Rautaruukki Corporation Financial Statement Bul...

Rautaruukki Corporation Financial statement bulletin 14 February 2014 at 9am EET

Rautaruukki Corporation Financial Statement Bulletin for 2013:Clear improvement in operating profit year on year, cash from operating activities rose to EUR 184 million

October-December 2013 (Q4/2012)
- Net cash from operating activities was EUR 80 million (79).
- Order intake was EUR 574 million (624).
- Comparable net sales were EUR 590 million (634).
- Comparable operating profit was EUR 8 million (-34).
- Comparable result before taxes was -EUR 3 million (-42).

January-December 2013 (2012)
- Net cash from operating activities was EUR 184 million (172).
- Order intake was EUR 2,376 million (2,605).
- Comparable net sales were EUR 2,404 million (2,597).
- Comparable operating profit was EUR 39 million (-50).
- Comparable result before taxes was -EUR 1 million (-88).

Dividend proposal
The Board of Directors proposes that no dividend be paid for 2013 (0.20).

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
		Q4/13	Q4/12	2013	2012
Comparable figures
Comparable net sales, EUR m		590	634	2,404	2,597
Comparable operating profit, EUR m		8	-34	39	-50
Comparable operating profit as % of net sales		1.3	-5.3	1.6	-1.9
Comparable result before income tax, EUR m		-3	-42	-1	-88
Reported figures
Reported net sales, EUR m		590	677	2,405	2,796
Reported operating profit, EUR m		4	-59	34	-101
Reported result before income tax, EUR m		-6	-67	-6	-139
Net cash from operating activities, EUR m		80	79	184	172
Net cash before financing activities, EUR m		60	56	101	78
Earnings per share, EUR		-0.07	-0.41	-0.10	-0.85
Return on capital employed, %				1.8	-4.9
Gearing ratio, %				68.5	71.2
Equity ratio, %				45.0	45.6
Personnel on average		8,638	10,468	8,955	11,214

Net sales and operating profit for 2012 have been restated for reasons of structural comparability. Part of Ruukki Engineering's business was divested at the end of 2012. The units excluded from the arrangement have been part of Ruukki Metals since the start of 2013. Ruukki Engineering units transferred to Fortaco and other Ruukki Engineering units have been eliminated from comparable figures.

PRESIDENT & CEO Sakari Tamminen:
"The continuing economic downturn in Europe impacted negatively on Ruukki's business environment. The swing to positive GDP across the eurozone during the second half of the year still failed to be reflected significantly in the form of growth in utilisation rates and investments in the manufacturing industry in Europe. Demand for steel in the EU in 2013 was down by about 2% year on year and capacity utilisation rates in the steel industry remained low. Demand for special steels outperformed demand for standard steel products in many market areas, even though the general weakening of the steel markets was reflected also in lower average selling prices of special steels. Construction activity in Europe was at a lower level than in earlier years. Construction activity in Finland was twofold. Renovation continued at the previous year's good level, but activity in new construction was especially low. In Russia, construction activity remained at a good level, especially in agricultural and industrial construction, despite the slowing pace of economic growth.

Ruukki Metals' delivery volumes were slightly higher than in the previous year and order volumes were down slightly. The decline of almost 10% in order intake value and comparable net sales was due to clearly lower average selling prices in the wake of weakened market conditions. Average selling prices also remained low because of declining prices of the main raw materials used in steel production. Weakened construction activity was reflected in Ruukki's construction businesses in the form of somewhat lower orders in many market areas. Ruukki Building Products' order intake was down 2% year on year, mostly because of decreased infrastructure construction orders. Ruukki Building Systems' orders were down 9% and the order book for building projects was 10% smaller than a year earlier.

Comparable operating profit improved by EUR 89 million year on year and was EUR 39 million. As we anticipated a year earlier, difficult market conditions showed the necessity of efficiency projects across all our business areas. Actions taken under efficiency programmes delivered an improvement totalling around EUR 70 million in earnings performance. Ruukki Metals' operating result since the second quarter shows that we have achieved in practice the aim of our cost savings programme - profitable operations at a capacity utilisation rate of 80%. Consolidated cash flow from operating activities improved year on year and was EUR 184 million. Improved cash flow was largely due to the better result since net working capital freed during the period had an impact of EUR 62 million (173). Net debt decreased and gearing was 68.5% at year-end.

Ruukki Building Products showed the best improvement within the Group and profitability for the whole year rose to a good level. Operating profit was up EUR 14 million year on year. This was particularly attributable to a better gross margin and the efficiency programme. A more favourable geographical spread of sales of residential roofing products, more effective steering of sales of building components and better functioning of business processes overall also contributed to operating profit growth.

Ruukki Building Systems operating result for the whole year remained negative despite significant profitability improvement. Profitability was weakened by some loss-making steel structure contracts, which had already started in 2012 and which had a negative impact totalling around EUR 8 million on the operating result for the whole year. Improving the use of the production network, scaling capacity in response to demand and cutting SGA costs were key to profitability improvement. These efficiency actions, together with selective offering activity, have paved the way for better profitability. Also the gross margin level of Ruukki Building Systems' order book was good at the end of the year.

Good progress was made with accelerating sales growth of special steels by acquiring new customers, developing new products and applications and by expanding into new market areas. The past year saw a significant expansion of the global distribution and sales network for special steels. New recruitments strengthened the sales team. Compared to a year earlier, the results were seen in clearly growing delivery volumes in many market areas. Likewise, order intake for special steels showed clear growth year on year. The actions taken began to be visible especially during the fourth quarter and sales of special steel products rose to account for 37% of Ruukki Metals' net sales. Special steel products accounted for 33% of Ruukki Metals' net sales for the whole year. We aim to considerably grow volumes of special steel products and to increase sales of special steels to EUR 850 million in 2015. Special steel products are notably more profitable than standard products, the volumes of which we intend to scale down as volumes of special steels rise.

Ruukki Building Products has a good market position and is aiming for profitable growth especially through energy-efficient products and residential roofing products. Development of components and solutions to optimise a building's lifecycle energy efficiency is a key aspect. Ruukki Building Products' offering is suitable for both renovation and new construction. In Ruukki Building Systems, our main aim is still improved profitability through better project management and more cost-efficient manufacturing.

We expect demand for steel to pick up slightly in 2014. We anticipate average selling prices of steel products to remain stable during the first quarter of the year. Special steel demand growth is expected to clearly outperform demand for standard products, especially in market areas outside Europe.

We estimate comparable net sales in 2014 to grow compared to 2013 and comparable operating profit in 2014 to improve compared to 2013.

After the report period, on 22 January 2014, Swedish steel company SSAB and Rautaruukki announced a plan to combine the two companies. SSAB is to make a public share exchange offer for Rautaruukki's shareholders recommended by the Board of Directors of Rautaruukki. Solidium Oy, Rautaruukki's largest owner, has given its full support for the combination and has undertaken to accept the share exchange. I believe that the combination of Ruukki and SSAB gives an excellent opportunity to continue the rationalisation of the cost base of the companies and build a new Nordic steel producer that is able to transit the steel business towards a global special steel company. There is also a good synergy potential in the construction business which offers profitable growth potential on top of the synergy benefits."

Rautaruukki Corporation's full financial statement bulletin for 2013 is attached to this bulletin.

For further information, please contact
Sakari Tamminen, President & CEO, tel. [phone]
Mikko Hietanen, CFO, tel. [phone]

News conference for analysts and the media
A joint news conference in English both for analysts and the media will be hosted on Friday 14 February at approximately 10.30am at Ruukki's head office, Suolakivenkatu 1, 00810 Helsinki.

A live webcast of the event and the presentation by the company's President & CEO Sakari Tamminen may be followed online on the company's website at www.ruukki.com/Investors starting at 10.30am EET. This event can also be attended through a conference call by dialling the number
below 5-10 minutes before the scheduled time:
[phone] (calls outside Finland)
[phone] (calls inside Finland)
Access code: 940875

A replay of the webcast can be viewed on the company's website from approximately 4pm EET. A replay of the conference call will be available until 21 February 2014 at:
[phone] (calls outside Finland)
[phone] (calls inside Finland)
Access code: 940875

Rautaruukki Corporation
Taina Kyllönen
SVP, Marketing and Communications

Ruukki specialises in steel and steel construction. We provide customers with energy-efficient steel solutions for better living, working and moving. We have around 8,600 employees and an extensive distribution and dealer network across some 30 countries including the Nordic countries, Russia and elsewhere in Europe and the emerging markets, such as India, China and South America. Net sales in 2013 totalled EUR 2.4 billion. The company's share is quoted on NASDAQ OMX Helsinki (Rautaruukki Oyj: RTRKS). www.ruukki.com

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

Rautaruukki Corporation Financial Statement Bulletin 2013

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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Rautaruukki Oyj via Globenewswire

HUG#1762012