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