2010-02-03 11:00:00 CET
2010-02-03 11:03:32 CET
REGULATED INFORMATION
Rautaruukki - Financial Statement Release
Financial statement bulletin 2009: In very difficult market conditions - weak result. Good cash flow, balance sheet remained strong
Rautaruukki Corporation, Financial statement bulletin 3 February 2010 at 12 noon
Summary results for 2009 (reference period 2008)
- Consolidated net sales EUR 1,950 million (EUR 3,829 million comparable)
- Consolidated reported negative operating profit was -EUR 323 million and
negative operating profit excluding non-recurring items was -EUR 306 million
(EUR 584 million comparable, excluding non-recurring items)
- Result before income tax was -EUR 359 million (548)
- Gearing ratio was 22.3 per cent (7.9)
- Cash flow from operating activities was EUR 182 million (382) and cash flow
before financing activities was EUR 30 million (169)
- Return on capital employed (rolling 12 months) -14.2 per cent (25.6)
- Earnings per share were -EUR 1.98 (2.93)
- Board of Directors' dividend proposal EUR 0.45 per share (EUR 1.35)
- The company estimates a 15-20 per cent year-on-year growth in net sales in
2010. Profitability is expected to improve significantly compared to the
previous year and the full-year result before income tax is estimated to be
positive.
+-----------+--------------------------------------+------+------+------+------+
| | | | | | |
|KEY FIGURES| | | | | |
+-----------+--------------------------------------+------+------+------+------+
| | | 2009| 2008| Q4/09| Q4/08|
+-----------+--------------------------------------+------+------+------+------+
|Net sales, EUR m | 1 950| 3 851| 521| 847|
+--------------------------------------------------+------+------+------+------+
|Net sales, comparable, EUR m | 1 950| 3 829| 521| 847|
+--------------------------------------------------+------+------+------+------+
|Operating profit, EUR m | -323| 568| -39| 62|
+--------------------------------------------------+------+------+------+------+
|Operating profit, comparable, excluding | -306| 584| -27| 74|
|non-recurring items, EUR m | | | | |
+--------------------------------------------------+------+------+------+------+
|Operating profit as % of net sales | -16.6| 14.7| -7.5| 7.3|
+--------------------------------------------------+------+------+------+------+
|Operating profit as % of net sales, comparable, | -15.7| 15.3| -5.2| 8.7|
|excluding non-recurring items | | | | |
+--------------------------------------------------+------+------+------+------+
|Result before income tax, EUR m | -359| 548| -46| 45|
+--------------------------------------------------+------+------+------+------+
|Cash flow before financing activities, EUR m | 30| 169| 78| 27|
+--------------------------------------------------+------+------+------+------+
|Earnings per share, EUR | -1.98| 2.93| -0.33| 0.27|
+--------------------------------------------------+------+------+------+------+
|Return on capital employed (rolling 12 mths), % | -14.2| 25.6| | |
+--------------------------------------------------+------+------+------+------+
|Gearing ratio, % | 22.3| 7.9| | |
+--------------------------------------------------+------+------+------+------+
|Personnel, average |12 664|14 953|11 913|14 555|
+--------------------------------------------------+------+------+------+------+
2009 in brief:
- Business activity in commercial and industrial construction was low throughout
the report period. Net sales of infrastructure construction declined clearly
less than those of other construction sectors. Market conditions for residential
roofing products during 2009 were much weaker than in earlier years.
- Delivery volumes in the engineering industry fell sharply, especially in the
lifting, handling and transportation equipment industry. Except for the fourth
quarter, deliveries to equipment manufacturers in the energy industry, both in
wind and diesel power plants, continued at a good level compared to other
customer groups.
- End-customer demand for steel products was weak and delivery volumes were
exceptionally low. Sales of colour-coated and galvanised strip products were
better than those of plate products. Sales of special steel products decreased
more than those of other product groups because of low activity in the main
industrial sectors that use these products, such as the heavy engineering
industry.
- The operational excellence programme, Boost, progressed faster than planned
and the company's cost structure improved noticeably. The largest single
benefits were achieved from the centralisation of steel service centre
operations in the Nordic countries, improved supply chain efficiency and from
efficiency programmes in the construction business in Russia and Poland. The
annualised impact of efficiency projects initiated during 2009 is around EUR 90
million.
- Working capital of EUR 317 million was released and the consolidated balance
sheet remained healthy.
President & CEO Sakari Tamminen:"During the past year we faced major negative changes both as regards market
conditions and Ruukki. The company's profitability was very weak, even though it
did improve towards the year-end. Weak performance was due mainly to lower sales
volumes and selling prices. In addition, the low capacity utilisation rate,
especially in steel production, had a major negative impact on the result for
the first half of the year, on top of high raw material costs.
We focused on strengthening cash flow and managed to maintain our balance sheet
healthy by releasing working capital and cutting capex. We also successfully
managed to clearly improve our operating efficiency corporate-wide and Boost,
the three-year operational excellence programme initiated in autumn 2008,
progressed faster than planned. The company's cost competitiveness is now
fundamentally better than at the start of 2009.
We have reviewed the focus of our businesses to strengthen the company's core
businesses and to reduce the impact of fluctuations in the economic cycle. Our
focus is now much stronger than earlier on products and business concepts that
we can replicate from one country to another. Such products include, for
example, cabins for mobile machines, as well as roofing products. Transferring
our competence from one country or unit to another will enable us to serve our
customers with standardised products and services in different market areas.
Besides a presence on the Eastern European markets, we are increasing our
presence also on the Western European markets. We are also increasing the share
of businesses that are less exposed to market cyclicality. Such businesses
include, among others, infrastructure and renovation construction, as well as
residential construction products, where we already have strong expertise.
During the past few years we have built a strong manufacturing and sales network
to serve our construction and engineering customers in the emerging markets in
Central Eastern Europe, Russia and China. In addition, we have also made
investments to increase the manufacturing capacity of special steel products.
Utilisation of these investments provides us with good potential to strengthen
our foothold in future growth markets.
The basis for 2010 is much better than for the previous year as market
conditions in a number of our customer industries have levelled off and in some
businesses there are already signs of improved demand. However, no fast recovery
of market conditions can be seen.
We estimate a 15-20 per cent year-on-year growth in net sales in 2010.
Profitability is expected to improve significantly compared to the previous year
and the full-year result before income tax is estimated to be positive."
For further information, please contact:
Sakari Tamminen, President & CEO, tel. +358 20 592 9075
Mikko Hietanen, CFO, tel. +358 20 592 9030
Rautaruukki has published a Corporate Governance Statement 2009, which is
appended to this release. The Statement may also be read on the company's
website at www.ruukki.com<http://www.ruukki.com/www/corporate.nsf/Documents/84745CBD965015C6C225722F0033E
D5A?OpenDocument&lang=1>.
Press conference
A press conference, in Finnish, for analysts and the media will be held on
Wednesday 3 February 2010 at 2.30pm at Ruukki, Suolakivenkatu 1, 00810 Helsinki.
The English webcast and conference call for investors and analysts will begin at
4.30pm EET. The webcast 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
following number 5-10 minutes before the conference begins: +44 (0)20
7162 0125, password: Rautaruukki
A recording of the conference call can be heard until 8 February 2010 at the
following number:
+44 (0)20 7031 4064, access code: 856309
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 around 11,700 people. Net sales in 2009 were approximately EUR 2.0
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
FINANCIAL STATEMENT BULLETIN 2009
Business environment
The year 2009 stood out also from an historical perspective. The economic
downturn triggered by the financial markets during the latter part of 2008
resulted in a contraction in the global gross national product for the first
time since 1946. The far-reaching impact of the downturn on the real economy
clearly gathered momentum during the first half of the year. As an export-driven
country, the collapse in world trade hit Finland harder than most other
countries. Industrial production shrank noticeably and market conditions were
extremely difficult. General uncertainty and caution in investment and financing
decisions prevailed throughout the earlier part of the year. An appreciable
weakening against the euro of many currencies in Eastern European and the Nordic
countries eroded the competitiveness of the eurozone, but increased the interest
of eurozone-actors in local manufacturing in Central Eastern Europe and Russia.
The first signs of economic development levelling off began to be seen towards
the end of the second quarter and the pace of decline in the global economy
slowed during the course of the third quarter. However, there was continued
caution in investment decisions despite the strengthening of a number of
confidence indicators. Even though stocks of finished goods decreased
considerably, industrial orders remained well below the level a year earlier.
The worst of the crisis was over in the latter part of the year and the global
economy and world trade began to show signs of a recovery. Also Finnish exports
to Sweden and Germany began to gradually recover. However, the recovery of
economic development is partly due to public-sector stimulus packages and partly
to stock cycles. The situation is also improving on the financial markets.
Growing uncertainty as a result of the economic downturn and the poor
functioning of the financial markets were reflected in the difficulty of
customers in arranging funding, which in turn weakened demand especially for
construction solutions and products. Growth in seasonal demand in construction
during the summer months was far below that of earlier years. However, continued
good activity in renovation construction boosted demand for residential roofing
products, which was brisker than expected. A severe, early winter swept across
most of Europe and brought the construction season to a slightly earlier end
than in previous years. Road and railway construction continued to be good
throughout the year.
Deliveries to engineering industry customers decreased during the early part of
the year, especially in the lifting, handling and transportation equipment
industry. High stock levels throughout the supply chain weakened demand.
Deliveries to equipment manufacturers in the energy industry, both in wind and
diesel power plants remained good in the early part of the year, but tailed off
towards the end of the year when equipment manufacturers in the wind power
industry rescheduled or cancelled some projects. Customers' stocks decreased
considerably during the second half of the year, but order intake showed hardly
any improvement. Market conditions remained weak throughout the year in
shipbuilding and there were very few new orders. The trend within the
engineering industry to pursue further cost efficiency by transferring
production to lower cost countries strengthened during the past year.
Delivery volumes in the steel industry fell sharply in all customer sectors.
Demand for plates in particular was weak. High stock levels also partly
contributed to lower delivery volumes. De-stocking took much longer than
expected. Almost all actors in the steel industry adjusted production
considerably and the global capacity utilisation rate in the steel industry
averaged just 70 per cent and was even much lower in the EU-27 region. Global
crude steel production grew during the final months of the year compared to the
previous year, but production figures for 2009 as a whole still fell far short
of those for 2008. Crude steel production in the EU-27 region was around 30 per
cent less than during the previous year.
Prices of steel products fell noticeably during the year. International
agreements on the prices of the main raw materials - coal and iron ore - were
signed during the spring and early summer. These agreements to some extent
steadied the fall in the prices of steel products as uncertainty about raw
material costs faded. Selling prices in some product groups rose slightly during
the fourth quarter, although the picture mellowed again towards the end of the
year.
Net sales for 2009
Unless otherwise stated, the figures in brackets refer to the same period a year
earlier.
Consolidated net sales for 2009 were EUR 1,950 million (EUR 3,851 million
reported and EUR 3,829 million comparable).
The solutions businesses - Ruukki Construction and Ruukki Engineering -
accounted for 46 per cent (48) of consolidated net sales in 2009. Finland
accounted for 30 per cent (31) of consolidated net sales, the other Nordic
countries 31 per cent (31) and Central Eastern Europe, Russia and Ukraine for
19 per cent (20). The rest of Europe accounted for 14 per cent (15) of
consolidated net sales and other countries for 6 per cent (3).
Ruukki Construction's net sales for 2009 were EUR 589 million (1,067) and Ruukki
Engineering's net sales were EUR 312 million (765). Ruukki Metals' net sales
were EUR 1,050 million (EUR 2,019 million reported and EUR 1,997 million
comparable).
Ruukki Construction's net sales fell mostly because of weak demand. Business
activity in commercial and industrial construction in particular was low
throughout the report period. There was continued caution in investment
decisions and noticeably fewer new construction projects were started than in
previous years. Net sales of infrastructure construction declined noticeably
less than those of other construction sectors due to the good level of activity
in road and railway construction projects in the Nordic countries. Lower net
sales in this segment were largely attributable to continued low demand for
piles used in building foundations. Market conditions for residential roofing
products during 2009 were much weaker than in earlier years. However, a
significant share of renovation construction meant that sales volumes in this
segment contracted much less than in commercial and industrial construction.
Ruukki Engineering's delivery volumes fell sharply compared to 2008. Low
end-customer demand and de-stocking decreased order intake and net sales for the
year were down in all customer segments. The sharpest fall in net sales was in
shipbuilding and in the lifting, handling and transportation equipment industry.
Deliveries to equipment manufacturers in the energy industry, both in wind and
diesel power plants, continued at a good level compared to other customer groups
for the first three quarters, but there was a marked fall in deliveries,
especially in the wind power industry, during the fourth quarter. Selling prices
also contracted during the year. A large number of the division's annual
contracts expired during the summer and prices under new contracts were
noticeably lower than for the previous term of contract. This contributed to
weaker net sales during the second half of the year.
Ruukki Metals' delivery volumes of steel products remained exceptionally low
throughout the year. End-customer demand was weak and de-stocking by customers
led to a decrease in delivery volumes during the first three quarters of the
year. Sales volume development in colour-coated and galvanised strip products
was clearly better than in plate products. Sales of special steel products
decreased more than those of other product groups during the year because of
continued low activity in the main industrial sectors that use these products,
such as the heavy engineering industry. Special steel products accounted for 19
per cent (27) of Ruukki Metals' net sales during the year. Prices of steel
products fell noticeably during the first half of the year. The fall in prices
in a number of product groups bottomed out during the third quarter and in some
market areas selling prices showed a light rise towards the end of the quarter.
Fourth quarter net sales 2009
Consolidated net sales for the fourth quarter were EUR 521 million (847).
Ruukki Construction's fourth quarter net sales were EUR 147 million (248).
Caution in investment decisions also continued during the fourth quarter and
there was a low level of activity in commercial and industrial construction.
Supported by good activity in road and railway projects in the Nordic countries,
fourth quarter net sales in infrastructure construction remained at the same
level as last year. Many transport infrastructure projects were announced during
the second half of the year, but the impact of these on net sales was still not
significant during the period. An early winter sweeping in across almost the
whole of Europe brought the construction season to a slightly earlier end than
in previous years and demand weakened towards the end of the fourth quarter.
Ruukki Engineering's fourth quarter net sales were EUR 49 million (187). Lower
delivery volumes and selling prices meant net sales were down during the fourth
quarter. The fall in delivery volumes to customers in the lifting, handling and
transportation equipment industry bottomed out during the fourth quarter and
delivery volumes to forest and mining machine customers picked up slightly
compared to the third quarter. Delivery volumes in wind power were noticeably
down. The fall in selling prices bottomed out during the fourth quarter.
Ruukki Metals' fourth quarter net sales were EUR 325 million (412), which is 21
per cent less year on year, but 26 per cent quarter on quarter. Compared to the
third quarter, delivery volumes rose slightly as customers replenished their
stocks. Deliveries of plate products continued low. Sales of trading products -
stainless steel and aluminium - were to some extent better than during the first
three quarters. A slight rise in selling prices of steel products in certain
market areas towards the end of the third quarter reflected positively in fourth
quarter net sales.
Operating profit 2009
Consolidated reported negative operating profit for the period was -EUR 323
million (568), which equates to -17 per cent of net sales (15). Negative
operating profit excluding non-recurring items was -EUR 306 million (comparable
operating profit excluding non-recurring items was EUR 584 million), which
equates to -16 per cent of net sales (15 per cent comparable, excluding
non-recurring items). The impact of efficiency and cost-savings measures was
evident in the company's cost structure, gaining strength towards the end of the
report period.
Ruukki Construction's negative operating profit was -EUR 49 million (128
reported and 132 excluding non-recurring items). Ruukki Engineering's reported
negative operating profit was -EUR 33 million (126) and negative operating
profit excluding non-recurring items was -EUR 16 million (128). Ruukki Metals'
negative operating profit was -EUR 228 million (EUR 338 million reported and EUR
350 million comparable, excluding non-recurring items).
Ruukki Construction's operating profit fell as a result of lower sales volumes
and selling prices. Selling prices decreased in all market areas during the
first half of the year as a result of lower steel material prices and tougher
competition. Even though the fall in selling prices levelled off during the
course of the third quarter, delivery contracts signed at lower selling prices
in both components and projects weakened operating profit, especially during the
fourth quarter. The use of own steel material produced at high raw material
prices, together with the use of high-cost external material in stock, weakened
profitability, particularly during the first half of the year.
Ruukki Engineering's operating profit was weakened by lower delivery volumes,
lower selling prices and, during the first half of the year, the use of steel
material produced at high raw material prices. Owing to sluggish demand in the
shipbuilding industry, profitability has been particularly poor in the company's
Mo i Rana plant in Norway, which posted a negative operating profit of -EUR 30
million for 2009. Operations were reorganised at the Mo i Rana plant in July,
but owing to continued difficult market conditions, a decision was taken in
December to study the options for the future of the unit. Options include
possible discontinuation of operations at the unit until further notice.
Non-recurring items include a EUR 5 million charge from discontinuing operations
at the Hässleholm and Oskarstöm units in Sweden and stock writedowns and credit
loss provisions of EUR 12 million at the Mo i Rana plant in Norway. The
non-recurring charges relating to the Swedish units were recognised during the
second quarter and the items relating to Mo i Rana during the fourth quarter of
the year.
Ruukki Metals' negative operating profit was mainly due to the continued
sluggish demand for steel products and to poor price development in the early
part of the year. The low steel production capacity utilisation rate during the
first half of the year increased costs per unit of steel produced. The cost
impact of low utilisation in steel production was around -EUR 215 million for
the whole year. Due to the low steel production capacity utilisation rate,
emissions allowances remained unused and were sold on the market for EUR 34
million (5), of which EUR 31 million was scheduled during the fourth quarter.
During the second half of the year, costs per unit of steel produced fell as a
result of a higher capacity utilisation rate and lower prices of coal and iron
ore - the main raw materials used in steel production. The full impact of lower
raw material costs has been reflected in the company's cost structure since
towards the end of the third quarter. The operating profit on stainless steel
and aluminium was slightly negative in 2009.
Group writedowns on stocks totalled EUR 32 million and credit losses and credit
loss provisions were EUR 9 million during 2009.
Fourth quarter operating profit 2009
Consolidated negative operating profit for the fourth quarter was -EUR 39
million (62), equating to -8 per cent (7) of net sales. Negative operating
profit excluding non-recurring items was -EUR 27 million (comparable operating
profit, excluding non-recurring items was EUR 74 million), equating to -5 per
cent of net sales (9 per cent comparable, excluding non-recurring items).
Ruukki Construction's negative operating profit for the fourth quarter was -EUR
22 million (EUR 13 reported and EUR 17 million excluding non-recurring items).
Ruukki Engineering's reported negative operating profit was -EUR 23 million (26)
and negative operating profit excluding non-recurring items was -EUR 11 million
(27). Non-recurring items consist of stock writedowns and a credit loss
provision in respect of the Mo i Rana plant. Ruukki Metals' operating profit for
the fourth quarter was EUR 10 million (EUR 29 million reported and EUR 36
million comparable, excluding non-recurring items).
Financial items and result for 2009
Net finance expense and exchange rate differences relating to finance totalled
EUR 36 million (23), including an arrangement fee of around EUR 5 million, paid
in June, for a revolving credit facility. Net interest costs totalled EUR 26
million (11).
Group taxes were -EUR 84 million (142), which includes an increase of EUR 84
million (23) in deferred tax assets.
The result for the period was -EUR 275 million (406).
Earnings per share were -EUR 1.98 (2.93).
Balance sheet, cash flow and financing
The balance sheet total at year-end 2009 was EUR 2,532 million (2,983). Equity
was EUR 1,507 million (1,948) equating to EUR 10.85 per share (14.04). The
decrease in equity during the period was mainly attributable to the consolidated
negative result and to dividends of EUR 187 million paid to shareholders in
April.
The equity ratio at 31 December 2009 was 59.9 per cent (65.9) and the gearing
ratio 22.3 per cent (7.9). Net interest-bearing financial liabilities at
year-end 2009 were EUR 336 million (155). Net interest-bearing liabilities
increased by EUR 181 million during the year.
Return on equity in 2009 was -15.9 per cent (20.7) and return on capital
employed was -14.2 per cent (25.6).
Fixed assets at year-end 2009 were EUR 1,336 million, up by EUR 26 million
during the year. Acquisitions accounted for EUR 10 million of this increase.
Goodwill rose by EUR 5 million to EUR 103 million.
Cash flow from operating activities during 2009 was EUR 182 million (382) and
cash flow before financing activities was EUR 30 million (169). EUR 317 million
was released from net working capital during the period. Despite a negative
result, cash flow from operating activities during the fourth quarter was EUR
113 million, which was largely due to the release of net working capital.
At year-end 2009, the group had liquid assets of EUR 261 million and undrawn
committed revolving credit facilities of EUR 350 million. Repayments totalling
EUR 96 million of non-current interest-bearing debt is due in 2010.
In June, the company signed a revolving credit facility of EUR 350 million. The
loan replaced a credit facility of EUR 300 million signed in April 2005. The new
facility has a maturity of three years and can be used flexibly for general
corporate purposes. In November, the company issued a EUR 150 million domestic
bond targeted at institutional investors. The five-year bond carries an annual
fixed-rate coupon of 5.25 per cent and is the first tranche of a EUR 300 million
tap issue.
Also transferring management of the statutory pensions liability under the
Finnish Employees Pensions Act (TyEL) from the pension foundation to a pension
insurance company gives Ruukki greater flexibility to arrange funding by
enabling the re-borrowing of around EUR 360 million of funds.
Actions to improve operational efficiency and adjust operations
In October 2008, Ruukki initiated its corporate-wide Boost programme, which aims
at further operational efficiency and at permanently improving the company's
competitive edge and profitability. The programme aims at an improvement of EUR
150 million in the company's operating profit by the end of 2011. The programme
has progressed faster than originally planned and had an impact of EUR 72
million on consolidated profitability in 2009. The annualised impact of actions
initiated during 2009 is around EUR 90 million.
The largest single benefits were achieved from the centralisation of steel
service centre operations in the Nordic countries, improved supply chain
efficiency and from efficiency programmes in the construction business.
Ruukki Construction has improved operational efficiency by centralising
production on increasingly larger units in Finland, Estonia, Poland and Romania.
Correspondingly, sites have been closed in, among other places, Latvia,
Lithuania and the Czech Republic. The manufacture of construction products at
Biatorbagy in Hungary has also been discontinued until further notice.
Centralising operations has strengthened engineering competence in Central
Eastern Europe and China. Component production was discontinued at the
Hässleholm and Oskarström units in Sweden and, during the latter part of the
year, was transferred mostly to Poland. In addition, a decision was made to
study the options for the future of the Mo i Rana plant in Norway. Options
include discontinuing operations at the plant until further notice.
Ruukki Metals' efficiency measures include centralising parts processing on the
steel service centres in Raahe and Seinäjoki, closure of the Tampere steel
service centre and merging the two steel service centres in Järvenpää, Finland.
In addition to the operational excellence programme, Boost, temporary adjustment
measures are also under way across the company as a result of difficult market
conditions. Employer-employee negotiations relating to actions to improve
efficiency and to adjust operations resulted in a corporate-wide workforce
reduction of around 2,400 employees during the year. Around 680 of these
reductions were in Finland. At year-end, a total of some 700 employees (1,450 at
the end of September), of which 240 in Finland, were subject to temporary layoff
measures. In addition, around 400 people in Central Eastern Europe and the
Baltic states are working a four-day week until further notice. Cost savings
from temporary adjustment measures totalled around EUR 25 million in 2009.
Personnel
The group employed an average of 12,664 (14,953) persons during 2009. At
year-end, the headcount was 11,648 (14,286), which was spread as follows: 5,905
in Finland, 1,023 in the other Nordic countries, 2,163 in Central Eastern
Europe, 2,214 in Russia and other CIS countries, 79 in Western Europe and 264 in
other countries.
Staff salaries and other employee benefits were EUR 371 million (464). Nearly
all the group's personnel belong to the profit sharing scheme. Since the group
posted a negative result for 2009, no costs in respect of profit sharing were
booked in 2009 (2008: EUR 3 million).
No expenses (2008: EUR 1 million) in respect of the 2009 earning period of the
valid 2008-2010 share ownership plan were booked in 2009. Ninety-six executives
and other key personnel belong to the share ownership plan.
Positive progress was made with safety in 2009 and lost time accident frequency
improved to 8 (11) per million hours worked.
Changes in group structure
The manufacture of steel products (Ruukki Production) was merged with Ruukki
Metals as of 1 February 2009. The merger has improved efficiency and supply
chain management in the steel business. The group now comprises two business
areas - Ruukki Construction and Ruukki Engineering - specialising in the
solutions business and Ruukki Metals, which focuses on the steel business. The
group's segment reporting remains unchanged.
February saw the completion of the acquisition of the entire share capital of
Skalles Eiendomsselskap AS, one of Norway's leading steel frame suppliers. This
acquisition has strengthened Ruukki's foothold as a local actor in the Nordic
steel construction market. Skalles' total deliveries include the design,
manufacture and installation of steel structures.
Capital expenditure
Net cash flow from investing activities in 2009 was -EUR 153 million (-213).
Capital expenditure on tangible and intangible assets during the period was EUR
161 million (229), of which maintenance investments accounted for EUR 76 million
(76). A total of EUR 7 million (9) was spent on acquisitions. Other shares
increased by EUR 3 million (1). Cash inflows of EUR 17 million (25) from
investing activities during the period were mainly generated by divestments of
fixed assets.
Depreciation of fixed assets during the period was EUR 146 million (146).
A decision was made in April to modernise blast furnace 1 at the Raahe Steel
Works in Finland. Modernisation is planned to begin in April 2010. The company
is also planning to modernise blast furnace 2 during 2011. Blast furnace
modernisation is a necessary maintenance investment. Both blast furnaces will be
shut down in turn for around two months during the maintenance break. It is
expected to take between four and six weeks after start-up for the blast
furnaces to return to normal production levels.
In connection with blast furnace modernisation, the company will switch over to
using iron ore pellets instead of sinter as the sole raw material in the
iron-making process. The sinter plant currently in use will be closed down by
the end of 2011.
The investments planned for 2009-2011 to modernise the blast furnaces and change
the feedstock base total around EUR 220 million, in addition to which
environmental investments of some EUR 60 million are planned. Some EUR 46
million of the investments were made by the end of 2009. Some EUR 125 million of
investments are expected to be scheduled for 2010 and EUR 110 million for 2011.
Consolidated capital expenditure on tangible and intangible assets in 2010 is
expected to be in the region of EUR 180 million.
Annual General Meeting 2009
Rautaruukki Corporation's Annual General Meeting was held in Helsinki on 24
March 2009.
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. The Board of Directors appoints the company's
CEO.
The Annual General Meeting decided on the payment of a dividend for 2008 of EUR
1.35 per share to make a total dividend payout of EUR 187 million. The dividend
was paid on 8 April 2009.
The Annual General Meeting confirmed that the Board of Directors is to have
seven members. Reino Hanhinen, Maarit Aarni-Sirviö, Christer Granskog, Pirkko
Juntti, Kalle J. Korhonen and Liisa Leino were all re-elected to the Board.
Hannu Ryöppönen was elected as a new member to the Board. Reino Hanhinen was
appointed as chairman of the Board of Directors and Christer Granskog as deputy
chairman.
The Annual General Meeting confirmed that the Supervisory Board is to have nine
members. Marjo Matikainen-Kallström and Inkeri Kerola were re-elected as
chairperson and deputy chairperson of the Supervisory Board respectively. Heikki
Allonen, Turo Bergman, Miapetra Kumpula-Natri, Petteri Orpo, Jouko Skinnari and
Tapani Tölli were all re-elected to the Supervisory Board. Hans Sohlström was a
new appointment to the Board.
The Annual General Meeting re-appointed KHT audit firm KPMG Oy Ab as the
company's auditor. Pekka Pajamo KHT acts as Rautaruukki's principal auditor.
The Annual General Meeting resolved to amend Article 4 §3 of the company's
Articles of Association by deleting the right of the Ministry of Trade and
Industry (Ministry of Employment and the Economy since 1 January 2008) to
appoint a member to the Supervisory Board, and to amend Article 11 §1 so that
notice of the Annual General Meeting shall be sent no later than 21 days
(earlier 17 days) before the Meeting and is also to be published on the
company's website.
The Annual General Meeting granted the Board of Directors the authority to
acquire a maximum of 12,000,000 of the company's own shares. The authority is
valid for 18 months from the date of the resolution of the Annual General
Meeting and supersedes the authority granted by the Annual General Meeting held
on 2 April 2008 to acquire 12,000,000 shares.
The Annual General Meeting granted the Board of Directors the authority to
decide on a share issue, which includes the right to issue new shares or to
transfer treasury shares held by the company. The authority applies to a maximum
of 15,000,000 shares in total. The Board of Directors has the right to disapply
the pre-emption rights of existing shareholders in a private placement. The
authority also includes the right to decide on a bonus issue. The authority is
valid until the close of the 2011 Annual General Meeting.
The Annual General Meeting decided to establish a Nomination Committee to
prepare proposals regarding the composition and remuneration of the Board of
Directors to be elected at the following Annual General Meeting. Representatives
of the three largest shareholders as at 2 November 2009 were appointed to the
Nomination Committee. These representatives are Kari Järvinen, Managing
Director, Solidium Oy; Timo Ritakallio, Deputy Chief Executive Officer,
Ilmarinen Mutual Pension Insurance Company; Matti Vuoria, President and CEO,
Varma Mutual Pension Insurance Company. Reino Hanhinen, Chairman of
Rautaruukki's Board of Directors, and Hannu Ryöppönen, who was appointed by the
Board of Directors, serve as the Nomination Committee's expert members.
At its organisation meeting on 24 March 2009, the Board of Directors elected
members to its committees from among its members. Hannu Ryöppönen was elected as
chairman and Liisa Leino and Kalle J. Korhonen as members of the Audit
Committee. Reino Hanhinen was elected as chairman and Maarit Aarni-Sirviö and
Christer Granskog as members of the Remuneration Committee.
Changes in executive management
The merger of Ruukki Metals and Ruukki Production resulted in changes to the
composition of the Corporate Management Board and Extended Management Board. 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.
As of 1 March 2009, the Extended Management Board comprises, in addition to
members of the Corporate Management Board, Eija Hakakari, SVP Human Resources;
Olli Huuskonen, SVP General Counsel; Sakari Kallo, SVP Production, Ruukki
Metals; Markku Koljonen, Chief Technology Officer; Taina Kyllönen, SVP
Marketing; Petteri Laaksomo, SVP Supply Chain Management; Anne Pirilä, SVP
Corporate Communications and Investor Relations and Ismo Platan, Chief
Information Officer.
Shares and share capital
During 2009, Rautaruukki Oyj shares (RTRKS) were traded for a total of EUR
2,752 million (5,530) on NASDAQ OMX Helsinki. The highest price quoted was EUR
18.14 in September and the lowest was EUR 11.06 in January. The volume weighted
average price during the year was EUR 14.53. The share closed at EUR 16.14 on
the year and the company had a year-end market capitalisation of EUR 2,264
million (1,706).
In addition to NASDAQ OMX Helsinki, Rautaruukki's share is also traded on
multilateral trading facilities (MTF). According to information received by the
company, Rautaruukki shares were traded on multilateral trading facilities in
2009 for a total of EUR 284 million.
The company's registered share capital at 31 December 2009 was EUR 238.5 million
and there were 140,285,425 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.
During the course of the year, the share capital was increased by 29,946 shares
or EUR 50,908.20 as a result of subscriptions exercised under the 2003 bond loan
with warrants. The bond loan with warrants, which was issued on 26 May 2003 and
targeted at the personnel and Rautaruukki's Personnel Fund, entitled holders to
subscribe a maximum aggregate of 1,400,000 shares between 24 May 2006 and 23 May
2009. Warrants were exercised to subscribe a total of 1,398,980 shares (99.9 per
cent) and the share capital was increased by EUR 2,378,266.00 accordingly.
At year-end 2009, the company held 1,421,575 treasury shares, which had a market
value of EUR 22.9 million and an accountable par value of EUR 2.4 million.
Treasury shares account for 1.01 per cent of the total number of shares and
votes.
Until the close of the 2009 Annual General Meeting, the Board of Directors was
authorised to transfer a maximum of 13,785,381 treasury shares held by the
company. Under this authority, on 20 March 2009, the company transferred, a
total of 48,052 treasury shares under the terms and conditions of the share
ownership plan 2008-2010, to the 77 employees covered by the plan's first
earning period, 2008. A total of 2,690 shares were returned to the company.
The 2009 Annual General Meeting granted the Board of Directors the authority to
decide on a share issue and to acquire own shares. These authorities are
detailed under the section Annual General Meeting 2009. During 2009, the Board
of Directors did not exercise its authority to issue shares or the authorities
to acquire the company's own shares. The treasury shares held by the company and
the maximum number of own shares that can be acquired under the valid authority
equates to 9.6 per cent of the total number of shares issued.
At the end of the period, the Board of Directors had no valid authority to issue
options or other special rights providing entitlement to shares.
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 2009 and on
the company's website.
Disclosure notifications
During 2009, the company received one disclosure notification under Chapter 2,
Section 9 of the Finnish Securities Markets Act concerning the portion of
holdings. On 28 January 2009, Capital Research and Management Company notified
that the aggregate holding of Rautaruukki's shares and votes by the funds it
manages had, as at 26 January 2009, decreased to below 5 per cent.
After the report period, on 14 January 2010, the company received a disclosure
notification, under Chapter 2, Section 9 of the Finnish Securities Markets Act,
from Capital and Research Management Company (CRMC) that the aggregate holding
in Rautaruukki shares for the funds it manages had, as at 12 January 2010,
increased to above five (5) per cent. The number of Rautaruukki Oyj shares
notified by CRMC is 7,297,852 shares, which equate to 5.20 per cent of
Rautaruukki's share capital and votes.
Research and development
The company used EUR 29 million (27) on research and development in 2009. This
equates to 2 per cent (1) of net sales. The thrust of R&D was on projects
quickly delivering revenues or savings, as well as on strategically important
long-term development programmes. Compared to the previous year, the company
launched almost twice as many new products and solutions resulting from R&D.
The push for optimal energy efficiency is playing a key role in the company's
research and development activities. The company is pursuing energy efficiency
by among other things making lighter structures, developing construction
components and prefabrication technologies and by designing solutions to benefit
from renewable energy. In production process development, the thrust was on cost
efficiency and new production technologies.
The company launched a number of new products on the construction market in
2009. These products included the Decorrey steel roof, which was launched on the
Eastern European market, and the sound insulated Classic Premium steel roof. In
infrastructure construction, the company launched an improved RD drilled pile
system which, thanks especially to its advanced jointing technology,
considerably improves piling work efficiency.
The engineering business focused on cabin product development, with the main
thrust on process development aimed at migrating to project-driven production
flow - combining the supply chain, manufacturing and technical design expertise.
Product development in the steel business focused on utilising direct quenching
technology in strip and plate products. The technology was used to increase the
dimensional ranges of a number of special steels and to develop completely new
products.
In 2009, Ruukki was actively involved in establishing and launching the
activities of national Strategic Centres for Science, Technology and Innovation
(CSTI) in Finland. Ruukki is a shareholder in three CSTI companies - the Finnish
Metals and Engineering Competence Cluster (FIMECC Ltd), the Cluster for Energy
and Environment (CLEEN Ltd) and the built environment cluster (RYM Ltd) - that
are consistent with the company's strategic objectives. FIMECC's first research
programmes began in autumn 2009 and Ruukki is currently participating in four
five-year projects.
Energy and the environment
In 2009, environmental management highlighted the company's commitment to a
continuous improvement in energy efficiency. The principles of environmental
management are described in the company's environmental policy, under which
energy efficiency is important to the company from the aspect of the
environmental impacts of products and production.
Development of environmental matters takes place at the corporate level with the
help of shared environmental objectives and aims. Site-specific impact
assessments are considered when setting environmental objectives at each site.
Management reviews regularly track the achievement of objectives at sites and at
the corporate level. 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 (98) of production and 87 per
cent (80) of employees in 2009.
The company's sites in Raahe and Hämeenlinna, Finland come under the EU's
Emissions Trading Scheme and the Mo i Rana plant in Norway comes under the
Norwegian emissions trading scheme. At the start of 2009, the Norwegian
authority announced a continuation of Norway's national allocation plan under
which the Mo i Rana plant received 46 654 annual emissions allowances for the
period 2008-2012. In 2009, emissions allowances trading generated income of EUR
34 million (5).
In April, the company continued to manage its carbon balance by investing EUR
10 million in GreenStream Network Plc's Climate Opportunity Fund, a vehicle
purchasing carbon emissions reductions. The emissions reductions generated can
be used in emissions trading in 2013-2020.
Environmental investments of around EUR 60 million are planned in conjunction
with blast furnace modernisation. Closure of the sinter plant in the same
context will cut carbon dioxide emissions by 10 per cent or 500,000 tonnes a
year, dust emissions by 37 per cent and sulphur dioxide emissions by 64 per
cent. Likewise, energy consumption at the Raahe Steel Works will decrease by 8
per cent or 1.16 megawatt hours a year. This energy saving equates to the annual
energy consumption of around 60,000 single-family homes.
Environmental investments in 2009 totalled EUR 21 million (12).
During the course of 2009, Ruukki received a number of recognitions for its work
on the corporate responsibility front. In September, the company was chosen for
inclusion in the Dow Jones Sustainability World (DJSI World) index for the
second year running and in the Dow Jones STOXX Sustainability (DJSI STOXX) index
for the third year running. Ruukki ranks among the world's seven best steel
companies on the DJSI World list. In July, the World Steel Association awarded
the company a Climate Action certificate for 2009-2010 for fulfilling its
commitment to take part in the worldsteel Climate Action recognition programme
against climate change, which is part of the steel industry's commitment to
reduce carbon dioxide emissions.
More information about environmental matters can be found in the Annual Report
2009, in the environmental reports for the Raahe and Hämeenlinna works and on
the company's website.
Litigation and other pending legal actions
The European Commission continued investigations during 2009 into suspected
price collusion relating to the manufacture of prestressing steel between 1996
and 2001 by Ruukki's former subsidiary, Fundia. The Commission is investigating
dozens of European companies and Fundia's comparatively minor prestressing steel
business is not at the centre of the investigation. In February 2009,
Rautaruukki took part in an oral hearing of the matter under investigation and
in March, June and October, Ruukki replied to the European Commission's requests
for information about the company's financial position. The Commission is
continuing to investigate but at this stage of the proceedings it is difficult
to weigh up possible sanctions.
In August, the Ministry for Economic Development and Trade of the Russian
Federation issued its draft resolution concerning the anti-dumping of
colour-coated products to the Government of the Russian Federation. According to
the Ministry's draft resolution, no legal requirements exist to impose import
duties. Since the Government of the Russian Federation did not react to the
draft resolution within the deadline, the decision is final. If import duties
had been introduced, they would have affected exports of colour-coated products
to Russia.
In 2009, criminal proceedings were instigated in Sweden in respect of a case
concerning safety at work in which, as the result of a fatal accident at the
Kista Galleria construction site in Solna, Sweden in 2008, the prosecutor
demanded that one of Ruukki's employees be sentenced and that Ruukki Sverige AB
be ordered to pay a corporate fine. The judgment given by the court of first
instance on 15 January 2010 dismissed the claims against the company's employee
and Ruukki Sverige AB. Settlement of the loss and costs attributable to the
accident is still going on between the parties and insurance companies are still
completing claims processing.
Other events
Management of the statutory pensions liability under the Finnish Employees
Pensions Act (TyEL) of Rautaruukki's Pension Foundation was transferred to Varma
Mutual Pension Insurance Company on 31 December 2009. The pension liabilities
transferred by Rautaruukki's Pension Foundation at year-end 2009 totalled around
EUR 485 million. Transferring management of the Pension Foundation to Varma
gives Ruukki greater flexibility to arrange funding by enabling the re-borrowing
of funds. A surplus of around EUR 52 million accrued by the Foundation will be
refunded to the company in conjunction with the transfer. Around EUR 27 million
of this was scheduled for December 2009 and the refund of the remaining sum of
around EUR 25 million is scheduled for 2010. The transfer had no material impact
through profit and loss.
Risks and risk management
Risk management at Ruukki seeks to underpin the company's strategy, achievement
of targets and to ensure business continuity. Risk management is guided by the
operating principles and process of corporate risk management defined in the
risk management policy approved by the company's Board of Directors. Risk
management is an integrated part of the management system.
The global recession and ensuing rapid change in the business environment is
adversely affecting the business of Ruukki and its customers and is thus
impacting on demand for the company's products. It is difficult to predict how
soon market conditions will be restored and how fast the economy will return to
the growth track. Ruukki is taking uncertain and rapidly changing market
conditions into account by securing its financial position and by aligning
production and costs to demand.
Rapidly changed market conditions showed the demand drivers for Ruukki's
businesses to be very similar, with an emphasis on new industrial investments.
The solutions businesses - construction and engineering - and special steel
products still do not account for a sufficiently large share of consolidated net
sales to balance the impacts of global recession. Balancing the group's business
structure geographically (emerging vs mature markets) and in relation to the
factors driving demand (investment- vs consumer-driven demand) is one of the
company's strategic intents. Achieving this intent is taken into account, for
example, in expansion of the sales and distribution network and in possible
acquisitions.
Finland and the other Nordic countries account for most of the company's net
sales. The company's business might be adversely affected by a major change in
the competitive situation on the company's home markets or, for example, by
customers relocating to lower cost countries owing to weak market conditions.
Ruukki has prepared for trends of this kind by building its own production
capacity in Eastern Europe and China, by developing an international
distribution network for special steel products and by securing its market share
in the home market.
International comparison shows the company's steel production to be competitive,
but small in terms of volume. Crude steel production takes place using two blast
furnaces integrated into one production unit. This means that steel production
has limited flexibility compared to large competitors, who have a number of
production units and who can optimise production between several units. The
company has prepared for this risk by improving cost efficiency and production
flexibility.
The availability, price and freight charges of iron ore, coal and other main raw
materials used in steel production are determined on the world market. This can
make the price of raw materials very volatile. Derivatives are used to manage
the price risk of electricity and zinc. Availability risks are managed through
long-term contracts to source the main materials and energy used in steel
production. The group generates almost half of the electricity it uses by
utilising the gases released in production processes. The main raw materials
used in steel production are priced in US dollars. This exposes the group to a
currency risk because the group has only very minor sales denominated in US
dollars. Derivatives are used to hedge against the currency risk.
The additional costs brought about by increasingly stricter environmental
regulations and carbon emissions trading impact on the company's investments and
competitiveness, especially if the same requirements do not apply equally to all
players in the field. The company has taken thorough steps to anticipate and
actively track changes in environmental legislation.
Information about the company's risk management is detailed in the Annual Report
2009.
Near-term outlook
Market conditions in almost all customer segments and market areas have
stabilised and demand is picking up in some segments. There has been a clear
improvement in the availability of funding. However, in certain market areas,
such as Russia and some parts of Central Eastern Europe, high interest rates
continue to impede the start-up of investments. Likewise, the low industrial
capacity utilisation rate might impact on the demand for investment-driven
products.
The worst of the construction market downturn is over. Construction activity in
the Nordic countries and a number of countries in Central Eastern Europe is
expected to level off and in Poland, for example, to show slight growth.
Infrastructure construction activity is expected to continue to be good in the
Nordic countries and especially in Poland, the Czech Republic and Russia to grow
compared to the previous year. Difficult market conditions persist in commercial
and industrial construction. If the price of oil remains at its present level or
rises, this is expected to some extent to boost construction in Russia. A
further decline in construction activity in the Baltic states and Hungary is
expected during 2010.
No significant change is expected in market conditions in the engineering
industry during the first half of the year. The long-term market outlook in
equipment for the energy industry is good and demand is expected to recover
noticeably from its present level during the course of 2010. Demand in the
lifting, handling and transportation equipment industry has stabilised at a low
level. Order intake volumes have started to grow in mining and forest machines.
Demand in the shipbuilding industry is expected to decline compared to the
previous year.
Except for selling prices, the basis for the steel business is much better for
2010 than it was for last year. It is believed there will be an increase in
delivery volumes compared to the exceptionally low level experienced in 2009.
Worldsteel forecasts growth of more than 12 per cent in apparent steel use in
the EU-27 region in 2010. Good demand in the automotive industry is estimated to
continue and demand is expected to begin to improve in the heavy engineering
industry. Delivery volumes of special steel products are estimated to increase
compared to the previous year as demand picks up in these industries. An
expansion of the distribution network into China and Turkey also supports sales
of special steel products.
Modernisation of blast furnace 1 beginning in April 2010 will reduce the steel
production capacity utilisation rate. The company has prepared for a two-month
disruption to production by building up its slab stocks to safeguard customer
deliveries. The low capacity utilisation rate during blast furnace maintenance
is expected to have a cost impact of around -EUR 25 million during the second
quarter. Prices for the main raw materials used in steel production have not yet
been agreed for the current year.
Thanks to actions initiated during 2009 to permanently improve efficiency, the
company's cost structure is significantly lighter than in previous years. The
annualised impact on profitability of actions initiated is around EUR 90
million. The operational excellence programme continues until the end of 2011
and aims at an improvement of EUR 150 million in operating profit.
Based on the above factors, the company estimates a 15-20 per cent year-on-year
growth in net sales in 2010. Profitability is expected to improve significantly
compared to the previous year and the full-year result before income tax is
estimated to be positive.
Board of Directors' proposal for the disposal of distributable funds
The parent company's distributable equity at 31 December 2009 was EUR 698
million.
The Board of Directors has decided to propose to the Annual General Meeting to
be held on 23 March 2010 that a dividend of EUR 0.45 per share (1.35) be paid
for 2009. Under the proposal, the total amount of dividend payable is EUR 62
million. It is proposed to pay the dividend on 8 April 2010.
The figures for the report period contained in this financial statement bulletin
have been audited.
Helsinki, 3 February 2010
Rautaruukki Corporation
Board of Directors
BUSINESS AREAS
Ruukki Construction
+-------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+----+
|EUR million |Q1/08|Q2/08|Q3/08|Q4/08|2008 |Q1/09|Q2/09|Q3/09|Q4/09|2009|
+-------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+----+
|Net sales |225 |285 |309 |248 |1 067|132 |145 |164 |147 |589 |
+-------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+----+
|Operating profit * |21 |38 |56 |17 |132 |-13 |-9 |-4 |-22 |-49 |
+-------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+----+
|as % of net sales *|9 |13 |18 |7 |12 |-10 |-6 |-3 |-15 |-8 |
+-------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+----+
|* Excluding non-recurring items. |
+------------------------------------------------------------------------------+
Net sales
Ruukki Construction's net sales for 2009 were 45 per cent down year on year at
EUR 589 million (1,067). The construction business accounted for 30 per cent
(28) of consolidated net sales. Fourth quarter net sales were EUR 147 million
(248).
Net sales fell mostly because of weak demand. Business activity in commercial
and industrial construction in particular was low throughout the report period.
Caution in investment decisions also continued during the fourth quarter and
noticeably fewer construction projects were started than in previous years. The
start of projects has been delayed in a number of market areas and, in some
countries in Central Eastern Europe, Russia and Ukraine, projects were even
discontinued. In Russia, and partly also in other market areas, publicly funded
projects, such as the construction of sports facilities and agricultural
buildings, accounted for a noticeably higher share of the division's net sales.
In Russia, deliveries for construction projects in the energy industry continued
to be brisker than for those in other industrial sectors.
Fourth quarter net sales in infrastructure construction remained at the previous
year's level, but were down for the period as a whole. Lower net sales were
largely attributable to continued low demand for piles used in building
foundation construction. There was a good level of activity in road and railway
projects in the Nordic countries. Many transport infrastructure projects were
announced during the second half of the year, but the impact of these on net
sales was still not significant during the report period. Infrastructure
construction products accounted for 15 per cent (11) of Ruukki Construction's
net sales in 2009.
Market conditions for residential roofing products were noticeably weaker in
2009 than in earlier years. However, sales volumes in this segment declined much
less than in commercial and industrial construction because of the significant
share of renovation construction in this segment and Ruukki's new product
launches. An early winter sweeping in across almost the whole of Europe brought
the construction season to a slightly earlier end than in previous years and
demand weakened towards the end of the fourth quarter. Residential roofing
products accounted for 19 per cent (16) of Ruukki Construction's net sales in
2009.
Operating profit
Ruukki Construction's negative operating profit was -EUR 49 million (EUR 128
million reported and EUR 132 million excluding non-recurring items) for 2009 and
fourth quarter negative operating profit -EUR 22 million (EUR 13 million
reported and EUR 17 million excluding non-recurring items). Operating profit
fell as a result of lower sales volumes and selling prices. Selling prices
decreased in all market areas during the first half of the year as a result of
lower steel material prices and tougher competition. Even though the fall in
selling prices levelled off during the course of the third quarter, delivery
contracts signed at lower selling prices in both components and projects
weakened operating profit, especially during the fourth quarter. Selling price
development differed greatly between product groups.
The use of own steel material produced at high raw material prices, together
with the use of high-cost external material in stock, impacted on profitability,
particularly during the first half of the year.
Major orders
Ruukki Construction signed a number of major delivery contracts during 2009. The
biggest contract was for the manufacture and installation of steel structures
and roofing elements for a new multi-purpose stadium to be built in Stockholm,
Sweden. Other major contracts included the steel structures and fire protection
design for a new sports centre in the Salmisaari district of Helsinki; design,
manufacture and installation of the steel structures for production premises to
be built near Bergen, Norway; the steel structures, including installation, and
steel piles for the foundations for Kråkeröy bascule bridge in Fredrikstad,
Norway and the manufacture and installation of the steel frame, together with
the design, manufacture and installation of envelope structures for a boiler
plant to be built in Kuopio, Finland.
In addition, a number of other significant delivery contracts, mostly for
transport infrastructure projects, were agreed during the fourth quarter.
October saw the agreement of a contract for the delivery and installation of
steel structures for a bridge over the Kyrönsalmi strait in Savonlinna, Finland.
In November, Ruukki signed a contract to deliver steel structures for three road
bridges and a railway bridge for the E6 road project in Sweden, contracts to
deliver components for bridge projects in Vladivostok, Russia and Warsaw, Poland
and a contract for the delivery and installation of steel structures for the
Lövö bridge project in southwest Finland. December saw the company agree
contracts for the steel structures and delivery of foundation piles for the
Särkijärvi bridge in Tampere, Finland and for the delivery of steel pipe piles
for the foundations for more than 20 bridges in the highway 5 improvement
project in Kuopio, Finland.
The above contracts are testimony to Ruukki's strong track record in road and
railway projects in the Nordic countries.
Capital expenditure, business and product development
Ruukki Construction's capital expenditure in 2009 totalled EUR 37 million (74).
Acquisition of the entire share capital of Skalles Eiendomsselskap AS and
construction of the new sandwich panel plant at Alajärvi, Finland were the most
significant investments during the period.
Acquisition of Skalles, one of Norway's leading steel frame suppliers, was
completed in February and has strengthened Ruukki's foothold as a local actor in
the Nordic steel construction market. Skalles' total deliveries include the
design, manufacture and installation of steel structures.
The new sandwich panel plant at Alajärvi came on stream during the fourth
quarter. Thanks to its high degree of automation, the plant will improve the
cost competitiveness. The new line at the new plant will also ensure Ruukki's
ability to manufacture panels that comply with tougher energy regulations that
entered into force at the start of 2010.
Construction of the sandwich panel line being built in Ukraine under an
investment programme to increase production capacity in Russia and Eastern
Europe is still incomplete. In the light of market conditions, the installation
and start-up of the line have been pushed back and it is planned to complete the
investment during spring 2010. The new panel plant investment under construction
in Obninsk, Russia has been discontinued until further notice.
A number of new products were launched on the construction market in 2009. These
products included the Decorrey steel roof, which was launched on the Eastern
European market, and the sound insulated steel roof, Classic Premium. In
infrastructure construction, the report period saw the launch of an improved RD
drilled pile system which, especially thanks to its advanced jointing
technology, considerably improves piling work efficiency.
Improved operational efficiency
Under the corporate-wide operational excellence programme, Boost, the division
actioned a number of
production arrangements between sites during the year. Operational efficiency
has been improved by centralising production on increasingly larger units in
Finland, Estonia, Poland and Romania. This has resulted in the closure of
production sites in Latvia, Lithuania and the Czech Republic. The manufacture of
construction products was discontinued at Kalajoki in Finland and since the
second quarter of the year the plant has switched over to making components for
the engineering industry. During the fourth quarter, production of roof and
facade profiles at the Biatorbagy plant in Hungary was transferred to larger
units in Poland and Romania. The manufacture of construction products at
Biatorbagy has been discontinued until further notice. An efficiency programme
was completed at Oborniki in Poland during the third quarter and a corresponding
programme at Obninsk in Russia during the fourth quarter.
In December, a decision was made to further improve operational efficiency and
adjust operations in Finland by streamlining the organisation and operating
model and by improving production efficiency at the plants in Vimpeli, Alajärvi
and Peräseinäjoki. Employer-employee negotiations initiated due to these actions
ended in January 2010 and resulted in the loss of 52 jobs.
Other events during the report period
During the year, Ruukki received awards for steel construction in the Nordic
countries. In May, the Swedish Institute of Steel Construction chose Swedbank
Stadium as the Swedish steel construction of the year. Ruukki was responsible
for the design, manufacture and installation of the steel structures for the
stadium in Malmö, Sweden. The Swedish Institute of Steel Construction gives an
award every other year for an innovatively constructed, architecturally
impressive steel structured building.
The Ypsilon pedestrian bridge in Drammen, delivered by Ruukki, was chosen as the
2009 steel construction of the year in Norway. The award is made by the
Norwegian Steel Association and Norwegian Structural Steel Association every
other year for an innovatively constructed, architecturally impressive steel
construction or structure. The Y-shaped bridge has previously received a
Certificate of Nomination in the ECCS Awards for Steel Bridges.
Ruukki Engineering
+-------------------+-----+-----+-----+-----+----+-----+-----+-----+-----+----+
|EUR million |Q1/08|Q2/08|Q3/08|Q4/08|2008|Q1/09|Q2/09|Q3/09|Q4/09|2009|
+-------------------+-----+-----+-----+-----+----+-----+-----+-----+-----+----+
|Net sales |188 |205 |184 |187 |765 |125 |75 |63 |49 |312 |
+-------------------+-----+-----+-----+-----+----+-----+-----+-----+-----+----+
|Operating profit * |32 |35 |34 |27 |128 |5 |-2 |-7 |-11 |-16 |+-------------------+-----+-----+-----+-----+----+-----+-----+-----+-----+----+
|as % of net sales *|17 |17 |19 |14 |17 |4 |-3 |-12 |-23 |-5 |
+-------------------+-----+-----+-----+-----+----+-----+-----+-----+-----+----+
|* Excluding non-recurring items. |
+-----------------------------------------------------------------------------+
Net sales
Ruukki Engineering's net sales for 2009 were EUR 312 million (765), down by 59
per cent year on year. The engineering business accounted for 16 per cent (20)
of consolidated net sales. Fourth quarter net sales were down considerably year
on year at EUR 49 million (187).
Delivery volumes fell sharply compared to 2008. Low end-customer demand and
de-stocking decreased order intake and net sales for the year were down in all
customer segments. The sharpest fall in net sales in 2009 was in shipbuilding
and in the lifting, handling and transportation equipment industry. The fall in
delivery volumes to customers in the lifting, handling and transportation
equipment industry bottomed out during the fourth quarter and delivery volumes
to forest and mining machine customers picked up slightly compared to the third
quarter.
Deliveries to equipment manufacturers in the energy industry, both in wind and
diesel power plants, continued at a good level compared to other customer groups
for the first three quarters, but there was a marked fall in deliveries,
especially to the wind power industry, during the last quarter.
Selling prices also contracted. A large number of the division's annual
contracts expired during the summer and prices under new contracts were lower
than for the previous term of contract. This contributed to weaker net sales
during the second half of the year. The fall in selling prices levelled off
during the fourth quarter.
Manufacturers of lifting, handling and transportation equipment accounted for
38 per cent (43) of Engineering's net sales for 2009 and equipment manufacturers
in the energy industry for 35 per cent (21).
Operating profit
Ruukki Engineering's reported negative operating profit was -EUR 33 million
(126) for 2009 and the negative operating profit excluding non-recurring items
was -EUR 16 million (128). Ruukki Engineering's fourth quarter reported negative
operating profit was -EUR 23 million (26) and negative operating profit
excluding non-recurring items was -EUR 11 million (27).
Operating profit for the period was weakened by lower delivery volumes, lower
selling prices and, during the first half of the year, the use of steel material
produced at high raw material prices.
Owing to sluggish demand in the shipbuilding industry, profitability was
particularly poor in the company's Mo i Rana plant in Norway, which posted a
negative operating profit of -EUR 30 million for 2009. Operations were
reorganised at the Mo i Rana plant in July, but owing to continued difficult
market conditions, a decision was taken in December to study the options for the
future of the unit. Options include possible discontinuation of operations at
the plant until further notice.
Non-recurring items include a EUR 5 million charge from discontinuing operations
at the Hässleholm and Oskarstöm units in Sweden and stock writedowns and credit
loss provisions of EUR 12 million at the Mo i Rana plant in Norway. The
non-recurring charges relating to the Swedish units were recognised during the
second quarter and the items relating to Mo i Rana during the fourth quarter of
the year.
Capital expenditure, business and product development
Ruukki Engineering's capital expenditure in 2009 totalled EUR 13 million (19).
The division has systematically invested in new manufacturing technology to
improve production efficiency, quality and delivery accuracy.
The report period saw the completion of a project to improve machining
operations at the Sepänkylä unit in Finland and the new equipment was brought
into use during the second quarter. In Finland, installation of two robot cells
at the cabin assembly unit in Kurikka and a project to automate welding
operations at the Peräseinäjoki site were completed during the third quarter. A
machining investment at Jaszbereny in Hungary was completed during the fourth
quarter.
Operations in Shanghai, China expanded into new premises during the first
quarter. The new lines serve customers in the lifting, handling and
transportation equipment industry and in equipment manufacturing for the energy
industry. The first cabins rolled off the lines during the second quarter.
Product development focused on cabins, with the main thrust on process
development aimed at migrating to project-driven production flow - combining the
supply chain, manufacturing and technical design expertise.
In September, Ruukki Engineering received multi-site certification, which
encompasses ISO 9001:2000 quality management certification, ISO 14001:2004
environmental management certification and ISO 3834-2 quality requirements for
fusion welding of metallic materials. Multi-site certification covers all Ruukki
Engineering's management systems and processes at both unit and divisional
level.
Improved operational efficiency
Ruukki Engineering improved operational efficiency by transferring production
lines and adjusting production. During the first quarter, production at the
Hatvan site in Hungary was transferred to the Jaszbereny component plant. The
plant at Kalajoki that earlier served construction customers was adapted to make
components for the engineering industry.
The Hässleholm and Oskarström units in Sweden were closed during 2009 and the
production equipment was transferred mostly to the company's plant in Poland.
These actions were taken to centralise the company's operations and to
strengthen its engineering competences in future growth areas, particularly in
Central Eastern Europe and China.
In July, a decision was taken to reorganise operations at the plant in Mo i
Rana, Norway due to weak demand in the shipbuilding industry. The workforce
reductions arising from adjusting operations were implemented during the latter
part of the year. Owing to continued difficult market conditions, a decision was
taken in December to study the options for the future of the unit. Options
include possible discontinuation of operations at the plant until further
notice. In this connection, worker consultations with the around 110 persons
affected were initiated.
In December, plans were announced to transfer the manufacture of engineering
components at the Peräseinäjoki unit to Ruukki's other units. Employer-employee
negotiations initiated in this context ended in January 2010.
Other events during the report period
Towards the end of the year, Ruukki decided to switch over from a
customer-industry-based approach to a product-based approach. The main future
focus areas in the engineering business are cabins, booms, equipment for the
energy industry and medium-heavy and heavy welded structures. The company aims
to strengthen its own design expertise in engineering industry products, such as
cabins.
Ruukki Metals
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|EUR million |Q1/08|Q2/08|Q3/08|Q4/08|2008 |Q1/09|Q2/09|Q3/09|Q4/09|2009 |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|Net sales |511 |571 |503 |412 |1 997|249 |218 |257 |325 |1 050|
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|Operating profit *|96 |106 |112 |36 |350 |-102 |-97 |-39 |10 |-228 |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|as % of net sales |19 |19 |22 |9 |18 |-41 |-44 |-15 |3 |-22 |
|* | | | | | | | | | | |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|All figures are comparable and exclude Carl Froh GmbH, which was divested. |
+------------------------------------------------------------------------------+
|* Excluding non-recurring items. |
+------------------------------------------------------------------------------+
Net sales
Ruukki Metals' net sales were EUR 1,050 million (EUR 2,019 million reported and
EUR 1,997 million comparable) and accounted for 54 per cent (52) of consolidated
net sales. Ruukki Metals' fourth quarter net sales were EUR 325 million (412),
which is 21 per cent less year on year, but 26 per cent higher quarter on
quarter.
Delivery volumes of steel products remained exceptionally low throughout the
year. End-customer demand was weak and de-stocking by customers led to a
decrease in delivery volumes during the three first quarters of the year.
Compared to the third quarter, delivery volumes rose slightly during the fourth
quarter as customers replenished their stocks. Sales volume development in
colour-coated and galvanised strip products was clearly better than in plate
products. Delivery volumes of plate products remained low also during the fourth
quarter.
Prices of steel products fell noticeably during the first half of the year.
However, the fall in prices in a number of product groups bottomed out during
the third quarter and in some market areas selling prices showed a light rise
towards the end of the quarter. This had a positive impact on fourth quarter net
sales.
Sales of special steel products decreased more than those of other product
groups during the year because of continued low activity in the main industrial
sectors that use these products, such as the heavy engineering industry. Special
steel products accounted for 19 per cent (27) of Ruukki Metals' net sales during
the year. Net sales of stainless steel and aluminium sold as trading products
were also down year on year at EUR 104 million (224). However, sales of these
products picked up somewhat towards the year end.
Operating profit
Ruukki Metals' negative operating profit was -EUR 228 million for 2009 (EUR 338
million reported and EUR 350 million comparable, excluding non-recurring items)
and the operating profit for the fourth quarter of 2009 was EUR 10 million (EUR
29 million reported and EUR 36 million comparable, excluding non-recurring
items).
Negative operating profit for the report period was mainly due to the continued
sluggish demand for steel products and to poor price development in the early
part of the year. The low steel production capacity utilisation rate during the
first half of the year increased costs per unit of steel produced. The capacity
utilisation rate rose during the second half of the year when both blast
furnaces were in operation and the cost impact attributable to low capacity
utilisation decreased significantly. The cost impact was -EUR 215 million for
the entire year (Q1: -EUR 90 million; Q2: -EUR 70 million; Q3: -EUR 30 million
and Q4: -EUR 25 million). Due to the low steel production capacity utilisation
rate, emissions allowances remained unused and were sold on the market for EUR
34 million (5), of which EUR 31 million was scheduled in the fourth quarter.
During the second half of the year, the fall in the price of coal and iron ore -
the main raw materials used in steel production - also lowered costs per unit of
steel produced. The full impact of this fall in prices has been reflected in the
company's cost structure since towards the end of the third quarter.
The operating profit on stainless steel and aluminium - sold as trading products
- was slightly negative in 2009. However, profitability improved towards the end
of the year and the fourth quarter showed an operating profit. Profitability
improved on the back of positive price development and improved operational
efficiency.
Steel production
+----------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|1000 tonnes |Q1/08|Q2/08|Q3/08|Q4/08|2008 |Q1/09|Q2/09|Q3/09|Q4/09|2009 |
+----------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|Steel production|672 |680 |703 |531 |2 585|269 |392 |604 |628 |1 892|
+----------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
The company's steel production in 2009 was 1,892 thousand tonnes (2,585).
The blast furnace which had been idle since December 2008 at the Raahe Steel
Works was restarted in early May and reached its target capacity utilisation
rate of around 80 per cent in mid-June, since when it has operated at an average
rate of around 85 per cent. Blast furnace start-up went as planned. The idle
blast furnace was restarted to build up reserve stocks to safeguard
uninterrupted customer deliveries during disruption to production for the period
of downtime in 2010 whilst maintenance work is being carried out. The blast
furnace will be idle for about two months and it is expected to take between
four and six weeks from start-up before it returns to normal production levels.
The capacity utilisation rate was below 50 per cent during the first half of the
year, when blast furnace 1 was idle.
There were nine strikes in steel production during the year and two strikes by
salaried employees. These strikes resulted in lost production and a
deterioration in delivery accuracy.
Capital expenditure, business and product development
Ruukki Metals' capital expenditure in 2009 totalled EUR 107 million (129).
A decision was made in April to modernise blast furnace 1 at the Raahe Steel
Works in Finland. The company is also planning to modernise blast furnace 2
during 2011. Blast furnace modernisation is a necessary maintenance investment.
Environmental investments are also planned in the same context. Modernisation of
blast furnace 1 is planned to begin in April 2010. In connection with blast
furnace modernisation, the company will switch over to using iron ore pellets
instead of sinter as the sole raw material in the iron-making process. The
sinter plant currently in use will be closed down by the end of 2011.
The investments planned for 2009-2011 to modernise the blast furnaces and change
the feedstock base total around EUR 220 million, in addition to which
environmental investments of some EUR 60 million are planned. Some EUR 46million of the investments were made by the end of 2009. Some EUR 125 million of
investments are expected to be scheduled for 2010 and EUR 110 million for 2011.
The company expanded its offering of special steel products during the second
half of the year with the launch of Optim 1500 QC, the world's strongest
hot-rolled structural steel. This ultra high-strength steel is an ideal material
for the structures of earth-moving machinery, for example. Optim 1500 QC steel
is made using a direct quenching method developed by Ruukki.
In addition to product launches, the company also developed its special steel
products business in 2009 by opening sales offices in Turkey and China.
Expansion of the sales network also underpins Ruukki's strategic intent of
becoming one of the leading European providers of special steel products. It
also improves customer service and shortens delivery times.
Improved operational efficiency
Ruukki Metals' efficiency measures in Finland included centralising parts
processing on steel service centres in Raahe and Seinäjoki, and in this context,
closure of the Tampere steel service centre. These measures were completed
during the course of the second quarter. In December, it was announced that in
Järvenpää, Finland, the Puurtajankatu steel service centre was to be merged with
the Asponkatu steel service centre. The steel service centres in Seinäjoki and
Raahe were merged to form one service centre organisation and operations at the
Hyvinkää steel service centre were reorganised.
Operational efficiency was further improved by discontinuing the production of
spiral-welded gas pipes at Oulainen, Finland. Production of these pipes is not
part of the company's core business.
Other events during the report period
Ruukki Production, which was responsible for the manufacture of steel products,
was merged with Ruukki Metals as of 1 February 2009. The merger streamlined the
corporate structure and improved efficiency and supply chain management in the
steel business.
TABLES
This financial statement bulletin has been prepared in accordance with IAS 34
and, with the exception of the following new and amended standards effective
from 1 January 2009, is in conformity with the accounting policies published in
the 2008 financial statements:
IAS 1 Presentation of Financial Statements. The revised standard aims to improve
users' ability to analyse and compare the information presented in the financial
statements by separating changes in equity of an entity arising from
transactions with owners from other changes in equity.
IFRS 8 Operating Segments. This new standard requires the company to apply the"management approach" to reporting the financial performance of its operating
segments. This means that the information disclosed must be based on the
information management uses internally to evaluate segment performance. Adoption
of the standard has not impacted on the group's segment structure.
IAS 23 Borrowing Costs. The amended standard requires an entity to capitalise
borrowing costs directly attributable to the acquisition, construction or
production of a qualifying asset as part of the cost of that asset. The group
applies the capitalisation rate to calculate the interest to be capitalised. The
amended standard has had no material impact on the group.
IFRS 2 Share-based payments amendments to the standard - Vesting Conditions and
Cancellations. The amendments clarify the accounting treatment of vesting
conditions and provide that cancellations by the company or other parties
receive similar accounting treatment.
Additionally, the Group has changed the presentation of the income statement
from the "nature of expense" method to the "function of expense" method. The
comparable figures have been restated accordingly.
Individual figures and totals appearing in the tables have been rounded to the
nearest full million of euros.
+---------------------------------------------------+-----+-----+-----+
|CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | | | |
+---------------------------------------------+-----+-----+-----+-----+
|EUR million |2009 |2008 |Q4/09|Q4/08|
+---------------------------------------------+-----+-----+-----+-----+
|Net sales |1 950|3 851|521 |847 |
+---------------------------------------------+-----+-----+-----+-----+
|Cost of sales |2 027|2 980|496 |715 |
+---------------------------------------------+-----+-----+-----+-----+
|Gross profit |-77 |872 |25 |132 |
+---------------------------------------------+-----+-----+-----+-----+
+---------------------------------------------+-----+-----+-----+-----+
|Other income |20 |31 |6 |13 |
+---------------------------------------------+-----+-----+-----+-----+
|Selling and marketing expenses |113 |148 |31 |40 |
+---------------------------------------------+-----+-----+-----+-----+
|Administrative expenses |151 |177 |38 |42 |
+---------------------------------------------+-----+-----+-----+-----+
|Other expenses |2 |10 |1 |0 |
+---------------------------------------------+-----+-----+-----+-----+
|Operating profit |-323 |568 |-39 |62 |
+---------------------------------------------+-----+-----+-----+-----+
+---------------------------------------------+-----+-----+-----+-----+
|Finance income |81 |98 |9 |50 |
+---------------------------------------------+-----+-----+-----+-----+
|Finance costs |117 |121 |16 |68 |
+---------------------------------------------+-----+-----+-----+-----+
|Net finance costs |-36 |-23 |-7 |-18 |
+---------------------------------------------+-----+-----+-----+-----+
+---------------------------------------------+-----+-----+-----+-----+
|Share of profit of equity accounted investees|0 |3 |0 |0 |
+---------------------------------------------+-----+-----+-----+-----+
|Result before income tax |-359 |548 |-46 |45 |
+---------------------------------------------+-----+-----+-----+-----+
|Income tax expense |84 |-142 |0 |-7 |
+---------------------------------------------+-----+-----+-----+-----+
|Result for the period |-275 |406 |-46 |37 |
+---------------------------------------------+-----+-----+-----+-----+
+---------------------------------------------+-----+-----+-----+-----+
|Attributable to: | | | | |
+---------------------------------------------+-----+-----+-----+-----+
|Owners of the Company |-275 |406 |-46 |38 |
+---------------------------------------------+-----+-----+-----+-----+
|Non-controlling interest |0 |-1 |0 |-1 |
+---------------------------------------------+-----+-----+-----+-----+
+---------------------------------------------+-----+-----+-----+-----+
|Diluted, EUR |-1.98|2.93 |-0.33|0.27 |
+---------------------------------------------+-----+-----+-----+-----+
|Basic, EUR |-1.98|2.93 |-0.33|0.27 |
+---------------------------------------------+-----+-----+-----+-----+
|Operating profit as % of net sales |-16.6|14.7 |-7.5 |7.3 |
+---------------------------------------------+-----+-----+-----+-----+
+--------------------------+-----------------------------+----+----+-----+-----+
|OTHER COMPREHENSIVE INCOME| | | | | |
+--------------------------+-----------------------------+----+----+-----+-----+
|EUR million |2009|2008|Q4/09|Q4/08|
+--------------------------------------------------------+----+----+-----+-----+
|Result for the period |-275|406 |-46 |37 |
+--------------------------------------------------------+----+----+-----+-----+
|Other comprehensive income: | | | | |
+--------------------------------------------------------+----+----+-----+-----+
|Effective portion of changes in fair value of cash flow |51 |-62 |23 |-40 |
|hedges | | | | |
+--------------------------------------------------------+----+----+-----+-----+
|Translation differences |-5 |-54 |-6 |-52 |
+--------------------------------------------------------+----+----+-----+-----+
|Actuarial gains and losses |-15 |-62 |-15 |-15 |
+--------------------------------------------------------+----+----+-----+-----+
|Income tax on other comprehensive income |-9 |32 |-2 |14 |
+--------------------------------------------------------+----+----+-----+-----+
|Other comprehensive income for the period, net of income|22 |-146|0 |-93 |
|tax | | | | |
+--------------------------------------------------------+----+----+-----+-----+
|Total comprehensive income for the period |-253|261 |-46 |-55 |
+--------------------------------------------------------+----+----+-----+-----+
+--------------------------------------------------------+----+----+-----+-----+
|Total comprehensive income attributable to: | | | | |
+--------------------------------------------------------+----+----+-----+-----+
|Owners of the Company |-253|261 |-46 |-54 |
+--------------------------------------------------------+----+----+-----+-----+
|Non-controlling interest |0 |-1 |0 |-1 |
+--------------------------------------------------------+----+----+-----+-----+
+---------------------------------------------+-+-----------+-----------+
|CONSOLIDATED STATEMENT OF FINANCIAL POSITION | | | |
+---------------------------------------------+-+-----------+-----------+
|EUR million | |31 Dec 2009|31 Dec 2008|
+---------------------------------------------+-+-----------+-----------+
|ASSETS | | | |
+---------------------------------------------+-+-----------+-----------+
|Non-current assets | |1 444 |1 442 |
+---------------------------------------------+-+-----------+-----------+
|Current assets | | | |
+---------------------------------------------+-+-----------+-----------+
|Inventories | |492 |750 |
+---------------------------------------------+-+-----------+-----------+
|Trade and other receivables | |335 |536 |
+---------------------------------------------+-+-----------+-----------+
|Cash and cash equivalents | |261 |254 |
+---------------------------------------------+-+-----------+-----------+
|Total assets | |2 532 |2 983 |
+++-------------------------------------------+-+-----------+-----------+
+++-------------------------------------------+-+-----------+-----------+
|EQUITY AND LIABILITIES | | | |
+---------------------------------------------+-+-----------+-----------+
|Equity | | | |
+---------------------------------------------+-+-----------+-----------+
|Attributable to equity holders of the Company| |1 507 |1 948 |
+---------------------------------------------+-+-----------+-----------+
|Non-controlling interest | |2 |2 |
+---------------------------------------------+-+-----------+-----------+
|Non-current liabilities | | | |
+---------------------------------------------+-+-----------+-----------+
|Interest-bearing liabilities | |387 |276 |
+---------------------------------------------+-+-----------+-----------+
|Non-interest-bearing liabilities | |98 |158 |
+---------------------------------------------+-+-----------+-----------+
|Current liabilities | | | |
+---------------------------------------------+-+-----------+-----------+
|Interest-bearing liabilities | |209 |133 |
+---------------------------------------------+-+-----------+-----------+
|Trade payables and other liabilities | |328 |466 |
+---------------------------------------------+-+-----------+-----------+
|Total equity and liabilities | |2 532 |2 983 |
+---------------------------------------------+-+-----------+-----------+
+---------------------------+-+---------------+-+----+----+
|SUMMARY CASH FLOW STATEMENT| | | | | |
+---------------------------+-+---------------+-+----+----+
|EUR million | |2009|2008|
+---------------------------------------------+-+----+----+
|Result for the period | |-275|406 |
+---------------------------------------------+-+----+----+
|Adjustments | |178 |250 |
+---------------------------------------------+-+----+----+
|Cash flow before change in working capital | |-97 |656 |
+---------------------------------------------+-+----+----+
|Change in working capital | |317 |-110|
+---------------------------------------------+-+----+----+
|Financing items and taxes | |-38 |-164|
+---------------------------------------------+-+----+----+
|Cash flow from operating activities | |182 |382 |
+---------------------------------------------+-+----+----+
|Cash inflow from investing activities | |17 |25 |
+---------------------------------------------+-+----+----+
|Cash outflow from investing activities | |-170|-238|
+---------------------------------------------+-+----+----+
|Total cash flow from investing activities | |-153|-213|
+---------------------------------------------+-+----+----+
|Cash flow before financing activities | |30 |169 |
+---------------------------------------------+-+----+----+
|Dividends paid | |-188|-277|
+---------------------------------------------+-+----+----+
|Change in interest-bearing liabilities | |181 |193 |
+---------------------------------------------+-+----+----+
|Other net cash flow from financing activities| |-18 |-4 |
+---------------------------------------------+-+----+----+
|Translation differences | |1 |-11 |
+---------------------------------------------+-+----+----+
|Change in cash and cash equivalents | |7 |70 |
+---------------------------------------------+-+----+----+
+-----------+-----------------------------------+-+-----------+-----------+
|KEY FIGURES| | | | |
+-----------+-----------------------------------+-+-----------+-----------+
| | |2009 |2008 |
+-----------------------------------------------+-+-----------+-----------+
|Net sales, EUR m | |1 950 |3 851 |
+-----------------------------------------------+-+-----------+-----------+
|Operating profit, EUR m | |-323 |568 |
+-----------------------------------------------+-+-----------+-----------+
|as % of net sales | |-16.6 |14.7 |
+-----------------------------------------------+-+-----------+-----------+
|Result before income tax, EUR m | |-359 |548 |
+-----------------------------------------------+-+-----------+-----------+
|as % of net sales | |-18.4 |14.2 |
+-----------------------------------------------+-+-----------+-----------+
|Result for the period, EUR m | |-275 |406 |
+-----------------------------------------------+-+-----------+-----------+
|as % of net sales | |-14.1 |10.5 |
+-----------------------------------------------+-+-----------+-----------+
|Return on capital employed (rolling 12 mths), %| |-14.2 |25.6 |
+-----------------------------------------------+-+-----------+-----------+
|Return on equity (rolling 12 mths), % | |-15.9 |20.7 |
+-----------------------------------------------+-+-----------+-----------+
|Equity ratio, % | |59.9 |65.9 |
+-----------------------------------------------+-+-----------+-----------+
|Gearing ratio, % | |22.3 |7.9 |
+-----------------------------------------------+-+-----------+-----------+
|Net interest-bearing liabilities, EUR m | |336 |155 |
+-----------------------------------------------+-+-----------+-----------+
|Equity per share, EUR | |10.85 |14.04 |
+-----------------------------------------------+-+-----------+-----------+
|Personnel, average | |12 664 |14 953 |
+-----------------------------------------------+-+-----------+-----------+
|Number of shares | |140 285 425|140 255 479|
+-----------------------------------------------+-+-----------+-----------+
|- excluding treasury shares | |138 863 850|138 788 542|
+-----------------------------------------------+-+-----------+-----------+
|- diluted, average | |138 846 063|138 773 118|
+-----------------------------------------------+-+-----------+-----------+
+-----------------------------------------+-------+------+------+-------+------+
|STATEMENT OF CHANGES IN EQUITY | | | | | |
+----------------+------------------------+-------+------+------+-------+------+
| |Equity attributable to shareholders of parent | |
+----------------+-------+-------+--------+-------+------+------+-------+------+
| | | |Fair | | | |Non- | |
| | | |value |Trans- |Trea- |Re- |cont- | |
|EUR million |Share |Share |and |lation |sury |tained|rolling|Total |
| |capital|premium|other |diff- |shares|earn- |inter- |equity|
| | | |re- |erences| |ings |est | |
| | | |serves | | | | | |
+----------------+-------+-------+--------+-------+------+------+-------+------+
|EQUITY 1 Jan |238 |220 |9 |-6 |-6 |1 505 |3 |1 963 |
|2008 | | | | | | | | |
+----------------+-------+-------+--------+-------+------+------+-------+------+
|Share issue |0 | | | | | | |0 |
+----------------+-------+-------+--------+-------+------+------+-------+------+
|Dividend | | | | | |-277 | |-277 |
|distribution | | | | | | | | |
+----------------+-------+-------+--------+-------+------+------+-------+------+
|Share-based | | |0 | |0 |0 | |0 |
|payments | | | | | | | | |
+----------------+-------+-------+--------+-------+------+------+-------+------+
|Total | | | | | | | | |
|comprehensive | | |-46 |-31 | |341 |-1 |261 |
|income | | | | | | | | |
+----------------+-------+-------+--------+-------+------+------+-------+------+
|EQUITY 31 Dec |238 |220 |-37 |-36 |-6 |1 569 |2 |1 950 |
|2008 | | | | | | | | |
+----------------+-------+-------+--------+-------+------+------+-------+------+
+----------------+-------+-------+--------+-------+------+------+-------+------+
|EQUITY 1 Jan |238 |220 |-37 |-36 |-6 |1 569 |2 |1 950 |
|2009 | | | | | | | | |
+----------------+-------+-------+--------+-------+------+------+-------+------+
|Share issue |0 | | | | | | |0 |
+----------------+-------+-------+--------+-------+------+------+-------+------+
|Dividend | | | | | |-188 | |-188 |
|distribution | | | | | | | | |
+----------------+-------+-------+--------+-------+------+------+-------+------+
|Share-based | | | | |0 |0 | |1 |
|payments | | | | | | | | |
+----------------+-------+-------+--------+-------+------+------+-------+------+
|Total | | | | | | | | |
|comprehensive | | |38 |-5 | |-287 |0 |-253 |
|income | | | | | | | | |
+----------------+-------+-------+--------+-------+------+------+-------+------+
|EQUITY 31 Dec |238 |220 |2 |-41 |-6 |1 095 |2 |1 509 |
|2009 | | | | | | | | |
+----------------+-------+-------+--------+-------+------+------+-------+------+
+-------------------+-+--------------------+-+----+----+
|NET SALES BY REGION| | | | | |
+-------------------+-+--------------------+-+----+----+
|As % of net sales | |2009|2008|
+------------------------------------------+-+----+----+
|Finland | |30 |31 |
+------------------------------------------+-+----+----+
|Other Nordic countries | |31 |31 |
+------------------------------------------+-+----+----+
|Central Eastern Europe, Russia and Ukraine| |19 |20 |
+------------------------------------------+-+----+----+
|Rest of Europe | |14 |15 |
+------------------------------------------+-+----+----+
|Other countries | |6 |3 |
+------------------------------------------+-+----+----+
+----------------------+-+-----------+-+----+----+
|CONTINGENT LIABILITIES| | | | | |
+----------------------+-+-----------+-+----+----+
|EUR million | |2009|2008|
+------------------------------------+-+----+----+
|Mortgaged real estate | |64 |24 |
+------------------------------------+-+----+----+
|Pledged assets | | |5 |
+------------------------------------+-+----+----+
|Other guarantees given | |43 |45 |
+------------------------------------+-+----+----+
|Collateral given on behalf of others| | |2 |
+------------------------------------+-+----+----+
|Rental liabilities | |114 |132 |
+------------------------------------+-+----+----+
+------------------------+-----------+-----------+-----------+-----------------+
|VALUES OF DERIVATIVE | | | | |
|CONTRACTS | | | | |
+------------------------+-----------+-----------+-----------+-----------------+
|CASH FLOW HEDGES QUALIFYING FOR HEDGE ACCOUNTING |
+------------------------+-----------+-----------+-----------+-----------------+
| |31 Dec 2009|31 Dec 2009|31 Dec 2008|31 Dec 2008 |
|EUR million |Nominal |Fair value |Nominal |Fair value |
| |amount | |amount | |
+------------------------+-----------+-----------+-----------+-----------------+
|Zinc derivatives | |
+------------------------+-----------+-----------+-----------+-----------------+
|Forward contracts, |24 000 |11 |35 500 |-34 |
|tonnes | | | | |
+------------------------+-----------+-----------+-----------+-----------------+
|Electricity derivatives | |
+------------------------+-----------+-----------+-----------+-----------------+
|Forward contracts, GWh |1 827 |-11 |1 903 |-18 |
+------------------------+-----------+-----------+-----------+-----------------+
+------------------------------------------------------------------------------+
|FAIR VALUE HEDGES QUALIFYING FOR HEDGE ACCOUNTING |
+------------------------+-----------+-----------+-----------+-----------------+
| |31 Dec 2009|31 Dec 2009|31 Dec 2008|31 Dec 2008 |
|EUR million |Nominal |Fair value |Nominal |Fair value |
| |amount | |amount | |
+------------------------+-----------+-----------+-----------+-----------------+
|Interest rate |75 |0 | | |
|derivatives | | | | |
+------------------------+-----------+-----------+-----------+-----------------+
+------------------------------------------------------------------------------+
|DERIVATIVES NOT QUALIFYING FOR HEDGE ACCOUNTING |
+------------------------+-----------+-----------+-----------+-----------------+
| |31 Dec 2009|31 Dec 2009|31 Dec 2008|31 Dec 2008 |
|EUR million |Nominal |Fair value |Nominal |Fair value |
| |amount | |amount | |
+------------------------+-----------+-----------+-----------+-----------------+
|Zinc derivatives | | | | |
+------------------------+-----------+-----------+-----------+-----------------+
|Forward contracts, | | |500 |0 |
|tonnes | | | | |
+------------------------+-----------+-----------+-----------+-----------------+
|Foreign currency | | | | |
|derivatives | | | | |
+------------------------+-----------+-----------+-----------+-----------------+
|Forward contracts |368 |-3 |904 |35 |
+------------------------+-----------+-----------+-----------+-----------------+
|Options | | | | |
+------------------------+-----------+-----------+-----------+-----------------+
|Bought |150 |-1 |120 |9 |
+------------------------+-----------+-----------+-----------+-----------------+
|Sold |150 |1 |120 |2 |
++-----------------------+-----------+-----------+-----------+-----------------+
++-----------------------+-----------+-----------+-----------+-----------------+
|The unrealised movements in the fair value of cash flow hedges are recognised |
|in other comprehensive income items to the extent the hedge is effective. |
|Other movements in fair value are recorded through profit and loss. |
+------------------------------------------------------------------------------+
+----------------------------------------+-+-----+-----+
|CHANGES IN PROPERTY, PLANT AND EQUIPMENT| | | |
+----------------------------------------+-+-----+-----+
|EUR million | |2009 |2008 |
+----------------------------------------+-+-----+-----+
|Carrying value at start of period | |1 124|1 076|
+----------------------------------------+-+-----+-----+
|Additions | |167 |215 |
+----------------------------------------+-+-----+-----+
|Additions through acquisitions | |5 |8 |
+----------------------------------------+-+-----+-----+
|Disposals | |-11 |-8 |
+----------------------------------------+-+-----+-----+
|Disposals through divestments | | |-22 |
+----------------------------------------+-+-----+-----+
|Depreciation and impairment | |-125 |-119 |
+----------------------------------------+-+-----+-----+
|Translation differences | |-1 |-26 |
+----------------------------------------+-+-----+-----+
|Carrying value at the end of period | |1 159|1 124|
+----------------------------------------+-+-----+-----+
+---------------------------------+---------+-+-----------+-----------+
|TRANSACTIONS WITH RELATED PARTIES| | | | |
+---------------------------------+---------+-+-----------+-----------+
|EUR million | |2009 |2008 |
+-------------------------------------------+-+-----------+-----------+
|Sales to associates | |24 |30 |
+-------------------------------------------+-+-----------+-----------+
|Purchases from associates | |6 |6 |
+-------------------------------------------+-+-----------+-----------+
|Transactions with Pension Foundation | |6 |6 |
++--------------------------------+---------+-+-----------+-----------+
++--------------------------------+---------+-+-----------+-----------+
| | |31 Dec 2009|31 Dec 2008|
+-------------------------------------------+-+-----------+-----------+
|Trade and other receivables from associates| |3 |5 |
+-------------------------------------------+-+-----------+-----------+
|Trade and other payables to associates | |1 |0 |
+-------------------------------------------+-+-----------+-----------+
+----------------------+-+---------------+-+-----------------+-----------------+
|INVESTMENT COMMITMENTS| | | | | |
+----------------------+-+---------------+-+-----------------+-----------------+
|EUR million | |After 31 Dec 2009|After 31 Dec 2008|
+----------------------------------------+-+-----------------+-----------------+
|Maintenance investments | |100 |102 |
+----------------------------------------+-+-----------------+-----------------+
|Development investments and investments | |77 |113 |
|in special products | | | |
+----------------------------------------+-+-----------------+-----------------+
|Total | |177 |215 |
+----------------------------------------+-+-----------------+-----------------+
+--------------------------------------+-+---------+-+-------------------------+
|INFORMATION ON BUSINESS COMBINATIONS | | | | |
+--------------------------------------+-+---------+-+-------------------------+
|EUR million |Fair values|Carrying values of acquired|
| | |companies |
+--------------------------------------+-----------+---------------------------+
|Assets and liabilities of acquired | | |
|companies | | |
+--------------------------------------+-----------+---------------------------+
|Non-current assets |9 |3 |
+--------------------------------------+-----------+---------------------------+
|Current assets | | |
+--------------------------------------+-----------+---------------------------+
|Inventories |1 |1 |
+--------------------------------------+-----------+---------------------------+
|Trade and other receivables |1 |1 |
+--------------------------------------+-----------+---------------------------+
|Cash and cash equivalents |4 |4 |
+--------------------------------------+-----------+---------------------------+
|Total assets |15 |9 |
+--------------------------------------+-----------+---------------------------+
|Non-current liabilities | | |
+--------------------------------------+-----------+---------------------------+
|Non-interest-bearing |2 |0 |
+--------------------------------------+-----------+---------------------------+
|Current liabilities | | |
+--------------------------------------+-----------+---------------------------+
|Interest-bearing |0 |0 |
+--------------------------------------+-----------+---------------------------+
|Other |3 |3 |
+--------------------------------------+-----------+---------------------------+
|Total liabilities |6 |4 |
++-------------------------------------+-+---------+-+-------------------------+
++-------------------------------------+-+---------+-+-------------------------+
|Net assets |9 |5 |
++-------------------------------------+-+---------+-+-------------------------+
++-------------------------------------+-+---------+-+-------------------------+
|Acquisition cost |13 | |
+--------------------------------------+-----------+---------------------------+
|- including conditional purchase price|0 | |
+--------------------------------------+-----------+---------------------------+
|Goodwill |4 | |
++-------------------------------------+-+---------+-+-------------------------+
++-------------------------------------+-+---------+-+-------------------------+
|Acquisition cost paid in cash |11 | |
+--------------------------------------+-----------+---------------------------+
|Cash and cash equivalents of acquired |4 | |
|company | | |
+--------------------------------------+-----------+---------------------------+
|Impact on cash flow |7 | |
+--------------------------------------+-----------+---------------------------+
|The figures above include information about the acquisition of the Norwegian |
|companies Skalles Eiendomsselskap AS and Pluss Stål AS. Rautaruukki acquired |
|the entire share capital of Skalles Eiendomsselskap AS in February 2009. The |
|acquisition strengthens Rautaruukki's market position in the Nordic countries |
|and particularly in Norwegian steel construction. Skalles' customer base and |
|products complement Rautaruukki's own. Skalles' total deliveries include the |
|design, manufacture and installation of steel structures. The company has some|
|50 employees and its net sales for 2008 were approximately EUR 16 million. |
|Skalles is located in Fredrikstad, Norway. The acquisition calculation is |
|provisional in accordance with IFRS 3. Pluss Stål AS was earlier an associated|
|company (50%) of Rautaruukki, which acquired the remaining 50 per cent of the |
|company's shares from its other owner in June 2009. Pluss Stål AS has been |
|consolidated as a subsidiary since 1 July 2009. |
+------------------------------------------------------------------------------+
+-------------------+-+-----------------------+-+-----------+-----------+
|SEGMENT INFORMATION| | | | | |
+-------------------+-+-----------------------+-+-----------+-----------+
|EUR million | |2009 |2008 |
+---------------------------------------------+-+-----------+-----------+
|External net sales | | | |
+---------------------------------------------+-+-----------+-----------+
|Ruukki Construction | |589 |1 067 |
+---------------------------------------------+-+-----------+-----------+
|Ruukki Engineering | |312 |765 |
+---------------------------------------------+-+-----------+-----------+
|Ruukki Metals | |1 050 |2 019 |
+---------------------------------------------+-+-----------+-----------+
|Corporate management | |0 |0 |
+---------------------------------------------+-+-----------+-----------+
|Consolidated net sales | |1 950 |3 851 |
+-------------------+-+-----------------------+-+-----------+-----------+
+-------------------+-+-----------------------+-+-----------+-----------+
|Operating profit | | | |
+---------------------------------------------+-+-----------+-----------+
|Ruukki Construction | |-49 |128 |
+---------------------------------------------+-+-----------+-----------+
|Ruukki Engineering | |-33 |126 |
+---------------------------------------------+-+-----------+-----------+
|Ruukki Metals | |-228 |338 |
+---------------------------------------------+-+-----------+-----------+
|Corporate management | |-13 |-25 |
+---------------------------------------------+-+-----------+-----------+
|Consolidated operating profit | |-323 |568 |
+-------------------+-+-----------------------+-+-----------+-----------+
+-------------------+-+-----------------------+-+-----------+-----------+
|Net finance costs | |-36 |-23 |
+---------------------------------------------+-+-----------+-----------+
|Share of profit of equity accounted investees| |0 |3 |
+---------------------------------------------+-+-----------+-----------+
|Result before income tax | |-359 |548 |
+---------------------------------------------+-+-----------+-----------+
|Income tax expense | |84 |-142 |
+---------------------------------------------+-+-----------+-----------+
|Result for the period | |-275 |406 |
+-------------------+-+-----------------------+-+-----------+-----------+
+-------------------+-+-----------------------+-+-----------+-----------+
|EUR million | |31 Dec 2009|31 Dec 2008|
+---------------------------------------------+-+-----------+-----------+
|Segment assets | | | |
+---------------------------------------------+-+-----------+-----------+
|Ruukki Construction | |718 |761 |
+---------------------------------------------+-+-----------+-----------+
|Ruukki Engineering | |253 |411 |
+---------------------------------------------+-+-----------+-----------+
|Ruukki Metals | |1 085 |1 247 |
+---------------------------------------------+-+-----------+-----------+
|Corporate management | |31 |36 |
+---------------------------------------------+-+-----------+-----------+
|Undistributed assets | |445 |527 |
+---------------------------------------------+-+-----------+-----------+
|Total assets | |2 532 |2 983 |
+---------------------------------------------+-+-----------+-----------+
+------------------------------------------------------------------------------+
|QUARTERLY SEGMENT INFORMATION, COMPARABLE, EXCLUDING NON-RECURRING ITEMS |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|EUR million |Q1/08|Q2/08|Q3/08|Q4/08|2008 |Q1/09|Q2/09|Q3/09|Q4/09|2009 |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|External net sales| | | |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|Ruukki |225 |285 |309 |248 |1 067|132 |145 |164 |147 |589 |
|Construction | | | | | | | | | | |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|Ruukki Engineering|188 |205 |184 |187 |765 |125 |75 |63 |49 |312 |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|Ruukki Metals |511 |571 |503 |412 |1 997|249 |218 |257 |325 |1 050|
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|Corporate |1 |-1 |0 |0 |0 |0 |0 |0 |0 |0 |
|management | | | | | | | | | | |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|Consolidated net |925 |1 060|996 |847 |3 829|506 |438 |485 |521 |1 950|
|sales | | | | | | | | | | |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|Operating profit | | | | | | | | | | |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|Ruukki |21 |38 |56 |17 |132 |-13 |-9 |-4 |-22 |-49 |
|Construction | | | | | | | | | | |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|Ruukki Engineering|32 |35 |34 |27 |128 |5 |-2 |-7 |-11 |-16 |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|Ruukki Metals |96 |106 |112 |36 |350 |-102 |-97 |-39 |10 |-228 |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|Corporate |-7 |-7 |-5 |-6 |-25 |-3 |-4 |-3 |-3 |-13 |
|management | | | | | | | | | | |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|Consolidated |141 |172 |197 |74 |584 |-113 |-112 |-54 |-27 |-306 |
|operating profit | | | | | | | | | | |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|Net finance costs |-4 |1 |-2 |-18 |-23 |-9 |-10 |-10 |-7 |-36 |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|Share of profit of|1 |1 |1 |0 |3 |0 |0 |0 |0 |0 |
|equity investees | | | | | | | | | | |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|Result before |139 |174 |195 |56 |564 |-122 |-123 |-64 |-34 |-342 |
|income tax | | | | | | | | | | |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|Income tax expense|-34 |-45 |-56 |-7 |-142 |32 |33 |19 |0 |84 |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
|Result for the |105 |129 |139 |49 |422 |-90 |-89 |-45 |-34 |-258 |
|period | | | | | | | | | | |
+------------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----+
Formulas for the calculation of key indicators:
Return on capital result before income tax + finance costs -
employed, % exchange rate gains (rolling 12 months)
= --------------------------------------- x100
total equity + interest-bearing financial
liabilities (average at beginning and end of
period)
Return on equity, % result before income tax - income tax expense
(rolling 12 months)
= --------------------------------------- x100
total equity (average at beginning and end of
period)
Equity ratio, % total equity
= --------------------------------------- x100
balance sheet total - advances received
Gearing ratio, % net interest-bearing financial liabilities
= --------------------------------------- x100
total equity
Net interest-bearing = interest-bearing financial liabilities -
financial liabilities interest-bearing financial assets and other
cash and cash equivalents
Earnings per share (EPS) profit or loss attributable to equity holders
of the parent company
= ---------------------------------------
weighted average number of shares outstanding
during the period
Earnings per share profit or loss attributable to equity holders
(EPS), diluted of the parent
= ---------------------------------------
weighted average diluted number of shares
outstanding during the period
Equity per share equity attributable to equity holders of the
parent company
= ---------------------------------------
basic number of shares outstanding at the
balance sheet date
Volume weighted average total EUR trading of shares
price = ---------------------------------------
total number of shares traded
basic number of shares at the end of the
Market capitalisation = period x closing price at the end of the
period
Personnel, average = average number of personnel at the end of each
month during the period
[HUG#1380122]
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