Ruukki's Capital Markets Day 1 December 2009: R...

Rautaruukki Corporation Stock exchange release 1 December 2009 at 9.20 Ruukki's annual Capital Markets Day for investors and analysts is being held in Helsinki today. The event features a presentation of the implementation of Ruukki's strategy in different businesses, a review of the company's financial position and actions to improve profitability. Summary: - Focus areas of business remain unchanged - Emphasis on product focus and utilisation of investments made in recent years - Businesses to be balanced to reduce cyclicality - Replicability of products and business concepts key to taking Ruukki's strategy forward - Efficiency programme has progressed faster than expected - Positive cash flow before investments - Earnings guidance unchanged The main focus areas of Ruukki's business remain unchanged, although in future operations will be run on a more product-focused driven basis than earlier. Recent years have seen Ruukki build a strong manufacturing and sales network in the emerging markets and complete major investments to increase the manufacturing capacity of special steel products. Utilising these investments is essential in all businesses and units. Work is continuing on compacting the production network. This in turn will increase efficiency and create a platform to improve profitability. Production and processes are being harmonised to enable customers to be provided with standardised products services in different market areas. In future, the focus will also be on products and business concepts, such as cabins and roofing products, which can be replicated from one country to another. One of the latest examples on this front is residential construction concept to enable fast, cost-efficient steel construction throughout the year. This solution will be launched on the Russian market during 2010. Competence development is being highlighted more than earlier at Ruukki and applies to all sectors, from product development to sales. To reduce the impact of fluctuations in the economic cycle on the businesses, the company is seeking balance also from the markets in Western Europe and from businesses - such as infrastructure and renovation construction and residential construction products - that are less exposed to market cyclicality. Strategic direction remains unchanged In construction, the company continues to focus on commercial and industrial construction in the Nordic countries, Central Eastern Europe, Russia and Ukraine. Increasing emphasis is also being given to infrastructure and residential construction within the construction business. In the engineering business, the key business segments are cabins, booms, windmill towers, and medium-heavy and heavy welded structures. The company intends to strengthen its own design competence in products for the engineering industry, in, for example, cabin design. In the steel business, the focus is on cost-efficiency and operational flexibility. The geographical focus is on the Nordic markets and the product focus is on special steel products. "The global economic crisis has severely shaken Ruukki's customer industries and thus considerably weakened both our steel business and solutions businesses: construction and the engineering industry. In future, our focus will increasingly be on businesses - such as infrastructure, renovation and residential construction products - that are less exposed to market cyclicality. However, despite difficult market conditions, we have noticeably improved our efficiency and cost competitiveness. In recent years, we have ramped up capacity serving construction and engineering industry customers in the emerging markets in Central Eastern Europe, Russia and China and invested in the manufacturing capacity of special steel products. This gives us a strong competitive edge when demand picks up again. Our strong balance sheet also enables acquisitions," says President & CEO Sakari Tamminen. Efficiency projects progressing faster than expected and raw material costs are lower than during the previous year Ruukki's three-year operational excellence programme Boost has progressed faster than expected. The biggest single savings have been achieved from improving supply chain efficiency, the construction efficiency programme in Russia and Poland and by a centralisation of steel service centre operations in the Nordic countries. Construction operations have been improved by centralising production on larger units in Finland, Estonia, Poland and Romania. In addition, there are plans to transfer the production of roof and façade profiles at Biatorbagy plant in Hungary to larger units. Centralising operations will also strengthen Ruukki's engineering expertise in Central Eastern Europe. The manufacture of components will be relocated from the Swedish units to Poland by the end of this year. The impact of the Boost programme on consolidated operating profit was around EUR 46 million at the end of September and is estimated to exceed EUR 60 million by the end of the year. The annualised impact of the above efficiency projects already under way is around EUR 80 million. Prices of the main raw materials (iron ore and coal) used in steel production have fallen during 2009 compared to the previous year. The impact of these lower raw material prices is estimated to be around EUR 60 million compared to 2008. Positive cash flow before investments Consolidated cash and cash equivalents at 30 September 2009 were EUR 88 million. A total of EUR 222 million has been released from working capital since the start of the year and the company's operative cash flow, before investment activities, by the end of September was EUR 69 million. Net gearing at 30 September 2009 was 26 per cent. The company had unused committed financing reserves at the end of November totalling around EUR 700 million. Investments are estimated to remain below EUR 170 million during the current year and to be EUR 160-190 million in 2010. Earnings guidance unchanged The earnings guidance given in Ruukki's interim report for January-September 2009 remains unchanged. The company estimates there will be a marked improvement in the result before taxes for the fourth quarter, compared to the third quarter, but that the result might remain slightly negative. From the start of 2010, the company will adopt the 21-day silent period (currently 14 days) before earnings disclosures. Capital markets day materials The Capital Markets Day presentation material is in English and will be available on 1 December from about 12.30 on the company's website at www.ruukki.com For further information, please contact: Sakari Tamminen, President & CEO, tel. +358 20 592 9075 Mikko Hietanen, CFO, tel. +358 20 592 9030 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 27 countries and employs 12,200 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. DISTRIBUTION: NASDAQ OMX Helsinki Main media www.ruukki.com This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
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