Rautaruukki Corporation's Financial Statement b...

Rautaruukki Corporation Financial Statement bulletin 5 February 2009
at 12.00

Summary results for 2008 (comparable figures for 2007)

- Comparable consolidated net sales up 2 per cent to EUR 3,829
million (3,744)
- Comparable consolidated operating profit, excluding non-recurring
items, EUR 584 million (635) Non-recurring restructuring costs of
-EUR 11 million booked for the fourth quarter
- Return on capital employed still at good level: 25.6 per cent
(29.8)
- Earnings per share (diluted) EUR 2.93 (3.31)
- Board of Directors' dividend proposal: EUR 1.35 per share (1.70 and
additional dividend of 0.30)
- The company expects comparable consolidated net sales and operating
profit for the first quarter of 2009 to fall considerably short of
those for the fourth quarter of 2008


+-------------------------------------------------------------------+
| KEY FIGURES               | 2008   | 2007   | Q4/ 2008 | Q4/ 2007 |
|---------------------------+--------+--------+----------+----------|
| Net sales, EUR m          | 3 851  | 3 876  | 847      | 982      |
|---------------------------+--------+--------+----------+----------|
| Net sales, EUR m,         |        |        |          |          |
| comparable                | 3 829  | 3 744  | 847      | 960      |
|---------------------------+--------+--------+----------+----------|
| Operating profit, EUR m   | 568    | 637    | 62       | 120      |
|---------------------------+--------+--------+----------+----------|
| Operating profit, EUR m,  |        |        |          |          |
| comparable, excluding     |        |        |          |          |
| non-recurring items       | 584    | 635    | 74       | 119      |
|---------------------------+--------+--------+----------+----------|
| Operating profit as % of  |        |        |          |          |
| net sales                 | 14.7   | 16.4   | 7.3      | 12.2     |
|---------------------------+--------+--------+----------+----------|
| Operating profit as % of  |        |        |          |          |
| net sales, comparable,    |        |        |          |          |
| excluding non-recurring   |        |        |          |          |
| items                     | 15.3   | 17.0   | 8.7      | 12.4     |
|---------------------------+--------+--------+----------+----------|
| Profit before taxes, EUR  |        |        |          |          |
| m                         | 548    | 621    | 45       | 109      |
|---------------------------+--------+--------+----------+----------|
| Profit before taxes, EUR  |        |        |          |          |
| m, comparable, excluding  |        |        |          |          |
| non-recurring items       | 564    | 619    | 56       | 109      |
|---------------------------+--------+--------+----------+----------|
| Earnings per share,       |        |        |          |          |
| diluted, EUR              | 2.93   | 3.31   | 0.27     | 0.57     |
|---------------------------+--------+--------+----------+----------|
| Return on capital         |        |        |          |          |
| employed, %               | 25.6   | 29.8   |          |          |
|---------------------------+--------+--------+----------+----------|
| Gearing ratio, %          | 7.9    | 1.4    |          |          |
|---------------------------+--------+--------+----------+----------|
| Personnel, average        | 14 953 | 14 326 | 14 555   | 14 627   |
+-------------------------------------------------------------------+


The comparable figures exclude the business operations of Ruukki
Betonstahl GmbH, Ruukki Welbond BV and Carl Froh GmbH, which have
been divested.

Fourth quarter of 2008 in brief:

- International credit crunch and economic downturn rapidly weakened
demand towards year-end
- Demand for non-residential construction weakened in all market
areas. Demand for infrastructure construction remained at level of
previous year and, except in the Baltics, demand for residential
roofing products remained reasonably strong.
- Good demand in the engineering industry from equipment
manufacturers in the energy industry. Demand for materials handling
machinery and shipbuilding profiles began to slow towards the
year-end.
- Demand for steel products weakened in almost all product groups.
- The company has started to adjust operations in line with demand
and the new operational excellence programme Boost was launched to
ensure the company's long-term competitive edge and profitability.

President & CEO Sakari Tamminen:

-In 2008, we achieved our corporate profitability targets, despite a
weak fourth quarter. Demand during the first three quarters of the
year was strong and sales volumes were high in all our customer
industries. However, there was a dramatic change in the market
environment during the fourth quarter, especially in December. The
international credit crunch and economic downturn have also affected
Rautaruukki's customer industries. This was reflected in a rapid
weakening in demand towards the end of the year, especially on the
steel product markets. We have reacted to this by adjusting our
operations in several units in line with decreased demand. We also
launched our operational excellence programme, Boost, which extends
to 2011. Boost aims to further improve efficiency and the company's
competitive edge, as well as to ensure good profitability in the long
term.

Despite difficult market conditions, we continue to take the company
forward in the direction we have chosen. We still see long-term
growth potential in non-residential construction, in the lifting,
handling and transportation equipment industry, within equipment
manufacturers in the energy industry, especially in wind energy, and
in special steels. I believe that Rautaruukki has every chance of
prospering even in challenging market conditions. A strong balance
sheet, competitive products and operations and an ability to react
quickly to changes in the customer field play a key role in this
respect.

It is currently difficult to predict how long the downturn will last.
We expect general economic uncertainty, the poor predictability of
customers' own demand and uncertainty of funding, as well as a
reduction in stock levels along the supply chain to keep demand weak
during the first months of 2009. We expect comparable consolidated
net sales and operating profit for the first quarter of 2009 to fall
considerably short of those for the fourth quarter of 2008.

Press conference

A press conference for analysts and the media will be held on 5
February 2009 at 1.30pm at Ruukki, Suolakivenkatu 1, 00810 Helsinki.

The English webcast and conference call for investors and analysts
will begin at 4pm Finnish time and can be viewed live on the
company's website at www.ruukki.com/investors. A replay of the
webcast can be viewed on the same site from about 8pm Finnish time.

To attend the conference call, please call the number below 5-10
minutes before the conference begins:
[phone]
Password: Rautaruukki

A recording of the conference call can be heard until 12 February
2009 at the number below:
[phone]
Access code: 824011

FOR FURTHER INFORMATION, PLEASE CONTACT:

Sakari Tamminen, President & CEO, tel. [phone]
Mikko Hietanen, CFO, tel. [phone]


Rautaruukki Corporation
Anne Pirilä
SVP, Corporate 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 26 countries and employs 14,300 people. Net sales in
2008 totalled EUR 3.9 billion. The company's share is quoted on
NASDAQ OMX Helsinki (Rautaruukki Oyj: RTRKS). The Corporation uses
the marketing name Ruukki.

www.ruukki.com

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

REPORT OF THE BOARD OF DIRECTORS 2008


Business environment

Market conditions in Rautaruukki's core market areas and main
customer industries remained good throughout the first half of 2008.
Strong demand continued also during the third quarter, even though,
as the quarter went on, there were signs of weaker markets and demand
in some customer segments such as residential construction
(Construction), colour-coated products (Metals) and, to some extent,
in the forest machinery sector (Engineering).

The fourth quarter of 2008 was abnormal in many ways. The fallout of
the global credit crunch and economic downturn was in evidence
towards the end of the year as it gathered strength in almost all the
company's market areas and customer industries. General uncertainty
and the increasing difficulties of customers in obtaining funding
have resulted in a rapid decline in demand for Rautaruukki's products
and services since November. This is particularly the case in the
demand for steel products and, to some extent, also in construction.


Net sales for 2008

Unless otherwise stated, the comparable figures in brackets refer to
the same period a year earlier.

Consolidated net sales for 2008 were EUR 3,851 million (3,876).
Comparable net sales for the report period were EUR 3,829 million
(3,744), up by EUR 85 million or 2 per cent year on year. The
comparable figures exclude Ruukki Betonstahl GmbH and Ruukki Welbond
BV, which were part of the Group until November 2007, and Carl Froh
GmbH, which was part of the Group until June 2008. Acquisitions had
no material impact on consolidated net sales for 2008.

The solutions businesses - Ruukki Construction and Ruukki Engineering
- grew their share of the company's net sales to 48 per cent (44) in
2008. Finland accounted for 32 per cent (31) of consolidated net
sales, the other Nordic countries for 31 per cent (30) and Central
Eastern Europe, Russia and Ukraine for 21 per cent (21). The rest of
Europe accounted for 13 per cent (15) of net sales and other
countries for 3 per cent (3).

Ruukki Construction's net sales for 2008 were EUR 1,067 million
(1,042) and Ruukki Engineering's net sales rose to EUR 765 million
(667). Ruukki Metals reported net sales of EUR 2,019 million (2,168)
and comparable net sales of EUR 1,997 million (2,035).

Ruukki Construction increased net sales on the back of good demand
for non-residential construction during the first months of the year,
higher price levels and growth in the frame and project business
across the entire market area.

Ruukki Engineering increased net sales due to growing demand in the
systems and component business and the resulting rise in sales
volumes, especially to equipment suppliers in the lifting, handling
and transportation equipment industry and energy industry.

Ruukki Metals' net sales for the year were down owing to lower net
sales, compared to the previous year, of stainless steel and
aluminium sold as trading products, and weakened demand in all main
product groups during the fourth quarter. Special products rose to
account for 27 per cent (24) of the division's net sales in 2008.


Net sales for the fourth quarter of 2008

Consolidated net sales for the fourth quarter of 2008 were EUR 847
million (Q4/2007: EUR 982 million reported and EUR 960 million
comparable).

Ruukki Construction's net sales fell during the fourth quarter due to
rapidly declining demand across all market areas as a result of the
global credit crunch. The division's net sales for the fourth quarter
were EUR 248 million (292).

Ruukki Engineering's net sales rose during the fourth quarter year on
year. Higher net sales were particularly attributable to deliveries
of wind turbine tower plates for existing customers in the wind
energy sector. The division's net sales for the fourth quarter were
EUR 187 million (180).

Ruukki Metals' net sales for the fourth quarter decreased to EUR 412
million due to low demand (EUR 488 million comparable and EUR 509
million reported Q4/2007). Demand weakened towards the end of the
fourth quarter in all customer segments, especially among
subcontractors to the Swedish automotive industry.


Operating profit for 2008

The company reported operating profit EUR 568 million (637), equating
to 15 per cent (16) of net sales for the year. Comparable operating
profit excluding non-recurring items was EUR 584 million (635).

The share of the solutions businesses rose to 45 per cent (42) of
consolidated operating profit for 2008. Ruukki Construction's
operating profit was EUR 128 million (163) and the operating profit
excluding non-recurring items was EUR 132 million (163). Ruukki
Engineering's operating profit was EUR 126 million (103) and
excluding non-recurring items EUR 128 million (103). Ruukki Metals'
operating profit was EUR 338 million (397) and comparable operating
profit excluding non-recurring items was EUR 350 million (395).

Ruukki Construction's operating profit for the entire year was
affected by the costs of building the organisation and sales network
relating to an investment programme in Central Eastern Europe, as
well as by higher steel material costs. The division's earnings
during the fourth quarter were also adversely affected by low
capacity utilisation rates due to low demand.

Ruukki Engineering's operating profit improved on the back of
continued strong demand, the profitability improvement programme
under way and increased sales prices. The division also restructured
production and developed its product portfolio to improve
profitability.

Ruukki Metals' operating profit was adversely affected throughout the
report period by the increased costs of unused capacity, especially
in December when one of the two blast furnaces at the Raahe Works in
Finland was shut down until further notice. Operating profit from
stainless steel and aluminium was also noticeably smaller than in
2007.

Foreign currency hedges helped to offset unfavourable impacts of
exchange rates in respect of raw material costs (USD) and the
company's major sales currencies (SEK, NOK, GBP).


Operating profit for the fourth quarter of 2008

Consolidated operating profit for the fourth quarter of 2008 was EUR
62 million (120), equating to 7 per cent of net sales. Comparable
operating profit excluding non-recurring items was EUR 74 million
(119).

Non-recurring restructuring costs of around EUR 11 million were
booked in the fourth quarter of 2008.

Ruukki Construction's operating profit for the fourth quarter dropped
to EUR 13 million (Q4/2007: EUR 38 million) and excluding
non-recurring items was EUR 17 million (38). Ruukki Engineering's
operating profit rose by 48 per cent year on year to EUR 26 million
(18), EUR 27 million (18) excluding non-recurring items. Ruukki
Metals' reported operating profit was EUR 29 million (68) and the
comparable operating profit excluding non-recurring items was EUR 36
million (68).


Financial items and profit for 2008

Net finance expense and exchange rate differences relating to finance
totalled EUR 23 million (20).

Group taxes were EUR 142 million (162), which include a decrease of
EUR 23 million (decrease of 6) in deferred tax. The Group's effective
tax rate was 26 per cent (26).

Profit for the period was EUR 406 million (459).

Diluted earnings per share were EUR 2.93 (3.31).


Balance sheet and key indicators

The consolidated balance sheet total was EUR 148 million higher at
EUR 2,983 million than at year-end 2007 and EUR 4 million lower than
at 30 September 2008 (2,987). Equity at year-end 2008 was EUR 1,948
million (1,960), equating to EUR 14.04 per share (14.13). The
decrease in equity was attributable to translation differences
arising from movements in the exchange rates of the equity of
subsidiaries, movements in the fair value of zinc and electricity
derivatives and changes in the accounting practice for employee
benefits. The equity ratio at year-end 2008 was 65.9 per cent (70.1).

Return on equity during 2008 was 20.7 per cent (24.2) and return on
capital employed was 25.6 per cent (29.8).


Cash flow and financing

Cash flow from operating activities was EUR 382 million (417) and
cash flow before financing activities was EUR 169 million (271). The
largest change was in cash flow from investing activities, which for
the entire report period was -EUR 213 million (-146).

Net interest-bearing financial liabilities at 31 December 2008 was
EUR 155 million (28) and the gearing ratio 7.9 per cent (1.4).

At year-end 2008, the Group had liquid assets of EUR 254 million and
undrawn revolving credit facilities of EUR 150 million. Repayments
totalling EUR 6 million of non-current interest-bearing debt are due
during 2009.

In April 2008, Rautaruukki paid its shareholders dividends totalling
EUR 277 million.


Personnel

The Group employed an average of 14,953 persons during 2008 (14,326).
At year-end 2008, the headcount was 14,286 (14 587) as follows: 6,955
employees in Finland, 5,538 in Central Eastern Europe, Russia and
Ukraine, 1,317 in the other Nordic countries, 94 elsewhere in Europe
and 382 in other countries.

Staff salaries and other employee benefits were EUR 464 million
(448), of which EUR 1 million (9) was expenses relating to share
bonuses and EUR 3 million (12) expenses related to profit sharing.
Nearly the whole of Rautaruukki's personnel belong to the profit
sharing scheme.

Expenses of around EUR 1 million in respect of the 2008 earning
period of the valid 2008-2010 share ownership plan were booked
through profit and loss in 2008. Around 85 executives or other key
personnel are covered by the share ownership plan.


Changes in Group structure

In 2008, property, plant and equipment increased by EUR 8 million and
goodwill by EUR 6 million through acquisitions.

To strengthen its position among customers within the lifting,
handling and transportation equipment industry, the company acquired,
in February 2008, the German company Wolter Metallverarbeitung GmbH,
which makes booms for telescopic and special cranes. To expand its
special product expertise in laser and laser-hybrid welding,
Rautaruukki acquired, in April, the business operations of Finnish
company Hybri-Steel Oy. In June, Rautaruukki divested its German unit
Carl Froh GmbH, which makes precision tubes and components for the
automotive industry.

In November, the company divested a colour-coating line making
colour-coated special products for the automotive industry, in Gävle,
Sweden. The colour-coating line was not part of the company's core
business. The transaction had a positive impact of around EUR 1
million on profit and loss. In December, Rautaruukki acquired the
entire share capital of Lithuanian steel frame company UAB Gensina.
The acquisition furthers Rautaruukki's frame and envelope project
management business in Lithuania and the other Baltic states, and
also strengthens Rautaruukki's manufacturing network serving the
Baltic states.

Capital expenditure

Net cash outflow from investing activities in 2008 was -EUR 213
million (-146). Capital expenditure on tangible and intangible assets
totalled EUR 229 million (172), of which maintenance investments were
EUR 76 million (54).

Investing activities generated a positive cash flow of EUR 25 million
(70), of which EUR 21 million (23) was derived from divestments of
plant, property and equipment and subsidiaries. EUR 9 million (44)
was spent on acquisitions during 2008.

Ruukki Construction has an investment programme under way to increase
delivery capacity in Central Eastern Europe and Russia. A decision
was taken in January 2008 to invest around EUR 20 million on building
a new sandwich panel plant in Finland. In April 2008, a decision was
taken to invest around EUR 13 million to build a steel service centre
in Russia. In addition, a total of around EUR 44 million was spent
during the report period on gradually increasing new finishing
capacity for special steel production.

Capital expenditure on tangible and intangible assets during 2009 is
estimated to remain well below EUR 200 million.


Annual General Meeting 2008

Rautaruukki Corporation held its Annual General Meeting in Helsinki
on 2 April 2008.

Under the company's Articles of Association, the Annual General
Meeting elects the chairman, deputy chairman and members of the Board
of Directors. The Annual General Meeting decides on any amendments to
the Articles of Association usually by a two thirds majority
decision. Under the Articles of Association the Board of Directors
appoints the company's CEO.

The Annual General Meeting re-elected Mr Jukka Viinanen and Mr Reino
Hanhinen as chairman and deputy chairman respectively of the Board of
Directors. Maarit Aarni-Sirviö, Christer Granskog, Pirkko Juntti,
Kalle J. Korhonen and Liisa Leino were all re-elected to the Board
for a further term of office, which ends at the close of the
following Annual General Meeting.

The Annual General Meeting elected Marjo Matikainen-Kallström as the
new chairperson of the Supervisory Board and Inkeri Kerola as the new
deputy chairperson. Heikki Allonen, Turo Bergman, Miapetra
Kumpula-Natri, Petteri Orpo, Jouko Skinnari, Markku Tynkkynen and
Tapani Tölli were all elected as members of the Supervisory Board.
The term of office of the Supervisory Board ends at the close of the
following Annual General Meeting.

The Annual General Meeting elected KHT audit firm KPMG Oy Ab as the
company's new auditor, with Mauri Palvi KHT as the principal auditor.

The Annual General Meeting authorised the Board of Directors to
resolve to acquire a maximum of 12,000,000 of the company's own
shares (8.56% of the shares issued). This authority is valid for 18
months from the decision of the Annual General Meeting.

Based on a proposal by the Ownership Steering Department of the Prime
Minister's Office, which represents the Finnish State as shareholder,
the Annual General Meeting decided to establish a shareholders'
Nomination Committee to prepare proposals for the following Annual
General Meeting regarding the composition of the Board of Directors
and directors' fees. Representatives of the three largest
shareholders as at 3 November 2008 were appointed to the Nomination
Committee. These representatives are Mr Markku Tapio, Senior
Financial Counsellor, Prime Minister's Office, Mr Timo Ritakallio,
Deputy Chief Executive Officer, Ilmarinen Mutual Pension Insurance
Company and Mr Esa Rannila. The Chairman of Rautaruukki's Board of
Directors, Mr Jukka Viinanen, serves as the Committee's expert
member.

The Annual General Meeting held on 2 April 2008 decided that a
dividend of EUR 1.70 per share, and an additional dividend of EUR
0.30 per share on the funds released from the divestment of the long
steel business, be paid for 2008. The dividend, totalling EUR 277
million, was paid on 16 April 2008.


Board of Directors' committees

The Board of Directors has two permanent committees: the Audit
Committee and the Remuneration Committee. Pirkko Juntti (chair),
Christer Granskog, Kalle J. Korhonen and Liisa Leino were members of
the Audit Committee during 2008. Jukka Viinanen (chair), Maarit
Aarni-Sirviö and Reino Hanhinen were members of the Remuneration
Committee.


Changes in executive management

As of 1 February 2009, Rautaruukki's Corporate Management Board
comprises Sakari Tamminen, President & CEO and chairman of the
Management Board; Mikko Hietanen, CFO and deputy to the CEO; Saku
Sipola, President, Ruukki Construction; Tommi Matomäki, President,
Ruukki Engineering; Olavi Huhtala, President, Ruukki Metals and Marko
Somerma, Chief Strategy Officer. Under the terms of his service
contract, Heikki Rusila, who was earlier President of Ruukki
Production, will retire in late 2009.


Shares and share capital

During 2008, Rautaruukki Oyj shares (RTRKS) were traded for a total
of EUR 5,530 million (8,444) on NASDAQ OMX Helsinki. The highest
price quoted in 2008 was EUR 34.77 in June and the lowest was EUR
9.51 in November. The volume weighted average price was EUR 22.03.
The share closed at EUR 12.16 on the year and the company had a
year-end market capitalisation of EUR 1,706 million (4,157).

The company's registered share capital at 31 December 2008 was EUR
238.4 million and there were 140,255,479 shares issued. The company
has one series of shares, with each share conveying one vote. Under
the company's Articles of Association, a voting restriction applies
whereby the votes of an individual shareholder are restricted to 80
per cent of the total number of votes carried by shares at the
meeting.

Based on warrants exercised under the 2003 bond with warrants, the
company's share capital was increased by 57,351 shares or EUR
97,496.70 during the report year. A total of 26,050 of these shares
were subscribed between 2 October and 26 November 2008 and the share
capital was increased by EUR 44,285.00 accordingly. This increase in
share capital was entered in the Trade Register on 17 December 2008.

Employee warrants based on the 2003 bond with warrants have been
publicly traded on NASDAQ OMX Helsinki since 24 May 2006. One warrant
entitles the holder to subscribe one share at an issue price of EUR
1.70. Warrants had been exercised to subscribe a total of 1,369,034
shares (98 per cent) by 31 December 2008. The remaining warrants
entitle holders to subscribe a total of 30,966 shares. The
subscription period expires on 23 May 2009.

The Board of Directors is authorised to acquire a maximum of
12,000,000 of the company's own shares. The authority is valid for a
period of 18 months from the resolution of the Annual General Meeting
on 2 April 2008. The Board of Directors did not exercise the
authorisation to buy own shares during the report period.

Similarly, the Board of Directors is also authorised to transfer a
maximum of 13,785,381 treasury shares held by the company. The
authority is valid until the close of the 2009 Annual General
Meeting. Under this authority, the company transferred, on 28 March
2008, 11,594 treasury shares to persons covered by the 2007 earning
period, which was the last, under the Group's Share Ownership Plan
2004. A total of 1,594 shares were returned to the company.

At year-end 2008, the company held 1,466,937 treasury shares, which
at 31 December 2008 had a market value of EUR 17.8 million and an
accountable par value of EUR 6.3 million. Treasury shares account for
a relative percentage of 1.05 per cent of the total number of shares
and votes.

At the end of the report period, the Board of Directors had no valid
authority to issue convertible bonds or bonds with warrants or to
increase the company's share capital.

An analysis of shareholdings in the company by sector and size, the
company's largest shareholders and the interests of governing bodies
and the Corporate Management Board are disclosed in more detail in
the Annual Report 2008.


Disclosure notifications

Pursuant to Chapter 2, Section 9 of the Finnish Securities Markets
Act, Rautaruukki received, on 28 May 2008, a disclosure notification
from Capital Research and Management Company (CRMC) that the
aggregate holding of Rautaruukki's shares and votes by the mutual
funds CRMC manages had increased to 5.42 per cent.

Pursuant to Chapter 2, Section 9 of the Finnish Securities Markets
Act, Rautaruukki received, on 12 December 2008, a disclosure
notification of an ownership arrangement whereby the shareholding of
the Finnish State in Rautaruukki Corporation falls below the
threshold referred to in Chapter 2, Section 9 of the Finnish
Securities Markets Act and Solidium Oy's ownership exceeding that
threshold. On 11 December 2008, the Finnish State transferred, as a
capital contribution under the Limited Liability Companies Act, all
the Rautaruukki Corporation shares it owned to Solidium Oy.
Subsequent to the transfer, Solidium owns 55,656,699 shares, equating
to 39.68 per cent of Rautaruukki's share capital and votes. The
Finnish Financial Supervision Authority (FIN-FSA) had granted
Solidium Oy an exemption from the obligation, which would otherwise
arise, to launch a mandatory bid to other shareholders of Rautaruukki
Corporation.

Since the balance sheet date, on 28 January 2009, Rautaruukki
Corporation, pursuant to Chapter 2, Section 9 of the Finnish
Securities Markets Act, has received a disclosure notification from
Capital and Research Management Company (CRMC) that the aggregate
holding in Rautaruukki shares for the mutual funds it manages had, as
at 26 January 2009, decreased to below five (5) per cent (1/20). The
number of Rautaruukki Oyj shares notified by CRMC (86-0206507) is
6,949,917 shares, which equate to 4.96 per cent of Rautaruukki's
share capital and votes.


Research and development

The company spent EUR 27 million (28) on research and development in
2008. This equates to roughly one per cent of net sales (1). The
thrust of R&D during the report period was on new solutions to meet
the needs of the construction industry and on high-strength and
wear-resistant steels for transportation, lifting and handling
equipment structures.

Rautaruukki launched a solutions package to speed up the design and
construction of single-storey buildings. The package includes a
software application developed by the company to considerably shorten
the initial stage of a construction project and ensure the choice of
compatible structures. In September, Rautaruukki launched, initially
in Finland, a new solution for performance-based fire design to
improve fire safety.

In the engineering industry Rautaruukki continued with a number of
major customers on the development of new applications throughout
2008. During the report period, Rautaruukki started to apply virtual
technology to cabin design, thus shortening lead time during the
product design stage.

The year saw further development of the direct quenching method for
high-strength steels and the launch of new grades of steels. A new
direct quenching unit started up on the plate line to manufacture
wear-resistant steels for the needs of the lifting, handling and
transportation equipment industry. Based on Rautaruukki's own
innovation, the direct quenching method can be used to make
increasingly higher-strength steels, resulting in lighter structures
and improved performance.

Rautaruukki is also actively involved in national Strategic Centres
for Science, Technology and Innovation (CSTI). The most important of
these centres as far as the company is concerned are FIMECC, the
Finnish Metals and Engineering Competence Cluster, which has already
started up, and CLEEN (energy and environment) and RYM-SHOK (built
environment) that are still being set up.


Environmental and energy issues

The corporate environmental policy, which was revised in December
2008, governs the environmental management of all Rautaruukki's
operations. The new environmental policy further emphasises the
company's commitment to the continuous improvement of energy
efficiency. Rautaruukki's production sites operate in conformance
with certified ISO 14001:2004 environmental management and ISO
9001:2000 quality management systems. Certified systems covered 98
per cent (95) of production and 80 per cent (75) of employees in
2008.

In the free initial allocation of emissions allowances for the second
period 2008-2012 (Kyoto period) of the EU Emissions Trading Scheme,
the Raahe and Hämeenlinna works in Finland received 23.5 million
emissions allowances, each representing one tonne. The Mo i Rana
rolling mill, which comes under the Norwegian emissions trading
scheme, will, according to a preliminary decision, receive annual
emissions allowances for 49,000 tonnes of emissions.

In 2008, emissions allowances trading generated income totalling EUR
4.9 million.

Taking into account the closure of the sinter plant at Raahe, recent
adjustments to production and the impacts of emissions reductions
brought about by carbon funds, the company does not expect to incur
significant costs as a result of emissions trading during the Kyoto
period. However, emissions trading does affect the cost of the
electricity the company sources from the Nordic electricity market.

In March 2008, Rautaruukki decided to close down the sinter plant at
the Raahe Works in Finland by the end of 2011. The company will
switch over to using only iron pellets as a raw material in the
iron-making process. Closure of the sinter plant will cut carbon
dioxide emissions by 10 per cent or 500,000 tonnes a year. It will
also lead to a significant reduction in dust and sulphur dioxide
emissions, as well as lower energy consumption.

In early September 2008, the Raahe Works received a new environmental
permit by decision of the Supreme Administrative Court. The new
permit contains stricter limits than earlier as regards emissions to
air and waterways. The new permit terms and conditions require
investments estimated at over EUR 70 million. These investments will
be completed by 2012.

In September 2008, Rautaruukki was included for the first time in the
Dow Jones Sustainability World (DJSI World) index and for the second
year running in the Dow Jones STOXX Sustainability (DJSI) index. The
indexes include the top companies in their sector that are committed
to sustainable development. In 2008, Rautaruukki was ranked among the
world's best six steel companies in the DJSI World index.

In 2008, Rautaruukki spent a total of EUR 12 million (7) on
environmental investments.

More information about environmental issues can be found in the
Annual Report 2008 and in the environmental reports for the Raahe and
Hämeenlinna works.


Ruukki United profitability improvement programme

Ruukki United, Rautaruukki's programme to harmonise ways of working
and improve efficiency, aimed to cut annual costs and permanently
free up capital, compared with the 2004 cost structure, by the end of
2008.

By year-end 2008, the Ruukki United programme achieved annual cost
savings of around EUR 135 million (the target at the start of the
programme was EUR 150 million). By year-end 2008, around EUR 75
million in capital had been freed up (target: EUR 150 million). The
Ruukki United profitability improvement programme ended at the end of
2008.


New operational excellence programme - Boost

In October 2008, Rautaruukki initiated its corporate-wide Boost
programme, which aims at further operational efficiency and at
improving the company's competitive edge and profitability. Boost
aims at a EUR-150-million improvement in the company's operating
profit, compared to the 2008 level, by year-end 2011. Cost savings as
a result of actions under the Boost programme are expected to be in
the region of EUR 50 million in 2009.

During the fourth quarter of the year, the company started actions
corporate-wide under the Boost programme. Ruukki Construction
division is centralising the manufacture of construction products in
the Baltic states on the Pärnu plant in Estonia. The small profiling
units in Riga, Latvia and in Vilnius, Lithuania will be closed by the
end of April 2009. Local sales offices in Latvia and Lithuania will
continue to operate. In the Czech Republic, the smaller profiling
unit at Ostrava will be closed and production lines gradually
relocated to Rautaruukki's bigger plants in Hungary, Poland and
Romania by the end of the first quarter of 2009. A profitability
programme initiated at the steel frame and sandwich panel plant at
Oborniki in Poland will last until summer 2009.

In Ruukki Engineering division, production at the Hatvan site in
Hungary will be transferred to the Jaszbereny components plant during
the first quarter of 2009.

In Ruukki Metals division, a decision was made to close the steel
service centre in Tampere, Finland by the end of June 2009. Parts
processing will be centralised on the steel service centres in Raahe
and Seinäjoki. Operational efficiency is to be improved and overlaps
eliminated in the division's other business and production units and
in administration.

In Ruukki Production division, production and cost efficiency are to
be improved mainly by cutting the number of shifts. In November, the
company announced it was to adjust tube production at Oulainen,
Finland. A decision was made to discontinue the production of
spiral-welded gas pipes at the site since it is not part of the
company's core business. In addition, maintenance functions were
outsourced at the Virsbo plant in Sweden and production volume at the
plant was scaled down in line with demand.

The company has also efficiency projects under way in business
support functions.

In the context of efficiency measures and actions to adjust
operations, the company initiated employer-employee negotiations in
December about possible redundancies, temporary layoffs and part-time
working. Non-recurring costs of EUR 11 million arising from these
actions were booked for the last quarter of 2008.


Capital Market Day

Rautaruukki's annual Capital Market Day for investors and analysts
was held in Vaasa, Finland in October. At the event, the company
announced it was to upgrade its EBIT margin target from 12 per cent
to 15 per cent. The company's other financial targets and dividend
policy remain unchanged. Also at the Capital Market Day, Rautaruukki
described the focus areas of business growth for the next few years:
Ruukki Construction's focus will be on the non-residential
construction market in Central Eastern Europe and CIS countries,
Ruukki Engineering will focus on OEM customers in the lifting,
handling and transportation equipment industry and in the energy
industry. Ruukki Metals will focus on special steels. The
corporate-wide operational excellence programme Boost was also
announced at the event.


Rise in prices of raw materials in steel production

Annual contracts in respect of the main raw materials (coal and iron
ore) Rautaruukki uses in steel production are in US dollars. Prices
of raw materials rose sharply on the global market in 2008. A
strengthening of the US dollar towards the end of the year
contributed to higher market prices of raw materials. However, thanks
to foreign currency hedging, currency fluctuations had no material
impact on the company's costs.

Compared to 2007, general rises in the cost of raw materials added
around EUR 200 million to the company's own steel production costs in
2008 after taking into account foreign currency hedges. Around one
third of the rise in costs was realised during the first half of the
year and two thirds during the second half.

Higher raw material costs were almost entirely offset by increased
sales prices and improved cost efficiency. The size and timing of
price rises varied according to product and market area. Hedging
against the US dollar had a positive impact of EUR 32 million (-21)
on operating profit for 2008.


Other events taking place in 2008
Ruukki Group Oyj, in a legal action brought in spring 2006, demanded
that the Market Court prohibit Rautaruukki, under penalty payment,
from using just the name Ruukki as its marketing name. In its
decision issued on 5 February 2008, the Market Court dismissed all
claims by Ruukki Group Oyj and stated that Ruukki Group has no
grounds to prohibit Rautaruukki from using the name Ruukki in
corporate communications and marketing. Furthermore, the Market Court
ordered Ruukki Group to compensate Rautaruukki's legal costs.

The Swedish company Boliden Commercial AB initiated arbitration
proceedings against Rautaruukki in late 2007. Boliden demanded a
price differential payment of around EUR 13 million from Rautaruukki.
The dispute concerned the premium components in the price of the zinc
bought by Rautaruukki. In October 2008, the Arbitral Tribunal
dismissed all claims by Boliden Commercial AB against Rautaruukki and
ordered Boliden to compensate Rautaruukki's legal costs in full.

In October 2008, Rautaruukki received a statement of objections from
the European Commission, which suspected Rautaruukki's former
subsidiary Fundia of price collusion between 1996 and 2001 in respect
of the manufacture of prestressing steel. Rautaruukki divested the
business operations in question in 2006. The prestressing steel
business, which is under investigation, accounted for a total of
around EUR 20 million of Fundia's net sales in 2001. The European
Commission served such a statement of objections on dozens of
European companies. According to the statement of objections, the
comparatively minor prestressing steel business operations of
Rautaruukki's former subsidiary are not at the centre of the
investigation. On 16 December 2008, Rautaruukki submitted a report in
respect of the statement of objections. At this stage of the
investigation, it is difficult to weigh up any sanctions.

In December 2008, the company adjusted steel production in line with
weakened demand by temporarily shutting down one of the two blast
furnaces at the Raahe Works in Finland. A start was made also on
adjusting production in other units. In connection with adjustment
and efficiency improvement, the company initiated employer-employee
negotiations regarding possible layoffs, dismissals and part-time
working in different market areas.


Events taking place after the balance sheet date

In January 2009, Rautaruukki announced it was to improve the
efficiency of its steel business by merging its steelmaking division,
Ruukki Production, with Ruukki Metals as of 1 February 2009. The
other divisions and segment reporting will remain unchanged. The
combination streamlines the corporate structure and improves
efficiency and supply chain management in the steel business.

In January 2009, Rautaruukki announced it is to acquire the entire
share capital of the Norwegian company Skalles Eiendomsselskap AS.
Skalles Mek Verksted AS, a fully-owned subsidiary of Skalles
Eiendomsselskap AS, is one of Norway's leading steel frame suppliers
for industrial and commercial premises. Skalles' total deliveries
include the design, manufacture and installation of steel structures.
The company has some 50 employees and net sales for 2008 are
estimated to be around EUR 15 million. The transaction is subject to
the approval of the regulatory authorities and is expected to be
closed during February 2009.

In January 2009, the company completed employer-employee negotiations
in Finland that were initiated during the fourth quarter of 2008.
Relating to operations to improve operational efficiency, the
negotiations resulted in a decision to reduce the workforce by some
460 persons, with around 250 of these reductions being implemented
through various pension arrangements. At the start of the
negotiations, it was estimated that a maximum of 520 reductions were
needed in Finland and around 1,000 across the company. Outside
Finland, negotiations with workers are progressing in accordance with
the legislation of each country concerned.

It was also additionally decided in the negotiations to temporarily
lay off people as a result of the need to adjust operations due to
weakened market conditions. The negotiations resulted in the
temporary layoff of approximately 400 persons at Raahe and around 170
at Hämeenlinna at any one time. Temporary layoffs will affect a total
of some 3,200 people at different sites. The time and length of
layoffs will vary according to site.

Risks and risk management

The company's risk management is guided by the operating principles
and process of corporate risk management set out in the risk
management policy approved by the company's Board of Directors. Risk
management is an integrated part of Ruukki's management system, which
also includes safety.

The global credit crunch and economic downturn have hampered the
business of Rautaruukki's customers and thus affected demand for the
company's products. Rautaruukki has factored in the changing
situation by protecting its financial position and by adjusting
production and costs to bring them into line with market demand.

The additional costs ensuing from increasingly stricter environmental
regulations and carbon emissions trading impact on the company's
investments and competitiveness, especially if not all actors in the
industry are affected in the same way. The company has taken thorough
steps to anticipate and actively track changes in environmental
legislation and started on the actions required accordingly.

The price and freight charges of iron ore, coal and other main raw
materials used in steelmaking are determined on the world market,
which can make the price of raw materials very volatile. Derivatives
are used to manage the price of electricity and zinc. The impact of
these can extend to six years ahead for electricity and three years
for zinc.

Availability risks are controlled through long-term contracts to
source the main materials and energy used in steelmaking. The Group
generates almost half of the electrical energy it uses by utilising
the gases released in the production process.

The main raw materials used by the Group in steelmaking are priced in
US dollars. This exposes the Group to a major foreign currency risk
since USD-denominated sales account for only around one per cent of
consolidated net sales. In sales, the Group is exposed to a foreign
currency risk mainly in Swedish and Norwegian crowns, the Russian
rouble and Polish zloty. Foreign currency derivatives are used to
hedge against currency exchange risks.

The company's currency-denominated investments to fund growth outside
Finland are exposed to fluctuations in exchange rates. The company
seeks to limit these investments to a certain percentage of total
investments so that exchange rate fluctuations in this respect do not
materially jeopardise the company's balance sheet position. Some of
these investments are also hedged against exchange rate fluctuations.

Most of the risk factors above apply to the company's steel business.
Overall business risks are balanced in line with the corporate
strategy by growing the solutions businesses.

The company's risk management is described in more detail in the
Annual Report 2008.


Near-term outlook

The global credit crunch and its impact on the real economy have
increased general uncertainty in all Rautaruukki's market areas and
customer industries. Growing economic uncertainty and customers'
difficulties to fund their business have weakened demand for almost
all Rautaruukki's products and services.

Market prospects in construction segments are expected to weaken
noticeably in all market areas compared to 2008. Demand for
infrastructure construction is expected to remain at last year's
level and recovery measures decided by the public sector are
anticipated to sustain infrastructure construction in the Nordic
countries.

Within the engineering industry, a decline on last year is expected
in the lifting, handling and transportation equipment segment. Demand
from equipment manufacturers in the energy industry is expected to
continue at a good level.

Demand for steel products is expected to improve on the exceptionally
low level witnessed at the end of 2008. Costs of raw materials used
in steel production are likely to come down considerably from what
they were in 2008. However, it is estimated that the impact of this
will not be fully reflected until the second half of the current
year.

Low demand will result in adjustments to production in several units
in Finland and elsewhere.

Cost savings as a result of actions under the Boost programme are
expected to be in the region of EUR 50 million in 2009. Other
adjustment measures are also expected to considerably lower costs
compared to 2008.

General uncertainty and high stock levels throughout the supply chain
are likely to result in continued weak demand during the first months
of 2009. The company expects comparable consolidated net sales and
operating profit for the first quarter of 2009 to fall considerably
short of those for the fourth quarter of 2008.

Given the prevailing market conditions, the company considers it to
be extremely challenging to anticipate development for the entire
year and will consequently review its guidance on a quarterly basis.

Board of Directors' proposal for the disposal of distributable funds

The parent company's distributable equity at 31 December 2008 was EUR
1,161 million.

The Board of Directors has decided to propose to the Annual General
Meeting to be held on 24 March 2009 that a dividend of EUR 1.35 per
share be paid for 2008 (2007: EUR 1.70 + an additional dividend of
EUR 0.30 on the funds freed up from divestment of the long steel
business). Under the proposal, the total amount of dividend payable
is EUR 187 million. It is proposed to pay the dividend on 8 April
2009.


The figures for the report period contained in this financial
statement bulletin have been audited.

Helsinki, 5 February 2009

Rautaruukki Corporation

Board of Directors



DIVISIONS

Since the beginning of 2008, the accounting principle for segment
information has been revised as follows: Ruukki Metals division is
responsible for the costs or income arising when steel production
diverges from normal capacity utilisation. The comparable segment
information for 2007 has been restated to comply with the new
accounting principle.


Ruukki Construction


+-------------------------------------------------------------------------+
|EUR million|Q1/  |Q2/  |Q3/  |Q4/  |2007  |Q1/  |Q2/  |Q3/  |Q4/  |2008  |
|           |07   |07   |07   |07   |      |08   |08   |08   |08   |      |
|-----------+-----+-----+-----+-----+------+-----+-----+-----+-----+------|
|Net sales  |213  |258  |278  |292  |1 042 |225  |285  |309  |248  |1 067 |
|-----------+-----+-----+-----+-----+------+-----+-----+-----+-----+------|
|Operating  |34   |40   |51   |38   |163   |21   |38   |56   |17   |132   |
|profit*    |     |     |     |     |      |     |     |     |     |      |
|-----------+-----+-----+-----+-----+------+-----+-----+-----+-----+------|
|as % of net|16   |16   |18   |13   |16    |9    |13   |18   |7    |12    |
|sales*     |     |     |     |     |      |     |     |     |     |      |
+-------------------------------------------------------------------------+

* Excluding non-recurring items.


Net sales

Ruukki Construction's net sales for 2008 were EUR 1,067 million
(1,042), up by 2 per cent year on year. The division accounted for 28
per cent (27) of consolidated net sales. Net sales during the fourth
quarter of 2008 declined to EUR 248 million (EUR 292 million
Q4/2007).

Ruukki Construction's net sales rose during the first three quarters
of the year on the back of continued good demand for non-residential
construction, higher price levels and growth in the frame and project
business across the entire market area.

Net sales during the fourth quarter of 2008, were not only affected
by the normal seasonal fluctuation in construction, but also by
rapidly weakened demand in all market areas as a result of the global
credit crunch. In Central Eastern Europe and Russia, decisions to
start projects were pushed back until 2009 and some projects were
discontinued until further notice due to the credit crunch hampering
the ability of customers to obtain funding.

Infrastructure construction in Finland and the other Nordic countries
remained at the same level as in 2007 also towards the end of the
year, despite a further slow in demand for pile structures for
building construction in Finland and Sweden during the fourth quarter
of 2008. Infrastructure construction accounted for 11 per cent of the
division's net sales in 2008.

Demand for residential roofing products remained reasonably strong,
except in the Baltics. In the Nordic countries, the focus has shifted
from new to renovation construction. Residential construction
accounted for 14 per cent of the division's net sales in 2008.


Operating profit

Ruukki Construction's operating profit for 2008, excluding
non-recurring items, was EUR 132 million (163). The division's
operating profit for the fourth quarter excluding non-recurring items
declined to EUR 17 million (38). The costs of starting up the
investment programme in Central Eastern Europe and building the
associated organisation and sales network, as well as higher steel
material costs, affected the division's earnings performance for the
year.

In addition, earnings for the fourth quarter were adversely affected
by low capacity utilisation rates due to weakened demand and by
tougher competition.


Major new orders during 2008

Ruukki Construction secured several major contracts during 2008, the
most important of which included delivery of steel structures for the
new Terminal 5 at London Heathrow Airport, steel superstructures for
a bridge spanning the Hudälven river in Sweden, the steel frame,
foundation piles and retaining wall structures for the new Oslo Opera
House in Norway, steel frame and cladding structures for an oriented
strand board plant in Russia, steel superstructures for the
Partihallsförbindelsen bridge project in Sweden and the delivery of
steel frames, walls and roofs of a shopping and entertainment centre
in Russia.

In addition, Rautaruukki played an extensive role in the construction
of Vuosaari Harbour in Helsinki, supplying a considerable amount of
the foundation structures for the quays and frame and envelope
structures for buildings. Deliveries in respect of the project were
completed during the course of 2008.

The most important contract during the fourth quarter of 2008 was
signed in October. The contract is for the delivery and installation
of steel bridge superstructures at Narvik Harbour in Norway. November
saw a contract signed to design and deliver steel structures for a
logistics complex to be built in Minsk, Belarus.

Materialisation of the approximately EUR 100-million contract, signed
by Rautaruukki in February 2008, to deliver steel structures for the
new Zenit football stadium in St Petersburg, Russia has turned out to
be uncertain. For reasons beyond Rautaruukki's control, the project
start has been postponed several times. The main contractor of the
project has changed and the new contractor is re-tendering the frame
delivery. Rautaruukki had not started making the steel structures for
the Zenit project and has thus not incurred costs as a result of the
project. Rautaruukki is negotiating about the delivery, but there is
no certainty that the project will continue as far as Rautaruukki is
concerned.


New technology solutions

In spring 2008, Ruukki Construction launched in Eastern Europe a
solution for single-storey construction. The concept is based on a
software application developed by Rautaruukki to considerably shorten
the initial stage of a construction project and ensure the choice of
compatible structures. The solution includes building design,
foundations, frame and envelope structures.

In September, Ruukki Construction rolled out a new solution for
performance-based fire design to improve the fire safety of steel
buildings. The solution can be used to choose the financially most
efficient method of fire protection in each case and thus improve the
competitiveness of steel frames.


Capital expenditure

Ruukki Construction's capital expenditure in 2008 totalled EUR 74
million. The division invested in considerably expanding the
production capacity of frame structures and sandwich panels for the
Central Eastern European and Russian construction markets. The
division's investment programme of around EUR 120 million to expand
production capacity in Central Eastern Europe, Russia and Finland was
largely completed in 2008. The thrust of investments was in growing
the production capacity of steel frames and sandwich panels. The
second and third quarters of 2008 saw the start-up of new frame
structure production lines in Poland and Romania and capacity
expansion investments in Russia.

The sandwich panel line at the Romanian plant, a profile production
and sandwich panel line at the Ukraine plant and a new sandwich panel
plant in Finland will be completed during 2009.

During the report period, Rautaruukki opened new sales offices in
Kazakhstan and Belarus.

In December 2008, Ruukki Construction strengthened its position in
the Baltic construction market through the acquisition of Lithuanian
steel frame company UAB Gensina, which has 82 employees and reported
net sales of around EUR 9 million for 2007.

Since the balance sheet date, in January 2009, Ruukki Construction
announced it is to acquire the entire share capital of the Norwegian
company Skalles Eiendomsselskap AS. The company has some 50 employees
and net sales for 2008 are estimated to be around EUR 15 million. The
transaction is subject to the approval of the regulatory authorities
and is expected to be closed during February 2009.


Improved operational efficiency

During the course of 2008, Ruukki Construction carried out a number
of actions to improve operational efficiency. A new production model
at the Pärnu element factory in Estonia resulted in the loss of 26
jobs. In October, the division announced it was to improve production
efficiency in Central Eastern Europe. The profiling unit in Ostrava,
Czech Republic will be closed and production lines will be relocated
to Hungary, Poland and Romania by the end of the first quarter of
2009. In addition, a profitability programme was initiated at the
Oborniki plant in Poland. In October, an announcement was made to
temporarily adjust the production of heavy frame structures at the
plants in Ylivieska and Kalajoki, Finland.

In December, an announcement was made that production efficiency is
to be improved by centralising the manufacture of construction
products in the Baltic states on the Pärnu plant in Estonia. The
small profiling units in Riga, Latvia and in Vilnius, Lithuania will
be closed by the end of April 2009. Local sales offices in Latvia and
Lithuania will continue to operate. These actions are part of the
Boost operational excellence programme.

Since the balance sheet date, at the end of January 2009, the company
decided to adjust production and to initiate employer-employee
negotiations at its sites in Alajärvi, Vimpeli and Peräseinäjoki in
Finland. It is estimated a maximum of 40 jobs will be reduced. These
negotiations also cover temporary layoffs as well as workforce
reductions.


Ruukki Engineering


+-------------------------------------------------------------------------+
|EUR million|Q1/  |Q2/  |Q3/  |Q4/  |2007  |Q1/  |Q2/  |Q3/  |Q4/  |2008  |
|           |07   |07   |07   |07   |      |08   |08   |08   |08   |      |
|-----------+-----+-----+-----+-----+------+-----+-----+-----+-----+------|
|Net sales  |167  |163  |157  |180  |667   |188  |205  |184  |187  |765   |
|-----------+-----+-----+-----+-----+------+-----+-----+-----+-----+------|
|Operating  |     |     |     |     |      |     |     |     |     |      |
|profit*    |32   |27   |25   |18   |103   |32   |35   |34   |27   |128   |
|-----------+-----+-----+-----+-----+------+-----+-----+-----+-----+------|
|as % of net|     |     |     |     |      |     |     |     |     |      |
|sales*     |19   |17   |16   |10   |15    |17   |17   |19   |14   |17    |
+-------------------------------------------------------------------------+

* Excluding non-recurring items.


Net sales

Ruukki Engineering's net sales for 2008 were EUR 765 million (667),
up by 15 per cent year on year. The division's share of consolidated
net sales rose to 20 per cent (17). Net sales during the fourth
quarter rose to EUR 187 million (EUR 180 million Q4/2007).

Ruukki Engineering's net sales during the first three quarters of the
year rose as a result of growing demand in the systems and component
business and the resulting rise in sales volumes, especially in the
lifting, handling and transportation equipment industry and within
energy equipment manufacturers. Demand in the shipbuilding industry
also remained good. An acquisition in Germany also increased net
sales compared to last year. Demand in the forest machinery sector
levelled off and the demand for booms for small earthmoving machinery
declined somewhat during the third quarter.

Higher net sales during the fourth quarter of 2008 were particularly
attributable to deliveries of wind turbine tower plates for existing
customers in the wind energy sector. Demand for materials handling
machinery weakened somewhat towards the end of the year. Demand
remained at a good level in the wood industry and offshore sector.
Growing uncertainty in the shipbuilding sector was reflected in fewer
orders for shipbuilding profiles. Demand for shipbuilding plates was
similar to that at the start of the year.

The lifting, handling and transportation equipment industry accounted
for 43 per cent (42) of the division's net sales for 2008 and the
energy sector for 21 per cent (19).


Operating profit

Ruukki Engineering's operating profit for 2008, excluding
non-recurring items, rose to EUR 128 million (103). Operating profit
for the fourth quarter, excluding non-recurring items, rose to EUR 27
million (18). During the first part of the year, the division's
improved profitability was attributable to continued strong demand in
systems and component deliveries to OEMs in the lifting, handling and
transportation equipment industry and within energy equipment
manufacturers, the profitability improvement programme currently
under way and higher sales prices. During the report period, the
division also restructured production and developed its product
portfolio to improve profitability.

Improved profitability during the fourth quarter was attributable to
higher sales prices for plate products and bigger sales volumes.
Supply chain management was also improved.

Integration of the units the division acquired in Germany and Hungary
was successfully completed by the end of 2008.


Capital expenditure

Ruukki Engineering's capital expenditure in 2008 totalled EUR 19
million. The division invested in new manufacturing technology to
serve European engineering customers and to broaden the customer
base. Investments aim at improving production efficiency,
productivity, product quality and delivery reliability.

The fourth quarter of 2008 saw the start-up of a new robot welding
line for booms in Wroclaw, Poland. In addition, a decision was made
to invest in two robot welding cells at the Kurikka unit in Finland.
Welding operations are also being automated in Peräseinäjoki,
Finland.

Projects to improve machining operations are progressing to plan at
the Sepänkylä and Kurikka plants in Finland and at the Jaszbereny
unit in Hungary. New equipment is being used in the manufacture of
components for energy equipment manufacturers and for the lifting,
handling and transportation equipment industry.


Improved operational efficiency

In February, Ruukki Engineering launched a profitability improvement
programme aimed at improving the division's operating profit by
around EUR 20 million by year-end 2008. Actions carried out improved
the division's operating profit by around EUR 15 million by the end
of 2008.

In the context of this programme, Ruukki Engineering introduced a new
organisation and management model to support profitable growth. In
addition, a decision was made to focus on long-term customer
relationships with growth potential. With the exception of certain
customers on an annual contract basis, the division increased sales
prices to offset the higher costs of raw materials. Ruukki Tisza
Zrt., the division's Hungarian unit, introduced a new enterprise
resource planning system to improve efficiency. In conjunction with
reorganisation and more efficient operations, agreement was reached
in July to cut 190 white-collar jobs in Hungary. In Finland,
negotiations resulted in the loss of 17 jobs in divisional
administration.

Under the corporate-wide operational excellence programme, Boost, the
division initiated a project to transfer production from the Hatvan
site in Hungary to the component plant in Jaszbereny during the first
quarter of 2009.

Ruukki Metals


+-------------------------------------------------------------------------+
|EUR million|Q1/  |Q2/  |Q3/  |Q4/  |2007  |Q1/  |Q2/  |Q3/  |Q4/  |2008  |
|           |07   |07   |07   |07   |      |08   |08   |08   |08   |      |
|-----------+-----+-----+-----+-----+------+-----+-----+-----+-----+------|
|Net sales  |531  |552  |464  |488  |2 035 |511  |571  |503  |412  |1 997 |
|-----------+-----+-----+-----+-----+------+-----+-----+-----+-----+------|
|Operating  |     |     |     |     |      |     |     |     |     |      |
|profit*    |116  |115  |96   |68   |395   |96   |106  |112  |36   |350   |
|-----------+-----+-----+-----+-----+------+-----+-----+-----+-----+------|
|as % of net|     |     |     |     |      |     |     |     |     |      |
|sales*     |22   |21   |21   |14   |19    |19   |19   |22   |9    |18    |
+-------------------------------------------------------------------------+

All figures are comparable and exclude Ruukki Betonstahl GmbH, Ruukki
Welbond BV and Carl Froh GmbH.
* Excluding non-recurring items.


Net sales

Ruukki Metals reported net sales for 2008 of EUR 2,019 million (2
168) and comparable net sales of EUR 1,997 million (2 035). The
division accounted for 52 per cent (56) of consolidated net sales in
2008.

Demand for steel products was good in all the division's market areas
and customer sectors during the first half of 2008. Higher net sales
were attributable to growth in the sale of special products and
increased sales prices. Demand continued to be mostly good during the
third quarter, but slowed for colour-coated products.

During the fourth quarter of 2008, there was a marked decline in
demand for steel products across all Ruukki Metals' market areas and
in almost all customer industries. Fourth quarter net sales were EUR
412 million, which is clearly lower than a year earlier (EUR 509
million reported and EUR 488 million comparable Q4/2007). Lower net
sales were largely owing to the general economic uncertainty created
by the global credit crunch, which in turn weakened end-customer
demand.

Demand weakened during the fourth quarter in all main product groups
- except for a few customer segments such as the electrical and
electronics industry, where good demand continued. The strongest fall
in demand was seen among subcontractors to the Swedish automotive
industry. Growing stock levels along the entire supply chain also
translated into lower demand during the fourth quarter.

Stainless steel and aluminium accounted for EUR 224 million (306) of
the division's net sales during 2008 and for EUR 41 million (69)
during the fourth quarter.


Operating profit

Ruukki Metals reported operating profit for 2008 was EUR 338 million
(397). Comparable operating profit excluding non-recurring items was
EUR 350 million (395). Higher sales prices and growth in the share of
special products contributed to operating profit for the whole year.

During the fourth quarter of the year, operating profit was weakened
because of lower demand, tougher price competition in Europe and
higher costs owing to unused capacity, especially in December, due to
the shut down of one of the two blast furnaces at the Raahe Works in
Finland.

Operating profit on stainless steel and aluminium was lower in 2008
than in 2007: EUR 26 million lower for the entire year and EUR 1
million lower during the fourth quarter than a year earlier.

Ruukki Metals made good progress during 2008 with its strategy to
increase the share of special products: special products accounted
for 27 per cent (24) of the division's net sales for the whole year
and 22 per cent (25) for the fourth quarter. During the second half
of 2008, Ruukki Metals secured a number of new strategic special
product customers outside its main market area.


Capital expenditure

Ruukki Metals' capital expenditure in 2008 totalled EUR 16 million.
The division's biggest investments were on growing the production
capacity of special steel products.

August saw the start-up of a new steel service centre in Oborniki,
Poland, where the machinery base was enlarged during late 2008. The
machinery at the Parnas steel service centre in St Petersburg was
modernised during 2008 and a new cut-to-length line came on stream
there during the fourth quarter.

A decision was made in August to invest EUR 12 million in steel
service centres. In addition, steel service centre operations were
centralised and the division of work reorganised between the units:
Naantali (special products) and Järvenpää (stainless and aluminium)
in Finland and Halmstad (upgrading of Rautaruukki's own steel
products) in Sweden. The service centres are specialising to further
improve delivery accuracy, cost-efficiency and profitability.

In April, a decision was made to establish a new steel service centre
next to the steel structure production plant in Obninsk, to the
southwest of Moscow. The approximately EUR 13-million investment will
broaden the special products portfolio and service capacity. The
steel service centre should begin operations in late 2009.


M&A arrangements

Acquisition of the business operations of Hybri-Steel Oy during the
second quarter of 2008 broadened the company's special products
expertise to encompass laser-welded steel plates and laser and
laser-hybrid welding.

In June, Rautaruukki divested its German unit Carl Froh GmbH, which
makes precision tubes and components for the automotive industry. The
divestment is part of Rautaruukki's strategy, whereby Ruukki Metals'
focus in the Central and Southern European markets is on special
products.

Improved operational efficiency

In December, the company announced plans to focus parts processing in
Finland on the steel service centres in Raahe and Seinäjoki and to
close the Tampere steel service centre by the end of June 2009.
Employer-employee negotiations relating to closure of the Tampere
unit ended in January 2009. Closure of the unit will result in the
loss of 63 jobs. These actions are part of the Boost operational
excellence programme which started in October 2008.
Since the balance sheet date, Rautaruukki announced that its steel
product manufacturing division, Ruukki Production, is to merge with
Ruukki Metals division. The merger, which took effect on 1 February
2009, streamlines the corporate structure and improves efficiency and
supply chain management in the steel business.

Major delivery and partnership agreements and other events

In July, Rautaruukki started parts processing for waste treatment
containers for the growing Russian market. The company has agreed on
long-term cooperation in fabrication with Europress Group Ltd. The
waste treatment containers are made at Rautaruukki's plant in
Obninsk, near Moscow and the first containers were delivered in
November 2008.

In September, Rautaruukki and the Finnish company Steelpa Oy started
working together to make parts for excavator buckets for the
engineering industry.  The companies signed a long-term manufacturing
partner agreement. The first parts for the buckets were delivered
during September.

In October, Rautaruukki strengthened its business in special products
and parts processing with the start of a long-term partnership with
VR, Finland's rail transport provider, to deliver special steels for
freight wagons. Deliveries under the contract started in October and
will continue until 2012. Deliveries will be worth a total of around
EUR 7 million by the end of 2009.

The Ministry for Economic Development and Trade of the Russian
Federation continues its investigation concerning the anti-dumping of
colour-coated products. If introduced, import duties would apply to
exports of colour-coated products to Russia from the date any
decision enters into force. Rautaruukki manufactures and exports
around EUR 30 million of these products from Finland to Russia each
year.


Ruukki Production


+--------------------------------------------------------------------------+
|1000 tonnes |Q1/  |Q2/  |Q3/  |Q4/  |2007  |Q1/  |Q2/  |Q3/  |Q4/  |2008  |
|            |07   |07   |07   |07   |      |08   |08   |08   |08   |      |
|------------+-----+-----+-----+-----+------+-----+-----+-----+-----+------|
|Steel       |     |     |     |     |      |     |     |     |     |      |
|production  |703  |672  |610  |561  |2 546 |672  |680  |703  |531  |2 585 |
+--------------------------------------------------------------------------+



Production

Rautaruukki's steel production during 2008 was 2,585 thousand tonnes
(2,546).

Steel production during the fourth quarter of 2008 was down compared
to the reference period a year earlier because production was
adjusted in line with lower demand. The steel production capacity
utilisation rate decreased especially in December, when one of the
two blast furnaces at the Raahe Works in Finland was shut down until
further notice. The lowest capacity utilisation rate during the
fourth quarter was in strip products. The capacity utilisation rate
in heavy plate production was high throughout the year.

December saw the start of employer-employee negotiations at Ruukki
Production in a bid to improve operational efficiency and to adjust
steel production and production costs to market conditions. In
January 2009, the negotiations resulted in a decision to reduce the
workforce at the Raahe Steel Works by some 140 persons. Efforts will
be made to carry out all of these reductions through various pension
arrangements. At the Hämeenlinna Works, the workforce will be reduced
by some 80, with around 50 of these reductions being implemented
through pension arrangements.

In addition, around 400 people at Raahe and around 170 people in
Hämeenlinna will be temporarily laid off at any one time. Temporary
layoffs will affect a total of some 3,200 people at different sites.
The time and length of layoffs will vary according to site.


Rise in prices of steel raw materials in 2008

Prices of raw materials rose sharply on the global market during the
report period. A strengthening of the US dollar towards the end of
the year also contributed to higher market prices of raw materials.
However, thanks to foreign currency hedging, currency fluctuations
had no material impact on the company's costs. Compared to 2007,
general rises in the cost of raw materials added around EUR 200
million to the company's own steel production costs in 2008 after
taking into account foreign currency hedges. Around one third of the
rise in costs was realised during the first half of the year and two
thirds during the second half. Higher costs were mostly attributable
to rises in the price of coal and iron ore.


Capital expenditure

A total of some EUR 44 million was spent in 2008 on increasing
special steel production capacity. The main thrust of investments was
on increasing the production capacity of high-strength and
wear-resistant steels and components for use in the lifting, handling
and transportation equipment industry. During the first part of the
year, the production capacity of special steel products at the Raahe
Works was increased by a new plasma cutting and packaging unit, as
well as by the commissioning of the first stage of a new ladle
treatment unit. Work started on the second stage of the ladle
treatment unit in January 2009 and the unit will be commissioned
during the second quarter of the year.

November saw the start-up of the colour-coating line at Antratsyt in
Ukraine after the automation was upgraded. The line's products are
mainly used in construction.

December saw the test run of a new cold leveller at the plate mill at
the Raahe Works. The leveller will start up fully during the first
quarter of 2009 and will broaden Rautaruukki's portfolio of
wear-resistant and high-strength special steel products. These
products are used, for example, in boom structures, excavator buckets
and in other demanding structures within the lifting, handling and
transportation equipment industry. A new plasma cutting and packaging
unit was commissioned on the plate cutting line at the works towards
the end of the year. The new unit will improve the cutting efficiency
of quenched plates.


Improved operational efficiency

In November, Rautaruukki announced it was to adjust tube production
at Oulainen, Finland. A decision was made to discontinue the
production of spiral-welded gas pipes at the site since this is not
part of the company's core business. Employer-employee negotiations
initiated at the site on 4 November 2008 ended at the end of January
2009. The result was a reduction of 53 jobs at Oulainen, with 18 of
these reductions being carried out through pension arrangements.
Spiral-welded line pipes used in mains water pipelines and the large
piles and structural pipelines used in construction will continue to
be made at Oulainen.

In addition, maintenance functions were outsourced at the Virsbo
plant in Sweden and production volume at the plant was aligned to
slackened demand. Around 20 maintenance staff transferred to the
employ of the company responsible for maintenance as a result. The
Virsbo plant makes small line pipes and structural tubes.


Other events taking place in 2008

In February, a strike by workers belonging to a trade union branch at
the Raahe Works in Finland stopped hot-rolling at the works for about
48 hours and steel production ran at half capacity. Likewise in May,
strikes by workers at the Raahe Works affected production. The Labour
Court judged the strikes unlawful on both occasions. The strikes had
a negative impact of around EUR 8 million on operating profit in
2008.

In March a decision was made to close the sinter plant at the Raahe
Works in Finland by the end of 2011. The company will switch over to
using only iron pellets as a raw material in the iron-making process
and has a long-term supply contract with LKAB of Sweden. Closure of
the sinter plant will also significantly cut emissions and energy
consumption at the Raahe Works.

In November, the company sold a colour-coating line in Gävle, Sweden
to the Swedish company Trelleborg Rubore AB. The line makes
colour-coated special products for the automotive industry and was
not part of Rautaruukki's core business. The 35 workers on the line
transferred to the employ of the new owner.

There was a marked improvement in the division's accident frequency
rate compared to a year earlier. The accident frequency rate in 2008
was 13 accidents per million hours worked (19).

From 1 February 2009, Ruukki Production is part of the Ruukki Metals
division.


TABLES

This financial statement release has been prepared in accordance with
IAS 34 and, with the exception of a change in the recognition of
pension and disability pension liabilities, is in conformity with the
accounting policies published in the 2007 financial statements.

Rautaruukki changed the accounting practice for pension obligations
with respect to the recognition of actuarial gains and losses. The
change decreased equity at 31 December 2007 by EUR 24 million and
balance sheet assets by EUR 26 million. The IFRS interpretation of
the Finnish disability benefit was changed from a defined
contribution plan to a defined benefit plan with effect from 1
January 2008. The change decreased equity by EUR 34 million. Further
information about the change in accounting practice is given at the
end of this release. The figures and calculations for reference
periods presented in this release have been restated accordingly.

Individual figures and totals appearing in the tables have been
rounded to the nearest full million of euros.



+-------------------------------------------------------------------+
| SUMMARY CONSOLIDATED INCOME     |       |       |        |        |
| STATEMENT                       |       |       |        |        |
|---------------------------------+-------+-------+--------+--------|
| EUR million                     | Q4/08 | Q4/07 | 2008   | 2007   |
|---------------------------------+-------+-------+--------+--------|
| Net sales                       | 847   | 982   | 3 851  | 3 876  |
|---------------------------------+-------+-------+--------+--------|
| Other operating income          | 13    | 10    | 31     | 26     |
|---------------------------------+-------+-------+--------+--------|
| Operating expense               | -761  | -832  | -3 169 | -3 111 |
|---------------------------------+-------+-------+--------+--------|
| Depreciation, amortisation and  |       |       |        |        |
| impairment losses               | -37   | -39   | -146   | -153   |
|---------------------------------+-------+-------+--------+--------|
| Operating profit                | 62    | 120   | 568    | 637    |
|---------------------------------+-------+-------+--------+--------|
| Finance income and expense      | -18   | -11   | -23    | -20    |
|---------------------------------+-------+-------+--------+--------|
| Share of results of associates  | 0     | 0     | 3      | 3      |
|---------------------------------+-------+-------+--------+--------|
| Profit before taxes             | 45    | 109   | 548    | 621    |
|---------------------------------+-------+-------+--------+--------|
| Taxes                           | -7    | -30   | -142   | -162   |
|---------------------------------+-------+-------+--------+--------|
| Profit for the period           | 37    | 79    | 406    | 459    |
|---------------------------------+-------+-------+--------+--------|
| Attributable to:                |       |       |        |        |
|---------------------------------+-------+-------+--------+--------|
| Equity shareholders of the      |       |       |        |        |
| parent                          | 38    | 79    | 406    | 458    |
|---------------------------------+-------+-------+--------+--------|
| Minority interests              | -1    | 0     | -1     | 1      |
|---------------------------------+-------+-------+--------+--------|
|                                 |       |       |        |        |
|---------------------------------+-------+-------+--------+--------|
| Diluted earnings per share, EUR | 0.27  | 0.57  | 2.93   | 3.31   |
|---------------------------------+-------+-------+--------+--------|
| Basic earnings per share, EUR   | 0.27  | 0.57  | 2.93   | 3.31   |
|---------------------------------+-------+-------+--------+--------|
| Operating profit as % of net    |       |       |        |        |
| sales                           | 7.3   | 12.2  | 14.7   | 16.4   |
+-------------------------------------------------------------------+




+---------------------------------------------------------------+
| SUMMARY CONSOLIDATED BALANCE SHEET          |        |        |
|---------------------------------------------+--------+--------|
| EUR million                                 | 31 Dec | 31 Dec |
|                                             | 2008   | 2007   |
|---------------------------------------------+--------+--------|
| ASSETS                                      |        |        |
|---------------------------------------------+--------+--------|
| Non-current assets                          | 1 442  | 1 447  |
|---------------------------------------------+--------+--------|
| Current assets                              |        |        |
|---------------------------------------------+--------+--------|
|  Inventories                                | 750    | 614    |
|---------------------------------------------+--------+--------|
|  Trade and other receivables                | 536    | 579    |
|---------------------------------------------+--------+--------|
|  Cash and cash equivalents                  | 254    | 196    |
|---------------------------------------------+--------+--------|
|                                             | 2 983  | 2 835  |
|---------------------------------------------+--------+--------|
|                                             |        |        |
|---------------------------------------------+--------+--------|
| EQUITY AND LIABILITIES                      |        |        |
|---------------------------------------------+--------+--------|
| Equity                                      |        |        |
|---------------------------------------------+--------+--------|
|  Attributable to shareholders of the parent | 1 948  | 1 960  |
|---------------------------------------------+--------+--------|
|  Minority interests                         | 2      | 3      |
|---------------------------------------------+--------+--------|
| Non-current liabilities                     |        |        |
|---------------------------------------------+--------+--------|
|  Interest-bearing liabilities               | 276    | 138    |
|---------------------------------------------+--------+--------|
|  Other non-current liabilities              | 158    | 189    |
|---------------------------------------------+--------+--------|
| Current liabilities                         |        |        |
|---------------------------------------------+--------+--------|
|  Interest-bearing liabilities               | 133    | 86     |
|---------------------------------------------+--------+--------|
|  Trade payables and other liabilities       | 466    | 461    |
|---------------------------------------------+--------+--------|
|                                             | 2 983  | 2 835  |
+---------------------------------------------------------------+




+-------------------------------------------------------------+
| SUMMARY CASH FLOW STATEMENT                   |      |      |
|-----------------------------------------------+------+------|
| EUR million                                   | 2008 | 2007 |
|-----------------------------------------------+------+------|
| Profit for the period                         | 406  | 459  |
|-----------------------------------------------+------+------|
| Adjustments                                   | 250  | 290  |
|-----------------------------------------------+------+------|
| Cash flow before change in working capital    | 656  | 749  |
|-----------------------------------------------+------+------|
| Change in working capital                     | -110 | -112 |
|-----------------------------------------------+------+------|
| Financing items and taxes                     | -164 | -219 |
|-----------------------------------------------+------+------|
| Cash flow from operating activities           | 382  | 417  |
|-----------------------------------------------+------+------|
| Cash inflow from investing activities         | 25   | 70   |
|-----------------------------------------------+------+------|
| Cash outflow from investing activities        | -238 | -217 |
|-----------------------------------------------+------+------|
| Total cash flow from investing activities     | -213 | -146 |
|-----------------------------------------------+------+------|
| Cash flow before financing activities         | 169  | 271  |
|-----------------------------------------------+------+------|
| Dividend paid                                 | -277 | -276 |
|-----------------------------------------------+------+------|
| Change in debt                                | 193  | -155 |
|-----------------------------------------------+------+------|
| Other net cash flow from financing activities | -13  | -6   |
|-----------------------------------------------+------+------|
| Change in cash and cash equivalents           | 70   | -166 |
+-------------------------------------------------------------+




+------------------------------------------------------------+
| KEY FIGURES                    | 2008        | 2007        |
|--------------------------------+-------------+-------------|
| Net sales, EUR m               |  3 851      | 3 876       |
|--------------------------------+-------------+-------------|
| Operating profit, EUR m        | 568         | 637         |
|--------------------------------+-------------+-------------|
| as % of net sales              | 14.7        | 16.4        |
|--------------------------------+-------------+-------------|
| Profit before taxes, EUR m     | 548         | 621         |
|--------------------------------+-------------+-------------|
| as % of net sales              | 14.2        | 16.0        |
|--------------------------------+-------------+-------------|
| Profit for the period, EUR m   | 406         | 459         |
|--------------------------------+-------------+-------------|
| as % of net sales              | 10.5        | 11.8        |
|--------------------------------+-------------+-------------|
| Return on capital employed, %  | 25.6        | 29.8        |
|--------------------------------+-------------+-------------|
| Return on equity, %            | 20.7        | 24.2        |
|--------------------------------+-------------+-------------|
| Equity ratio, %                | 65.9        | 70.1        |
|--------------------------------+-------------+-------------|
| Gearing ratio, %               | 7.9         | 1.4         |
|--------------------------------+-------------+-------------|
| Net interest-bearing financial |             |             |
| liabilities, EUR m             | 155         | 28          |
|--------------------------------+-------------+-------------|
| Equity per share, EUR          | 14.04       | 14.13       |
|--------------------------------+-------------+-------------|
| Personnel on average           | 14 953      | 14 326      |
|--------------------------------+-------------+-------------|
| Number of shares               | 140 255 479 | 140 198 128 |
|--------------------------------+-------------+-------------|
| - excluding treasury shares    | 138 788 542 | 138 721 191 |
|--------------------------------+-------------+-------------|
| - diluted, average             | 138 773 118 | 138 566 355 |
+------------------------------------------------------------+




+-----------------------------------------------------------------------+
|CHANGE IN EQUITY 2008                                                  |
|-----------------------------------------------------------------------|
|EUR million                 |Attributable to shareholders of the parent|
|----------------------------+------------------------------------------|
|                            |Share|Share|Fair |Trans|Re-   |Total|Minor|
|                            |ca-  |prem.|value|la   |tained|     |ity  |
|                            |pital|act. | and |tion |earn- |     |int. |
|                            |     |     |other|diff.|ings  |     |     |
|                            |     |     |reser|     |      |     |     |
|                            |     |     |ves  |     |      |     |     |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|EQUITY AT 31 DEC 2007       |238  |220  |9    |-6   |1 498 |1 960|3    |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|Cash flow hedges, net of tax|     |     |-46  |     |      |-46  |     |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|Actuarial gains and losses, |     |     |     |     |      |     |     |
|net of tax                  |     |     |     |     |-46   |-46  |     |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|Change in translation       |     |     |     |     |      |     |     |
|difference                  |     |     |     |-31  |-23   |-54  |     |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|Net income and expense      |     |     |     |     |      |     |     |
|booked direct to equity     |0    |0    |-46  |-31  |-69   |-146 |0    |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|Profit for the period       |     |     |     |     |406   |406  |-1   |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|Total income and expense    |     |     |     |     |      |     |     |
|recognised for the period   |0    |0    |-46  |-31  |337   |261  |-1   |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|Share-based payments, net of|     |     |     |     |      |     |     |
|tax                         |     |     |0    |     |0     |0    |     |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|Disposal of treasury shares |     |     |0    |     |0     |0    |     |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|Dividend distribution       |     |     |     |     |-277  |-277 |0    |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|Other change                |     |     |     |     |4     |4    |     |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|EQUITY AT 31 DEC 2008       |238  |220  |-37  |-36  |1 562 |1 948|2    |
+-----------------------------------------------------------------------+




+-----------------------------------------------------------------------+
|CHANGE IN EQUITY 2007                                                  |
|-----------------------------------------------------------------------|
|EUR million                 |Attributable to shareholders of the parent|
|----------------------------+------------------------------------------|
|                            |Share|Share|Fair |Trans|Re-   |Total|Minor|
|                            |ca-  |prem.|value|la   |tained|     |ity  |
|                            |pital|act. | and |tion |earn- |     |int. |
|                            |     |     |other|diff.|ings  |     |     |
|                            |     |     |reser|     |      |     |     |
|                            |     |     |ves  |     |      |     |     |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|EQUITY AT 1 JAN             |238  |220  |44   |-3   |1 326 |1 825|1    |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|Cash flow hedges, net of tax|     |     |-33  |     |      |-33  |     |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|Actuarial gains and losses, |     |     |     |     |      |     |     |
|net of tax                  |     |     |     |     |-16   |-16  |     |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|Change in translation       |     |     |     |     |      |     |     |
|difference                  |     |     |0    |-3   |3     |1    |     |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|Net income and expense      |     |     |     |     |      |     |     |
|booked direct to equity     |0    |0    |-32  |-3   |-13   |-48  |0    |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|Profit for the period       |     |     |     |     |458   |458  |1    |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|Total income and expense    |     |     |     |     |      |     |     |
|recognised for the period   |0    |0    |-32  |-3   |445   |410  |1    |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|Share-based payments, net of|     |     |     |     |      |     |     |
|tax                         |     |     |0    |     |0     |0    |     |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|Disposal of treasury shares |     |     |-3   |     |3     |0    |     |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|Dividend distribution       |     |     |     |     |-276  |-276 |     |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|Acquisition of subsidiaries |     |     |     |     |      |     |1    |
|----------------------------+-----+-----+-----+-----+------+-----+-----|
|EQUITY AT 31 DEC            |238  |220  |9    |-6   |1 498 |1 960|3    |
+-----------------------------------------------------------------------+




+-------------------------------------------------------------------+
| CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE           |
|-------------------------------------------------------------------|
| EUR million                                         | 2008 | 2007 |
|-----------------------------------------------------+------+------|
| Profit for the period                               | 406  | 459  |
|-----------------------------------------------------+------+------|
| Cash flow hedges, net of tax                        | -46  | -33  |
|-----------------------------------------------------+------+------|
| Translation differences                             | -54  | 1    |
|-----------------------------------------------------+------+------|
| Defined benefit plan actuarial gains (losses), net  |      |      |
| of tax                                              | -46  | -16  |
|-----------------------------------------------------+------+------|
| Net income and expense booked direct to equity      | -146 | -48  |
|-----------------------------------------------------+------+------|
| Total recognised income and expense for the period  | 261  | 411  |
|-----------------------------------------------------+------+------|
|                                                     |      |      |
|-----------------------------------------------------+------+------|
| Recognised income and expense attributable to       |      |      |
| minority interests during the period                | -1   | 1    |
|-----------------------------------------------------+------+------|
| Recognised income and expense attributable to       |      |      |
| shareholders during the period                      | 262  | 410  |
|-----------------------------------------------------+------+------|
| Total recognised income and expense for the period  | 261  | 411  |
+-------------------------------------------------------------------+




+-------------------------------------------------------------------+
| NET SALES BY DIVISION                                             |
|-------------------------------------------------------------------|
| EUR million           | 2008   | 2007   | 2008       | 2007       |
|                       |        |        | comparable | comparable |
|-----------------------+--------+--------+------------+------------|
| Ruukki Construction   | 1 067  | 1 042  | 1 067      | 1 042      |
|-----------------------+--------+--------+------------+------------|
| Ruukki Engineering    | 765    | 667    | 765        | 667        |
|-----------------------+--------+--------+------------+------------|
| Ruukki Metals         | 2 019  | 2 168  | 1 997      | 2 035      |
|-----------------------+--------+--------+------------+------------|
| Corporate management  |        |        |            |            |
| and other units       | 0      | 0      | 0          | 0          |
|-----------------------+--------+--------+------------+------------|
| Consolidated net      |        |        |            |            |
| sales                 | 3 851  | 3 876  | 3 829      | 3 744      |
|-------------------------------------------------------------------|
| Comparable = excluding Ruukki Betonstahl GmbH, Ruukki Welbond BV  |
| and Carl Froh GmbH.                                               |
+-------------------------------------------------------------------+




+-------------------------------------------------------------------+
| OPERATING PROFIT BY DIVISION                                      |
|-------------------------------------------------------------------|
| EUR million           | 2008  | 2007  | 2008        | 2007        |
|                       |       |       | comparable* | comparable* |
|-----------------------+-------+-------+-------------+-------------|
| Ruukki Construction   | 128   | 163   | 132         | 163         |
|-----------------------+-------+-------+-------------+-------------|
| Ruukki Engineering    | 126   | 103   | 128         | 103         |
|-----------------------+-------+-------+-------------+-------------|
| Ruukki Metals         | 338   | 397   | 350         | 395         |
|-----------------------+-------+-------+-------------+-------------|
| Corporate management  |       |       |             |             |
| and other units       | -25   | -25   | -25         | -25         |
|-----------------------+-------+-------+-------------+-------------|
| Consolidated          |       |       |             |             |
| operating profit      | 568   | 637   | 584         | 635         |
|-------------------------------------------------------------------|
| Comparable = excluding Ruukki Betonstahl GmbH, Ruukki Welbond BV  |
| and Carl Froh GmbH.                                               |
| * Excluding non-recurring items.                                  |
+-------------------------------------------------------------------+




+-------------------------------------------------------------------+
| QUARTERLY NET SALES                                               |
|-------------------------------------------------------------------|
| EUR million       | Q1/ | Q2/ | Q3/ | Q4/ | Q1/ | Q2/ | Q3/ | Q4/ |
|                   | 07  | 07  | 07  | 07  | 08  | 08  | 08  | 08  |
|-------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| Ruukki            |     |     |     |     |     |     |     |     |
| Construction      | 213 | 258 | 278 | 292 | 225 | 285 | 309 | 248 |
|-------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| Ruukki            |     |     |     |     |     |     |     |     |
| Engineering       | 167 | 163 | 157 | 180 | 188 | 205 | 184 | 187 |
|-------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| Ruukki Metals     | 570 | 588 | 500 | 509 | 525 | 580 | 503 | 412 |
|-------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| Corporate         |     |     |     |     |     |     |     |     |
| management and    |     |     |     |     |     |     |     |     |
| other units       | 0   | 0   | 0   | 0   | 1   | -1  | 0   | 0   |
|-------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| Consolidated net  |     | 1   |     |     |     | 1   |     |     |
| sales             | 950 | 009 | 935 | 982 | 939 | 069 | 996 | 847 |
+-------------------------------------------------------------------+




+-------------------------------------------------------------------+
| QUARTERLY OPERATING PROFIT                                        |
|-------------------------------------------------------------------|
| EUR million       | Q1/ | Q2/ | Q3/ | Q4/ | Q1/ | Q2/ | Q3/ | Q4/ |
|                   | 07  | 07  | 07  | 07  | 08  | 08  | 08  | 08  |
|-------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| Ruukki            |     |     |     |     |     |     |     |     |
| Construction      | 34  | 40  | 51  | 38  | 21  | 38  | 56  | 13  |
|-------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| Ruukki            |     |     |     |     |     |     |     |     |
| Engineering       | 32  | 27  | 25  | 18  | 32  | 35  | 34  | 26  |
|-------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| Ruukki Metals     | 117 | 115 | 96  | 68  | 97  | 100 | 112 | 29  |
|-------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| Corporate         |     |     |     |     |     |     |     |     |
| management and    |     |     |     |     |     |     |     |     |
| other units       | -6  | -5  | -10 | -5  | -7  | -7  | -5  | -6  |
|-------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| Consolidated      |     |     |     |     |     |     |     |     |
| operating profit  | 178 | 178 | 162 | 120 | 143 | 166 | 197 | 62  |
+-------------------------------------------------------------------+




+-------------------------------------------------------------------+
| QUARTERLY NET SALES (COMPARABLE) EXCLUDING RUUKKI BETONSTAHL,     |
| RUUKKI WELBOND and CARL FROH                                      |
|-------------------------------------------------------------------|
| EUR million       | Q1/ | Q2/ | Q3/ | Q4/ | Q1/ | Q2/ | Q3/ | Q4/ |
|                   | 07  | 07  | 07  | 07  | 08  | 08  | 08  | 08  |
|-------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| Ruukki            |     |     |     |     |     |     |     |     |
| Construction      | 213 | 258 | 278 | 292 | 225 | 285 | 309 | 248 |
|-------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| Ruukki            |     |     |     |     |     |     |     |     |
| Engineering       | 167 | 163 | 157 | 180 | 188 | 205 | 184 | 187 |
|-------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| Ruukki Metals     | 531 | 552 | 464 | 488 | 511 | 571 | 503 | 412 |
|-------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| Corporate         |     |     |     |     |     |     |     |     |
| management and    |     |     |     |     |     |     |     |     |
| other units       | 0   | 0   | 0   | 0   | 1   | -1  | 0   | 0   |
|-------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| Consolidated net  |     |     |     |     |     | 1   |     |     |
| sales             | 911 | 973 | 899 | 960 | 925 | 060 | 996 | 847 |
+-------------------------------------------------------------------+




+-------------------------------------------------------------------+
| QUARTERLY OPERATING PROFIT (COMPARABLE) EXCLUDING RUUKKI          |
| BETONSTAHL, RUUKKI WELBOND and CARL FROH AND EXCLUDING            |
| NON-RECURRING ITEMS                                               |
|-------------------------------------------------------------------|
| EUR million       | Q1/ | Q2/ | Q3/ | Q4/ | Q1/ | Q2/ | Q3/ | Q4/ |
|                   | 07  | 07  | 07  | 07  | 08  | 08  | 08  | 08  |
|-------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| Ruukki            |     |     |     |     |     |     |     |     |
| Construction      | 34  | 40  | 51  | 38  | 21  | 38  | 56  | 17  |
|-------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| Ruukki            |     |     |     |     |     |     |     |     |
| Engineering       | 32  | 27  | 25  | 18  | 32  | 35  | 34  | 27  |
|-------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| Ruukki Metals     | 116 | 115 | 96  | 68  | 96  | 106 | 112 | 36  |
|-------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| Corporate         |     |     |     |     |     |     |     |     |
| management and    |     |     |     |     |     |     |     |     |
| other units       | -6  | -5  | -10 | -5  | -7  | -7  | -5  | -6  |
|-------------------+-----+-----+-----+-----+-----+-----+-----+-----|
| Consolidated      |     |     |     |     |     |     |     |     |
| operating profit  | 177 | 178 | 162 | 119 | 141 | 172 | 197 | 74  |
+-------------------------------------------------------------------+




+---------------------------------------+
| NET SALES BY REGION                   |
|---------------------------------------|
| As % of net sales       | 2008 | 2007 |
|-------------------------+------+------|
| Finland                 | 32   | 31   |
|-------------------------+------+------|
| Other Nordic countries  | 31   | 30   |
|-------------------------+------+------|
| Central Eastern Europe, |      |      |
| Russia and Ukraine      | 21   | 21   |
|-------------------------+------+------|
| Rest of Europe          | 13   | 15   |
|-------------------------+------+------|
| Other countries         | 3    | 3    |
+---------------------------------------+




+--------------------------------------------------------+
| CONTINGENT LIABILITIES                                 |
|--------------------------------------------------------|
| EUR million                          | Dec 08 | Dec 07 |
|--------------------------------------+--------+--------|
| Mortgaged real estates               | 24     | 24     |
|--------------------------------------+--------+--------|
| Pledges given                        | 5      | 5      |
|--------------------------------------+--------+--------|
| Other guarantees given               | 45     | 41     |
|--------------------------------------+--------+--------|
| Collateral given on behalf of others | 2      | 6      |
|--------------------------------------+--------+--------|
| Rental liabilities                   | 132    | 154    |
+--------------------------------------------------------+




+-------------------------------------------------------------------+
| VALUES OF DERIVATIVE CONTRACTS AT 31 DECEMBER 2008                |
|-------------------------------------------------------------------|
|                                                                   |
|-------------------------------------------------------------------|
| CASH FLOW HEDGES QUALIFYING FOR HEDGE ACCOUNTING                  |
|-------------------------------------------------------------------|
|                                | Nominal amount | Fair value, EUR |
|                                |                | million         |
|----