as mixes, mortars and castables and other specialised refractory products lining customer industry specific furnace types and aggregates. In addition to refractory products, services such as refractory engineering solutions (drawings or design of a Linings concept), installation, supervision, maintenance and recycling are delivered. Beyond traditional refractory solutions, a growing portfolio of advanced technologies is offered to customers, including systems, sensors, machinery and digital products.
In addition, the Group engages in the sale of internally produced raw materials such as magnesite ore, dead-burned magnesia and fused magnesia within the Group and 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 has the responsibility over allocation of resources and evaluates the performance of each operating segment and is therefore the Chief Operating Decision Maker (“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 are prepared using the same accounting policies as the Consolidated Financial Statements and reported after elimination of any inter-segment transactions.
Each reporting period the appropriateness and decision usefulness of the Group’s segment reporting structure is reassessed. This reassessment has resulted in a change of the Group’s segment reporting structure which aims to provide a more detailed insight into the financial performance of the Cement & Lime, Non-Ferrous Metals and Process Industries reportable segments, which had formed part of the former Industrial reportable segments until the previous reporting period. The comparative figures have been restated in accordance with IFRS 8 to reflect the new segment reporting structure.
The following tables show the financial information for the reportable segments for the year 2024 and the previous year:
Steel | Industrial | Minerals | ||||
2024 in € million | Cement & Lime | Non-Ferrous Metals | Process Industries | Group 2024 | ||
Revenue | 2,373 | 376 | 247 | 426 | 65 | 3,487 |
Gross profit | 551 | 83 | 110 | 101 | 3 | 848 |
EBIT | 242 | |||||
Net finance costs | (42) | |||||
Profit before income tax | 200 | |||||
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
Steel | Industrial | Minerals | ||||
2023 in € million | Cement & Lime | Non-Ferrous Metals | Process Industries | Group 2023 | ||
Revenue | 2,461 | 424 | 281 | 326 | 80 | 3,572 |
Gross profit | 550 | 105 | 119 | 74 | 9 | 857 |
EBIT | 333 | |||||
Net finance costs | (100) | |||||
Profit before income tax | 233 | |||||
No single customer contributed 10% or more to consolidated revenue in 2024 and in 2023. Companies that are known to be part of a group are treated as one customer.
In the below breakdown of revenue by type of product or service, a distinction is made in refractory products between shaped (e.g. hydraulically pressed bricks, fused cast bricks, isostatically pressed products), unshaped (e.g. repair mixes, building mixes and casting mixes), flow control (e.g. distributors, ladle slides, ladles) and other refractory products.
In the reporting year, revenue is classified by type of product or service as follows:
Steel | Industrial | Minerals | ||||
in € million | Cement & Lime | Non-Ferrous Metals | Process Industries | Group 2024 | ||
Shaped refractory products | 1,097 | 311 | 204 | 314 | 0 | 1,926 |
Unshaped refractory products | 579 | 51 | 21 | 57 | 0 | 708 |
Flow control refractory products | 553 | 0 | 0 | 0 | 0 | 553 |
Other refractory products | 27 | 5 | 3 | 18 | 0 | 53 |
Systems, sensors, machinery and digital products | 19 | 3 | 8 | 5 | 0 | 35 |
Services | 88 | 6 | 9 | 32 | 0 | 135 |
Raw materials | 10 | 0 | 2 | 0 | 65 | 77 |
Revenue | 2,373 | 376 | 247 | 426 | 65 | 3,487 |
In 2023, revenue was classified by type of product or service as follows:
Steel | Industrial | Minerals | ||||
in € million | Cement & Lime | Non-Ferrous Metals | Process Industries | Group 2023 | ||
Shaped refractory products | 1,177 | 340 | 231 | 233 | 0 | 1,981 |
Unshaped refractory products | 591 | 63 | 32 | 45 | 0 | 731 |
Flow control refractory products | 555 | 0 | 0 | 0 | 0 | 555 |
Other refractory products | 32 | 6 | 3 | 15 | 0 | 56 |
Systems, sensors, machinery and digital products | 21 | 4 | 7 | 3 | 0 | 35 |
Services | 71 | 10 | 6 | 30 | 0 | 117 |
Raw materials | 14 | 1 | 2 | 0 | 80 | 97 |
Revenue | 2,461 | 424 | 281 | 326 | 80 | 3,572 |
Notes to the Consolidated Financial Statements 2024 | ||||
The revenue is based on the locations of the customers.
in € million | 2024 | 2023 |
Netherlands | 15 | 14 |
USA | 584 | 612 |
India | 445 | 477 |
Brazil | 353 | 371 |
China | 260 | 260 |
Other countries | 1,830 | 1,838 |
Revenue | 3,487 | 3,572 |
The carrying amounts of goodwill, other intangible assets and property, plant and equipment are classified based on the location of the Group companies:
in € million | 31.12.2024 | 31.12.2023 |
Brazil | 407 | 503 |
India | 392 | 383 |
Austria | 343 | 368 |
USA | 235 | 225 |
Germany | 205 | 212 |
China | 188 | 201 |
Other countries | 274 | 277 |
Goodwill, intangible assets and property, plant and equipment | 2,044 | 2,169 |
6. Restructuring
Summary of restructuring and write-down expenses/income recognised as follows:
in € million | 2024 | 2023 |
Restructuring (expenses) | (32) | (20) |
Restructuring income | 8 | 0 |
Restructuring (expenses) - net | (24) | (20) |
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 impaired assets mainly formed part of the Non-Ferrous Metals and Process Industries reportable segments. 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.
2023
Restructuring includes €12 million of termination costs following the transfer of certain global functions to the regions. In addition, it includes €5 million of plant closure costs, which mainly reflect €2 million of costs in Dashiqiao plant, China.
In Brazil, an impairment loss was recognised on fixed assets of €1 million which was partially caused by a flood at the Contagem plant.
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
7. Other income
in € million | 2024 | 2023 |
Net amortisation of Oberhausen provision | 14 | 11 |
Gains from the disposal of non-current assets | 6 | 3 |
Bargain purchase gain | 0 | 8 |
Miscellaneous income | 18 | 5 |
Other income | 38 | 27 |
The net amortisation of the Oberhausen provision includes a utilisation of €10 million (2023: €10 million) for the performance against the onerous contract, and €4 million (2023: €1 million) arising from updated estimates. 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 | 2024 | 2023 |
Expenses for strategic projects | (75) | (16) |
Impairment of property, plant and equipment and intangible assets | (37) | 0 |
Losses from the disposal of non-current assets | (3) | (7) |
Miscellaneous expenses | (24) | (16) |
Other expenses | (139) | (39) |
Expenses for strategic projects amounting to €24 million (2023: €16 million) mainly include legal and consulting fees related to M&A activities and integration costs for newly acquired businesses. Additionally, the Group incurred Software as a Service costs, which are expensed as incurred, amounting to €45 million and costs amounting to €6 million to develop an integrated supply chain planning solution.
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 in 2024 consequent of the Resco Group acquisition. The impaired assets formed part of the Steel and Cement & Lime reportable segments. The recoverable amount of zero was based on fair value less costs of disposal. In addition, the Group recorded an impairment loss of €8 million for capitalised development costs recognised as intangible assets. This impairment loss is due to the reduction of the project scope. The impaired intangible assets formed part of all reportable segments except Minerals. The recoverable amount of €14 million was based on value in use.
Miscellaneous expenses mainly consist of €12 million of expenses related to investments in and losses from the disposal of special Argentinian government bonds (refer to Note (3)) 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 2024 and the previous year:
in € million | 2024 | 2023 |
Cost of materials | (1,352) | (1,375) |
Personnel costs | (806) | (747) |
Energy costs | (225) | (257) |
Freight expenses | (201) | (229) |
Depreciation and amortisation charges | (175) | (178) |
External services | (173) | (164) |
Changes in inventories, own work capitalised | (11) | (54) |
Write-down expenses | (42) | (1) |
Other income and expenses | (260) | (234) |
Total expenses | (3,245) | (3,239) |
Notes to the Consolidated Financial Statements 2024 | ||||
Cost of materials includes expenses for raw materials and supplies and purchased goods of €1,307 million (2023: €1,311 million) and expenses for services received amounting to €45 million (2023: €64 million). Research and development costs amounted to €51 million (2023: €51 million), of which €5 million (2023: €8 million) in development costs were capitalised. Amortisation and impairment of development costs recognised within cost of sales was €10 million (2023: €3 million).
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised as an expense in the Consolidated Statement of Profit or Loss. 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 2024 amount to €7 million (2023: €5 million).
Please refer to Note (8) for details on write-down expenses.
Other income of €53 million (2023: €36 million) mainly comprises gains on disposal of non-current assets, income from research grants which amounted to €4 million (2023: €4 million), insurance reimbursements and amortisation of grants related to assets; also included are €9 million related to the disposal of Dashiqiao plant in China and €6 million related to receivables previously written-down. Other expenses mainly consist of external consulting fees, IT costs, travel expenses and repairs and maintenance expenditure.
10. Personnel costs
Personnel costs consist of the following components:
in € million | 2024 | 2023 |
Wages and salaries | (634) | (579) |
Social security contribution | (121) | (113) |
Fringe benefits | (32) | (33) |
Pension and other post-employment benefits | ||
Defined contribution plans | (12) | (11) |
Defined benefit plans | (4) | (4) |
Other expenses termination benefits | (3) | (7) |
Personnel expenses (without interest expenses) | (806) | (747) |
Average employee numbers
The average number of employees of the Group based on full time equivalents amounts to:
2024 | 2023 | |
Salaried employees | 7,426 | 7,063 |
Waged workers | 8,626 | 7,953 |
Number of employees on annual average | 16,052 | 15,016 |
108 full time equivalents of salaried employees work in the Netherlands (2023: 120 employees).
11. Interest income
Includes interest income on cash at banks and similar income amounting to €22 million (2023: €19 million).
12. Net income/(expense) on foreign exchange effects
The net income 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 loss on the net monetary position related to hyperinflation accounting (IAS 29) and can be detailed as follows:
in € million | 2024 | 2023 |
Foreign exchange gains/(losses) | 30 | (44) |
(Losses)/gains on forward exchange contracts and derivatives in open orders | (18) | 11 |
(Loss)/gain on net monetary position | (1) | 3 |
Net income/(expense) on foreign exchange effects | 11 | (30) |
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
The foreign exchange gains in the current reporting period mainly result from the depreciation of the functional currencies of subsidiaries with a net asset foreign currency exposure against USD and the appreciation 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 | 2024 | 2023 |
Net interest expense relating to personnel provisions | (12) | (12) |
Unwinding of discount of provisions and payables | (7) | (8) |
Interest income/(expense) on non-controlling interest liabilities | 1 | (7) |
Interest expense on lease liabilities | (3) | (2) |
Income from the revaluation of NCI put options | 21 | 7 |
Other interest and similar income and expenses1) | (14) | (10) |
Other net financial expenses | (14) | (32) |
1) Mainly includes costs associated with the trade receivables factoring programme of €10 million (2023: €12 million).
14. Taxation
Income tax
Income tax consists of the following items:
in € million | 2024 | 2023 |
Current tax expense | (51) | (67) |
Deferred tax (expense)/income relating to | ||
temporary differences | (4) | 9 |
tax loss carryforwards | 9 | (4) |
5 | 5 | |
Income tax | (46) | (62) |
The current tax expense includes tax income for prior periods of €5 million (2023: €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 of economic volatility and (iii) the Group’s latest forecasts and assumptions used for goodwill impairment testing and viability statement assessment. The Group’s forecast period is four years with the fifth year being the final year, consistent with goodwill impairment testing. In Brazil, a longer time frame is used due to the annual limitation for use of 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 €7 million (2023: €15 million tax), 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 holding company RHI Magnesita N.V. is tax resident in Austria), and the income tax reported is shown below:
Notes to the Consolidated Financial Statements 2024 | ||||
in € million | 2024 | 2023 |
Profit before income tax | 200 | 233 |
Income tax expense calculated at 23% (2023: 24%) | 46 | 56 |
Different foreign tax rates | 8 | 2 |
Expenses not deductible and additions to tax base, non-creditable taxes | 22 | 28 |
Non-taxable income and tax benefits | (30) | (28) |
Tax losses and temporary differences of the financial year not recognised | 5 | 1 |
Utilisation of previously unrecognised loss carryforwards and temporary differences | (5) | (1) |
Deferred tax expense due to tax rate changes | 1 | 2 |
Deferred income tax relating to previous periods | 4 | (7) |
Income tax relating to foreign currency translation of local currency to functional currency | 0 | 4 |
Current income tax relating to prior periods | (5) | 5 |
Recognised tax expense | 46 | 62 |
Effective tax rate (in %) | 23.0% | 26.7% |
Below is the summary of major effects on the effective tax rate reconciliation:
In 2024, expenses not deductible and additions to the tax base include: transfer pricing adjustments mainly related to Argentina of €4 million (2023: transfer pricing adjustments and inventory revaluation in Brazil of €5 million); share-based payments and other employee costs and write-up of treasury shares in Austria of €3 million (2023: €5 million); non-creditable withholding taxes in Austria of €2 million (2023: €2 million) and non-deductible subsidiary related expenses of €3 million (2023: €1 million).
In 2024, non-taxable income and tax benefits mainly include: tax incentives in Brazil of €2 million (2023: €8 million); additional tax depreciation in Austria of €7 million (€2023: €7 million) relating to historical acquisitions; inflationary adjustments in South America and Türkiye of €6 million (2023: €4 million); gains on the measurement of liabilities related to the fixed term or puttable non-controlling interests of €6 million; income of €2 million related to receivables previously written down to zero and gains from the disposal of foreign operations of €2 million.
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 €4 million (2023: €1 million) and the utilisation of previously unrecognised temporary differences in China of €5 million (2023: €1 million).
In the United States a change in the tax rate from 24.19% to 24.57% led to a deferred tax expense of €1 million (2023: deferred tax income due to a tax rate change from 25.65% to 24.19% amounting to €1 million). The tax rate change in Slovenia from 19% to 22% led to a deferred tax expense of €1 million (2023: no tax rate change in Slovenia).
Deferred taxes expense relating to prior periods based on information obtained in the reporting period arises mainly from Mexico amounting to a deferred tax expense of €2 million (2023: deferred tax expense of €1 million) and from India amounting to a deferred tax expense of €3 million.
The current tax income relating to prior periods of €5 million mainly relates to Peru (€3 million) and Chile (€2 million) where, respectively, there was a reversal of a tax risk provision due to a court case judgement, and return-to-provision reconciliations.
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
Deferred taxes
Deferred taxes are related to the following significant balance sheet items and tax loss carryforwards:
31.12.2024 | 2024 | 31.12.2023 | 2023 | |||
in € million | Deferred tax assets | Deferred tax liabilities | (Expense)/Income | Deferred tax assets | Deferred tax liabilities | (Expense)/Income |
Property, plant and equipment, intangible assets | 28 | 107 | 8 | 29 | 121 | 3 |
Inventories | 26 | 10 | 4 | 24 | 10 | 0 |
Trade receivables, other assets | 14 | 22 | (10) | 12 | 9 | 12 |
Pensions and other personnel provisions | 35 | 0 | (1) | 45 | 0 | (5) |
Other provisions | 23 | 0 | (2) | 30 | 0 | 2 |
Trade payables, other liabilities | 39 | 5 | (3) | 28 | 6 | (3) |
Tax loss carried forward | 67 | 0 | 9 | 67 | 0 | (4) |
Offsetting | (80) | (80) | 0 | (83) | (83) | 0 |
Deferred taxes | 152 | 64 | 5 | 152 | 63 | 5 |
For temporary differences and tax loss carryforwards of subsidiaries which have generated tax losses either in the current or previous reporting period deferred tax assets amounting to €101 million (2023: €5 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 €347 million at 31 December 2024 (2023: €402 million). For tax loss carryforwards of €235 million (2023: €221 million) deferred tax assets are recognised while no deferred tax assets are recognised for the remaining amount of €112 million (2023: €181 million).
The following table shows the origin of tax loss carryforwards per country for which no deferred tax assets are recognised:
in € million | 31.12.2024 | 31.12.2023 |
Country | ||
Brazil | 51 | 61 |
Luxembourg | 0 | 61 |
China | 37 | 24 |
UK | 6 | 18 |
Dubai | 4 | 4 |
Germany | 6 | 6 |
France | 5 | 4 |
Others | 3 | 3 |
Total | 112 | 181 |
Notes to the Consolidated Financial Statements 2024 | ||||
The following table shows the tax loss carryforwards by year of expiry:
in € million | 31.12.2024 | 31.12.2023 |
Year of expiry | ||
2024 | 0 | 6 |
2025 | 1 | 2 |
2026 | 2 | 2 |
2027 | 10 | 8 |
2028 | 6 | 6 |
2029 | 19 | 0 |
2030 or later | 0 | 1 |
Not subject to expiration | 74 | 156 |
Total unrecognised tax losses | 112 | 181 |
No deferred tax assets were recognised on temporary differences totalling €123 million (2023: €176 million), which are expected to reverse by 2034. These temporary differences mainly relate to Austria: €120 million (2023: €151 million).
Taxable temporary differences of €1,477 million (2023: €1,241 million) and temporary deductible differences of €96 million (2023: €50 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 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 of Austria (where the ultimate parent entity is resident) has not led to inclusion of additional tax expense for the countries the Group operates in.
Income tax receivables
Income tax receivables amounting to €40 million (2023: €44 million) are mainly related to tax prepayments and deductible withholding taxes.
Income tax liabilities
Income tax liabilities amounting to €29 million (2023: €51 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.
2024 | 2023 | |
Profit after income tax attributable to RHI Magnesita N.V. shareholders (in € million) | 142 | 165 |
Weighted average number of shares for basic EPS | 47,170,570 | 47,078,254 |
Effects of dilution from share options | 1,154,648 | 1,014,964 |
Weighted average number of shares for dilutive EPS | 48,325,218 | 48,093,218 |
Earnings per share basic (in €) | 3.01 | 3.50 |
Earnings per share diluted (in €) | 2.94 | 3.42 |
16. Dividend payments and proposed dividend
The final proposed dividend is subject to the approval of the AGM in May 2025 and was not recognised as a liability in these Consolidated Financial Statements. The final proposed dividend for 2024 will amount to €1.20 per share (2023: €1.25 per share).
In line with the Group’s dividend policy, the Board paid out an interim dividend in the second half of 2024 of €0.60 per share for the first half of 2024 amounting to €28 million. The total dividend for 2024, which includes the proposed final dividend, yet to be approved by shareholders, amounts to €1.80 per share (2023: €1.80 per share).
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
Based on a resolution adopted by the AGM in May 2024, the final dividend for 2023 amounted to €1.25 per share and was paid out in June 2024, amounting to €59 million. The total dividend for 2023 amounted to €1.80 per share.
17. Goodwill
in € million | 2024 | 2023 |
Carrying amount at beginning of year | 339 | 137 |
Business combinations and PPA finalisation | 3 | 197 |
Currency translation | (3) | (2) |
Hyperinflation adjustment | 3 | 7 |
Carrying amount at year-end | 342 | 339 |
Impairment of CGUs with significant goodwill
Goodwill is tested for impairment at least annually based on the CGU to which it is allocated. The Group’s significant goodwill is assigned to the Steel CGUs and to the Industrial Cement & Lime CGU as shown in the table below.
The impairment test is based on the value in use; the recoverable amount 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 at approximately €48 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 2025 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 markets 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 2025 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 for the development of the customer’s industries; regional growth rates of the steel production and output of the non-steel 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 flows 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 recoverable amount only takes into account changes in working capital.
Notes to the Consolidated Financial Statements 2024 | ||||
The following table shows the perpetual annuity growth rates and discount rates before tax applied in the value in use determination for CGUs to which significant goodwill is allocated:
2024 | 2023 | |||||
Discount rate before Tax | Perpetual annuity growth rate | Goodwill in € million | Discount rate before Tax | Perpetual annuity growth rate | Goodwill in € million | |
Steel - Linings | 9.7% | 0.9% | 218 | 9.9% | 0.9% | 213 |
Steel - Flow Control | 10.3% | 0.9% | 67 | 10.0% | 0.9% | 67 |
Industrial - Cement & Lime | 10.7% | 0.9% | 56 | 10.5% | 0.9% | 55 |
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 2.5%
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
18. Other intangible assets
in € million | Mining rights | Customer relationship | 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 charges | 2 | 20 | 3 | 14 | 0 | 39 |
Impairment charges | 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 |
in € million | Mining rights | Customer relationship | Internally generated intangible assets | Other intangible assets | Prepayments made and intangible assets under construction | Total |
Cost at 31.12.2022 | 152 | 132 | 79 | 157 | 0 | 520 |
Currency translation | 1 | (5) | 0 | (2) | 0 | (6) |
Additions | 0 | 0 | 8 | 2 | 0 | 10 |
Additions initial consolidation | 0 | 159 | 0 | 6 | 8 | 173 |
Retirements and disposals | (1) | 0 | 0 | (1) | 0 | (2) |
Reclassifications | 0 | (2) | 0 | 8 | 14 | 20 |
Cost at 31.12.2023 | 152 | 284 | 87 | 170 | 22 | 715 |
Accumulated amortisation 31.12.2022 | 15 | 45 | 49 | 94 | 0 | 203 |
Currency translation | (1) | (1) | 0 | 1 | 0 | (1) |
Amortisation charges | 3 | 20 | 4 | 17 | 0 | 44 |
Reclassifications | 0 | 0 | 0 | (1) | 0 | (1) |
Accumulated amortisation 31.12.2023 | 17 | 64 | 53 | 111 | 0 | 245 |
Carrying amounts at 31.12.2023 | 135 | 220 | 34 | 59 | 22 | 470 |
Internally generated intangible assets comprise capitalised software and product development costs. Other intangible assets include in particular acquired patents, trademark rights, software, and land-use rights.
The following table shows the individually material intangible assets acquired and their remaining useful lives:
Notes to the Consolidated Financial Statements 2024 | ||||
in € million | Remaining useful life in years | 31.12.2024 Net book value | 31.12.2023 Net book value |
Mining rights | |||
Brazil | 49 | 63 | 77 |
US | 46 | 61 | 58 |
Customer relationships | |||
RHI Magnesita India Refractories Ltd and RHI Magnesita Seven Refractories Ltd | 8-18 | 91 | 95 |
Former Magnesita Group | 4-8 | 48 | 55 |
Seven Refractories Group | 14 | 21 | 26 |
RHI Magnesita India / Hi-Tech Chemicals Ltd | 4 | 21 | 22 |
Land use rights | 13-53 | 20 | 24 |
There are no restrictions on the sale of intangible assets.
19. Property, plant and equipment
in € million | Real estate, land and buildings | Technical equipment, machinery | Other plant, furniture and fixtures | Prepayments made and plant under construction | Right-of-use assets | Total |
Cost at 31.12.2023 | 758 | 1,231 | 417 | 267 | 134 | 2,807 |
Currency translation | (13) | (10) | (9) | (25) | (3) | (60) |
Additions1) | 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 charges | 21 | 61 | 32 | 0 | 22 | 136 |
Impairment charges | 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.
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
in € million | Real estate, land and buildings | Technical equipment, machinery | Other plant, furniture and fixtures | Prepayments made and plant under construction | Right-of-use assets | Total |
Cost at 31.12.2022 | 712 | 1,143 | 393 | 232 | 112 | 2,592 |
Currency translation | (1) | (2) | 1 | 3 | 0 | 1 |
Additions1) | 14 | 19 | 11 | 127 | 14 | 185 |
Additions initial consolidation | 52 | 51 | 6 | 6 | 22 | 137 |
Retirements and disposals | (35) | (24) | (15) | 0 | (14) | (88) |
Reclassifications | 16 | 44 | 21 | (101) | 0 | (20) |
Cost at 31.12.2023 | 758 | 1,231 | 417 | 267 | 134 | 2,807 |
Accumulated depreciation 31.12.2022 | 317 | 768 | 252 | 1 | 50 | 1,388 |
Currency translation | 0 | 0 | 0 | 0 | 1 | 1 |
Depreciation charges | 17 | 67 | 30 | 0 | 20 | 134 |
Impairment charges | 0 | 0 | 1 | 0 | 0 | 1 |
Retirements and disposals | (30) | (21) | (13) | 0 | (14) | (78) |
Reclassifications | 0 | 0 | 1 | 0 | 0 | 1 |
Accumulated depreciation 31.12.2023 | 304 | 814 | 271 | 1 | 57 | 1,447 |
Carrying amounts at 31.12.2023 | 454 | 417 | 146 | 266 | 77 | 1,360 |
1) Including €8 million capitalised borrowing costs.
Prepayments made and plant under construction includes €106 million (2023: €259 million) mainly relating to the expansion and production optimisation of the plants in Brazil during 2024. The spend in 2023 mainly related to the expansion of a production plant in Austria and a magnesite plant in Brazil.
Please refer to Note (27) for the 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 €6 million (2023: €9 million).
Please refer to Note (8) for details regarding the impairment charges.
The Right-of-use assets per category developed as follows as of 31 December 2024:
in € million | Right-of-use assets land and buildings | Right-of-use assets technical equipment and machinery | Right-of-use assets other equipment, furniture and fixtures | Total |
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 charges | 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 Right-of-use assets per category developed as follows as of 31 December 2023:
Notes to the Consolidated Financial Statements 2024 | ||||
in € million | Right-of-use assets land and buildings | Right-of-use assets technical equipment and machinery | Right-of-use assets other equipment, furniture and fixtures | Total |
Cost at 31.12.2022 | 69 | 33 | 10 | 112 |
Additions | 9 | 1 | 4 | 14 |
Additions initial consolidation | 21 | 1 | 0 | 22 |
Retirements and disposals | (8) | (5) | (1) | (14) |
Cost at 31.12.2023 | 91 | 30 | 13 | 134 |
Accumulated depreciation 31.12.2022 | 25 | 19 | 6 | 50 |
Currency translation | 0 | 1 | 0 | 1 |
Depreciation charges | 12 | 5 | 3 | 20 |
Retirements and disposals | (7) | (5) | (2) | (14) |
Accumulated depreciation 31.12.2023 | 30 | 20 | 7 | 57 |
Carrying amounts at 31.12.2023 | 61 | 10 | 6 | 77 |
The average lease term is 10 years for land and buildings, five 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 | 31.12.2024 | 31.12.2023 |
Prepayments related to the acquisition of Resco Group | 46 | 0 |
Deferred mine stripping costs | 13 | 12 |
Tax receivables | 11 | 14 |
Other non-current assets | 6 | 11 |
Other non-current assets | 76 | 37 |
21. Inventories
in € million | 31.12.2024 | 31.12.2023 |
Raw materials and supplies | 264 | 274 |
Work in progress | 215 | 220 |
Finished products and goods | 464 | 489 |
Prepayments made | 14 | 13 |
Emission rights1) | 5 | 5 |
Inventories | 962 | 1,001 |
1) With effect from 1 January 2024 "Other current receivables" excludes "Emission rights" which are now presented in "Inventories". Prior period comparatives have been revised to conform with current year presentation.
Net write-down expenses amount to €0 million (2023: €12 million). Please refer to Note (3) for details on the change in an accounting estimate related to the calculation of net realisable value in relation to reduced recoverability.
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
22. Trade and other receivables
in € million | 31.12.2024 | 31.12.2023 |
Trade receivables | 530 | 538 |
Contract assets | 3 | 4 |
Other tax receivables | 87 | 95 |
Prepaid expenses | 9 | 8 |
Other current receivables1) | 31 | 36 |
Trade and other current receivables | 660 | 681 |
thereof financial assets | 533 | 542 |
thereof non-financial assets | 127 | 139 |
1) With effect from 1 January 2024 "Other current receivables" excludes "Emission rights" which are now presented in "Inventories". Prior period comparatives have been revised to conform with current year presentation.
The Group enters into factoring agreements and sells trade receivables to financial institutions. Trade receivables sold at the end of the year was €237 million (2023: €259 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 | 31.12.2024 | 31.12.2023 |
Cash at banks and in hand | 530 | 644 |
Money market funds | 46 | 60 |
Cash and cash equivalents | 576 | 704 |
Cash and cash equivalents include amounts not available for use by the Group totalling €3 million at 31 December 2024 (2023: €10 million). Cash not available for use by the Group is mainly comprised of deposits for credit lines and bank guarantees.
24. Share capital
25. Group reserves
Treasury shares
At 31 December 2024, RHI Magnesita treasury shares amount to 2,281,769 (2023: 2,347,367).
Additional paid-in capital
At 31 December 2024, as well as at 31 December 2023, 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 former RHI Group and 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 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.
Notes to the Consolidated Financial Statements 2024 | ||||
Accumulated other comprehensive income
Cash flow hedge reserves include gains and losses from the effective part of cash flow hedges less tax effects. The accumulated gain or loss from the hedge allocated to reserves is only reclassified to the 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 tax effects. No reclassification of these amounts to the Statement of Profit or Loss will be made in future periods.
Currency translation includes the accumulated currency translation differences from translating the Financial Statements of foreign subsidiaries, unrealised currency translation differences from monetary items which are part of a net investment in a foreign operation, net of related income taxes, as well as the effective portion of foreign exchange gains or losses when a financial instrument is designated as the hedging instrument in net investment hedge in a foreign operation.
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. and Intermetal Engineers (India) Private Ltd which together form the Subgroup India. The Subgroup India is included in all reportable segments of the Group and the share of the non-controlling interests amounts to 43.9% (2023: 43.9%). Aggregated financial information of the Subgroup India as of 31 December 2024 is provided below:
in € million | 31.12.2024 | 31.12.2023 |
Non-current assets | 432 | 420 |
Current assets | 260 | 258 |
Non-current liabilities | (24) | (18) |
Current liabilities | (123) | (152) |
Net assets before intragroup eliminations | 545 | 508 |
Intragroup eliminations | (1) | (2) |
Net assets | 544 | 506 |
Carrying amount of non-controlling interests | 162 | 149 |
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
The aggregated Statement of Profit or Loss and Statement of Comprehensive Income of the Subgroup India for financial year 2024 are shown below:
in € million | 2024 | 2023 |
Revenue | 430 | 427 |
Operating expenses, net finance costs and income tax | (406) | (410) |
Profit after income tax before intragroup eliminations | 24 | 17 |
Intragroup eliminations | 1 | (2) |
Profit after income tax | 25 | 15 |
thereof attributable to non-controlling interests | 11 | 6 |
in € million | 2024 | 2023 |
Profit after income tax | 24 | 15 |
Other comprehensive income/(expense) | 26 | (33) |
Total comprehensive income | 50 | (18) |
thereof attributable to non-controlling interests | 22 | (8) |
The following table shows the summarised Statement of Cash Flows of the Subgroup India for financial year 2024:
in € million | 2024 | 2023 |
Net cash flow from operating activities | 38 | 38 |
Net cash flow from investing activities | (13) | (123) |
Net cash flow from financing activities | (26) | 75 |
Total cash flow | (1) | (10) |
Net cash flow from financing activities includes dividend payments to non-controlling interests amounting to €2 million (2023: €3 million).
Change of non-controlling interests without a change of control
In April 2024, the Group acquired non-controlling interests of Seven Refractories' Group 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.
In July 2024, the Group acquired non-controlling interests of P-D Group 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. Loan proceeds were used for the acquisition of the Resco Group (refer to Note (42) for details). The term loan remained fully undrawn per 31 December 2024.
In April 2024, the Group prepaid €100 million from a €150 million bilateral term loan, which matures in April 2026, to optimise the Group’s capital structure, maturity profile, and reduce excess cash.
Resulting from the Group’s strong EcoVadis ESG rating upgrade in June 2024, with an improvement by four points to a total score of 76, the margin payable on the Group’s ESG-linked financings amounting to €1,983 million (including the fully undrawn €600 million RCF) was reduced by 3bps,
Notes to the Consolidated Financial Statements 2024 | ||||
The principal borrowing facilities, including the Syndicated & Term Loan as well as the Bonded Loans, are subject to a financial covenant, being the ratio of net debt excluding lease liabilities to Adjusted EBITDA of a maximum of 3.5 times. Compliance with the financial covenant is measured on a semi-annual basis and its calculation is shown in Note (37). If the financial covenant of the Syndicated & Term Loans is breached, the lenders have the right for immediate loan repayment. If repayment of the Syndicated & Term Loans is demanded, the Bonded Loans will also become due. If the Syndicated & Term loans’ financial covenant is breached but the full repayment is waived, the Bonded Loans interest margin payable will increase.
The Group complied with the financial covenant in 2024 and 2023. There are no indications that the Group will have difficulties complying with the financial covenant in the 12 months following the reporting date. The breakdown of borrowings is presented in the following table:
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 |
Total | |||
in € million | 31.12.2023 | Current | Non-current |
Syndicated & Term Loan | 1,114 | 45 | 1,069 |
Bonded loans ("Schuldscheindarlehen") | 755 | 35 | 720 |
Other credit lines and other loans | 63 | 60 | 3 |
Total liabilities to financial institutions | 1,932 | 140 | 1,792 |
Other financial liabilities | 18 | 9 | 9 |
Capitalised transaction costs | (1) | 0 | (1) |
Borrowings | 1,949 | 149 | 1,800 |
Including interest swaps, 73% (2023: 69%) of the liabilities to financial institutions carry fixed interest and 27% (2023: 31%) 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 | 31.12.2024 Carrying amount in € million | Interest terms fixed until | Effective annual interest rate | Currency | 31.12.2023 Carrying amount in € million |
2025 | EURIBOR + margin | EUR | 444 | 2024 | EURIBOR + margin | EUR | 573 |
0.50% | EUR | 150 | 3.10% | EUR | 35 | ||
Various - Variable rate | Various | 35 | Various - Variable rate | Various | 34 | ||
2026 | 3.61% | EUR | 264 | 2025 | 0.50% | EUR | 150 |
2027 | 2.41% | EUR | 715 | 2026 | 3.63% | EUR | 264 |
2028 | 1.87% | EUR | 119 | 2027 | 2.44% | EUR | 744 |
2029 | 1.52% | EUR | 8 | 2028 | 1.90% | EUR | 119 |
2031 | 1.25% | EUR | 5 | 2029 | 1.52% | EUR | 8 |
2031 | 1.28% | EUR | 5 | ||||
1,740 | 1,932 |
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 €13 million have been pledged as security for a local loan in China.
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
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).
31.12.2024 | 31.12.2023 | |||||
in € million | Current | Non-current | Total | Current | Non-current | Total |
Forward exchange contracts | 1 | 0 | 1 | 1 | 0 | 1 |
Interest rate derivatives | 0 | 4 | 4 | 0 | 2 | 2 |
Commodity swaps | 2 | 3 | 5 | 1 | 10 | 11 |
Derivatives in open orders | 0 | 0 | 0 | 3 | 0 | 3 |
Derivative financial liabilities | 3 | 7 | 10 | 5 | 12 | 17 |
Lease liabilities | 17 | 60 | 77 | 18 | 52 | 70 |
Fixed-term or puttable non-controlling interests | 7 | 45 | 52 | 18 | 69 | 87 |
Other financial liabilities | 27 | 112 | 139 | 41 | 133 | 174 |
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 | 31.12.2024 | 31.12.2023 |
Horn & Co. Minerals Recovery GmbH & Co.KG | 45.00% | 4 | 8 |
RHI Magnesita Czech Republic a.s. | 3.13% | 1 | 0 |
RHI Magnesita (Chongqing) Refractory Materials Co., Ltd. | 49.00% | 11 | 15 |
Jinan New Emei Industries Co. Ltd. | 35.00% | 21 | 30 |
Liaoning RHI Jinding Magnesia Co., Ltd. | 16.67% | 4 | 23 |
RHI Refractories Liaoning Co., Ltd. | 34.00% | 11 | 11 |
Liabilities to fixed-term or puttable non-controlling interests | 52 | 87 |
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 | 31.12.2024 | 31.12.2023 |
Liabilities at beginning of the year | 87 | 68 |
Currency translation1) | 2 | (5) |
Interest accrued2) | (1) | 7 |
Remeasurement gains2) | (21) | (7) |
Dividends paid | (6) | (8) |
Additions | 1 | 0 |
Additions from initial consolidation | 0 | 32 |
Derecognition related to Liaoning RHI Jinding Magnesia Co., Ltd. | (10) | 0 |
Liabilities at year-end | 52 | 87 |
1) Recognised in OCI.
2) Recognised in profit or loss as other net financial expenses.
Notes to the Consolidated Financial Statements 2024 | ||||
In 2024 the termination of the Joint Venture Agreement related to Liaoning RHI Jinding Magnesia Co., Ltd was confirmed in an arbitration procedure that was initiated by the Group in the previous reporting period. Due to this confirmation the termination has become legally effective and allows derecognition of the portion of the financial liability towards the minority shareholder that is no longer payable as a result of the confirmed termination. The derecognised amounts include accrued dividend payments related to previous periods, the value of the outstanding shares held by the minority shareholder subject to an expired call option and a liability related to land-use-rights.
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% | 6 | |
Profit measure decreases by 15% | 6 |
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 | 31.12.2024 | 31.12.2023 |
Present value of pension obligations | 377 | 421 |
Fair value of plan assets | (182) | (186) |
Deficit of funded plans | 195 | 235 |
Asset ceiling | 5 | 5 |
Net liability from pension obligations | 200 | 240 |
Overfunded pension plans | (1) | (2) |
Other pension plans | 201 | 242 |
The present value of pension obligations by beneficiary groups is as follows:
in € million | 31.12.2024 | 31.12.2023 |
Active beneficiaries | 62 | 62 |
Vested terminated beneficiaries | 41 | 44 |
Retirees | 274 | 315 |
Present value of pension obligations | 377 | 421 |
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
The pension obligations are measured using the following actuarial assumptions for the key countries in which the Group operates:
in % | 31.12.2024 | 31.12.2023 |
Interest rate | ||
Austria and Germany | 3.4% | 3.3% |
Brazil | 12.2% | 10.1% |
United Kingdom | 5.5% | 4.5% |
USA | 5.5% | 4.8% |
Future salary increase | ||
Austria | 2.7% | 3.9% |
Germany | 2.5% | 2.5% |
Brazil | 5.8% | 4.5% |
United Kingdom1) | n/a | n/a |
USA | 3.3% | 3.3% |
Future pension increase | ||
Austria | 3.3% | 5.3% |
Germany | 2.0% | 2.2% |
Brazil | 4.3% | 4.5% |
United Kingdom | 3.1% | 3.0% |
USA | 2.0% | 2.0% |
1) No active plan members.
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 rating of AA, 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 from 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 €68 million (2023: €80 million) of the present value of pension obligations and for €8 million (2023: €9 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. 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. Rather, 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 €113 million (2023: €119 million) of the present value of pension obligations and for €1 million (2023: €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 for 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.
Notes to the Consolidated Financial Statements 2024 | ||||
The pension plan of the US group company Magnesita Refractories Company, York, USA, accounts for €71 million (2023: €71 million) of the present value of pension obligations and for €69 million (2023: €63 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, accounts for €37 million (2023: €42 million) of the present value of pension obligations and holds €42 million (2023: €46 million) of assets, although no plan assets are reflected on the balance sheet due to the application of International Financial Reporting Interpretations Committee 14 (IFRIC 14) (asset ceiling). The company sponsors a funded defined benefit pension plan for qualifying UK employees. The plan is administered by a separate Board of Trustees which is legally separate from the company. The trustees are composed of representatives of both the employer and employees, plus an independent professional trustee. The trustees are required by law to act in the interest of all relevant beneficiaries and are responsible for the investment policy with regard to the assets plus the day-to-day administration of the benefits. Under the plan, employees are entitled to annual pensions on retirement at age 65. During 2022, the Board of Trustees agreed to a buy-in of the defined benefit obligation with a third-party insurer in the United Kingdom. In terms of the buy-in, the insurer assumed the obligations relating to the plan from July 2022 while the plan assets were liquidated and transferred to the insurer at a value of around €62 million. Until the defined benefit scheme is wound up (the buy-out), the Group will continue to recognise the pension obligation and the value of the insurance policy as a plan asset equal to the pension obligation. The surplus plan assets of €5 million, at 31 December 2024 are not recognised due to the application of IFRIC 14 and the asset ceiling requirements. It is expected that the remaining surplus, net of adjustments, tax payments and other minor expenses will be refunded to the Group once the plan will be wound up.
The pension liabilities of the Brazilian group company Magnesita Refratários S.A. account for €35 million (2023: €55 million) of the present value of pension obligations and for €25 million (2023: €31 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 can 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.
The following table shows the development of net liability from pension obligations:
in € million | 2024 | 2023 |
Net liability from pension obligations at beginning of year | 240 | 213 |
Currency translation | (5) | 2 |
Additions initial consolidation | 0 | 11 |
Pension cost | 12 | 12 |
Remeasurement (gains)/losses | (25) | 23 |
Benefits paid | (19) | (17) |
Employers' contributions to external funds | (3) | (4) |
Net liability from pension obligations at year-end | 200 | 240 |
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
The present value of pension obligations developed as follows:
in € million | 2024 | 2023 |
Present value of pension obligations at beginning of year | 421 | 396 |
Currency translation | (5) | 4 |
Additions initial consolidation | 0 | 11 |
Current service cost | 2 | 2 |
Interest cost | 18 | 19 |
Remeasurement losses/(gains) | ||
from changes in demographic assumptions | 0 | (1) |
from changes in financial assumptions | (25) | 28 |
due to experience adjustments | (3) | (3) |
Benefits paid | (32) | (35) |
Employee contributions to external funds | 1 | 1 |
Plan amendments | 0 | (1) |
Present value of pension obligations at year-end | 377 | 421 |
The movement in plan assets is shown in the table below:
in € million | 2024 | 2023 |
Fair value of plan assets at beginning of year | 186 | 187 |
Currency translation | 0 | 1 |
Interest income | 9 | 9 |
(Losses)/gains on plan assets less interest income | (3) | 3 |
Benefits paid | (14) | (19) |
Employers' contributions to external funds | 3 | 4 |
Employee contributions to external funds | 1 | 1 |
Fair value of plan assets at year-end | 182 | 186 |
The changes in the asset ceiling are shown below:
in € million | 2024 | 2023 |
Asset ceiling at beginning of year | 5 | 4 |
Losses from changes in asset ceiling less interest expense | 0 | 1 |
Asset ceiling at year-end | 5 | 5 |
At 31 December 2024, the weighted average duration of pension obligations amounts to 10.3 years (2023: 10.5 years).
The following amounts were recorded in the Consolidated Statement of Profit or Loss:
in € million | 2024 | 2023 |
Current service cost | 2 | 2 |
Interest cost | 19 | 19 |
Interest income | (9) | (9) |
Pension expense recognised in profit or loss | 12 | 12 |
Notes to the Consolidated Financial Statements 2024 | ||||
The remeasurement results recognised in OCI are shown in the table below:
in € million | 2024 | 2023 |
Accumulated remeasurement losses at beginning of year | 118 | 95 |
Remeasurement (gains)/losses on present value of pension obligations | (28) | 24 |
Losses/(gains) on plan assets less interest income | 3 | (2) |
Losses from changes in asset ceiling less interest expense | 0 | 1 |
Accumulated remeasurement losses at year-end | 93 | 118 |
The present value of plan assets is distributed to the following classes of investments:
31.12.2024 | 31.12.2023 | |||||
in € million | Active market | No active market | Total | Active market | No active market | Total |
Insurances | 0 | 73 | 73 | 22 | 55 | 77 |
Equity instruments | 46 | 0 | 46 | 40 | 0 | 40 |
Debt instruments | 41 | 1 | 42 | 44 | 0 | 44 |
Cash and cash equivalents | 12 | 0 | 12 | 9 | 1 | 10 |
Other assets | 9 | 0 | 9 | 15 | 0 | 15 |
Fair value of plan assets | 108 | 74 | 182 | 130 | 56 | 186 |
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 part of the other assets is invested in pension reinsurance, which creates a low counterparty risk towards insurance companies. In addition, the Group is exposed to interest risks and longevity risks resulting from 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 2025, the Group expects employer contributions to external plan assets to amount to €4 million and direct payments to entitled beneficiaries to €18 million. Employer contributions of €5 million and direct pension payments of €17 million had been expected for the financial year 2024.
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).
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
31.12.2024 | 31.12.2023 | ||||
in € million | Change of assumption in percentage points or years | Pension plans | Termination benefits | Pension plans | Termination benefits |
Present value of the obligations | 377 | 39 | 421 | 36 | |
Interest rate | +0.25 | (9) | (1) | (10) | (1) |
(0.25) | 10 | 1 | 10 | 1 | |
Salary increase | +0.25 | 1 | 1 | 1 | 1 |
(0.25) | (1) | (1) | 0 | (1) | |
Pension increase | +0.25 | 6 | 8 | ||
(0.25) | (7) | (7) | |||
Life expectancy | + 1 year | 6 | 3 | ||
(1) year | (5) | (2) | |||
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 | 31.12.2024 | 31.12.2023 |
Termination benefits | 35 | 34 |
Service anniversary bonuses | 20 | 19 |
Semi-retirements | 4 | 2 |
Other personnel provisions | 59 | 55 |
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 83.0% of the balance (2023: 81.0%) were based on the following measurement assumptions:
in % | 31.12.2024 | 31.12.2023 |
Interest rate | 3.4% | 3.3% |
Future salary increase | 3.4% | 3.3% |
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 | 2024 | 2023 |
Provisions for termination benefits at beginning of year | 34 | 32 |
Additions initial consolidation | 0 | 2 |
Current service cost | 1 | 2 |
Interest cost | 1 | 1 |
Remeasurement losses | 1 | 0 |
Benefits paid | (2) | (3) |
Provisions for termination benefits at year-end | 35 | 34 |
Notes to the Consolidated Financial Statements 2024 | ||||
Payments for termination benefits are expected to amount to €2 million in the year 2025. In the previous year, the payments for termination benefits expected for 2024 amounted to €2 million.
The following remeasurement gains and losses were recognised in OCI:
in € million | 2024 | 2023 |
Accumulated remeasurement losses at beginning of year | 18 | 18 |
Remeasurement losses | 1 | 0 |
Accumulated remeasurement losses at year-end | 19 | 18 |
At 31 December 2024 the average duration of termination benefit obligations amounted to 10.5 years (2023: 10.6 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 3.4% (2023: 3.3%) in Austria and 3.4% (2023: 4.2%) in Germany and considers salary increases of 5.1% (2023: 5.2%) in Austria and 2.5% in Germany (2023: 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 | 31.12.2024 | 31.12.2023 |
Present value of semi-retirement obligations | 5 | 4 |
Fair value of plan assets | (1) | (1) |
Provisions for semi-retirement obligations | 4 | 3 |
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 2024 and 2023:
in € million | Onerous/unfavourable contracts | Labour and civil contingencies | Demolition/disposal costs, environmental damages | Restructuring costs | Other | Total |
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 |
Additions interest | 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 |
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
in € million | Onerous/unfavourable contracts | Labour and civil contingencies | Demolition/disposal costs, environmental damages | Restructuring costs | Other | Total |
31.12.2022 | 62 | 9 | 23 | 12 | 4 | 110 |
Currency translation | 3 | 0 | 0 | 0 | 0 | 3 |
Reversals | (2) | (3) | (1) | (1) | (1) | (8) |
Additions | 11 | 6 | 8 | 3 | 7 | 35 |
Additions interest | 6 | 1 | 1 | 0 | 0 | 8 |
Use | (13) | (2) | (1) | (5) | (1) | (22) |
Reclassifications | 0 | 0 | 0 | 0 | 0 | 0 |
31.12.2023 | 67 | 11 | 30 | 9 | 9 | 126 |
non-current | 52 | 11 | 28 | 0 | 0 | 91 |
current | 15 | 0 | 2 | 9 | 9 | 35 |
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 €32 million as of 31 December 2024 (2023: €48 million) and the current portion to €9 million (2023: €11 million). In addition, provisions for other unfavourable contracts amount to €5 million (2023: €8 million), mainly in Türkiye and Europe.
The provision for labour and civil contingencies primarily comprises labour and civil litigation amounting to €8 million (2023: €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 €7 million (2023: €9 million), various sites in Europe amounting to €15 million (2023: €10 million) and in the USA amounting to €7 million (2023: €6 million).
Provisions for restructuring costs amounting to €20 million at 31 December 2024 (2023: €9 million) primarily consist of estimated benefit obligations to employees due to termination of employment and dismantling costs. €15 million (2023: €3 million) relates to the remaining redundancy costs at Mainzlar, Germany, €3 million (2023: €3 million) relates to the plant closure in Trieben, Austria and €1 million (2023: €2 million) pertains to the termination of employment as a result of the Group’s reorganisation of certain global functions to regional ones.
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 | 31.12.2024 | 31.12.2023 |
Trade payables | 455 | 414 |
Trade payables subject to supplier finance arrangements | 117 | 84 |
Contract liabilities | 59 | 65 |
Liabilities to employees | 111 | 136 |
Taxes other than income tax | 31 | 33 |
Capital expenditure payable | 22 | 33 |
Payables from commissions | 10 | 9 |
Other current liabilities | 38 | 46 |
Trade payables and other current liabilities | 843 | 820 |
thereof financial liabilities | 619 | 561 |
thereof non-financial liabilities | 224 | 259 |
Notes to the Consolidated Financial Statements 2024 | ||||
The payment terms of trade payables subject to supplier finance arrangements other than forfaiting lie within a range of 60 to 150 days compared to the range of payment terms of 30 to 120 days for trade payables not subject to supplier finance arrangements. The payment terms of trade payables subject to forfaiting extend up to 360 days. The carrying amount of trade payables subject to supplier finance arrangements of which suppliers have received payment from financial institutions amounts to €98 million. The Group provides corporate parental guarantees, disclosed as part of the Group’s contingent liabilities, to the financial institutions as security for supplier finance arrangements.
The item liabilities to employees primarily consists of obligations for wages and salaries, payroll taxes and employee-related duties, performance bonuses, unused vacation and flextime credits. The increase in liabilities to employees is primarily driven by the newly acquired entities, higher bonus accruals and underlying inflationary effects in wages and salaries.
32. Cash generated from operations
in € million | 2024 | 2023 | |
Profit after income tax | 154 | 171 | |
Adjustments for | |||
income tax | 46 | 62 | |
depreciation | 136 | 134 | |
amortisation | 39 | 44 | |
impairment of property, plant and equipment and intangible assets | 42 | 1 | |
(income) / expense from financial assets excluding trade and other receivables | 3 | (23) | |
(gains)/losses from the disposal of property, plant and equipment | (5) | 4 | |
(gains)/losses from the disposal of foreign operations | (8) | 1 | |
net interest expense, interest rate derivatives and remeasurement of liabilities to the fixed-term or puttable non-controlling interest | 43 | 63 | |
other non-cash changes | (10) | 42 | |
Changes in working capital | |||
inventories | 25 | 183 | |
trade receivables | 2 | 2 | |
trade payables | 83 | (118) | |
contract liabilities | (5) | (14) | |
Changes in other assets and liabilities | |||
other receivables and assets | 7 | 13 | |
provisions | (28) | (25) | |
other liabilities | (22) | 25 | |
Cash generated from operations | 502 | 565 |
Other non-cash changes include share-based payments of €9 million (2023: €9 million), net interest expenses for defined benefit obligations amounting to €12 million (2023: €12 million) and the unrealised portion of the net income on foreign exchange effects amounting to €31 million (2023: the unrealised portion of the net expense on foreign exchange effects of €36 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:
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
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 interests1) | (87) | 6 | (2) | 22 | 9 | 0 | 0 | (52) | |
1) Refer to Note (28) for details.
Cash changes | Non-cash changes | ||||||||
in € million | 31.12.2022 | Changes in foreign exchange rates | Interest and other fair value changes | Reclassifications | Additions from initial consolidation | Additions and modifications of leases (IFRS 16) | 31.12.2023 | ||
Borrowings | (1,620) | (257) | 1 | 1 | 0 | (74) | 0 | (1,949) | |
Lease liabilities | (64) | 23 | 1 | (3) | 0 | (12) | (15) | (70) | |
Cash and cash equivalents | 521 | 196 | (4) | 0 | (9) | 0 | 0 | 704 | |
Marketable securities | 0 | 11 | 0 | 0 | 0 | 0 | 0 | 11 | |
Net debt | (1,163) | (27) | (2) | (2) | (9) | (86) | (15) | (1,304) | |
Liabilities to fixed-term or puttable non-controlling interests1) | (68) | 8 | 5 | 0 | 0 | (32) | 0 | (87) | |
1)Refer to Note (28) for details.
34. Additional disclosures on financial instruments
The following tables show the carrying amounts and fair values of financial assets and liabilities by measurement category and the allocation to the measurement category. In addition, carrying amounts are shown aggregated according to 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 31.12.2024 | Fair value as of 31.12.2024 |
Financial assets | |||||||
Non-current financial assets | 12 | 15 | 7 | 8 | 0 | 42 | 42 |
Trade and other receivables | 0 | 0 | 46 | 487 | 127 | 660 | 660 |
Current financial assets | 13 | 4 | 0 | 0 | 0 | 17 | 17 |
Cash and cash equivalents | 0 | 0 | 0 | 576 | 0 | 576 | 576 |
25 | 19 | 53 | 1,071 | 127 | 1,295 | 1,295 | |
Financial liabilities | |||||||
Borrowings | 0 | 0 | 0 | 1,750 | 0 | 1,750 | 1,737 |
Other financial liabilities | 9 | 38 | 0 | 92 | 0 | 139 | 139 |
Trade payables and other liabilities | 0 | 0 | 0 | 619 | 224 | 843 | 843 |
9 | 38 | 0 | 2,461 | 224 | 2,732 | 2,719 |
Notes to the Consolidated Financial Statements 2024 | ||||
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 31.12.2023 | Fair value as of 31.12.2023 |
Financial assets | |||||||
Non-current financial assets | 21 | 14 | 5 | 3 | 0 | 43 | 43 |
Trade and other receivables | 0 | 0 | 31 | 510 | 139 | 681 | 681 |
Current financial assets | 0 | 12 | 0 | 2 | 0 | 14 | 14 |
Cash and cash equivalents | 0 | 0 | 0 | 704 | 0 | 704 | 704 |
21 | 26 | 36 | 1,219 | 139 | 1,441 | 1,441 | |
Financial liabilities | |||||||
Borrowings | 0 | 0 | 0 | 1,949 | 0 | 1,949 | 1,937 |
Other financial liabilities | 13 | 58 | 0 | 103 | 0 | 174 | 174 |
Trade payables and other liabilities | 0 | 0 | 0 | 561 | 259 | 820 | 820 |
13 | 58 | 0 | 2,613 | 259 | 2,943 | 2,931 |
Non-current financial assets as well as current financial assets comprise marketable securities, derivative financial instruments, shares and other interests. Marketable securities, derivative financial instruments and shares are measured at fair value.
Borrowings and other financial liabilities excluding liabilities related to fixed-term or puttable non-controlling interests are carried at amortised cost in the Consolidated Statement of Financial Position. Liabilities related 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 other financial liabilities approximate their fair value at the reporting date.
Trade and other current 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 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:
The table below analyses the fair value of financial instruments held by the Group by measurement technique:
31.12.2024 | 31.12.2023 | |||||||
in € million | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total |
Assets | ||||||||
Non-current financial assets | 12 | 12 | 8 | 32 | 12 | 20 | 5 | 37 |
Current financial assets | 0 | 16 | 0 | 16 | 11 | 1 | 0 | 12 |
Liabilities | ||||||||
Borrowings | 0 | 1,727 | 0 | 1,727 | 0 | 1,920 | 0 | 1,920 |
Other financial liabilities | 0 | 10 | 52 | 62 | 0 | 17 | 87 | 104 |
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.
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
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 2024 and 31 December 2023.
Net results by measurement category in accordance with IFRS 9
The effect of financial instruments on the income and expenses recognised in 2024 and 2023 is shown in the following table, classified according to the measurement categories defined in IFRS 9:
in € million | 2024 | 2023 |
Net gain from financial assets and liabilities measured at fair value through profit or loss | 5 | 18 |
Net (loss) from financial assets and liabilities measured at amortised cost | (1) | (4) |
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 on derecognitions. Net finance costs include interest income amounting to €22 million (2023: €20 million) and interest expenses of €76 million (2023: €75 million), which result from financial assets and liabilities measured at amortised cost.
Other financial assets
Other financial assets consist of the following items:
31.12.2024 | 31.12.2023 | |||||
in € million | Current | Non-current | Total | Current | Non-current | Total |
Marketable securities and shares | 0 | 20 | 20 | 11 | 17 | 28 |
Interest rate derivatives and commodity swaps | 0 | 12 | 12 | 0 | 21 | 21 |
Restricted cash | 0 | 8 | 8 | 0 | 3 | 3 |
Other interests | 0 | 2 | 2 | 0 | 2 | 2 |
Loans | 0 | 0 | 0 | 2 | 0 | 2 |
Derivatives in open orders and forward exchange contracts | 17 | 0 | 17 | 1 | 0 | 1 |
Other financial assets | 17 | 42 | 59 | 14 | 43 | 57 |
The marketable securities and shares include €7 million (2023: €5 million) investment representing a minority stake in MCi Carbon Pty Ltd..
Notes to the Consolidated Financial Statements 2024 | ||||
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 €6 million at the reporting date (2023: €18 million) and is shown in other non-current financial assets in the Consolidated Statement of Financial Position. For the reporting period of 2024, €6 million gain (2023: €15 million loss) has been recognised in OCI as fair value movements of the hedging instrument and €18 million (2023: €10 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 2024 and 2023 is shown as follows:
in € million | Carrying amount | Statement of Financial Position | Change in fair value recognised in Other Comprehensive Income | Nominal amount |
2024 | 6 | Other non-current financial assets (liabilities) | 6 | EUR 1,052 million |
2023 | 18 | Other non-current financial assets (liabilities) | (15) | EUR 1,081 million |
in € million | Cash flow hedge reserve within Equity | Balance net of deferred tax |
2024 | 6 | 5 |
2023 | 18 | 14 |
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 €3 million at the reporting date and is shown in other non-current and current financial liabilities in the Consolidated Statement of Financial Position. For the reporting period of 2024, a €8 million gain has been recognised in OCI as fair value movements of the hedging instrument and €1 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.
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
The financial effect of the hedged items and the hedging instruments for the year 2024 is shown as follows:
in € million | Carrying amount | Statement of Financial Position | Change in fair value recognised in Other Comprehensive Income | Nominal amount |
2024 | (3) | Other current and non-current financial assets (liabilities) | 8 | Gas 1,536 GWh Oil 624,033 bbl Power 117 GWh |
2023 | (11) | Other current and non-current financial assets (liabilities) | (11) | Gas 1,141 GWh Oil 700,297 bbl Power 30 GWh |
in € million | Cash flow hedge reserve within Equity | Balance net of deferred tax |
2024 | (3) | (2) |
2023 | (11) | (8) |
The average commodity prices hedged by the commodity swaps derivatives are as follows:
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 |
31.12.2023 | |||
Hedging instrument | up to 1 year | 1 to 5 years | |
Commodity swaps - gas | Notional amount (Gwh) | 20 | 1,121 |
Average hedged price per MWh | 58.40 | 40.17 | |
Commodity swaps - oil | Notional amount (bbl) | 406,324 | 293,973 |
Average hedged price per bbl | 76.67 | 75.28 | |
Commodity swaps - power | Notional amount (Gwh) | 30 | |
Average hedged price per MWh | 89.45 |
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.
Notes to the Consolidated Financial Statements 2024 | ||||
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 in million | Fair value 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) | |||
The nominal value and fair value of forward exchange contracts as of 31 December 2023 are shown in the table below:
31.12.2023 | ||||
Purchase | Sale | Nominal in | Nominal value in million | Fair value in € million |
EUR | ZAR | ZAR | 175 | 0 |
MXN | USD | MXN | 670 | 0 |
USD | INR | USD | 20 | 0 |
EUR | USD | USD | 150 | (1) |
BRL | USD | USD | 30 | 0 |
CLP | USD | USD | 19 | 0 |
EUR | INR | EUR | 33 | 0 |
CZK | EUR | EUR | 16 | 0 |
Forward exchange contracts | (1) | |||
In 2024, the Group signed a share purchase agreement with the intention to acquire the Resco Group. The acquisition was closed after the reporting date (refer to Note (42) for details). The cash outflow related to the acquisition is payable in USD but is funded in EUR. This exposes the Group to foreign currency risk in the form of potential variability in the EUR equivalent of the USD cash outflow due to changes in the USD/EUR exchange rate between the signing date and the closing date of this acquisition. To hedge this foreign currency exposure, the Group entered a deal contingent forward exchange contract (‘deal contingent forward’) with a nominal value of USD 360 million at the time of signing the share purchase agreement. The Group has designated the deal contingent forward as hedging instrument with the EUR equivalent of the USD cash outflow stemming from the intended acquisition as hedged item in a hedging relationship recognised as 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 forward exchange rate considering the knock-out feature amounted to USD/EUR 1.0834 on the reporting date.
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.
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
The fair value of the deal contingent forward amounts to €13 million at the reporting date and is shown in other current financial assets in the Consolidated Statement of Financial Position. For the reporting period of 2024, a hedging gain of €13 million has been recognised in OCI as fair value movement of the hedging instrument. The corresponding balance of the cash flow hedge reserve, net of tax, amounts to €10 million at the reporting date.
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 €1,168 million (2023: €1,302 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 | 31.12.2024 | 31.12.2023 |
Trade receivables and contract assets - gross | 533 | 542 |
Credit insurance and letters of credit | (258) | (235) |
Trade receivables and contract assets - net | 275 | 307 |
The movement in the valuation allowance in respect of trade receivables and contract assets during the year and the previous year was as follows:
2024 | 2023 | |||
in € million | Individually assessed - credit impaired | Collectively assessed - not credit impaired | Individually assessed - credit impaired | Collectively assessed - not credit impaired |
Accumulated valuation allowance at beginning of year | 52 | 1 | 29 | 1 |
Currency translation | (2) | 0 | 0 | 0 |
Additions initial consolidation | 0 | 0 | 9 | 0 |
Addition | 3 | 0 | 19 | 0 |
Use | (2) | 0 | (4) | 0 |
Reversal | (4) | 0 | (1) | 0 |
Accumulated valuation allowance at year-end | 47 | 1 | 52 | 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.
Notes to the Consolidated Financial Statements 2024 | ||||
in € million | Trade receivables and contract assets | ||||||
31.12.2024 | not past due | less than 30 days | more than 31 days | Collectively assessed - not credit impaired | Individually assessed - credit impaired | Total | |
Expected credit loss rate in % | 0.03 - 0.54% | 0.09-1.24% | 0.77 - 85.52% | ||||
Gross carrying amount invoiced | 371 | 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 | ||||||
in € million | Trade receivables and contract assets | |||||
31.12.2023 | not past due | less than 30 days | more than 31 days | Collectively assessed - not credit impaired | Individually assessed - credit impaired | Total |
Expected credit loss rate in % | 0.01 - 0.57% | 0.05-1.22% | 0.30 - 59.13% | |||
Gross carrying amount invoiced | 414 | 28 | 17 | 459 | 90 | 549 |
Lifetime expected credit loss | (1) | 0 | 0 | (1) | (1) | |
Valuation allowance - credit impaired | (52) | (52) | ||||
Carrying amount with either expected credit loss or incurred loss allowance | 496 | |||||
Carrying amount without expected credit loss or incurred loss allowance | 46 | |||||
Total trade receivables and contract assets | 542 | |||||
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 2024, the Group has a committed RCF of €600 million, which was unutilised (2023: 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 financial 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.
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
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:
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 current liabilities | 619 | 619 | 619 | 0 | 0 |
Non-derivative financial liabilities | 2,498 | 2,683 | 970 | 1,598 | 115 |
Borrowings | |||||
fixed interest | 433 | 455 | 49 | 391 | 15 |
variable interest | 1,499 | 1,736 | 154 | 1,364 | 218 |
Other financial liabilities | 17 | 23 | 14 | 9 | 0 |
Lease liabilities | 70 | 77 | 18 | 34 | 25 |
Liabilities to fixed-term or puttable non-controlling interests | 87 | 181 | 18 | 13 | 150 |
Trade payables and other current liabilities | 561 | 561 | 561 | 0 | 0 |
Non-derivative financial liabilities | 2,667 | 3,033 | 814 | 1,811 | 408 |
Derivative financial instruments
The remaining terms of derivative financial instruments as of 31 December 2024 and 31 December 2023 are shown in the table below:
Remaining term | |||||
in € million | Carrying amount 31.12.2024 | Cash flows | up to 1 year | 1 to 5 years | over 5 years |
Receivables from derivatives with net settlement | |||||
Interest rate swaps | 10 | 10 | 0 | 10 | 0 |
Commodity swaps | 2 | 2 | 0 | 2 | 0 |
Forward exchange contracts | 14 | 14 | 14 | 0 | 0 |
Derivatives in open orders | 3 | 3 | 3 | 0 | 0 |
Liabilities from derivatives with net settlement | |||||
Commodity swaps | 5 | 5 | 2 | 3 | 0 |
Interest rate derivatives | 4 | 4 | 0 | 4 | 0 |
Forward exchange contracts | 1 | 1 | 1 | 0 | 0 |
Notes to the Consolidated Financial Statements 2024 | ||||
Remaining term | |||||
in € million | Carrying amount 31.12.2023 | Cash flows | up to 1 year | 1 to 5 years | over 5 years |
Receivables from derivatives with net settlement | |||||
Interest rate derivatives | 20 | 20 | 0 | 20 | 0 |
Commodity swaps | 1 | 1 | 1 | 0 | 0 |
Forward exchange contracts | 0 | 0 | 0 | 0 | 0 |
Liabilities from derivatives with net settlement | |||||
Commodity swaps | 11 | 11 | 1 | 10 | 0 |
Derivatives in open orders | 3 | 3 | 3 | 0 | 0 |
Interest rate derivatives | 2 | 2 | 0 | 1 | 1 |
Forward exchange contracts | 1 | 1 | 1 | 0 | 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. Significant provisions denominated in foreign currencies are also included in the analysis of risk.
The following table shows the foreign currency positions in the Group’s major currencies as of 31 December 2024 and 31 December 2023:
31.12.2024 in € million | USD | EUR | ZAR | TRY | Other | Total |
Financial assets | 579 | 82 | 11 | 22 | 15 | 709 |
Financial liabilities, provisions | (426) | (44) | 0 | (6) | (20) | (496) |
Net foreign currency position | 153 | 38 | 11 | 16 | (5) | 213 |
31.12.2023 in € million | USD | EUR | GBP | INR | Other | Total |
Financial assets | 729 | 60 | 8 | 3 | 48 | 848 |
Financial liabilities, provisions | (470) | (95) | (15) | (1) | (22) | (603) |
Net foreign currency position | 259 | (35) | (7) | 2 | 26 | 245 |
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.
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
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) |
A 10% appreciation or devaluation of the relevant functional currency against the following major currencies as of 31 December 2023 would have had the following effect on profit or loss and equity (both excluding income tax):
Appreciation of 10% | Devaluation of 10% | |||
31.12.2023 in € million | (Loss)/gain | Equity | Gain/(loss) | Equity |
USD | (22) | (20) | 27 | 25 |
EUR | 2 | 6 | (2) | (7) |
Other currencies | (2) | (2) | 2 | 2 |
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 2024, one interest rate collar with a nominal value of €180 million (2023: €180 million) and interest rate swaps with a nominal value of €872 million (2023: €901 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 2024 had been 25 basis points higher or lower, equity would have been €2 million (2023: €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 2024 had been 25 basis points higher or lower, the interest result would have been €0 million (2023: €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).
Notes to the Consolidated Financial Statements 2024 | ||||
Other market price risk
The Group holds certificates in an investment fund amounting to €12 million (2023: €12 million) in order to provide the legally required coverage of personnel provisions 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.
31.12.2024 | 31.12.2023 | |
Net debt (in € million)1) | 1,251 | 1,304 |
Net gearing ratio (in %) | 91.2% | 95.6% |
Net debt to Adjusted EBITDA | 2.30x | 2.40x |
1) 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 to total equity.
Net debt excluding lease liabilities/Adjusted EBITDA is the main financial covenant of loan agreements. The key performance indicator for net debt in the Group is the group leverage, which reflects the ratio of Net debt to Adjusted EBITDA, including lease liabilities. It is calculated as follows:
in € million | 31.12.2024 | 31.12.2023 |
EBIT | 242 | 333 |
Amortisation | 40 | 44 |
Restructuring and write-down expenses | 24 | 20 |
Other operating income and expenses | 101 | 12 |
Adjusted EBITA | 407 | 409 |
Depreciation | 136 | 134 |
Adjusted EBITDA | 543 | 543 |
Total debt | 1,750 | 1,949 |
Lease liabilities | 77 | 70 |
Less: Cash and cash equivalents | 576 | 704 |
Less: Marketable securities | 0 | 11 |
Net debt | 1,251 | 1,304 |
Net debt excluding IFRS 16 lease liabilities | 1,174 | 1,234 |
Net debt to Adjusted EBITDA | 2.30x | 2.40x |
Net debt to Adjusted EBITDA excluding IFRS 16 lease liabilities | 2.16x | 2.27x |
In both 2024 and the previous reporting period, the Group complied with the financial covenant of the Group’s principal borrowing facilities (refer to Note (27)). The Group has sufficient liquidity headroom within its committed debt facilities.
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
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. Adjusted EBITA and adjusted EBITDA are key non-IFRS measures that the Executive Management Team and Directors use internally to assess the underlying performance of the Group. Adjusted EBITDA is defined as EBIT, as presented in the Condensed Consolidated Statement of Profit or Loss, before amortisation, depreciation, and excluded Items. 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. Excluded items are other income, other expenses and restructuring expenses as reflected on the Statement of Consolidated Profit or Loss, which are non-recurring in nature and not reflective of the underlying operational performance of the business. The excluded items presented as other income, and other expenses are explained and broken down in Notes (7) and (8).
38. Contingent liabilities
Contingent liabilities have a remaining term of between one and five years. Based on historical experience, the future probability that contingent liabilities are realised is considered to be low.
At 31 December 2024, warranties, performance guarantees and other guarantees amount to €78 million (2023: €71 million). The Group is subject to lawsuits and disputes in the normal course of the business; the Group has assessed these positions and recorded provisions where necessary.
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 tax items presented in the Consolidated Financial Statements may be subject to different interpretations by local finance authorities. In this context it should be noted that a tax provision is generally recognised when the Group has a present obligation as a result of a past event, and when it is considered probable that there will be a future outflow of funds.
The Group is continually adapting its global presence to improve customer service and maintain its competitive advantage, and leads open discussions with tax authorities about, for example, transfer of functions and related profit between related parties and exit taxation. In this regard, disputes may arise, where the Group management’s understanding differs from the positions of the local tax authorities. In such cases, where an appeal is available, management’s judgements are based on a likely outcome approach, taking into consideration previous experience and advice from professional firms when assessing the risks.
The Group is party to several tax proceedings in Brazil which involve estimated contingent liabilities amounting to €117 million (2023: €272 million). These tax proceedings are as follows:
Income Tax relating to historical corporate transactions
There were 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, reducing the cash exposure to €33 million (2023: €177 million). Such exposure is limited to the fiscal tax years up to 2018 at which stage all available goodwill tax deductions had been made, and the Group is currently disputing the remaining amounts in the judicial courts. The proceedings are expected to last for at least five years.
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, which are mining royalties payable by every mining company. The authorities have mainly 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, together with its technical and legal advisors 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 three to four years. At 31 December 2024, the potential risk amounts to €28 million (2023: €32 million), including interest and penalties.
Corporate income and other taxes
There are several tax audits ongoing in Brazil mainly relating to: offsetting federal tax payables and receivables, social security contributions, as well as offsetting certain federal tax debts with corporate income tax credits. The potential cash outflow resulting from the outcome of these tax audits amount to €57 million (2023: €63 million).
Notes to the Consolidated Financial Statements 2024 | ||||
39. Independent Auditor’s remuneration
in € million | 2024 | 2023 |
Fees in respect of the audit of the Consolidated and Parent Company Financial Statements1) | (1) | (1) |
Other audit fees, in respect of subsidiaries' audit, to PwC network firms | (2) | (2) |
Total audit fees | (3) | (3) |
Other non-audit services1)2) | (1) | (1) |
Total fees | (4) | (4) |
1) Total fees to PricewaterhouseCoopers Accountants N.V. totalled €1 million (2023: €1 million).
2) Other non-audit services mainly include Interim review fees of €0.3 million (2023: €0.2 million) and fees for limited assurance on Sustainability Statement of €0.3 million (2023: €0.0 million).
40. Business Combinations
Acquisitions completed in 2023
In July 2023 the Group completed the acquisition of Seven Refractories Group. The purchase price allocation is final. Compared to the preliminary amounts recognised for the acquired assets and liabilities in last year’s Consolidated Financial Statements, the intangible asset related to identified customer relationships decreased by €3 million accompanied by a reduction in deferred tax liabilities of €1 million. These adjustments were reflected against goodwill and non-controlling interests, in line with IFRS 3, and mainly result from the reassessment of valuation parameters used in the measurement of the intangible asset.
In October 2023 the Group completed the acquisition of P-D Refractories. The purchase price allocation is final and does not materially differ from the purchase price allocation disclosed in the last year’s Consolidated Financial Statements.
Acquisitions completed in 2024
In June 2024 the Group, through its non-wholly owned subsidiary Horn & Co. RHIM Minerals Recovery GmbH, completed the acquisition of 100% of the equity shares of Refrattari Trezzi S.r.l., a company engaged in the refractory recycling business. The acquisition means that a strategic production facility has been added to the Group’s existing plant network. The strengthened presence in Italy will enable an increased supply of high-value secondary raw materials and customised services to extend the Group’s full-line services portfolio for the customers. The consideration paid in cash amounts to €5 million.
41. Transactions with related parties
Related companies include joint ventures, associates and MSP Stiftung, Liechtenstein, as a shareholder of RHI Magnesita N.V., since it exercises significant influence based on its shareholding of more than 25%. 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 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 2024 and 2023, the Group conducted the following transaction with its related companies:
Joint ventures | ||
in € million | 2024 | 2023 |
Revenue from the sale of goods and services | 2 | 2 |
Purchase of raw materials | 6 | 6 |
Trade liabilities | 0 | 1 |
In 2024 and 2023, no transactions were carried out between the Group and MSP Stiftung, FEWI Beteiligungs GmbH or Chestnut Beteiligungs GmbH, 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 (2023: €1 million) were made to the personnel welfare foundation. At 31 December 2024, a net asset from overfunded pension plans of €1 million (2023: €2 million) is recognised.
Notes to the Consolidated Financial Statements 2024 Financial Statements 2024 Continued |
Related persons
Remuneration of key management personnel of the Group comprises the remuneration of the Board of Directors and the EMT.
in € million | 2024 | 2023 |
Executive Directors and EMT | ||
Short-term employee benefits | 9 | 10 |
Share-based payments | 4 | 6 |
Total | 13 | 16 |
Non-Executive Directors1) | 2 | 1 |
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.
There is a non-remunerated consultancy agreement in place between RHI Magnesita and a close relative of a Non-Executive Director to advise the Group in respect of political and/or strategic analysis in countries outside the European Union and Brazil.
42. Material events after the reporting date
In March 2024, the Group signed a share purchase agreement stipulating its acquisition of 100% of the shares of Balmoral Refractories Holdings, Inc., USA, and its six wholly owned subsidiaries, together referred to as 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 the Group'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. Following the integration, the Resco Group will form part of all reportable segments.
The preliminary cash consideration amounts to USD315 million (€300 million) and is subject to post-closing adjustments in relation to Resco Group’s working capital and net debt. Additionally, the Group repaid borrowings and liabilities for acquisition-related costs totalling USD100 million (€96 million) on behalf of the Resco Group and acquired cash amounting to USD6 million (€6 million) on closing of the acquisition resulting in a preliminary net cash outflow related to the acquisition totalling USD409 million (€390 million). Of this amount, USD48 million (€44 million) was paid before the reporting date, and the remainder was paid after the reporting date.
The settlement of the deal contingent forward exchange contract disclosed in Note (36) to hedge against the potential variability in the cash outflow due to changes in the USD/EUR exchange rate resulted in a realised gain of €13 million. This gain reduces the EUR equivalent of the net preliminary cash outflow related to the acquisition and goodwill, in accordance with the cash flow hedge accounting requirements.
At the time the Consolidated Financial Statements were authorised for issue, the purchase price was not allocated to the assets acquired and liabilities assumed since the Financial Statements of the Resco Group as of the acquisition date were not available. Therefore, the amounts recognised for each major class of assets acquired and liabilities assumed, the determination of preliminary goodwill as well as information on the income tax deductibility of goodwill and the composition of goodwill are not disclosed.
Company Financial Statements of RHI Magnesita N.V. | ||||
Company Financial Statements of RHI Magnesita N.V.
Company Balance Sheet as at 31 December 2024
(before appropriation of result)
in € million | Note | 31.12.2024 | 31.12.2023 |
ASSETS | |||
Non-current assets | |||
Non-current financial assets | (A) | 1,193 | 1,196 |
Securities | 1 | 1 | |
Deferred tax assets | 11 | 7 | |
Total non-current assets | 1,205 | 1,204 | |
Current assets | |||
Receivables from group companies | 1 | 9 | |
Other current receivables | 4 | 1 | |
Cash and cash equivalents | (B) | 0 | 1 |
Total current assets | 5 | 11 | |
Total assets | 1,210 | 1,215 | |
EQUITY AND LIABILITIES | |||
Equity | |||
Share capital | (C) | 50 | 50 |
Treasury shares | (D) | (108) | (111) |
Additional paid-in capital | (E) | 361 | 361 |
Legal and mandatory reserves | (F) | 86 | 86 |
Other reserves | 671 | 651 | |
Result for the period | (J) | 142 | 165 |
Shareholders' Equity | 1,202 | 1,202 | |
Current liabilities | |||
Current liabilities | (G) | 8 | 13 |
Total liabilities | 8 | 13 | |
Total equity and liabilities | 1,210 | 1,215 |
Company Financial Statements of RHI Magnesita N.V. As at 31 December 2024 | ||||
Sensitivity: Confidential
Company Statement of Profit or Loss for the period 1 January 2024 to 31 December 2024
in € million | Note | 2024 | 2023 |
General and administrative expenses | (H) | (25) | (30) |
Result before taxation | (25) | (30) | |
Loss before income tax | (25) | (30) | |
Income tax | 3 | (3) | |
Net result from investments | (I) | 164 | 198 |
Net result for the period | (J) | 142 | 165 |
Movements in Shareholders’ Equity
Legal and mandatory reserves | Other reserves | |||||||||
in € million | Share capital | Treasury shares | Additional paid-in capital | Cash flow hedges | Currency translation | Mandatory reserve | Retained earnings | Net result | Equity attributable to shareholders | |
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 | |
Legal and mandatory reserves | Other reserves | |||||||||
in € million | Share capital | Treasury shares | Additional paid-in capital | Cash flow hedges | Currency translation | Mandatory reserve | Retained earnings | Net result | Equity attributable to shareholders | |
31.12.2022 | 50 | (116) | 361 | 32 | (148) | 289 | 378 | 156 | 1,002 | |
Appropriation of prior year result | - | - | - | - | - | - | 156 | (156) | - | |
Net result | - | - | - | - | - | - | - | 165 | 165 | |
Share transfer / Vested LTIP | - | 5 | - | - | - | - | (5) | - | - | |
Share-based expenses | - | - | - | - | - | - | 9 | - | 9 | |
Dividends | - | - | - | - | - | - | (78) | - | (78) | |
Net income / (expense) recognised directly in equity | - | - | - | (26) | (15) | - | 145 | - | 104 | |
31.12.2023 | 50 | (111) | 361 | 6 | (163) | 289 | 605 | 165 | 1,202 | |
Notes to the CompanY Financial Statements 2024 | ||||
Notes to the Company Financial Statements 2024
General
The Financial Statements of RHI Magnesita N.V. for the year ended 31 December 2024 were approved and authorised for issue by the Board of Directors on 26 February 2025. 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., Vienna 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
● Refractory Intellectual Property GmbH
● RHI Refractories Raw Material GmbH
● Veitsch-Radex GmbH
● Veitsch-Radex Vertriebgesellschaft m.b.H
● Veitscher Vertriebsgesellschaft 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 2024). 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% (2023: 24.0%). The effective tax rate is negative 1.9% (2023: 1.9%) with an income tax income of €3 million (2023: €3 million expense) on a profit before income tax of €139 million (2023: €168 million). Overall, a taxable income of €5 million deriving from movement in deferred tax positions is offset by a tax expense of €2 million which stems from the consolidation of the results of subsidiaries which are part of the fiscal unity; RHI Magnesita N.V. 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 (€164 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. In case the net asset value of an investment in a Group company is negative, any existing loans to Group companies considered as net investment are impaired. A provision for any remaining equity deficit is recognised when an outflow of resources is probable and can be reliably estimated.
Notes to the Company Financial Statements 2024Continued |
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 financial assets
(A) Non-current financial assets
The financial fixed assets comprise investments in:
31.12.2024 | 31.12.2023 | ||
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 | 2024 | 2023 |
At beginning of year | 1,196 | 943 |
Transactions with non-controlling interests without change of control | 5 | 161 |
Changes from currency translation and cash flow hedges | (84) | (40) |
Changes from defined benefit plans | 16 | (16) |
Dividend distribution | (104) | (50) |
Net result from investments | 164 | 198 |
Balance at year-end | 1,193 | 1,196 |
Notes to the CompanY Financial Statements 2024 | ||||
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%:
31.12.2024 | 31.12.2023 | ||||
Ser. no. | Name and country of incorporation of the company | Share- holder | Share in % | Share- holder | Share in % |
1. | RHI Magnesita N.V., Arnhem, Netherlands | ||||
2. | Agellis Group AB, Lund, Sweden | 32. | 100.0 | 32. | 100.0 |
3. | Baker Refractories Holding Company, Delaware, USA | 22. | 100.0 | 22. | 100.0 |
4. | Baker Refractories I.C., Inc., Delaware, USA | 3. | 100.0 | 3. | 100.0 |
5. | Didier Société Industrielle de Production et de Construction - "D.S.I.P.C.", Valenciennes, France | 47. | 100.0 | 47. | 100.0 |
6. | Dutch Brasil Holding B.V., Arnhem, Netherlands | 90. | 100.0 | 90. | 100.0 |
7. | Dutch MAS B.V., Arnhem, Netherlands | 47. | 100.0 | 47. | 100.0 |
8. | Dutch US Holding B.V., Arnhem, Netherlands | 90. | 100.0 | 90. | 100.0 |
9. | Foreign Enterprise “VERA", Dnepropetrovsk, Ukraine | 32. | 100.0 | 32. | 100.0 |
10. | GIX International Limited, Dinnington, United Kingdom | 94. | 100.0 | 94. | 100.0 |
11. | Horn & Co. RHIM Minerals Recovery GmbH, Siegen, Germany | 48. | 55.0 | 48. | 51.0 |
12. | Intermetal Engineers (India) Private Limited, Mumbai, India | 49. | 100.0 | 49. | 100.0 |
13. | Jinan New Emei Industries Co. Ltd., Jinan, China | 43. | 65.0 | 43. | 65.0 |
14. | Liaoning RHI Jinding Magnesia Co., Ltd, Dashiqiao, China1) | 32. | 100.0 | 32. | 100.0 |
15. | Lokalbahn Mixnitz-St. Erhard GmbH, Vienna, Austria | 69. | 100.0 | 69. | 100.0 |
16. | LWB Refractories Holding France S.A.S., Valenciennes, France 3) | 33. | 100.0 | n/a | 100.0 |
17. | Magnesita Asia Refractory Holding, Limited, Hong Kong, Hong Kong | 16. | 100.0 | 16. | 100.0 |
18. | Magnesita Malta Finance Ltd., St. Julians, Malta 3) | 19. | 100.0 | n/a | 100.0 |
19. | Magnesita Malta Holding Ltd., St. Julians, Malta 3) | 48. | 100.0 | n/a | 100.0 |
20. | Magnesita Mineração S.A., Brumado, Brazil | 28. | 100.0 | 28. | 100.0 |
21. | Magnesita Refractories (Dalian) Co., Ltd., Dalian, China 3) | 43. | 100.0 | n/a | 100.0 |
22. | Magnesita Refractories Company, York, USA | 33. | 100.0 | 33. | 100.0 |
23. | Magnesita Refractories Limited, Dinnington, United Kingdom | 3. | 100.0 | 3. | 100.0 |
24. | Magnesita Refractories México, S.A. de C.V., Monterrey, Mexico | 3.,4. | 100.0 | 3.,4. | 100.0 |
25. | Magnesita Refractories Middle East Free Zone Establishment, Dubai, United Arab Emirates 3) | 6. | 100.0 | n/a | 100.0 |
26. | Magnesita Refractories S.C.S., Valenciennes, France 3) | 16.,33. | 100.0 | n/a | 100.0 |
27. | Magnesita Refractories S.R.L., Milano, Italy 3) | 33. | 100.0 | n/a | 100.0 |
28. | Magnesita Refratários S.A., Contagem, Brazil | 6. | 100.0 | 6. | 100.0 |
29. | Magnesita Resource (Anhui) Company Ltd., Chizhou, China | 43. | 100.0 | 43. | 100.0 |
30. | P-D Refractories CZ a.s., Velké Opatovice, Czech Republic | 48. | 96.9 | 48. | 86.8 |
31. | Producción RHI México, S. de R.L. de C.V., Ramos Arizpe, Mexico | 64.,94. | 100.0 | 64.,94. | 100.0 |
32. | Radex Vertriebsgesellschaft m.b.H., Leoben, Austria | 92. | 100.0 | 92. | 100.0 |
33. | Rearden G Holdings Eins GmbH, Wiesbaden, Germany 3) | 6. | 100.0 | n/a | 100.0 |
34. | Refractarios Argentinos S.A, Industrial Comercial Y Minera (I.C.M.), San Nicolás, Argentina | 6.,8.,94. | 100.0 | 6.,8.,94. | 100.0 |
35. | Refractarios Magnesita Colombia S.A.S., Sogamoso, Colombia | 6. | 100.0 | 6. | 100.0 |
36. | Refractarios Magnesita Perú S.A.C., Lima, Peru | 6. | 100.0 | 6. | 100.0 |
37. | Refractory Intellectual Property GmbH, Vienna, Austria | 48. | 100.0 | 48. | 100.0 |
38. | Refractory Intellectual Property GmbH & Co KG, Vienna, Austria | 37. | 100.0 | 37. | 100.0 |
39. | Refrattari Trezzi S.r.l., Merlino, Italy | 11. | 100.0 | - | 0.0 |
40. | RHI Canada Inc., Burlington, Canada | 94. | 100.0 | 94. | 100.0 |
Notes to the Company Financial Statements 2024Continued |
31.12.2024 | 31.12.2023 | ||||
Ser. no. | Name and country of incorporation of the company | Share- holder | Share in % | Share- holder | Share in % |
41. | RHI Chile S.A., Santiago, Chile | 10.,34.,94. | 100.0 | 10.,34.,94. | 100.0 |
42. | RHI Italia S.R.L., Brescia, Italy | 48. | 100.0 | 48. | 100.0 |
43. | RHI Magnesita (China) Co., Ltd., Shanghai, China | 32. | 100.0 | 32. | 100.0 |
44. | RHI Magnesita (Chongqing) Refractory Materials Co., Ltd., Chongqing, China | 43. | 51.0 | 43. | 51.0 |
48. | RHI Magnesita GmbH, Vienna, Austria | 1. | 100.0 | 1. | 100.0 |
49. | RHI Magnesita India Limited, New Delhi, India | 6.,8.,94. | 56.1 | 6.,8.,94. | 56.1 |
50. | RHI Magnesita India Refractories Limited, Rajgangpur, India | 49. | 100.0 | 49. | 100.0 |
51. | RHI Magnesita RE Limited, Guernsey, United Kingdom | 32. | 100.0 | 32. | 100.0 |
52. | RHI Magnesita Sales Germany GmbH, Wiesbaden, Germany | 75. | 100.0 | 75. | 100.0 |
53. | RHI Magnesita Seven Refractories Limited, Dseven, India | 50. | 100.0 | 50. | 100.0 |
54. | RHI Magnesita Switzerland AG, Hünenberg, Switzerland | 32.,47. | 100.0 | 32.,47. | 100.0 |
55. | RHI Magnesita Trading B.V., Rotterdam, Netherlands | 48. | 100.0 | 48. | 100.0 |
56. | RHI Magnesita Turkey Refrakter Ticaret Anonim Sirketi, Eskisehir, Türkiye2) | 15.,32.,90. | 100.0 | 15.,32.,90. | 100.0 |
57. | RHI Magnesita Vietnam Company Limited, Ho Chi Minh City, Vietnam | 63. | 100.0 | 63. | 100.0 |
58. | RHI Magnesita Wetro GmbH, Puschwitz, Germany | 48. | 100.0 | 48. | 100.0 |
59. | RHI Marvo S.R.L., Bucharest, Romania | 32.,90. | 100.0 | 32.,90. | 100.0 |
60. | RHI Refractories (Dalian) Co., Ltd., Dalian, China | 43. | 100.0 | 43. | 100.0 |
61. | RHI Refractories Africa (PTY) LTD, Sandton, South Africa | 32. | 100.0 | 32. | 100.0 |
62. | RHI Refractories Andino, C.A., Puerto Ordaz, Venezuela | 94. | 100.0 | 94. | 100.0 |
63. | RHI Refractories Asia Pacific Pte. Ltd, Singapore, Singapore | 48. | 100.0 | 48. | 100.0 |
64. | RHI Refractories España, S.L., Lugones, Spain | 7.,47. | 100.0 | 7.,47. | 100.0 |
65. | RHI Refractories France SA, Valenciennes, France | 47.,52.,81. | 100.0 | 47.,52.,81. | 100.0 |
66. | RHI Refractories Ibérica, S.L., Oviedo, Spain | 81. | 100.0 | 81. | 100.0 |
67. | RHI Refractories Liaoning Co., Ltd., Bayuquan, China1) | 43. | 100.0 | 43. | 100.0 |
68. | RHI Refractories Nord AB, Stockholm, Sweden | 81. | 100.0 | 81. | 100.0 |
69. | RHI Refractories Raw Material GmbH, Vienna, Austria | 1.,32.,48. | 100.0 | 1.,32.,48. | 100.0 |
70. | RHI Refractories Site Services GmbH, Wiesbaden, Germany | 47. | 100.0 | 47. | 100.0 |
71. | RHI Refractories UK Limited, Bonnybridge, United Kingdom | 47. | 100.0 | 47. | 100.0 |
72. | RHI Refratãrios Brasil Ltda., Contagem, Brazil | 6.,28. | 100.0 | 6.,28. | 100.0 |
73. | RHI Trading (Dalian) Co., Ltd, Dalian, China | 43. | 100.0 | 43. | 100.0 |
74. | RHI Ukraina LLC, Dnepropetrovsk, Ukraine | 32.,90. | 100.0 | 32.,90. | 100.0 |
75. | RHI Urmitz AG & Co. KG, Mülheim-Kärlich, Germany | 47.,70. | 100.0 | 47.,70. | 100.0 |
76. | RHI US Ltd., Delaware, USA | 8. | 100.0 | 8. | 100.0 |
77. | RHI Wostok Limited Liability Company, Moscow, Russia | 32.,48. | 100.0 | 32.,48. | 100.0 |
78. | RHI Wostok Service Limited Liability Company, Moscow, Russia | 32.,48. | 100.0 | 32.,48. | 100.0 |
79. | RHIM Mireco Mitterdorf GmbH, St.Barbara im Mürztal, Austria | 11. | 100.0 | 11. | 100.0 |
80. | RHI-Refmex, S.A. de C.V., Ramos Arizpe, Mexico | 55.,64.,94. | 100.0 | 64.,94. | 100.0 |
81. | Sapref AG für feuerfestes Material, Basel, Switzerland | 94. | 100.0 | 94. | 100.0 |
82. | Seven Refractories (UK) Ltd, Rotherham, United Kingdom | 83. | 100.0 | 83. | 76.0 |
83. | Seven Refractories d.o.o, Divača, Slovenia | 48. | 100.0 | 48. | 100.0 |
84. | Seven Refractories Deutschland GmbH, Düsseldorf, Germany | 48. | 100.0 | 48. | 100.0 |
85. | Seven Refractories Holding, Inc., Huron, USA | 83. | 100.0 | 83. | 100.0 |
Notes to the CompanY Financial Statements 2024 | ||||
31.12.2024 | 31.12.2023 | ||||
Ser. no. | Name and country of incorporation of the company | Share- holder | Share in % | Share- holder | Share in % |
86. | Seven Refractories Limited, Nicosia, Cyprus | 83. | 100.0 | 83. | 51.0 |
87. | Seven Refractories S.r.l., Castellazzo Bormida, Italy | 83. | 100.0 | 83. | 100.0 |
88. | Sipra S.p.A., Bergamo, Italy | 83. | 52.0 | 83. | 52.0 |
89. | Sörmaş Söğüt Refrakter Malzemeleri Anonim Şirketi, Söğüt / Bilecik, Türkiye | 32. | 91.3 | 32. | 91.0 |
90. | Veitscher Vertriebsgesellschaft m.b.H., Vienna, Austria | 48. | 100.0 | 48. | 100.0 |
91. | Veitsch-Radex GmbH, Vienna, Austria | 48. | 100.0 | 48. | 100.0 |
92. | Veitsch-Radex GmbH & Co OG, Vienna, Austria | 48. | 100.0 | 48. | 100.0 |
93. | Veitsch-Radex Vertriebsgesellschaft m.b.H., Vienna, Austria | 48. | 100.0 | 48. | 100.0 |
94. | VRD Americas B.V., Arnhem, Netherlands | 32.,48. | 100.0 | 32.,48. | 100.0 |
95. | Zimmermann & Jansen GmbH, Wiesbaden, Germany | 47. | 100.0 | 47. | 100.0 |
96. | Dr.-Ing. Petri & Co. Unterstützungs-Gesellschaft m.b.H., Wiesbaden, Germany | 47. | 100.0 | 47. | 100.0 |
97. | Horn & Co Polska sp. z o.o., Chorzów, Poland | 11. | 100.0 | 11. | 100.0 |
98. | Magnesita Refractories Private Limited, Mumbai, India 3) | 33. | 100.0 | n/a | 100.0 |
99. | Minerals and Metals Recovering - Mireco Aktiebolag, Fagersta, Sweden | 11. | 100.0 | 11. | 100.0 |
100. | Mireco SARL, Entzheim, France | 11. | 100.0 | 11. | 100.0 |
101. | Mireco SH.P.K, Lebushe, Kosovo | 11. | 100.0 | 11. | 100.0 |
102. | Rudgruvans Industrier Aktiebolag, Fagersta, Sweden | 11. | 100.0 | 11. | 100.0 |
Equity-accounted joint ventures and associated companies | |||||
103. | Chongqing Boliang Refractory Materials Co., Ltd., Chongqing, China | 43. | 51.0 | 43. | 51.0 |
104. | Magnesita-Envoy Asia Ltd., Kaohsiung, Taiwan | 3. | 50.0 | 3. | 50.0 |
105. | 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) Further shareholder is VRD Americas B.V., Arnhem, Netherlands.
3) 2023 Shareholder(s) have been merged and are consequently no longer part of this list.
Notes to the Company Financial Statements 2024Continued |
Current assets
(B) Cash and cash equivalents
Cash and cash equivalents are at RHI Magnesita N.V.’s free disposal.
Equity
(C) 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 2024, RHI Magnesita N.V.’s issued and fully paid-in share capital consists of 47,195,936 ordinary shares (2023: 47,130,338 ordinary shares). For additional information on treasury shares see (D).
(D) Treasury shares
As at 31 December 2024, RHI Magnesita treasury shares amount to 2,281,769 (2023: 2,347,367).
(E) Additional paid-in capital
Additional paid-in capital comprises premiums on the issue of shares less issue costs by RHI Magnesita N.V.
(F) 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 (€16 million).
Current liabilities
(G) Current liabilities
in € million | 31.12.2024 | 31.12.2023 |
Trade payables | 0 | 1 |
Payables to group companies | 3 | 5 |
Accrued liabilities | 5 | 7 |
Total current liabilities | 8 | 13 |
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.
Notes to the CompanY Financial Statements 2024 | ||||
(H) General and administrative expenses
in € million | 2024 | 2023 |
External services/consulting expenses | (2) | (6) |
Personnel expenses | (21) | (21) |
Other expenses | (2) | (3) |
Total general and administrative expenses | (25) | (30) |
in € million | 2024 | 2023 |
Wages and salaries | (18) | (18) |
Social security charges | (1) | (1) |
Pension contributions | (1) | (1) |
Other employee costs | (1) | (1) |
Total wages and salaries | (21) | (21) |
(I) Net results from investments
In 2024, the full year results of the investments amount to a profit of €164 million (2023: €198 million) and are recognised in the Company Statement of Profit or Loss.
(J) Net result for the period
In 2024, 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 | 2024 |
Profit attributable to shareholders | 142 |
In accordance with Article 27 clause 1 to be transferred to reserves | 0 |
At the disposal of the General Meeting of Shareholders | 142 |
For 2024, the Board of Directors will propose a final dividend of €1.80 per share for the shareholders of RHI Magnesita N.V. The proposed dividend is subject to approval by the AGM in May 2025.
Other notes
Number of employees
The average number of employees of RHI Magnesita N.V. during 2024 amounts to 9 (2023: 9); 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 €1,783 million (2023: €2,008 million) for the borrowings of the Group. The Borrowings are as disclosed in Note (27) of the Consolidated Financial Statements. Additionally, €44 million (2023: €20 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.
Notes to the Company Financial Statements 2024Continued |
The following branches are part of subsidiaries which are directly or indirectly controlled by RHI Magnesita N.V.: "Magnesita Asia Refractory Holding Limited Company (Korea branch)", Gyeongsangbuk-do (Jidok-dong), Republic of Korea; Sipra S.p.a. Branch office nr. BG-2, Filago, Italy; Magnesita Resource (Anhui) Company Ltd., ChangLong Gang Dolomite Quarry, Chizhou, China; RHI Refractories Asia Pacific Ptd Ltd Taiwan Branch, Kaohsiung, Taiwan; RHI Refractories Asia Pacific Pte Ltd Korea Branch, Gyeongsangbuk-do, Republic of Korea; RHI Refractories Site Services GmbH-Niederlassung Unterwellenborn, Unterwellenborn, Germany; Veitsch-Radex Vertriebsgesellschaft m.b.H. (Spólka z ograniczona odpowiedzialnoscia) Oddzial w Polsce, Zabrze, Poland; Veitsch-Radex Vertriebsgesellschaft m.b.H. Podružnica Jesenice, Jesenice, Slovenia; 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.
Notes to the CompanY Financial Statements 2024 | ||||
Vienna, 26 February 2025
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 | Janice “Jann” Brown |
Karl Sevelda | Marie-Hélène Ametsreiter |
Wolfgang Ruttenstorfer | A. Katarina Lindström |
Employee Representative Directors | |
Karin Garcia | Martin Kowatsch |
Michael Schwarz | |
OTHER INFORMATION Continued |
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.
OTHER iNFORMATION | ||||
Independent auditor’s report
To: the general meeting of RHI Magnesita N.V.
Report on the audit of the financial statements 2024
Our opinion
In our opinion:
● the consolidated financial statements of RHI Magnesita N.V. together with its subsidiaries (‘the Group’) give a true and fair view of the financial position of the Group as at 31 December 2024 and of its result and cash flows for the year then ended in accordance with IFRS Accounting Standards as adopted by the European Union (‘EU’) and with Part 9 of Book 2 of the Dutch Civil Code;
● the company financial statements of RHI Magnesita N.V. (‘the Company’) give a true and fair view of the financial position of the Company as at 31 December 2024 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.
What we have audited
We have audited the accompanying financial statements 2024 of RHI Magnesita N.V., Arnhem. The financial statements comprise the consolidated financial statements of the Group and the company financial statements.
The consolidated financial statements comprise:
● the consolidated statement of financial position as at 31 December 2024;
● the following statements for 2024: the consolidated statements of profit or loss, comprehensive income, changes in equity and cash flows; and
● the notes to the consolidated financial statements, including material accounting policy information and other explanatory information.
The company financial statements comprise:
● the company balance sheet as at 31 December 2024;
● the company statement of profit or loss for the period 1 January 2024 to 31 December 2024; and
● the notes, comprising a summary of the accounting policies applied and other explanatory information.
The financial reporting framework applied in the preparation of the financial statements is IFRS Accounting Standards as adopted by the EU and the relevant provisions of Part 9 of Book 2 of the Dutch Civil Code for the consolidated financial statements and Part 9 of Book 2 of the Dutch Civil Code for the company financial statements.
The basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. We have further described our responsibilities under those standards in the section ‘Our responsibilities for the audit of the financial statements’ of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of RHI Magnesita N.V. in accordance with the European Union Regulation on specific requirements regarding statutory audit of public-interest entities, the ‘Wet toezicht accountantsorganisaties’ (Wta, Audit firms supervision act), the ‘Verordening inzake de onafhankelijkheid van accountants bij assuranceopdrachten’ (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore, we have complied with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics).
Our audit approach
We designed our audit procedures with respect to the key audit matters, fraud and going concern, and the matters resulting from that, in the context of our audit of the financial statements as a whole and in forming our opinion thereon. The information in support of our opinion, such as our findings and observations related to individual key audit matters, the audit approach fraud risk and the audit approach going concern was addressed in this context, and we do not provide separate opinions or conclusions on these matters.
Overview and context
RHI Magnesita N.V. is a global supplier of high-grade refractory products, systems and solutions. The Group is comprised of several components and therefore we considered our group audit scope and approach as set out in the section ‘The scope of our group audit’. We paid specific attention to the areas of focus driven by the operations of the Group, as set out below.
OTHER INFORMATION Continued |
The Group experienced a year of weak market conditions as a result of the reduced demand from its steel and cement customers for refractories. In response, the Group focussed on benefits to be achieved through operational excellence and network efficiencies, but also had to incur sizeable restructuring and impairment expenses as a result of network optimalisation decisions made in 2024. In 2024 the Group also incurred significant expenses in relation to the implementation of digital transformation projects. However, mainly due to the positive contribution of the various acquisitions completed in 2023, revenues, margins and profitability in 2024 remained relatively stable compared to 2023. These developments affected the scope of our group audit and our audit procedures, as described in the sections ‘The scope of our audit’ and ‘Key audit matters’.
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we considered where the board of directors made important judgements, for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. In these considerations, we paid attention to, among others, the assumptions underlying the physical and transition risks related to climate change.
In note 3 of the consolidated financial statements, the Company describes the areas of judgement in applying accounting policies and the key sources of estimation uncertainty. Given the significant estimation uncertainty and the related higher inherent risks of material misstatement in respect of the valuation of goodwill and the recognition and valuation of uncertain tax positions, we considered these matters as key audit matters as set out in the section ‘Key audit matters’ of this report.
RHI Magnesita N.V. furthermore assessed the risks and opportunities of climate change on its financial position; refer to the sections ‘Principal risks’ and ‘Sustainability Statement’ of the Group’s Strategic Report where management defined potential physical as well as transitional risks, risk mitigating activities, risk governance, strategy and metrics. Reference is also made to note 4 of the consolidated financial statements, where management further assessed the key areas of climate change impacts that potentially have longer-term effects on amounts recognised at 31 December 2024. These areas are the impairment of goodwill, useful lives of property, plant and equipment, recognition of restoration provisions, valuation of deferred tax assets and the finance cost with respect to ESG linked loans.
We discussed RHI Magnesita N.V.’s above-mentioned assessment and governance thereof with the board of directors as well as the Audit & Compliance Committee and evaluated the potential impact on the financial position including underlying assumptions and estimates, for example with respect to the valuation of goodwill. Please also refer to the Key audit matter ‘Valuation of goodwill’ where the impact and the approach thereon is described.
Apart from key audit matters and the impact from the climate change on our audit, as described above, other areas of focus in our audit were the impairment considerations regarding a significant construction project that was suspended in the previous years, the closure of a European plant, material changes in estimates and the change in reportable segments. We furthermore discussed with management, based on review of contracts and research of authoritative accounting guidance, the accounting for digital transformation related implementation costs in respect of IT systems and processes.
And finally, we performed audit procedures on the items marked as ‘audited’ in the 2024 Annual Report on Remuneration.
We ensured that the audit teams at both the group and component level included the appropriate skills and competences which are needed for the audit of an international industrial products group. We therefore included experts and specialists in the areas of, among others, valuations, employee benefits, IT and corporate income taxes in our team.
The outline of our audit approach was as follows:
Materiality • Overall materiality: €15.6 million. |
Audit scope • We conducted audit work in 11 locations. • Site visits were conducted in Austria, Brazil, India and the United States of America. • Audit coverage: 78% of consolidated revenue, 78% of consolidated total assets and 76% of consolidated profit before tax. |
Key audit matters • Valuation of goodwill; and • Recognition and valuation of uncertain tax positions. |
Materiality
The scope of our audit was influenced by the application of materiality, which is further explained in the section ‘Our responsibilities for the audit of the financial statements’.
OTHER iNFORMATION | ||||
Based on our professional judgement we determined certain quantitative thresholds for materiality, including the overall materiality for the financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and to evaluate the effect of identified misstatements, both individually and in aggregate, on the financial statements as a whole and on our opinion.
Overall group materiality | €15.6 million (2023: €14 million). |
Basis for determining materiality | We used our professional judgement to determine overall materiality. As a basis for our judgement, we used 5% of profit before tax adjusted for certain non-operating items. |
Rationale for benchmark applied | We used profit before tax adjusted for certain non-operating items (e.g. restructuring costs, digital transformation implementation costs and impairments of non-current assets recorded as Other income or Other expense) as the primary benchmark, a generally accepted auditing practice, based on our analysis of the common information needs of the users of the financial statements. On this basis, we believe that profit before tax adjusted for non-operating items is the most relevant metric for assessing the financial performance of the Group. |
Component materiality | Based on our judgement, we allocate materiality to each component in our audit scope that is less than our overall group materiality. The range of materiality allocated across components was between €1.5 million and €12.5 million. |
We also take misstatements and/or possible misstatements into account that, in our judgement, are material for qualitative reasons.
We agreed with the board of directors and the Audit & Compliance Committee that we would report to them any misstatement identified during our audit above €1 million (2023: €1 million) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
The scope of our group audit
RHI Magnesita N.V. is the parent company of a group of entities. The financial information of this group is included in the consolidated financial statements of RHI Magnesita N.V.
We are responsible for the identification and assessment of the risks of material misstatement of the financial statements of the group, including those with respect to the consolidation process. Based on our risk assessment, we tailored the scope of our audit to ensure that we, in aggregate, performed sufficient work on the financial statements to enable us to provide an opinion on the financial statements as a whole.
In setting the scope of our group audit we determined what audit work needed to be performed at group level or component level and whether involvement of component auditors was necessary.
Based on this outcome, we subjected 10 components to audits of their complete financial information, as those components are considered significant due to risk or size. Additionally, we selected 16 components for specified audit procedures to achieve appropriate coverage on selected financial line items in the consolidated financial statements.
In total, in performing these procedures, we achieved the following coverage on the financial line items:
Revenue | 78% |
Total assets | 78% |
Profit before tax | 76% |
None of the remaining components represented more than 3% of total group revenue or total group assets.
The group engagement team performed full scope audit procedures for the parent company RHI Magnesita N.V., specified audit procedures for the subsidiary RHI Magnesita Trading B.V. and specified audit procedures for the Global Shared Services activities in Spain on areas such as property, plant & equipment, cash and cash equivalents and certain aspects of accounts payable and accounts receivable. In addition, the group engagement team performed audit work over the headquarter-related activities in Vienna. This included the audit of IT systems, group consolidation, inventory valuation, financial statement disclosures, remuneration disclosures and several complex accounting items, such as goodwill impairment testing, share based compensation accounting, as well as compliance of emerging accounting positions taken by the Group in accordance with IFRS Accounting Standards as adopted by the EU.
OTHER INFORMATION Continued |
For the remaining components we used component auditors who are familiar with the local laws and regulations to perform the audit work. Where component auditors performed the work, we determined the nature, timing and extent of direction and supervision of the component auditors and review of their work. We furthermore:
● Issued group audit instructions to component auditors to set expectations for the component auditor's work and facilitate our direction and supervision of the component auditor and review of their work.
● Participated in discussions with component auditors as part of planning the engagement, including determining the nature, timing and extent of audit responses to identified and assessing the risks of material misstatements.
● Communicated with component auditors throughout the course of the group audit, either virtually by leveraging technology solutions, in-person meetings (e.g., as part of a site visit to the component auditor's territory), or through a combination of these, in order to monitor the progress of the component auditor's work. These ongoing communications included matters affecting the execution, completion and reporting of the group audit.
● Reviewed relevant parts of the component auditor's work including the component auditor's communication of matters relevant to our conclusion with regard to the group audit. Our review of the component auditor's work took place throughout the engagement. This included on-site and/or virtual reviews, including of the component auditor's working papers.
● Had individual calls with each of the component audit teams in scope for their complete financial information both during the year and upon conclusion of their work. During these calls, we discussed the financial performance of the components, significant accounting and audit issues identified by the component auditors, their reports, the findings of their procedures and other matters, that could be of relevance for the consolidated financial statements.
● Visited the RHI Magnesita N.V. business operations and finance functions in Austria, Brazil, India and the United States of America, given the size of these operating locations. During these visits we met with local management and component auditors, discussed strategy and financial performance of the local businesses, significant business developments, accounting matters and the areas of significant risks.
By performing the procedures outlined above at the components, combined with additional procedures exercised at Group level, we have been able to obtain sufficient and appropriate audit evidence on the Group’s financial information, to provide a basis for our opinion on the financial statements.
Audit approach fraud risks
We identified and assessed the risks of material misstatements of the financial statements due to fraud. During our audit we obtained an understanding of RHI Magnesita N.V. and its environment and the components of the internal control system. This included the board of directors’ (fraud) risk assessment process, the board of directors’ process for responding to the risks of fraud and monitoring the internal control system. We refer to section ‘Effective risk management’ of the Group’s Strategic report for management’s fraud risk assessment.
We evaluated the design and relevant aspects of the internal control system with respect to the risks of material misstatements due to fraud, and in particular the fraud risk assessment, as well as the code of conduct, whistleblower procedures and incident registration process, among other things.
As part of our process of identifying fraud risks, we evaluated fraud risk factors with respect to financial reporting fraud, misappropriation of assets and bribery and corruption. We evaluated whether these factors indicate that a risk of material misstatement due to fraud is present.
Our evaluation included the following procedures:
● We performed an inquiry of the Audit & Compliance Committee as to fraud risks and related party transactions to identify the areas of their concerns in relation to fraud.
● We inquired with the Chief Audit Executive about fraud cases identified throughout the year and reviewed the reports of the Internal Audit Function relevant to the reporting period. Where deemed appropriate, we performed followed-up procedures on these fraud cases. We also assessed the matters reported through the Group’s whistleblowing and complaints procedure as well as the results of management’s investigation and follow-up on such matters.
● We inquired with the board of directors, the executive management team and local executives as well as sales managers, as to whether they have any knowledge of actual or suspected fraud, their views on overall fraud risks within the Group and their perspectives on the Group’s mitigating controls addressing the risk of fraud.
● We assessed the IT environment around key systems. We paid specific attention to access safeguards in the IT system and potential violations of the segregation of duties within such systems.
We identified the following fraud risks and performed the following specific procedures:
OTHER iNFORMATION | ||||
Identified fraud risks | Our audit work and observations | |
Risk of management override of controls It is generally presumed that management is in a unique position to perpetrate fraud because of the opportunity to manipulate accounting records and prepare fraudulent financial statements by overriding manual controls, such as those related to journal entries, related party transactions, significant accounting estimates, etc. Adjusted EBITDA and adjusted EBITA are key financial measures that the board of directors and the executive management team use to assess the performance of the Group. Adjusted EBITA and adjusted operating cash flow are furthermore key financial incentives for the executive directors. A strong focus on meeting these financial targets could potentially provide management an incentive for overriding controls. | Where relevant to our audit, we evaluated the design and effectiveness of controls in the processes of generating and processing journal entries. We assessed whether deficiencies in controls may create additional opportunities for fraud and incorporated respective corroborative procedures in our audit approach. We considered the outcome of our audit procedures over the estimates and significant accounting areas and assessed whether control deficiencies and misstatements identified could be indicative of fraud. Where necessary, we planned and performed additional audit procedures to ensure that fraud risks are sufficiently addressed in our audit. We paid specific attention to the access safeguards in the IT systems and the set-up of the segregation of duties in systems and processes. Together with management we assessed the business rationale for conflicting user rights when these were identified within the IT environment. We performed data analysis focused on journal entries using defined fraud risk-criteria identified as part of our fraud risk assessment. Where we identified instances of unexpected journal entries, we performed additional audit procedures. In addition we performed substantive testing procedures over the consolidation entries. We evaluated key accounting estimates and judgements used in accounting areas where management judgement is applied (e.g. recognition and valuation of provisions, eligibility of capitalisation of expenses) for biases, including retrospective reviews of prior year’s estimates where possible. In this context we also paid specific attention to the support for the change in method for determining inventory provisions as detailed in Note 3 of the consolidated financial statements. We evaluated the business rationale of the significant transactions concluded in 2024. We incorporated an element of unpredictability in the nature, timing, and extent of audit procedures. Our audit procedures did not identify indications of fraud or suspicions of fraud with respect to management override of controls. | |
Risk of fraud in revenue recognition As part of our risk assessment and based on a presumption that there are risks of fraud in revenue recognition, we considered the risk of fraud in revenue recognition. This relates to the presumed management incentive that exists to overstate revenue in order to meet financial targets, guidance provided to the market or shareholder expectations | We discussed and inquired with the board of directors, the Audit & Compliance Committee and the executive management team about their views on overall fraud risks within the Group, their perspectives on the Group’s mitigating controls addressing the risk of fraud in revenue and whether they have any knowledge of (suspected) fraud. Where relevant to our audit, we have evaluated the design of the internal control measures, including automated revenue related controls in the relevant IT systems, that are intended to mitigate the risk of fraud in revenue recognition and assessed the operating effectiveness of those measures. Through data analysis using defined risk-criteria, we tested unexpected journal entries across all relevant revenue streams. We tested, on a sample basis, the performance and transaction prices of revenue transactions based on sales agreements, delivery documents, sales invoices and/or cash receipts. We tested the receivable balances at year end via external confirmations or alternative procedures if these were not received. We also paid specific attention to the appropriateness of the change in application for determining the moment of revenue recognition for products sold under CIF/CFR incoterms as detailed in Note 3 of the consolidated financial statements. We did not identify specific indications of fraud or suspicion of fraud in respect of revenue recognition |
OTHER INFORMATION Continued |
We incorporated an element of unpredictability in our audit. We reviewed lawyer’s letters and correspondence with regulators. During the audit, we remained alert to indications of fraud. Furthermore, we considered the outcome of our other audit procedures and evaluated whether any findings were indicative of fraud or non-compliance with laws and regulations.
Audit approach going concern
As disclosed in the section ‘Going concern’ of note 1 of the consolidated financial statements the board of directors performed their assessment of the entity’s ability to continue as a going concern for at least 12 months from the date of preparation of the financial statements and has not identified events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern (hereafter: going-concern risks).
Our procedures to evaluate the board of directors’ going-concern assessment included, among others:
● Review of the board of directors’ going-concern assessment and related sensitivity analysis. We corroborated the board of directors’ assessment with the approved budget 2025 as well as information that came to our attention as a result of our audit procedures;
● Review of the board of directors’ debt analysis including the appropriateness of the forecasted levels of net debt, the access to available undrawn borrowing facilities, assessed compliance with debt covenants and the overall debt maturity profile;
● Review of the consistency between the board of directors’ going-concern assessment and the analysis of the forecasted levels of net debt with the future cash flow forecasts as incorporated in the goodwill impairment test. In evaluating the board of directors’ net debt and cash flow forecasts we performed look-back analyses to assess the accuracy of the forecasting process;
● Inquiries of the board of directors, the executive management team and other Group and local management as to their knowledge of going-concern risks beyond the period of the board of directors’ going-concern assessment.
Our procedures did not result in outcomes contrary to the board of directors’ assumptions and judgements used in the application of the going-concern assumption.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements. We have communicated the key audit matters to the board of directors. The key audit matters are not a comprehensive reflection of all matters identified by our audit and that we discussed. In this section, we described the key audit matters and included a summary of the audit procedures we performed on those matters.
The key audit matter ‘recognition and valuation of purchase price allocation balances resulting from acquisitions’ was no longer included in 2024, since no significant acquisitions were completed during 2024. The key audit matters with respect to the valuation of goodwill and the recognition and valuation of uncertain tax positions identified in previous year's report continue to be relevant and important for the audit of the financial statements.
OTHER iNFORMATION | ||||
Key audit matter | Our audit work and observations | |
Valuation of goodwill Refer to notes 3, 4 and 17 of the consolidated financial statements The Group recognised goodwill of €342 million, which is allocated to various cash-generating units (‘CGUs’). At least on an annual basis, these goodwill balances per CGU are tested for possible impairment. The Group prepares the goodwill impairment test using cashflow projections including next year’s budget and the long-term planning covering four subsequent years. The key assumptions used in the projections are: projected sales (growth), EBIT margin, discount rate and terminal value growth rate. As disclosed in note 4 of the consolidated financial statements, the Group has considered the long-term impact of climate change, in particular by considering a long-term growth rate in the estimation of the terminal value in line with the change in steel and cement demand on the longer term based on the specific characteristics of the businesses involved. Management also considered and modelled the potential impact of the European Carbon Border Adjustment Mechanism (CBAM) regulation on its assets located within Europe. The goodwill impairment test did not result in an impairment. We identified the valuation of goodwill as a key audit matter due to significant estimates and assumptions used with respect to, among others, discount rates, profitability forecasts and growth rates. | In the context of the annual goodwill impairment test, we have performed various procedures which varied in depth per CGU based on our risk assessment with respect to the related goodwill balances as compared to our materiality used. Our audit procedures included, among others: ● Assessing the appropriateness of management’s identification of the Group’s CGUs based on management’s monitoring of the business and decision making processes as well as the allocation of goodwill and carrying values to these CGUs. ● Evaluating and challenging the composition of management’s future cash flow forecasts and the process by which they were drawn up as well as the key assumptions underlying the valuation model used by the Group, which includes, among others, the projected sales growth rates, the projected EBIT margin, the discount rate and terminal value growth rate. We have compared and challenged management’s assumptions against available external benchmarks, available competitor information and our own accumulated industry knowledge. ● Performing a retrospective review of the prior year estimates by comparing the current year actual results to those projected in the prior year. ● Assessing the appropriateness of the valuation methodology applied against generally accepted valuation techniques as well as reperforming the calculations made to determine the respective carrying and recoverable values resulting from the model. ● Assessing the adequacy of the Company’s disclosures regarding assumptions and sensitivities as included in Note 17 to the consolidated financial statements. Based on the audit procedures performed, we found the assumptions to be reasonable and supported by available evidence. | |
Recognition and valuation of uncertain tax positions Refer to notes 3 and 38 of the consolidated financial statements As described in Note 38 of the consolidated financial statements, the Group is party to several tax proceedings in Brazil which involve estimated contingent liabilities amounting to €117 million. Given that the tax legislation in Brazil is complex and unpredictable, and is also going through a major reform, this could give rise to significant uncertainties and the Group’s estimate of tax liabilities may differ from interpretations by the relevant tax authorities as to how regulations should be applied to actual transactions. Judgement is therefore required by management to determine whether it is probable that an uncertain tax position should be recognised. Due to the inherent level of uncertainty, the significant judgement involved as well as the potential limitations in the recoverability of uncertain tax positions, we considered the recognition and valuation of uncertain tax positions to be a key audit matter for our audit. | With regard to the recognition and valuation of uncertain tax positions we have requested and obtained management’s assessment of such uncertain tax positions taken, reviewed correspondence with the tax authorities, reviewed independent legal and tax opinions as well as the latest available tax filings. We corroborated the assessment made with Group management and the local auditors as well as internal tax specialists. We also analysed the recent resolutions of tax disputes in Brazil. Based on the audit procedures performed, we found the Group’s estimates and judgement used in the recognition and valuation of uncertain tax positions to be appropriately supported. We furthermore assessed the disclosures made in the consolidated financial statements to be adequate and appropriate. |
Report on the other information included in the annual report
The annual report contains other information. This includes all information in the annual report in addition to the financial statements and our auditor’s report thereon.
OTHER INFORMATION Continued |
Based on the procedures performed as set out below, we conclude that the other information:
● is consistent with the financial statements and does not contain material misstatements; and
● contains all the information regarding the directors’ report and the other information that is required by Part 9 of Book 2 and regarding the remuneration report required by the sections 2:135b and 2:145 subsection 2 of the Dutch Civil Code.
We have read the other information. Based on our knowledge and the understanding obtained in our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements.
By performing our procedures, we comply with the requirements of Part 9 of Book 2 and section 2:135b subsection 7 of the Dutch Civil Code and the Dutch Standard 720. The scope of such procedures was substantially less than the scope of those procedures performed in our audit of the financial statements, except for the audit procedures performed on information in the Annual Report on Remuneration marked ‘audited’.
The board of directors is responsible for the preparation of the other information, including the directors’ report and the other information in accordance with Part 9 of Book 2 of the Dutch Civil Code. The board of directors is responsible for ensuring that the remuneration report is drawn up and published in accordance with sections 2:135b and 2:145 subsection 2 of the Dutch Civil Code.
Report on other legal and regulatory requirements and ESEF
Our appointment
We were appointed as auditors of RHI Magnesita N.V. This followed the passing of a resolution by the shareholders at the annual general meeting held on 4 October 2017. Our appointment has been renewed annually by the shareholders and now represents a total period of uninterrupted engagement of 8 years.
European Single Electronic Format (ESEF)
RHI Magnesita N.V. has prepared the annual report in ESEF. The requirements for this are set out in the Delegated Regulation (EU) 2019/815 with regard to regulatory technical standards on the specification of a single electronic reporting format (hereinafter: the RTS on ESEF).
In our opinion, the annual report prepared in XHTML format, including the marked-up consolidated financial statements, as included in the reporting package by RHI Magnesita N.V., complies in all material respects with the RTS on ESEF.
The board of directors is responsible for preparing the annual report, including the financial statements in accordance with the RTS on ESEF, whereby the board of directors combines the various components into a single reporting package.
Our responsibility is to obtain reasonable assurance for our opinion whether the annual report in this reporting package complies with the RTS on ESEF.
We performed our examination in accordance with Dutch law, including Dutch Standard 3950N ‘Assuranceopdrachten inzake het voldoen aan de criteria voor het opstellen van een digitaal verantwoordingsdocument’ (assurance engagements relating to compliance with criteria for digital reporting).
Our examination included, among others:
● Obtaining an understanding of the entity’s financial reporting process, including the preparation of the reporting package.
● Identifying and assessing the risks that the annual report does not comply in all material respects with the RTS on ESEF and designing and performing further assurance procedures responsive to those risks to provide a basis for our opinion, including:
○ obtaining the reporting package and performing validations to determine whether the reporting package containing the Inline XBRL instance document and the XBRL extension taxonomy files have been prepared in accordance with the technical specifications as included in the RTS on ESEF;
○ examining the information related to the consolidated financial statements in the reporting package to determine whether all required mark-ups have been applied and whether these are in accordance with the RTS on ESEF.
No prohibited non-audit services
To the best of our knowledge and belief, we have not provided prohibited non-audit services as referred to in article 5(1) of the European Regulation on specific requirements regarding statutory audit of public-interest entities.
Services rendered
The services, in addition to the audit, that we have provided to the Company or its controlled entities, for the period to which our statutory audit relates, are disclosed in note 39 to the consolidated financial statements.
OTHER iNFORMATION | ||||
Responsibilities for the financial statements and the audit
Responsibilities of the board of directors
The board of directors is responsible for:
● the preparation and fair presentation of the financial statements in accordance with IFRS Accounting Standards as adopted by the EU and Part 9 of Book 2 of the Dutch Civil Code; and for
● such internal control as the board of directors determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the board of directors is responsible for assessing the Company’s ability to continue as a going concern. Based on the financial reporting frameworks mentioned, the board of directors should prepare the financial statements using the going-concern basis of accounting unless the board of directors either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so. The board of directors should disclose in the financial statements any event and circumstances that may cast significant doubt on the Company’s ability to continue as a going concern.
Our responsibilities for the audit of the financial statements
Our responsibility is to plan and perform an audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence to provide a basis for our opinion. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high but not absolute level of assurance, and is not a guarantee that an audit conducted in accordance with the Dutch Standards on Auditing will always detect a material misstatement when it exists. Misstatements may arise due to fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
Materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.
A more detailed description of our responsibilities is set out in the appendix to our report.
Rotterdam, 26 February 2025
PricewaterhouseCoopers Accountants N.V.
Original has been signed by A. F. Westerman RA
Appendix to our auditor’s report on the financial statements 2024 of RHI Magnesita N.V.
In addition to what is included in our auditor’s report, we have further set out in this appendix our responsibilities for the audit of the financial statements and explained what an audit involves.
The auditor’s responsibilities for the audit of the financial statements
We have exercised professional judgement and have maintained professional scepticism throughout the audit in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit consisted, among other things of the following:
● Identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the intentional override of internal control.
● Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
● Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the board of directors.
● Concluding on the appropriateness of the board of directors’ use of the going-concern basis of accounting, and based on the audit evidence obtained, concluding whether a material uncertainty exists related to events and/or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report and are made in the context of our opinion on the financial statements as a whole. However, future events or conditions may cause the Company to cease to continue as a going concern.
● Evaluating the overall presentation, structure and content of the financial statements, including the disclosures, and evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We are responsible for planning and performing the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the group as a basis for forming an opinion on the financial statements. We are also responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.
We communicate with the board of directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. In this respect, we also issue an additional report to the audit and compliance committee in accordance with article 11 of the EU Regulation on specific requirements regarding statutory audit of public-interest entities. The information included in this additional report is consistent with our audit opinion in this auditor’s report.
We provide the board of directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related actions taken to eliminate threats or safeguards applied.
From the matters communicated with the board of directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Our limited assurance conclusion
Based on the procedures we have
performed and the assurance evidence
we have obtained, nothing has come to
our attention that causes us to believe that
the consolidated sustainability statement
of RHI Magnesita N.V. and its subsidiaries
(‘the Group’) for 2024 is not, in all
material respects,
• Prepared in accordance with the
European Sustainability Reporting
Standards (‘ESRS’) as adopted by
the European Commission and in
accordance with the process, carried
out by the Group, to identify the
information to be reported pursuant
to the ESRS; and
• Compliant with the reporting
requirements provided for in Article 8
of Regulation (EU) 2020/852
(‘the Taxonomy Regulation’).
The subject matter of our limited
assurance procedures
We have conducted a limited assurance
engagement on the 2024 consolidated
sustainability statement of RHI Magnesita
N.V., Arnhem, included in section
‘Sustainability Statement’ of the ‘Strategic
Report’ within the Group’s Annual Report
and Accounts 2024, including the
information incorporated in the
consolidated sustainability statement
by reference.
In the consolidated sustainability statement,
references are made to external sources or
websites. The information on these external
sources or websites is not subject to our
limited assurance procedures for the
consolidated sustainability statement.
We therefore do not provide assurance
on this information.
The basis for our conclusion
We conducted our limited assurance
engagement in accordance with Dutch
law, including the Dutch Standard 3810N
‘Assuranceopdrachten inzake
duurzaamheidsverslaggeving’ (assurance
engagements relating to sustainability
reporting), which is a specific Dutch
Standard that is based on the International
Standard on Assurance Engagements
(ISAE) 3000 ‘Assurance engagements
other than audits or reviews of historical
financial information’. Our responsibilities
under this standard are further described
in the section ‘Our responsibilities for the
limited assurance engagement on the
consolidated sustainability statement’ of
our report. We believe that the assurance
evidence we have obtained is sufficient
and appropriate to provide a basis for
our conclusion.
Our independence and quality
management
We are independent of RHI Magnesita N.V.
in accordance with the ‘Verordening inzake
de onafhankelijkheid van accountants bij
assuranceopdrachten’ (ViO, Code of ethics
for professional accountants, a regulation
with respect to independence) and other
relevant independence regulations in the
Netherlands. Furthermore, we have
complied with the ‘Verordening gedrags- en
beroepsregels accountants’ (VGBA, Dutch
Code of ethics for professional accountants).
PwC applies the applicable quality
management requirements pursuant to the
‘Nadere voorschriften kwaliteitsmanagement’
(NVKM, regulations for quality management)
and the International Standard on Quality
Management (ISQM) 1, and accordingly
maintains a comprehensive system of
quality management including documented
policies and procedures regarding
compliance with ethical requirements,
professional standards and other relevant
legal and regulatory requirements.
Emphasis of matter
Emphasis on the double materiality
assessment process
We draw attention to section ESRS 2
General disclosure of the consolidated
sustainability statement. The disclosure in
this section explains possible future
changes in the ongoing due diligence and
double materiality assessment process,
including engagement with affected
stakeholders. Due diligence is an on-going
practice that responds to and may trigger
changes in the Group’s strategy, business
model, activities, business relationships,
operating, sourcing and selling contexts
relevant for stakeholders as a group. The
double materiality assessment process may
also be impacted in time by sector-specific
standards to be adopted. The consolidated
sustainability statement may therefore not
include every impact, risk and opportunity
or additional entity-specific disclosure that
each individual stakeholder may consider
important in its own assessment.
Our conclusion is not modified in respect
of this matter.
Corresponding information not
subject to assurance procedures
The corresponding information in the
consolidated sustainability statement and
thereto related disclosures with respect to
previous years have not been subjected to
reasonable or limited assurance procedures.
Limited assurance report of
the independent auditor on the
consolidated sustainability statement
To: the general meeting of RHI Magnesita N.V.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024322
OTHER INFORMATION CONTINUED
Inherent limitations in preparing
the consolidated sustainability
statement
In reporting forward-looking information
in accordance with the ESRS, the board of
directors of the Group is required to prepare
the forward-looking information based on
disclosed assumptions about events that
may occur in the future and possible future
actions by the company. The actual
outcome is likely to be different since
anticipated events frequently do not occur
as expected. Forward-looking information
relates to events and actions that have not
yet occurred and may never occur. We do
not provide assurance on the achievability
of this forward-looking information.
The comparability of sustainability
information between entities and over time
may be affected by the lack of historical
sustainability information in accordance
with the ESRS and by the absence of a
uniform practice on which to draw, to
evaluate and measure this information.
This allows for the application of different,
but acceptable, measurement techniques,
especially in the initial years.
Calculations to determine information as
included in the consolidated sustainability
statement could be based on assumptions
and sources from third parties that include
information about, among others, value
chain and information collected from
actors in the value chain, when appropriate.
We have not performed procedures on the
content of these assumptions and these
external sources, other than evaluating
the suitability and plausibility of these
assumptions and sources from third
parties used.
Responsibilities for the
consolidated sustainability
statement and for the limited
assurance procedures thereon
Responsibilities of the board
of directors for the consolidated
sustainability statement
The board of directors of RHI Magnesita
N.V. is responsible for the preparation of
the consolidated sustainability statement
in accordance with ESRS, including the
development and implementation of the
double materiality process, which is a
process to identify the information reported
in the consolidated sustainability statement
in accordance with the ESRS and for
disclosing this process in the consolidated
sustainability statement.
This responsibility includes:
• Understanding the context in which
RHI Magnesita N.V.’s activities and
business relationships take place and
developing an understanding of its
affected stakeholders;
• The identification of the actual and
potential impacts (both negative and
positive) related to sustainability matters,
as well as risks and opportunities that
affect, or could reasonably be expected
to affect, the Group’s financial position,
financial performance, cash flows,
access to finance or cost of capital over
the short-, medium-, or long-term;
• The assessment of the materiality of
the identified impacts, risks and
opportunities related to sustainability
matters by selecting and applying
appropriate thresholds; and
• Making assumptions and estimates that
are reasonable in the circumstances.
The board of directors is also responsible
for preparing the disclosures in compliance
with the reporting requirements provided
in the Taxonomy Regulation.
Furthermore, the board of directors is
responsible for such internal control as the
board of directors determines is necessary
to enable the preparation of the
consolidated sustainability statement that
is free from material misstatement, whether
due to fraud or error.
The board of directors is responsible for
overseeing the Group’s sustainability
reporting process including the double
materiality process carried out by the Group.
Our responsibilities for the limited
assurance engagement on the
consolidated sustainability statement
Our responsibility is to plan and perform
the limited assurance engagement in a
manner that allows us to obtain sufficient
appropriate assurance evidence to provide
a basis for our conclusion.
Our objectives are to obtain a limited level
of assurance, as appropriate, about whether
the consolidated sustainability statement
is free from material misstatements, and to
issue a limited assurance conclusion in our
report. Misstatements can arise from fraud
or error and are considered material if,
individually or in the aggregate, they
could reasonably be expected to influence
decisions of users taken on the basis of the
consolidated sustainability statement. The
procedures vary in nature and timing from,
and are less in extent than for, a reasonable
assurance engagement. The level of
assurance obtained in a limited assurance
engagement is therefore substantially less
than the assurance obtained in a
reasonable assurance engagement.
Our other responsibilities in respect
of the limited assurance engagement
on the consolidated sustainability
statement include:
• Performing risk assessment procedures,
including obtaining an understanding
of internal control relevant to the
engagement, to identify where material
misstatements are likely to arise, whether
due to fraud or error; and
• Designing and performing procedures
responsive to where material
misstatements are likely to arise in the
consolidated sustainability statement.
The risk of not detecting a material
misstatement resulting from fraud is
higher than for one resulting from error,
as fraud may involve collusion, forgery,
intentional omissions, misrepresentations,
or the override of internal control.
323RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
OTHER INFORMATION CONTINUED
Procedures performed
We have exercised professional judgement
and have maintained professional scepticism
throughout the assurance engagement, in
accordance with the Dutch Standard 3810N,
ethical requirements and independence
requirements. Our procedures included,
amongst others, the following:
• Performing inquiries and an analysis of
the external environment and obtaining
an understanding of relevant
sustainability themes and issues, the
characteristics of the Group, its activities
and the value chain and its key
intangible resources to assess the
process to identify the information to be
reported carried out by the Group as the
basis for the consolidated sustainability
statement and disclosure of all material
sustainability-related impacts, risks and
opportunities in accordance with ESRS.
• Obtaining through inquiries a general
understanding of the internal control
environment, the Group’s processes for
gathering and reporting entity-related
and value chain information, the
information systems and the Group’s
risk assessment process relevant to
the preparation of the consolidated
sustainability statement and for
identifying the Group’s activities,
determining eligible and aligned
activities and prepare the disclosures
provided for in the Taxonomy
Regulation, without testing the
operating effectiveness of controls.
• Assessing the double materiality process
carried out by the Group and identifying
and assessing areas of the consolidated
sustainability statement, including the
disclosures provided for in the Taxonomy
Regulation where misleading or
unbalanced information or material
misstatements, whether due to fraud or
error, are likely to arise. We designed and
performed further assurance procedures
aimed at determining that the
consolidated sustainability statement
is free from material misstatements
responsive to this risk analysis.
• Considering whether the description
of the process to identify the information
to be reported in the consolidated
sustainability statement made by the
board of directors appears consistent with
the process carried out by the Group.
• Evaluated the methods, assumptions
and data for developing estimates and
forward-looking information. Assessing
whether the Group’s methods for
developing estimates are appropriate
and have been consistently applied for
selected disclosures. Our procedures did
not include testing the data on which the
estimates are based or separately
developing our own estimates against
which to evaluate the Group’s estimates.
• Analysing, on a limited sample basis,
relevant internal and external
documentation at the level of the Group
(including other entities or value chain
from which the information may stem)
for selected disclosures.
• Reading the other information in the
Annual Report and Accounts 2024
to identify material inconsistencies,
if any, with the consolidated
sustainability statement.
• Considering whether the disclosures
provided to address the reporting
requirements provided for in the
Taxonomy Regulation for each of the
environmental objectives, reconcile with
the underlying records of the Group and
are consistent or coherent with the
consolidated sustainability statement,
appear reasonable, in particular whether
the eligible economic activities meet the
cumulative conditions to qualify as
aligned and whether the technical
criteria are met, and whether the
accompanying key performance
indicators disclosures have been defined
and calculated in accordance with the
Taxonomy reference framework, and
comply with the reporting requirements
provided for in the Taxonomy
Regulation, including the format in
which the activities are presented.
• Reconciling the relevant financial
information to the financial statements.
• Considering the overall presentation,
structure and the balanced content
of the consolidated sustainability
statement, including the reporting
requirements provided for in the
Taxonomy Regulation.
• Considering, based on our limited
assurance procedures and evaluation
of the assurance evidence obtained,
whether the consolidated sustainability
statement as a whole, including the
sustainability matters and disclosures,
is clearly and adequately disclosed
in accordance with ESRS.
We communicate with the board of
directors regarding, among other matters,
the planned scope and timing of the limited
assurance engagement and significant
findings that we identify during our limited
assurance engagement.
Rotterdam, 26 February 2025
PricewaterhouseCoopers Accountants N.V.
Original has been signed by
A. F. Westerman RA
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024324
OTHER INFORMATION CONTINUED
Alternative performance
measures (APMs)
Definitions of APMs used by the Group are
set out below. These definitions cover the
purpose and usefulness of each APM, and
give 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
and to give 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 (Excluded Items) 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 2024 2023
Adjusted operating cash flow
(APM) 419 418
Capital expenditure 145 180
Income Taxes paid (69) (60)
Other income/expenses
and restructuring items (62) (33)
Net cash flow from operating
activities 433 505
1. As reflected in the Consolidated Statement
of Cash Flows.
ALTERNATIVE PERFORMANCE MEASURES (APMS)
325RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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 2024 2023
Cash and cash equivalents 576 704
Revolving credit facility 600 600
Syndicated term loan 200 0
Liquidity 1,376 1,304
1. As reflected in the Consolidated Statement
of Cash Flows.
ALTERNATIVE PERFORMANCE MEASURES (APMS) CONTINUED
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 2024 2023
Cash changes in Net debt 80 (41)
Proceeds from borrowings 14 336
Repayment of borrowings (174) (16)
Change in current borrowings (41) (63)
Repayment of lease obligations (20) (20)
Cash inflow from financial assets 11 0
Change in cash and cash
equivalents (130) 196
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 2024 2023
Inventories (Note 21) 962 1,001
Trade receivables (Note 21) 530 538
Contract assets (Note 21) 3 4
Contract liabilities (Note 31) (59) (65)
Accounts receivable 4 74 477
Trade payables (Note 31) (572) (498)
Total working capital 864 980
1. As reflected in the Consolidated Statement
of Financial Position.
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 2024 2023
Revenue 3,487 3,572
Cost of sales (2,639) (2,715)
Selling and marketing expenses (131) (153)
General and administrative
expenses (350) (339)
Income taxes paid (69) (60)
NOPAT 298 305
€m 2024 2023
Goodwill 342 339
Other intangible assets 417 470
Property, plant and equipment 1,285 1,360
Investments in joint ventures
and associates 7 6
Other non-current assets 76 37
Deferred tax assets 152 152
Inventories 962 1,001
Trade and other receivables 660 681
Income tax receivables 40 43
Deferred tax liabilities (64) (62)
Trade and other current liabilities (843) (820)
Income tax liabilities (29) (51)
Current provisions (43) (34)
Invested capital 2,962 3,122
Average invested capital 3,043 2,854
Return on invested capital 9.8% 10.7%
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. NOPAT divided by average invested capital
of the year.
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024326
GLOSSARY
AFM Dutch Authority for the Financial Markets
AGM Annual General Meeting
AI Artificial Intelligence
APM Alternative Performance Measures
BOF Basic Oxygen Furnace
BRICS Intergovernmental organization consisting of
five emerging economies: Brazil, Russia, India,
China, and South Africa.
CapEx Capital Expenditure
Capgemini Capgemini Consulting, a renowned provider
of consulting, technology services and digital
transformation solutions,
CBAM Carbon Border Adjustment Mechanism
CCO Chief Customer Officer
CCU Carbon Capture & Utilisation
CDP Global disclosure system for investors,
companies, cities, states and regions to
manage their environmental impacts
CEO Chief Executive Officer
CFO Chief Financial Officer
CO Carbon dioxide
CoGS Cost of Goods Sold
CoRe Complexity Reduction Programme
COVID-19 Coronavirus disease 2019
CIS Commonwealth of Independent States
CREST Certificateless Registry for Electronic Share
Transfer
CSC Corporate Sustainability Committee
CSDDD Corporate Sustainability Due Diligence
Directive
CSRD Corporate Sustainability Reporting Directive
CTO Chief Technology Officer
DACH Three Central European countries of Germany
(D), Austria (A), and Switzerland (CH)
DBM Dead Burned Magnesia
DBRL Dalmia Bharat Refractories Limited
DEI Diversity, equity and inclusion
DCGC Dutch Corporate Governance Code 2022
DMA Double Materiality Assessment
DNSH Do-No-Significant-Harm criteria
DRI Direct Reduced Iron
dss+ DSS Sustainable Solutions, a leading
consultancy firm, focused on safety
DTR Disclosure & Transparency Rules (UK)
EAF Electric Arc Furnace
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
ERD Employee Representative Director
ERP Enterprise Resource Planning system
ESCC Equity Shares (Commercial
Companies) category of the Official List on the
Main Market of the London Stock Exchange
ESEF European Single Electronic Format
ESF Electric Smelting Furnace
ESG Environmental Social & Governance
ESRS European Sustainability Reporting Standards
Ethixbase360 Anti-bribery standard-setting organisation
ETPs Effluent Treatment Plants
ETR Effective Tax Rate
ETS Emissions Trading Schemes
EU European Union
EU Taxonomy EU Taxonomy Regulation
FCA UK Financial Conduct Authority
FRC UK Financial Reporting Council
FTE Full-time equivalent
FTSE Financial Times Stock Exchange
FX Foreign Exchange
GAAP Generally Accepted Accounting Principles
GHG Greenhouse Gas Protocol
GSS Global Shared Services
H&S Health & Safety
Hi-Tech Hi-Tech Chemicals Ltd
IARC Internal Audit, Risk & Compliance
IAS International Accounting Standards
IEA International Energy Agency
IFRS International Financial Reporting Standards
ILO International Labour Organisation
IMS Integrated Management System
IPCC Intergovernmental Panel on Climate Change
IRO Impact, risk and opportunity
Jinan New Emei Jinan New Emei Industries Co. Ltd
KF Korn Ferry
KPI Key Performance Indicator
LTIF Lost Time Injury Frequency
LTIP Long-Term Incentive Plan
MCi Carbon Mineral Carbonation International Pty Ltd.
M&A Mergers and Acquisitions
MPMs Management-defined performance measures
MIRECO Horn & Co. RHIM Minerals Recovery GmbH
Glossary
327RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
GLOSSARY CONTINUED
MSCI Morgan Stanley Capital International
MSS Minimum Social Safeguards
MT Metrics and Targets
NACE The ‘statistical classification of economic
activities’ in the European Community. The
term NACE is derived from the French title:
Nomenclature statistique des activités
économiques dans la Communauté
européenne.
NAM One of the RHI Magnesita’s strategic regions
including North America and Central America
NCI Non-Controlling Interest
NED Non-Executive Director
NFRD Non-financial reporting Directive
NG Natural Gas
NGOs Non-governmental organisations
NOx Nitrogen oxides
NOPAT Net Operating Profit After Tax
NPS Net Promoter Score
OCF Operating Cash Flow
Oberhausen Unfavourable contract required to satisfy EU
remedies at the time of the combination of RHI
and Magnesita to form RHI Magnesita
OECD Organisation for Economic Co-operation and
Development
OeKB Oesterreichische Kontrollbank AG
OES Operations Excellence System
OIE Other Income and Expenses
OMV Austrian petroleum company – OMV AG
OT Operations Technology
PCF Product Carbon Footprint
P-D Refractories P-D Refractories CZ a.s.
PIFOT Process In Full On Time
PPE Personal Protective Equipment
PP&E Property Plants & Equipment
PwC PricewaterhouseCoopers Accountants N.V.
QIP Qualified Institutional Placement, a
mechanism used for equity issuance in India
Resco Resco Group
R&D Research & Development
RCF Revolving Credit Facility
RHI Magnesita
HELP Fund/H&S
Fund/Health &
Safety Fund
RHI Magnesita HELP – Verein zur
Unterstützung von Arbeitnehmern in
Notsituationen, an independent non-profit
association that supports individuals, and their
direct family members, who have been
affected by occupational, work-related
accidents, or fatalities
Rhône Capital Refers to the group of a number of limited
partnerships, parallel investment and
co-investment vehicles which are ultimately
controlled by Rhône Capital L.L.C.
ROIC Return On Invested Capital
RM Raw material
RR Recycling Rate
SAM One of the RHI Magnesita strategic regions:
South America
SAR+ Refractory Application System
SBTi Science Based Targets initiative
SDGs United Nations Sustainable Development
Goals
Seven Refractories Seven Refractories d.o.o.
SFDR Sustainable Finance Disclosure Regulation
SIF Serious injuries and fatalities
SIFp Preventive Ratio, Near Misses, Unsafe
Situations, Serious Injuries & Fatalities
SG&A Selling, General and Administrative Expenses
SID Senior Independent Director
SMART SMART maintenance uses digital tools to
make maintenance and servicing more
efficient
SOx Sulphur oxides
Sörmaş Söğüt Refrakter Malzemeleri Anonim Şirketi
SKUs Stock keeping units
SRM Secondary Raw Materials
SS Scrap Steel
STPs Sewage treatment plants
TCFD Task Force on Climate-related Financial
Disclosures
tCO Tonnes of CO
TRACE TRACE International, a leading anti-bribery
standard-setting organisation, is now named
Ethixbase360
TRI Total recordable injuries
TRIF Total Recordable Injury Frequency
TRL Technology Readiness Level
TSC Technical Screening Criteria
TSR Total Shareholder Return
UK United Kingdom
UKCGC UK Corporate Governance Code 2018
UN United Nations
UNGC United Nations Global Compact
UNGPs United Nations Guiding Principles on Business
and Human Rights
US/USA United States of America
WC Works Council
Workvivo RHI Magnesita employee mobile application
for corporate communications
WTW Willis Towers Watson
WSA World Steel Association
WWF World Wide Fund for Nature
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024328
SHAREHOLDER INFORMATION
RHI Magnesita N.V. is a public company
with limited liability under Dutch law
and was incorporated on 20 June 2017.
It has its corporate seat in Arnhem, the Netherlands, its
administrative seat in Vienna, Austria and its registered office
at Kranichberggasse 6, 1120 Vienna, Austria.
The telephone number of the Issuer is +43 50 2136200.
The Company shares, represented by depository interests, of
RHI Magnesita N.V, are listed within the Equity Shares (Commercial
Companies) category (“ESCC”) of the Official List on the Main Market
of the London Stock Exchange and RHI Magnesita N.V holds a
secondary listing on the Prime Segment of the Vienna Stock
Exchange (Wiener Börse).
Ticker symbol: RHIM
ISIN Code: NL 0012650360
Investor information
The Company’s website www.rhimagnesita.com provides
information for shareholders and should be the first port of call for
general queries. The Investors section here contains details on the
current and historical share price, analyst presentations, shareholder
meetings as well as a “Shareholders Information” section. Annual
and Interim Reports can also be downloaded from this section.
You can also subscribe to an “Investors mail alert service” to
automatically receive an email when significant announcements
are made.
Shareholding information
To manage your shareholding, you should contact your bank, broker
or nominee, who will administer your shareholding on your behalf.
The shares traded on the London Stock Exchange are settled as
Depositary Interests. Depositary Interests for RHI Magnesita are
issued by our Depositary, Computershare Investors Services plc,
who can be contacted using the below details:
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
United Kingdom
www.computershare.com/uk
T: +44 (0) 370 702 0000
Financial calendar
Q1 Trading Update 7 May 2025
Annual General Meeting 7 May 2025
Half Year Results 30 July 2025
Investor Relations department
Kranichberggasse 6
1120 Vienna
Austria
T: +43 699 1870 6490
Email: investor.relations@rhimagnesita.com
Corporate brokers
Peel Hunt LLP
100 Liverpool Street
London EC2M 2AT
United Kingdom
T: +44 20 7418 8900
www.peelhunt.com
Barclays Bank PLC
1 Churchill Place
Canary Wharf
London E14 5HP
United Kingdom
T: +44 20 7623 2323
www.barclays.com
Auditor
PricewaterhouseCoopers Accountants N.V,
Fascinatio Boulevard 350
3065 WB Rotterdam
The Netherlands
T: +31 88 792 00 20
www.pwc.nl
Follow us
linkedin.com/company/
rhi-magnesita/
instagram.com/
rhimagnesita/
facebook.com/
rhimagnesita
Shareholder
information
329RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
This Annual Report 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 Annual Report 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 Annual Report 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 Annual Report 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 Annual Report 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 Annual Report
may not sum precisely to the totals provided and percentages may
not precisely reflect the absolute figures, due to rounding.
Forward looking
statements
FORWARD LOOKING STATEMENTS
RHI MAGNESITA ANNUAL REPORT AND ACCOUNTS 2024330
Designed and produced by
Gather.London
RHI Magnesita N.V.
Kranichberggasse 6,
1120 Vienna, Austria
www.rhimagnesita.com