Rautaruukki Corporation Interim Report H1/2014:...

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
	Q2/14	Q2/13	Q1-Q2/14	Q1-Q2/13	2013
Comparable figures
Comparable net sales, EUR m	617	633	1,198	1,222	2,404
Comparable operating profit, EUR m	14	17	19	21	39
Comparable operating profit as % of net sales	2.3	2.6	1.6	1.7	1.6
Comparable result before income tax, EUR m	6	6	-5	2	-1
Reported figures
Reported net sales, EUR m	617	633	1,198	1,223	2,405
Reported EBITDA, EUR m	41	49	69	87	168
Reported EBITDA as % of net sales	6.6	7.8	5.7	7.1	7.0
Reported operating profit, EUR m	7	16	3	20	34
Reported result before income tax, EUR m	-1	5	-21	1	-6
Net cash from operating activities, EUR m	45	54	24	77	184
Net cash before financing activities, EUR m	24	31	-12	38	101
Earnings per share, EUR	-0.02	-0.01	-0.15	-0.03	-0.10
Return on capital employed (rolling 12 months), %			0.9	-3.0	1.8
Return on capital employed (annualised), %			0.3	2.1	1.8
Gearing ratio, %			72.3	74.2	68.5
Equity ratio, %			44.7	43.6	45.0
Personnel on average	9,069	9,271	8,821	9,074	8,955

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. [phone]
Mikko Hietanen, CFO, tel. [phone]

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

Rautaruukki Corporation Interim Report Q2 2014

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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

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