Rautaruukki Corporation Interim Report Q1/2011: Demand improved in all business areas, growth expected to continue

Rautaruukki Corporation Interim Report    21 April 2011 9.00 EEST

January-March 2011 (Q1/2010)
- Order intake was up 33 per cent year on year at EUR 674 million (507).
- Net sales were EUR 675 million (500).
- Operating profit was EUR 25 (-43).
- Result before taxes was EUR 14 million (-51).

Revised estimate of financial performance in 2011
Rautaruukki is revising its guidance in respect of net sales. Consolidated net
sales in 2011 are estimated to grow approximately 25 per cent year on year.
Profitability is estimated to clearly improve compared to 2010.

(In its financial statement bulletin issued on 3 February 2011, the company
estimated that net sales would grow 20-25 per cent year on year. Profitability
was estimated to clearly improve compared to 2010).

KEY FIGURES
------------------------------------------------------------------------
                                                     Q1/11  Q1/10   2010
------------------------------------------------------------------------
Comparable figures

Comparable net sales, EUR m                            675    500  2 403

Comparable operating profit, EUR m                      25    -43     38

Comparable operating profit as % of net sales          3.7   -8.6    1.6

Comparable result before income tax, EUR m              14    -51      8



Reported figures

Reported net sales, EUR m                              675    505  2 415

Reported operating profit, EUR m                        25    -36    -12

Reported result before income tax, EUR m                14    -44    -74



Net cash flow from operating activities, EUR m           6    -55    -64

Net cash flow before financing activities, EUR m       -29    -87   -226

Earnings per share, EUR                               0.06  -0.24  -0.57

Return on capital employed (rolling 12 mths), %        2.7  -11.5   -0.3

Gearing ratio, %                                      50.3   29.6   44.7

Equity ratio, %                                       49.3   56.9   55.3

Personnel on average                                11 436 11 525 11 693
------------------------------------------------------------------------


President & CEO Sakari Tamminen:

Driven by the emerging markets, the global economy showed brisk growth during
the first quarter. Positive economic development was seen also in many European
countries. Of the Nordic countries, Sweden in particular showed strong economic
growth. The economy in Finland grew moderately, but industrial production
recovery was still slower than in many other countries in Europe.

Compared to the start of the previous year, Ruukki's market environment improved
clearly in almost all our businesses and our order intake was up by a third year
on year at EUR 674 million. Our net sales were up by 35 per cent year on year at
EUR 675 million. This was mainly due to good development in the steel business.
Relatively strongest net sales growth was in the engineering business.

In the construction business, January-March is typically the quietest quarter of
the year, but sales of our roofing products grew by 86 per cent compared to a
year earlier. Also activity in commercial and industrial construction improved
year on year, and our project and component deliveries increased both in the
Nordic countries and in Central Eastern Europe. In Russia, order volumes of
concept buildings were up compared to the previous year. In infrastructure
construction, there were fewer bridge projects in Finland and Norway than a year
earlier, but our delivery volumes for road and railway construction increased in
Sweden.

In our engineering business, the market outlook strengthened year on year in all
our main customer sectors during January-March. Demand improved especially from
manufacturers of machines and equipment for the mining industry. Also demand
grew for forest machines and materials handling equipment - especially harbour
cranes - during the report period. Activity in the wind power industry increased
clearly compared to the low level of the previous year.

In our steel business, deliveries increased to the heavy engineering industry,
especially to equipment manufacturers of mining machines, and to subcontractors
in the heavy vehicle industry and automotive industry. In our home markets in
the Nordic countries, sales of steel products grew, especially in Finland, but
deliveries continued to be brisk also in Sweden and Norway. We have strengthened
our sales and distribution of special steel products globally. This was
reflected in sales growth in all new markets for special steel products.
Strongest relative growth in sales of special steel products was in China, with
Germany accounting for the highest growth in Europe. The share of special steels
rose to account for 32 per cent of our steel business compared to 20 per cent a
year earlier. We aim to increase the share of special steel products to 60 per
cent of our steel business over the next few years.

Profitability improved clearly year on year and we posted a positive operating
profit for the first quarter. Operating profit improved by higher delivery
volumes in all business areas, growth in the sales of special steel products and
a rise in the selling prices of steel products. Due to improved operating
profit, the report period also saw the return to positive cash flow from
operating activities. We are continuing actions to strengthen cash flow by
improving the efficiency of working capital management.

Profitability improved in the construction and engineering businesses, but
operating profit was still negative. Our priority during the second quarter of
2011 is to generate a positive operating profit from our solutions businesses.
It is essential to increase the capacity utilisation rate, which is supported by
improved demand in customer industries. On top of this, we will optimise our
product portfolio as well as operations between plants. In addition, we will
continue to improve efficiency.

Consolidated net sales in 2011 are estimated to grow approximately 25 per cent
year on year. Profitability is estimated to clearly improve compared to 2010."

Rautaruukki Corporation's full interim report for the first quarter is attached
to this release.

For further information, please contact:
Sakari Tamminen, President & CEO, tel. +358 20 592 9075
Markku Honkasalo, CFO, tel. +358 20 592 8840

A presentation in English for analysts and the media will be held on 21 April
2011 at 10.30am EEST at Ruukki, Suolakivenkatu 1, 00810 Helsinki.

A live webcast of the event may be followed online starting at 10.30am on the
company's website at www.ruukki.com/investors. The event may also be attended
through a conference call. To attend the conference call, please call the number
below 5-10 minutes before the scheduled start time: +44 (0)20 7162 0125, access
code: 892903.

A replay of the webcast can be viewed on the company's website on 21 April 2011
from about 4pm EEST onwards. An encore replay of the conference call can be
heard until 28 April 2011 at +44 (0)20 7031 4064, access code: 892903.

Rautaruukki Corporation
Anne Pirilä
SVP, Communications and Investor Relations

Rautaruukki supplies metal-based components, systems and integrated systems to
the construction and engineering industries. The company has a wide selection of
metal products and services. Rautaruukki has operations in 27 countries and
employs around 11,700 people. Net sales in 2010 totalled around EUR 2.4 billion.
The company's share is quoted on NASDAQ OMX Helsinki (Rautaruukki Oyj: RTRKS).
The Corporation uses the marketing name Ruukki.

DISTRIBUTION:
NASDAQ OMX Helsinki
Main media
www.ruukki.com



[HUG#1508380]