Rautaruukki - Interim report (Q1 and Q3)

Rautaruukki Corporation interim report Q1/2013: EFFICIENCY PROGRAMMES IMPROVED PROFITABILITY

Rautaruukki Corporation Stock exchange release 25 April 2013 at 9am EEST

January-March 2013 (Q1/2012)

- Net cash from operating activities was EUR 22 million (54).
- Order intake was down 7% at EUR 590 million (634).
- Comparable net sales were down 16% at EUR 590 million (699). This decrease was
mostly due to divestment of the Engineering business at the end of 2012.
- Comparable operating profit was EUR 5 million (-15).
- Comparable result before taxes was -EUR 3 million (-25).

Guidance for 2013 remains unchanged

Comparable net sales in 2013 are estimated to be at the same level as in 2012.
Comparable operating profit is estimated to improve compared to 2012 and to be
positive.

KEY FIGURES
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                                              Q1/13  Q1/12   2012
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Comparable figures
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Comparable net sales, EUR m                     590    699  2,789
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Comparable operating profit, EUR m                5    -15    -65
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Comparable operating profit
as % of net sales                               0.8   -2.2   -2.3
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Comparable result before
income tax, EUR m                                -3    -25   -103
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Reported figures
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Reported net sales, EUR m                       590    702  2,796
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Reported operating profit,
EUR m                                             4    -16   -101
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Reported result before
income tax, EUR m                                -4    -27   -139
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Net cash from operating activities, EUR m        22     54    172
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Net cash before financing activities, EUR m       7     32     78
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Earnings per share, EUR                       -0.03  -0.15  -0.85
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Return on capital employed
(rolling 12 months), %                         -4.1   -0.7   -4.9
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Return on capital employed
(annualised), %                                 0.8   -2.9   -4.9
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Gearing ratio, %                               72.4   67.9   71.2
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Equity ratio, %                                44.3   46.3   45.6
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Personnel on average                          8,876 11,350 11,214
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President & CEO Sakari Tamminen

Uncertainty in the eurozone continued and the area was in recession during the
first quarter of 2013. Economic development continued also to show regional
differences. Market sentiment was and is wait-and-see. The emerging markets and
the United States are forecast to maintain global growth. As regards Ruukki's
most important markets, Sweden upgraded its growth forecast, whereas forecasts
in Russia were downgraded due to weakened domestic demand and fewer investments.
Many forecasts do not expect the eurozone economy, underpinned by export-driven
demand, to return to growth until the second half of 2013 or in early 2014.

Improved earnings performance was mainly attributable to efficiency improvement
projects we initiated about a year ago across our businesses and to favourable
price development of raw material costs. These efficiency projects have
progressed to plan and during the first quarter this year generated cost
benefits totalling around EUR 18 million in addition to around EUR 20 million in
earnings improvement achieved last year. The annualised cost impact of ongoing
projects was around EUR 70 million at the end of March. It is now estimated that
the savings of around EUR 100 million sought will be achieved and that the
improvement in earnings performance will be visible in full from the third
quarter of this year onwards.

Significantly improved earnings performance in our steel business, both year on
year and quarter on quarter, turned comparable consolidated operating profit
back into the black. Compared to the previous quarter, improved earnings
performance was also visible as positive cash flow of EUR 22 million from
operating activities. Net working capital to sales was unchanged quarter on
quarter at 18%. Order intake in the construction business was up 4% year on
year, whereas order intake in the steel business was down 10%. Ruukki's net
sales were clearly at a lower level compared to a year earlier. This was largely
due to withdrawal from the engineering business at the end of last year.

Operating profit in our construction business improved year on year as a result
of the efficiency programme, but was down quarter on quarter due to normal
seasonality. Order intake for residential roofing products was at the same level
as a year earlier, which is in line with market growth expectations. Ruukki's
focus on its own distribution in roofing products was visible as higher than
market growth last year and it is my view that this performance can be repeated
also during the current year. Our order intake for commercial and industrial
construction was up clearly compared to a year earlier. Russia and Sweden
accounted for most of the growth, whereas activity in Finland was more modest.
Order intake included new project orders in Sweden and in Russia order intake
was up both for concept buildings and steel structure projects.

The clear improvement in profitability compared to the previous quarter in our
steel business was attributable to higher delivery volumes, better product mix,
lower costs and optimum use of raw materials, together with cost savings
achieved. The comparable share of special steel products reported for previous
years rose year on year to account for 32% (30) of net sales in our steel
business.

Overcapacity in the steel industry in Europe means that price development
depends not just on demand, but also greatly on the price development of main
raw materials. It is estimated that steel wholesalers have now restocked and
this might weaken demand during the second quarter. There are good prospects for
Ruukki to grow its share of special steels because our product portfolio and
quality, together with our sales and distribution network, provide a strong
platform for growth.

My expectations for 2013 are mildly optimistic thanks to our actions to improve
efficiency and the business choices we have made, even though we cannot expect
any significant help from a pick-up in the market. Comparable net sales in 2013
are estimated to be at the same level as in 2012. Comparable operating profit is
estimated to improve compared to 2012 and to be positive.

Rautaruukki Corporation's full interim report for January-March 2013 is attached
to this release.







For further information, please contact
Sakari Tamminen, President & CEO, tel. +358 20 592 9075
Markku Honkasalo, CFO, tel. +358 20 592 8840

News conference for analysts and the media
A joint news conference in English both for analysts and the media will be
hosted on Thursday 25 April at 10.30am at Ruukki, Suolakivenkatu 1, 00810
Helsinki.

A live webcast of the event and the presentation by the company's President &
CEO Sakari Tamminen may be followed online on the company website at
www.ruukki.com/Investors starting at 10.30am EEST. This event can also be
attended through a conference call by dialling the number below 5-10 minutes
before the scheduled time:
+44 207 1620 177 (calls outside Finland)
+358 9 2313 9202 (calls inside Finland)
Access code: 930974

A replay of the webcast can be viewed on the company's website from no later
than 4pm EEST onwards. A recording of the conference call will be available
until 3 May 2013 at:
+44 20 7031 4064 (calls outside Finland)
+358 9 2314 4681 (calls inside Finland)
Access code: 930974



Rautaruukki Corporation
Taina Kyllönen
SVP, Marketing and Communications

Ruukki specialises in steel and steel construction. We provide customers with
energy-efficient steel solutions for better living, working and moving. We have
around 9,000 employees and an extensive distribution and dealer network across
some 30 countries including the Nordic countries, Russia and elsewhere in Europe
and the emerging markets, such as India, China and South America. Net sales in
2012 totalled EUR 2.8 billion. The company's share is quoted on NASDAQ OMX
Helsinki (Rautaruukki Oyj: RTRKS). www.ruukki.com

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


[HUG#1696155]

Attachments:

Rautaruukki Corporation Interim Report Q1 2013.pdf