Report for the third quarter 2016: Improved earnings driven by higher prices and lower costs


The quarter

  · Sales were SEK 13,477 (13,594) million
  · Operating profit before depreciation/amortization was SEK 1,635 (751)
million
  · Operating profit/loss was SEK 707 (-191) million
  · The result after financial items was SEK 461 (-438) million
  · Earnings per share were SEK 0.57 (-0.37)
  · Operating cash flow was SEK 926 (-160) million
Comments by the CEO

SSAB posted an operating profit of SEK 707 million for the third quarter of
2016, up by SEK 115 million compared to prior quarter. Improved earnings were
driven mainly by higher prices and further cost reductions, despite seasonally
lower shipments and planned maintenance costs. Compared with the third quarter
of 2015, which was adversely affected by the costs of relining the blast furnace
in Luleå, earnings were up by SEK 900 million. We are well on track to realizing
our cost reduction plan of SEK 2.8 billion, including synergies from the
Rautaruukki acquisition, and the savings are now visible in the result.

The market situation in SSAB’s home markets, Europe and North America, differed
from each other during the third quarter. In Europe underlying demand was
stable, when adjusted for normal seasonal slowdown. Also market prices were
stable and showed a slight rise due to continued low imports. Provisional import
duties on Chinese hot-rolled strip and heavy plate imposed by the European
Commission in early October are expected to support price levels in Europe. In
North America, demand for heavy plate was weak and prices declined throughout
the quarter. This led to reduced orders from Steel Service Centers and lower
than expected shipments for SSAB Americas. Imports of heavy plate into the USA
remained at a high level. A preliminary decision on import duties on heavy plate
in the USA is expected during the fourth quarter. Demand for high-strength
steels globally remained stable, although with some seasonal slowdown.

SSAB presented in April this year the target to reduce net debt by SEK 10
billion from the end of the first quarter 2016 to the end of 2017. The rights
issue during the second quarter of this year raised net SEK 4.9 billion and the
net cash flow during the second and third quarters amounted to approximately SEK
1.3 billion. The remaining amount of approximately SEK 3.8 billion will be
achieved through cash flow generated from operations, reduction of working
capital and a possible divestment of non-core assets.

During the third quarter, net cash flow was positive at SEK 612 million and the
net debt was reduced to SEK 18.2 billion.

During the past two years, SSAB has focused on the integration between SSAB and
Rautaruukki and realizing the identified synergies. Going forward, we will
continue to implement our “Taking the Lead” strategy with the goal to reach
industry-leading profitability through growth within certain prioritized
strategic initiatives and by driving efficiency through continuous improvement
in all our operations. Our strategic growth initiatives include growth in
Special Steels, Automotive and other premium products, as well as increased
focus on service and after-market activities.

Invitation to SSAB’s third quarter 2016 results briefing
SSAB invites you to a presentation of the results for the third quarter to be
held at 09.30am CEST on Friday October 28, 2016.

The press conference will be held in English and webcast live on www.ssab.com.
It is also possible to participate in the briefing via telephone.

Venue and time of briefing: World Trade Center (WTC) Stockholm, Kungsbron 1,
Conference room Manhattan, 09.30am CEST.

Telephone numbers:
+46 8 505 564 74 (Sweden),
+44 203 364 5374 (UK),
+1 855 753 2230 (USA).

Link to webcast: Go to webcast (http://edge.media-server.com/m/p/anjngk5p)

For further information, please contact

Investor Relations: Liisa-Maija Seppänen, Investor Relations Manager,
liisa-maija.seppanen@ssab.com, +358 20 593 9232

Media: Viktoria Karsberg, Head of Corporate Communications,
viktoria.karsberg@ssab.com, +46 8 454 5734

This information is information that SSAB AB is obliged to make public pursuant
to the EU Market Abuse Regulation and the Securities Markets Act. The
information was submitted for publication, through the agency of the contact
persons set out above, at 7.30 am CEST on October 28, 2016.
SSAB is a Nordic and US-based steel company. SSAB offers value added products
and services developed in close cooperation with its customers to create a
stronger, lighter and more sustainable world. SSAB has employees in over 50
countries. SSAB has production facilities in Sweden, Finland and the US. SSAB is
listed on the Nasdaq OMX Nordic Exchange in Stockholm and has a secondary
listing on the Nasdaq OMX in Helsinki. www.ssab.com.

Attachments

10282406.pdf SSAB Q3 2016 Presentation.pdf