Rautaruukki Corporation Interim report 20 July 2011 at 9am EEST April-June 2011 (Q2/2010) - Order intake was up 13 per cent at EUR 672 million (596). - Comparable net sales were up 13 per cent at EUR 730 million (647). - Comparable operating profit was EUR 71 million (45), equating to 9.7 per cent of net sales. - Comparable result before taxes was EUR 62 million (39), equating to 8.5 per cent of net sales. January-June 2011 (H1/2010) - Order intake was up 22 per cent at EUR 1,346 million (1,103). - Comparable net sales were up 22 per cent at EUR 1,405 million (1,147). - Comparable operating profit was EUR 96 million (2), equating to 6.8 per cent of net sales. - Comparable result before taxes was EUR 76 million (-12), equating to 5.4 per cent of net sales. Estimate of financial performance in 2011 Rautaruukki is keeping its guidance unchanged. 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. KEY FIGURES -------------------------------------------------------------------------------- Q2/11 Q2/10 Q1-Q2/11 Q1-Q2/10 2010 -------------------------------------------------------------------------------- Comparable figures Comparable net sales, EUR m 730 647 1 405 1 147 2 403 Comparable operating profit, EUR m 71 45 96 2 38 Comparable operating profit as % of net sales 9.7 6.9 6.8 0.1 1.6 Comparable result before income tax, EUR m 62 39 76 -12 8 Reported figures Reported net sales, EUR m 730 655 1 405 1 160 2 415 Reported operating profit, EUR m 68 34 93 -2 -12 Reported result before income tax, EUR m 59 28 74 -16 -74 Net cash flow from operating activities, EUR m 7 14 13 -41 -64 Net cash flow before financing activities, EUR m -34 -38 -64 -125 -226 Earnings per share, EUR 0.32 0.14 0.38 -0.09 -0.57 Return on capital employed (rolling 12 mths), % 4.1 -4.4 -0.3 Return on capital employed (annualised), % 8.9 0.0 -0.3 Gearing ratio, % 57.9 35.9 44.7 Equity ratio, % 48.7 55.2 55.3 Personnel on average 11 688 11 632 11 839 11 733 11 693 -------------------------------------------------------------------------------- President & CEO Sakari Tamminen: In many respects, we can be pleased with progress made during the second quarter. Market conditions continued to be favourable in almost all our businesses. Increased sales of special steel products, good profitability in the steel business and restoring our construction business to profitability were the most positive notes during April-June. The engineering business still posted a loss, but improved operating profit compared to a year earlier. Also in the construction business we still have a lot to improve. Our order intake was up 13 per cent year on year at EUR 672 million. Strongest growth in demand during the second quarter was in Finland and the other Nordic countries, Central Eastern Europe, especially Poland, and also in Russia. Our net sales for April-June were up 13 per cent year on year at EUR 730 million. In Finland, net sales grew especially in the construction business, whereas in the other Nordic countries growth came mostly from the steel and engineering businesses. Relatively best net sales growth was in Central Eastern Europe. In the construction business, the most positive note was growth of around 30 per cent both in residential roofing products and in commercial and industrial construction. Commercial and industrial construction deliveries grew clearly, particularly in Finland, Sweden, Poland and Romania. A good growth rate was also seen in Russia, especially for concept buildings, and net sales in Russia were up by around 25 per cent year on year. In the engineering business, the outlook in our main customer segments strengthened further during April-June. This was mainly due to growth in the emerging markets and increased demand for mining industry machines and equipment. Net sales for April-June in our engineering business were up 25 per cent year on year. Growth was highest in delivery volumes of cabins, frames and booms for the lifting, handling and transportation equipment industry. Also deliveries to mining industry equipment manufacturers and forest machine manufacturers showed further growth. In our steel business, sales during the second quarter were up in almost all our market areas and in all main customer segments. Net sales developed particularly well in our near market areas - Finland and the other Nordic countries. Growth was relatively strongest in Central Eastern Europe and also in Russia, where the steel business grew in the wake of construction. Sales of special steel products grew in new market areas such as China and South Africa, as well as in Western Europe, and accounted for 34 per cent of net sales in our steel business during the second quarter. Profitability improved clearly compared to a year earlier. Increased operating profit was due to higher selling prices, improved capacity utilisation rates and good sales growth of special steel products. Our main priority during the second quarter was to generate a positive operating profit from our solutions businesses. We succeeded in doing this on the construction side, but not on the engineering side. We will continue actions to improve cost efficiency and profitability in the solutions businesses. The outlook in our main market areas remains favourable, even though the debt crisis in Europe has created uncertainty about market development. We estimate a return of commercial and industrial construction to the growth track in many market areas already this year and we forecast that residential construction will remain at a good level. Also we estimate that market conditions in the engineering business will further improve during the second half of the year. Demand in the steel business is at a good level. We estimate that expansion of our distribution network into emerging and mining-intensive markets will impact positively on sales of special steel products. 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 January-June 2011 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 20 July 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 through the conference call, please call the number given 5-10 minutes before the scheduled start time: +44 (0)20 7162 0125, access code: 898257. A replay of the webcast can be viewed on the company's website on 20 July 2011 from about 4pm EEST. An encore replay of the conference call can be accessed until 3 August 2011 at +44 (0)20 7031 4064, access code: 898257. 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#1532176]
Rautaruukki Corporation Interim report H1/2011: Growing demand - clear improvement in operating profit
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