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RHI AG

A World Leader in Refractories Technology

September 2017

Index

Market & Company

Planned combination with Magnesita

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0 bn * listed Refractory products protect furnaces against thermal. Chosun (KR)* Chemicals Puyang (CN)* Minteq (US)* Resco (US) IFGL (IN)* > € 20 bn € 0.5 bn € 1. mechanical and chemical stress Base raw materials are Magnesite and Dolomite due to their high melting point 3 20 . Market & Company Refractories Indispensable for industrial high-temperature processes Refractory Market Competitive landscape Market size by customer industries Selected market players by refractory revenues Glass Vesuvius (UK)* Cement ~7% RHI (AT)* Magnesita (BR)* ~8% Imerys (FR)* Nonferrous Krosaki (JP)* Metals Shinagawa (JP)* ~10% Magnezit (RU) ANH (US) Steel ~60% Morgan (UK)* ~15% Refratechnik (DE) Energy.0 bn € 1.0 bn € 0.5 bn € 2.

Market & Company Different kind of refractory products Selected Raw Materials Mixes Bricks Magnesite ore Bricks Functional Products Dead-burned magnesia Mixes Fused magnesia Slide gates Nozzles Purge plugs ISO 4 20 .

0% refractory engineering Wide areas of application Project driven demand cycles Energy / Secondary Environment / 5 – 10 years ~1. ~1.5% 2 months refractory management casting ladles Demand correlated to steel output Cement / Rotary kiln annually ~0.2% Metals converter specific requirements of various industrial production processes Complete lining concepts including Glass Glass furnace up to 10 years ~1.5% Lime Investment goods Longer replacement cycles Nonferrous Copper. Market & Company Comprehensive offering of products. 5 20 . Customized solutions based on the 1 – 10 years ~0. services and solutions Key industries Applications Replacement Costs* Refractory characteristics Consumable product Basic oxygen-. 20 minutes to Systems and solutions for complete Steel electric arc furnace. they are crucial to the quality of the products manufactured.5% reformer Chemicals * Although refractory products account for less than 2% of the production costs of customer industries.

Index Market & Company Planned combination with Magnesita 6 20 .

Planned combination with Magnesita Magnesita Company Overview Key Highlights Fully Integrated Business Model Refractory Full performance  3rd largest refractory producer and no. Brazil and listed on the BM&FBovespa stock exchange North America 27% Source: Company information. Germany. Note: (1) Magnesita reported Adjusted EBITDA. 7 20 Note: . APAC Taiwan and the United States MEA-CIS 6% 6%  Revenues of US$ 1.000 customers in approx. 1 in dolomite products in North America and Western Quality Europe Market-Controlled Mill-Controlled 80% of Costs 20% of Costs  More than 1. Brazil.100 countries  Production and mining operations in 8 countries Revenue by Region (2016A)(2) > Argentina. 1 player in South Mining manufacturing Services based solution America > Strong in steel in South America Slag Engineering Energy Consumption Yield Improvement > Strong in cement in South America Raw Material Equipment Utilization Consumables Steel  No. Belgium. China. (2) Mineral sales assumed to have only occurred in South America.0 billion and Adjusted EBITDA(1) of Europe US$ 151 million in 2016 16% South America 45%  Headquartered in São Paulo. France.

Planned combination with Magnesita Strategic Rationale Combination with Magnesita building on RHI’s strategy Enhance Growth Profile Distinct Service Offer  Improved regional presence  High level functional support on the ground locally  Complementary product portfolio with high-quality magnesite and high  On-site functional support with value-added dolomite products centralized solutions  Strengthening competitive position  High quality brands. appreciated by against consolidating Chinese clients refractory industry Strengthen RHI’s Geographic Cluster Retain Raw Material Integration  Enhanced global footprint:  Global mining network to smooth out production facilities in several markets demand volatility and reduce capital where RHI and Magnesita on their requirements as well as logistic costs own are lacking capacity  Magnesita with significant value of  Economies of scale in important reserves. with leading mines in Brazil operational areas (Brumado) and the United States (York)  Increased proximity to customers 8 20 .

52 as of 4 October 2016)  Approvals by the relevant competition authorities  Migration of RHI to the Netherlands (75% approval required in RHI general meeting) Conditions  RHI’s shareholders not having exceeded withdrawal rights in an amount of more than € 70 million in connection Precedent with organizational changes preceding RHI’s migration from Austria  Listing of RHI Magnesita in the premium segment on the Main Market of the London Stock Exchange  Acquisition of a controlling stake of at least 46%. but no more than 50% plus one share of the total share capital Transaction in Magnesita from the controlling shareholders GP and Rhône structure  Subsequent mandatory tender offer (will include a cash-only alternative amounting to € 8.19 per share)  Any RHI Magnesita shares that are not taken up will be placed into the market or with institutional investors  The migration of RHI will be effected by RHI Magnesita becoming the ultimate holding company of RHI Group and the shareholders of RHI ceasing to hold shares in RHI and instead holding RHI Magnesita shares Organizational  RHI’s shares will cease to be listed on the Vienna Stock Exchange Changes  The place of effective management of RHI Magnesita will be Austria  Corporate governance will be constituted on a one-tier board structure  Magnesita continues to finance itself on a standalone basis without credit support from RHI Group Note: (1) Assuming issuance of 10 million RHI Magnesita shares. 9 20 . Planned combination with Magnesita Planned combination with Magnesita Key Transaction Term Offer for 100% of Magnesita's equity capital1 consisting of a stock consideration of 10 million RHI Magnesita Offer Value and shares and cash amounting to € 256 million (value of € 451 million based on RHI’s six-month volume-weighted Consideration average price of € 19.

9 2. EBITDA and Margin(1) Operating Cash Flow(2) Revenue (in € billion) Volume (in million tons) 12.7 2.700. Excluding other income and expenses. RHI 27% Copper) MAG RHI RHI RHI 28% RHI MEA-CIS RHI RHI Steel 13% 69% Steel MAG MAG North MAG MAG 72% RHI America Europe 22% 28% Total: € 2. Planned combination with Magnesita Pro-Forma Financials Pro-forma for acquisition of 100% of Magnesita (in € million.9 137 124 131 MAG 196 120 113 MAG RHI 1.0 124 1. 10 20 Note: (1) Magnesita reported adjusted EBITDA.9 0.0 1.121 and 3.106 and yearly €/R$ exchange rate 2014 and 2015 of 3.9 1.2% 12.6 2.532 million Total: € 2. .381 million Total: € 2.9 295 276 MAG 0.7 199 198 201 RHI 175 163 RHI 72 2014 2015 2016 2014 2015 2016 2014 2015 2016 Total Revenue by Segment(3) Refractory Revenue by Industry(3) Refractory Revenue by Geography(3) Minerals APAC South 4% 17% America MAG Industrial MAG 20% (Cement. Note: Magnesita figures converted at yearly average US$/€ exchange rate for 2016 of 1. Note: (2) Operating Cash Flow defined as Net Cash Flow from Operating Activities. Note: (3) As of 2016.9 0.9 2.532 million Source: Company information.7 1.9 2.3% 13.0 0. MAG MAG RHI Industrial Glass.9 2.8 1. except otherwise stated) Revenue and Refractory Volume Adj. RHI refractory revenue excluding raw materials.3% 2.5 323 329 338 1.

netted against certain gross-selling revenue. Note: (1) Net market loss due to customer overlap. Net Run- Operations Marketing Integration Rate Loss(1) Operating Rate Synergies Cost (2) Synergies Additional Synergies until 2020 Implementation Costs until 2020  Annual Capex synergies of € 2 to € 7 million  Cash restructuring costs of € 50 to € 90 million  Aggregate working capital synergies of € 40 million  Write-offs of € 20 to € 35 million Source: Company information. Net Market Add. 11 20 Note: (2) Additional costs resulting from RHI Magnesita incorporation. . Planned combination with Magnesita Synergy Potential Irrespective of ultimate ownership level significant synergy potential Run-Rate Synergies Expected to be Achieved by 2020 (on EBIT Level) 46% Case 100% Case (in € million) 112 13 6 2 30 3 1 72 3 75 76 36 6 8 63 50 17 4 38 166 36 Sourcing & G&A Freight Sales & R&D Backward COSS Gross Run.

Note: (5) RHI reported EBITDA adjusted for negative effects on earnings related to a necessary change in the measurement of a long-term energy supply contract. Non Controlling Interest of €7mn and Pension Liabilities of €88mn as per H1 2016 – US$/€: 0. .035(1) 1. Investments of €17mn. EBITDA 5.11.1x Axis Title 2015A 4 October 2016 @ Transaction Value of @ Transaction Value of 4 October 2016 €451mn €451mn + Net Run- Rate Synergies of c.8x 6. €36-72mn Source: Company information. EBITDA 167 . Note: (4) Including run-rate synergies of €36-72 million allocated to 100% to Magnesita. Fact Set as per 4 October 2016.035(1) 1. Investments of €2mn.90.9x Implied 6.2x FV/ Adj. (including 131 131 synergies) below 198(5) 2015A 203(3)(4) As reported by Magnesita(3) RHI trading valuation 7.9x 7. 12 20 Note: (3) Magnesita reported adjusted EBITDA converted at 2015 yearly average €/US$ exchange rate of 1.560(2) Implied Magnesita valuation Adj. Note: (1) FV adjusted for Net Debt of €491mn (Debt of €702mn less Cash and Cash Equivalents of €211mn). Non Controlling Interest of €14mn and Pension Liabilities of €244mn as per H1 2016 and AR 2015. Note: (2) FV adjusted for Net Debt of €374mn (Debt of €530mn less Cash and Cash Equivalents of €156mn). Planned combination with Magnesita Valuation Overview Attractive valuation considering significant synergy potential (in € million) Valuation Overview Magnesita RHI Equity Value 311 451 451 945 Firm Value 894(1) 1.

to long-term”. however. 1) Management’s financial targets are not forecasts and there can be no guarantee that the actual results will resemble the targets in the medium term or mid. Planned combination with Magnesita Aspirational financial target1  RHI’s aspiration for the Combined Group is to have organic revenue growth in line with the volume growth in its customers’ industries  an operating EBIT margin of more than 12% after capturing the combined group’s envisaged net synergies of approximately € 70 million in the case of a delisting of Magnesita from the BOVESPA  RHI’s aspiration for the combined group is to pay stable dividends in 2017 and 2018. organic growth and de-leveraging of the company’s capital structure. as a result of stronger cash flow generation resulting from synergies.to long-term. “medium term” and “mid. . RHI’s aspiration is to increase dividend payments from the combined group. and does not intend to define. 13 20 RHI has not defined. in line with RHI’s previous years’ payment levels. In the mid.to long-term. and these financial targets should not be read as indicating that RHI is targeting such metrics for any particular fiscal year.

Same as above placement of shares Refinancing of € 230.5 million 2019 – 2024 ~ 2% p.0 beginning with banks debt 2019) Equity Ratio Core*: 25% Repayment with proceeds from the Financing of MTO € 88 million Short Term ~1. Planned combination with Magnesita Financing secured RHI after refinancing  all existing export credits.1% p. Combined**: 4. one-time financing and debentures (Schuldscheindarlehen) were refinanced  syndicated loan (with participation of Austrian Control Bank OeKB) for the financing of the Magnesita transaction Average Covenants Instrument Volume Tenor Details interest rate (at the start of the transaction) Net Debt/EBITDA (before 5 Years restructuring) Syndicated loan & (partially Core*: 3.a.a.a. None 42 Investors Debentures * Core Group = RHI without Magnesita 14 20 ** Combined Group = RHI and Magnesita .4% p.5 Syndicate of 18 refinancing of existing € 477 million amortizing ~ 2.

Spain > comprises the dolomite business (production.000 tons  Contribution to revenue of the two RHI sites totaled roughly € 50 million in 2016 (roughly 3% of Group revenue) Contract signed with an European refractory producer regarding the required divestments beginning of September. sale. Planned combination with Magnesita Merger control clearance almost completed no conditions conditions no conditions November 2016 June 2017 July 2017  Divestment of the production sites in Marone. 15 20 . Italy.) of the RHI Group in the European Economic Area (EEA)  Divestment of the production site in Oberhausen. of the Magnesita Group > comprises the entire Oberhausen business (production. etc. etc. Germany. sale. Buyer needs to be confirmed by European Commission. of magnesia-carbon bricks and basic mixes) in the EEA  Potential buyer receives supply contracts for sintered magnesia amounting to a maximum of roughly 43. and Lugones.

g. Head of Procurement) Workstream Team  Support by operational team of both companies and external consultants (part-time) Clean Team: The exchange of information as part of the integration preparation has taken place and will take place until the closing under strict control with respect to competition law by external lawyers and the internal legal and compliance departments. Planned combination with Magnesita Integration preparation Fully operational for closing end of October Integration leadership & Integration Management Office (IMO) Communication Org. Head of R&D. Support .Industrial & Technology SCM Raw materials Functions Raw Materials Workstream Leadership (full-time)  Key managers in respective function of both companies (e. 16 20 …RHI employees …Magnesita employees .Steel . Business Go-To-Market Market R&D/ network & ment incl. Transition & Culture Clean Team Go-To- Production Procure. Sensitive information has been and will be analyzed exclusively within the Clean Team.

RHI AG N. EGM vote of 99. Planned combination with Magnesita Overview of corporate restructuring RHI Group PRIOR demerger RHI Group AFTER demerger RHI Group AFTER merger Austria Austria Netherlands RHI-MAG RHI AG RHI AG N. Exchange ratio of 1:1 (1 RHI AG share = 1 RHI-MAG N.V.V. RHI RHI RHI RHI-MAG RHI-MAG Feuerfest RHI RHI AG AG Feuerfest Feuerfest N.7% in favor of proposals 17 20 . share).V.V.V. GmbH RHI AG Other GmbH GmbH subsidiaries Austria Netherlands Austria Netherlands Austria various countries RHI RHI AG AG RHI RHI AG AG RHI RHIAG AG Other RHI RHIAG AG Other subsidiaries subsidiaries various countries various countries  Demerger of all significant assets of RHI AG to its wholly-owned Austrian subsidiary RHI Feuerfest GmbH  Subsequent cross-border merger of RHI AG with its wholly-owned Dutch subsidiary RHI-MAG N.

Planned combination with Magnesita Designated Executive Management Team Stefan Borgas Octavio Lopes Gerd Schubert Reinhold Steiner Luis Rodolfo Bittencourt CEO CFO COO CSO CTO Industrial experience: Industrial experience: Industrial experience: Industrial experience: Industrial experience: + 20 years + 20 years + 20 years + 20 years + 20 years with RHI: with Magnesita: with RHI: with RHI: with Magnesita: since 2016 since 2012 since 2017 since 2012 since 1989 Thomas Jakowiak Luiz Rossato Simone Oremovic Integration RHI-Magnesita Corporate Development Human Resources 18 20 .

(ICL)) Directors Octavio Lopes / BR – CFO (current Chair and former CEO Magnesita Refratário S. employee representatives at RHI AG are currently entitled to appoint 1/3rd of the supervisory 6 Employee directors. therefore they must also be granted the right to appoint 1/3rd of the Non-Executive Directors of Representatives RHI-MAG after the merger 19 20 . Brazil) Herbert Cordt / AT – Chairman David Schlaff / AT Stanislaus zu Sayn-Wittgenstein / DE Fersen Lambranho / BR independent according to UK Corporate Governance Code: 11 Non-Executive Jim Leng / UK – Senior Independent Director Directors Ms Celia Baxter / UK – Chair Remuneration Committee John Ramsay / UK – Chair Audit Committee David Haines / UK Andrew Hosty / UK Wolfgang Ruttenstorfer / AT Karl Sevelda / AT mandatory. Planned combination with Magnesita Designated Board of Directors 2 Executive Stefan Borgas / DE – CEO (former CEO Lonza AG. President & CEO Israel Chemicals Ltd..A.

These statements may be identified by words such as “expectation” or “target” and similar expressions. e-mail: simon. These supplemental financial measures should not be viewed in isolation as alternatives to measures of RHI’s financial condition. performance or achievements express or implied by such forward-looking statements. financial condition. Thank you for your interest in RHI! www. a reconciliation to the most directly comparable IFRS financial measures and information regarding the usefulness and limitations of these supplemental financial measures please contact the RHI Investor Relations team (investor. Investor Relations Simon Kuchelbacher. or by their context. or achievements of RHI to differ materially from the results. which may cause the actual results. uncertainties and other factors. For definition of these supplemental financial measures. RHI disclaims any obligation to update these forward- looking statements to reflect future events or developments. the Disclaimer/Terms of use of the RHI group’s websites shall be applied. No information contained in this document constitutes or shall be deemed to constitute a basis for investment decisions or an invitation to invest or otherwise deal in shares of RHI. recipients of this document are cautioned not to place undue reliance on these forward-looking statements.rhi-ag.com RHI AG.com Important notice: This document contains forward-looking statements based on the currently held beliefs and assumptions of the management of RHI AG (“RHI”). uncertainties and other factors. which are expressed in good faith and. This document may use terms which are non-IFRS financial measures.com). 20 20 .relations@rhi-ag. performance. CIIA Wienerbergstrasse 9.kuchelbacher@rhi-ag. reasonable. 1100 Vienna. Given these risks. financial condition. in their opinion. Austria Phone: +43 (0) 50213-6676. results of operations or cash flows as presented in accordance with IFRS in RHI’s consolidated financial statements. Forward-looking statements involve known and unknown risks. Additionally.