Rautaruukki Corporation Interim report 7 August 2014 at 9am EEST
Rautaruukki CORPORATION INTERIM REPORT h1/2014:
Comparable net sales and profitability at previous year's level
April-June 2014 (Q2/2013)
- Order intake was EUR 627 million (644).
- Comparable net sales were EUR 617 million (633).
- Reported EBITDA was EUR 41 million (49).
- Comparable operating profit was EUR 14 million (17).
- Comparable result before taxes was EUR 6 million (6).
- Net cash from operating activities was EUR 45 million (54).
January-June 2014 (H1/2013)
- Order intake was EUR 1,187 million (1,235).
- Comparable net sales were EUR 1,198 million (1,222).
- Reported EBITDA was EUR 69 million (87).
- Comparable operating profit was EUR 19 million (21).
- Comparable result before taxes was -EUR 5 million (2).
- Net cash from operating activities was EUR 24 million (77).
Guidance for 2014:
Comparable net sales in 2014 are estimated to grow compared to 2013.
Comparable operating profit in 2014 is estimated to improve compared to 2013.
KEY FIGURES
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Q2/14 Q2/13 Q1-Q2/14 Q1-Q2/13 2013
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Comparable figures
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Comparable net sales, EUR m 617 633 1,198 1,222 2,404
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Comparable operating profit,
EUR m 14 17 19 21 39
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Comparable operating profit
as % of net sales 2.3 2.6 1.6 1.7 1.6
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Comparable result before
income tax, EUR m 6 6 -5 2 -1
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Reported figures
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Reported net sales, EUR m 617 633 1,198 1,223 2,405
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Reported EBITDA, EUR m 41 49 69 87 168
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Reported EBITDA as % of net sales 6.6 7.8 5.7 7.1 7.0
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Reported operating profit,
EUR m 7 16 3 20 34
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Reported result before
income tax, EUR m -1 5 -21 1 -6
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Net cash from operating activities, EUR m 45 54 24 77 184
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Net cash before financing activities, EUR
m 24 31 -12 38 101
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Earnings per share, EUR -0.02 -0.01 -0.15 -0.03 -0.10
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Return on capital employed (rolling 12
months), % 0.9 -3.0 1.8
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Return on capital employed
(annualised), % 0.3 2.1 1.8
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Gearing ratio, % 72.3 74.2 68.5
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Equity ratio, % 44.7 43.6 45.0
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Personnel on average 9,069 9,271 8,821 9,074 8,955
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PRESIDENT & CEO Sakari Tamminen:
"Despite a relative strengthening of the euro and the Ukraine crisis, moderate
recovery was visible in economic development in Europe. As regards Ruukki's most
important markets, economic growth in Sweden, Norway and Germany continued to be
at a good level, whereas the situation in Finland has still yet to show any
signs of a turn for the better.
Construction activity in our main market areas showed a seasonal pick-up
compared to the previous quarter, but was roughly at the same level year on
year. Ruukki Building Products' order intake was down 1% and net sales were down
4% year on year. This was largely because of a clear decline in construction
activity in Ukraine and weakened demand for building components in the Nordic
countries. Demand and orders for our roofing products showed clear seasonal
growth compared to the previous quarter and net sales were up 4% year on year.
Ruukki Building Systems' order book was 23% smaller than a year earlier. This
was mainly due to an exceptionally large order received in Russia during the
reference period. On a positive note, project orders in our main commercial and
industrial construction markets in Sweden and Finland showed clear growth both
year on year and quarter on quarter. Weakened economic conditions in Russia were
hardly visible in the demand for building projects and orders remained at a
fairly good level. During the report period, we decided to withdraw from the
building component business in Ukraine and to focus on residential roofing
products there.
Development in the steel markets was largely as we expected during the second
quarter. Apparent demand for steel across the EU showed moderate growth. Global
market prices for iron ore, one of the main raw materials in steel production,
declined further during the second quarter. This had a negative impact on market
prices for steel products.
Falling prices were reflected in the Ruukki Metal's order intake value, which
was down 1% year on year despite a clear increase in order volumes. Likewise,
Ruukki Metals' net sales were up by just 1%, even though delivery volumes rose
in most market areas. It was particularly pleasing to note that our efforts in
expanding the global sales network for special steels are already paying off in
the form of clearly higher delivery volumes in many market areas. Net sales of
special steels were up 11% year on year and 6% quarter on quarter. Compared to
the previous year, sales of special steel products rose to account for 37% (34)
of Ruukki Metals' net sales.
Comparable operating profit for the second quarter was EUR 14 million. Ruukki
Metals' comparable operating profit was EUR 10 million. Operating profit showed
a slight improvement year on year. This was due to higher delivery volumes and
an increase in the share of special steel products. Operating profit was
weakened particularly by poorer gross margins due to lower selling prices for
standard steel products.
Ruukki Building Products comparable operating profit was EUR 9 million, which
was slightly below the figure a year earlier. This was because of the start-up
costs of expanding the distribution network for roofing products, weak demand
for components in Finland and a clear decline in net sales in Ukraine. Despite a
clear decline in Ruukki Building Systems' net sales, thanks to efficiency
measures, the business area's operating result was at the same level as a year
earlier, -EUR 2 million.
Consolidated cash flow during the first half of the year was EUR 24 million and
EUR 27 million was tied up in net working capital. Net debt fell since the end
of the first quarter and was EUR 715 million. The gearing ratio was 72% at the
end of the report period.
We expect demand for steel in Europe to continue along the slow growth track
also for the rest of 2014. However, demand growth will continue to be limited by
overcapacity in the steel markets and slowing economic growth in the emerging
countries. We expect demand for special steels to outpace demand for standard
products, especially in market areas outside Europe. We forecast continued
moderate recovery of construction growth in most of Ruukki's main market areas
also in the second half of 2014, albeit from a very low level.
Comparable net sales in 2014 are estimated to grow compared to 2013. Comparable
operating profit in 2014 is estimated to improve compared to 2013.
Since the end of the report period, the combination of Ruukki and SSAB has
progressed to plan. Approval from the EU competition authority was obtained on
14 July and other regulatory competition approvals were already obtained
earlier. On 22 July, approval for the share exchange offer was received from
Rautaruukki's shareholders who hold more than 90% of the shares. The combination
formally took place on 29 July."
Rautaruukki Corporation's full interim report for H1/2014 is attached to this
release.
For further information, please contact
Sakari Tamminen, President & CEO, tel. +358 20 592 9075
Mikko Hietanen, CFO, tel. +358 20 592 9030
Rautaruukki Corporation
Taina Kyllönen
SVP, Marketing and Communications
Rautaruukki is now part of SSAB (publ) ("SSAB"), a steel company with global
reach which has its main production plants in Sweden, Finland and the United
States. The company's steel business is structured around four divisions - SSAB
Special Steels, SSAB Europe, SSAB Americas and the steel distribution partner
Tibnor, and one division, Ruukki Construction, which focuses on the construction
business. Rautaruukki's share is quoted on NASDAQ OMX Helsinki. SSAB's shares
are quoted on NASDAQ OMX Nordic Stockholm and NASDAQ OMX Helsinki. www.ssab.com.
www.ruukki.com
DISTRIBUTION:
NASDAQ OMX Helsinki
Main media
www.ruukki.com
[HUG#1847124]
Rautaruukki Corporation Interim Report H1/2014: Comparable net sales and profitability at previous year's level
| Source: Rautaruukki
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