MAGNESITA ANNOUNCES ITS 1Q17 RESULTS Contagem, Brazil - May 9th, 2017 - MAGNESITA REFRATÁRIOS S.A. ("Magnesita" or "Company") - (BM&FBOVESPA Novo Mercado: MAGG3) - announces today its 2017 first quarter results ("1Q17"). Comparisons are made with 2016 first quarter ("1Q16") and 2016 fourth quarter ("4Q16") results. Operational and financial information of the Company, unless otherwise stated, were prepared according to International Financial Reporting Standards (IFRS), and should be read together with our Financial Statements ("DFP") filed with the CVM. This Earnings Release presents the results in millions of U.S. Dollars ("US$"). Exchange Rates used to translate foreign currencies into U.S. Dollars are presented on page 13. FINANCIAL SUMMARY

In $ million, unless otherwise indicated

Quarter

Var. %

1Q17 (a)

4Q16 (b)

1Q16 (c)

a/b

a/c

Refractories volume ('000 tonnes)

239.0

221.4

231.1

8.0%

3.4%

Net operating revenues

284.2

248.8

234.0

14.2%

21.5%

Gross profit

94.1

86.4

78.5

8.9%

19.9%

Gross margin (%)

33.1%

34.7%

33.6%

-160 bp

-40 bps

EBIT

28.4

57.1

29.4

-50.4%

-3.4%

EBIT margin (%)

10.0%

23.0%

12.6%

-1300 bp

-260 bps

Adjusted EBIT¹

35.3

25.0

28.6

41.0%

23.5%

Adjusted EBIT margin (%)

12.4%

10.1%

12.2%

240 bp

20 bps

EBITDA

40.2

73.8

39.9

-45.5%

0.8%

EBITDA margin (%)

14.2%

29.6%

17.1%

-1550 bp

-290 bps

Adjusted EBITDA¹

46.6

35.6

39.1

31.0%

19.2%

Adjusted EBITDA margin (%)

16.4%

14.3%

16.7%

210 bp

-30 bps

Net income

16.0

93.0

22.7

-82.8%

-29.7%

Net margin (%)

5.6%

37.4%

9.7%

-3180 bp

-410 bps

0.31

1.78

0.43

-82.5%

-28.5%

Last Twelve Months

Var. %

1Q17 (d)

1Q16 (e)

f/g

898.9

931.0

-3.4%

1.024.7

965.7

6.1%

349.2

296.3

17.8%

34.1%

30.7%

340 bps

132.9

-59.4

-323.8%

13.0%

-6.1%

1910 bps

115.8

85.1

36.2%

11.3%

8.8%

250 bps

176.0

-9.5

-1952.8%

17.2%

-1.0%

1820 bps

158.9

134.9

17.8%

15.5%

14.0%

150 bps

126.4

-265.5

-147.6%

12.3%

-27.5%

3980 bps

2.46

-5.07

-148.4%

Earnings per share (US$/share)²

¹Excluding other income and expenses

²EPS considers the weighted amount of shares in the period minus shares held in treasury

Earnings Conference Call: Wednesday, May 10th, 2017 In English, with simultaneous translation to Portuguese

11:00am (Brasília time) - Phone: +55 11 2188-0155 (Brazil)*

10:00am (New York time) - Phone: +1 646 843 6054 (USA)

3:00pm (London time) - Phone: +44 203 051 6929 (Other countries)

Password: Magnesita

*In the above dial-in, the participant will be directed automatically to the original audio in English. In case you would like to listen to the audio in Portuguese (simultaneous translation), please ask the operator.

Webcast (English): http://cast.comunique-se.com.br/Magnesita/1Q17

Webcast (Portuguese): http://cast.comunique-se.com.br/Magnesita/1T17

Investor Relations Contacts Eduardo Gotilla - Global CFO Daniel Domiciano - IR Manager

Phone: +55 11 3152 3237 / 3241 / 3202

ri@magnesita.com www.magnesita.com/ir

MESSAGE FROM THE MANAGEMENT

"The year began with better prospects for Magnesita. After several years dealing with declining steel production in our established markets, we finally witnessed a rebound in first quarter of 2017. South America recorded an 8.6% increase vs 1Q16, whilst North America (excl. Mexico) and Western Europe posted a 4.3% and 2.4% expansion, respectively.

Accordingly, our deliveries to the steel industry expanded by 6%, more than offsetting lower sales to industrial applications. Moreover, we continued expanding our presence in new geographies such as Mexico and MEA-CIS. Another highlight in the quarter was our DBM sales where sales volumes were near record levels for Magnesita in a single quarter.

Net revenue reached US$284 million in the quarter, a 21% growth over the 1Q16, supported by higher sales to the steel industry and higher DBM sales. Adjusted EBITDA reached US$47 million, the 2nd highest quarterly level in 4 years, with a 16.4% margin.

Working capital remained virtually stable quarter-over-quarter, at a record-low of 21.1% of sales, and well below the 27.2% from the previous year. Likewise, leverage was also flat against December, at 3.0x, but significantly below 4.1x in the 1Q16.

As we post another very positive quarter for Magnesita, we feel very confident that our strategy to expand into selected geographies, while simultaneously increasing profitability, cash flow and return over invested capital, is generating significant value to our shareholders.

We remain committed, as well, to complete, before year end, the combination with RHI, which will certainly be a transformational event for Magnesita, accelerating our growth and global presence, bringing major benefits to our clients, and opening many new opportunities to our employees."

Octavio Pereira Lopes

Chairman

Segment

Quarter

Var. %

1Q17 (a)

4Q16 (b)

1Q16 (c)

a/b

a/c

Refractory Solutions

Volume ('000 tonnes)

239.0

221.4

231.1

8.0%

3.4%

Revenues (US$ million)

250.9

214.0

208.8

17.2%

20.2%

Industrial Minerals

Revenues (US$ million)

16.5

14.9

10.9

11.1%

51.6%

Services

Revenues (US$ million)

16.7

19.9

14.2

-15.9%

18.0%

TOTAL

Revenues (US$ million)

284.2

248.8

233.9

14.2%

21.5%

Last Twelve Months

Var. %

1Q17 (d)

1Q16 (e)

f/g

898.9

931.0

-3.4%

894.4

844.8

5.9%

62.2

61.1

1.8%

68.1

59.8

13.9%

1,024.6

965.7

6.1%

OPERATIONAL AND FINANCIAL PERFORMANCE REVENUE AND VOLUME Revenue by segment REVENUE AND GROSS MARGIN

Refractory Solutions

Refractory Solutions

Quarter

Var. %

1Q17 (a)

4Q16 (b)

1Q16 (c)

a/b

a/c

Volume ('000 tonnes)

239.0

221.4

231.1

8.0%

3.4%

Revenues (US$ million)

250.9

214.0

208.8

17.2%

20.2%

Refractory Solutions - Steel

Quarter

Var. %

1Q17 (a)

4Q16 (b)

1Q16 (c)

a/b

a/c

Volume ('000 tonnes)

200.4

178,8

188,2

12.1%

6.5%

Revenues (US$ million)

204.5

174.1

169.1

17.5%

20.9%

Refractory Solutions - Industrial

Quarter

Var. %

1Q17 (a)

4Q16 (b)

1Q16 (c)

a/b

a/c

Volume ('000 tonnes)

38.6

42.5

42.9

-9.2%

-10.0%

Revenues (US$ million)

46.4

40.0

39.7

16.2%

16.9%

Last Twelve Months

Var. %

1Q17 (d)

1Q16 (e)

f/g

898.9

931.0

-3.4%

894.4

844.8

5.9%

Last Twelve Months

Var. %

1Q17 (d)

1Q16 (e)

f/g

756.5

800.3

-5.5%

743.7

714.6

4.1%

Last Twelve Months

Var. %

1Q17 (d)

1Q16 (e)

f/g

142.4

130.7

8.9%

150.7

130.1

15.8%

Revenue from the refractory segment amounted to US$250.9 million in 1Q17, 20.2% above the previous year driven by higher deliveries and the currency effect on sales in Brazilian real due to the appreciation against the US Dollar. Year-over-year, volume reached 239,000 tonnes, 3.4% above the previous year, driven by the increase in steel production in Magnesita's established markets and higher sales in new geographies such as Mexico and MEA-CIS. The positive performance in the steel industry more than offset the lower deliveries to industrial applications.

Refractory sales per region in the 1Q17 shows an increase in the participation of sales in South America, vis-à-vis the 1Q16, which is almost entirely attributable to the stronger sales performance in Brazil.

Refractory sales per region (in US$)

The breakdown of sales by segment remained virtually unchanged year-over-year, with steel accounting for 81% of sales and industrial applications - mostly cement, nonferrous and glass - accounting for 19% of refractory sales.

Refractories sales by segment (US$)

1Q17 1Q16

18.5%

19.0%

81.5%

81.0%

Steel Industrial

Magnesita Refratários SA published this content on 05 September 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 11 September 2017 11:33:04 UTC.

Original documenthttp://ri.magnesita.com/Download.aspx?Arquivo=SfNxwTZ2E2vTGnuOMD2qAg==

Public permalinkhttp://www.publicnow.com/view/F8129B443C4E02455BB6C090D860CDDAB6E68C89