2011-05-11 08:00:00 CEST
2011-05-11 08:00:09 CEST
REGULATED INFORMATION
Ruukki Group Oyj - Interim report (Q1 and Q3)
RUUKKI GROUP PLC'S Q1 INTERIM REPORT FOR 1 JANUARY-31 MARCH 2011
07:00 London, 09:00 Helsinki, 11 May 2011 - Ruukki Group Plc (“Ruukki” or “the
Company”) (LSE: RKKI, OMX: RUG1V) Interim Report
RUUKKI GROUP PLC'S Q1 INTERIM REPORT FOR 1 JANUARY-31 MARCH 2011
STRATEGIC HIGHLIGHTS
- Ruukki continued its strategic transformation into a pure mining and minerals
business by finalising the sale of its house building business
- Chromex assets, which were acquired in the fourth quarter of 2010, were
integrated into FerroAlloys business
- Production increased to 87,808 (29,661) tonnes
- Preparations for strengthening the organisation continued during the period
and in May a new CEO and COO were appointed
FINANCIAL HIGHLIGHTS
- Revenue and EBITDA improved
- Revenue from continuing operations was EUR 34.8 (30.1) million, representing
a growth of 15.6 percent
- EBITDA from continuing operations was EUR 3.5 (-0.5) million and EBITDA
margin was 9.9%
- EBIT from continuing operations was EUR -3.6 (-6.9) million
- Profit for the period from continuing operations totalled EUR -3.1 (-5.3)
million
- EUR 40.8 million gain on disposal of the house building business was
recognised
- Earnings per share (undiluted) was EUR 0.17 (-0.01)
- Cash flow from operations was EUR 3.8 (4.5) million and liquid funds at 31
March were EUR 89.2 (59.0) million (31 December 2010: EUR 8.6 million).
KEY FIGURES
EUR million Q1/2011 Q1/2010 Change % Q1-Q4/2010
Revenue 34.8 30.1 15.6% 123.3
EBITDA 3.5 -0.5 -8.4
EBITDA margin 9.9% -1.8% -6.8%
EBIT -3.6 -6.9 -75.6
EBIT margin -10.2% -22.8% -61.3%
Earnings before taxes -3.9 -6.7 -76.3
Earnings margin -11.2% -22.3% -61.8%
Profit for the period, continuing -3.1 -5.3 -65.3
operations
Profit for the period, discontinued 43.0 0.8 5,057.0% 14.2
operations
Profit for the period 39.9 -4.4 -51.1
Earnings per share, undiluted 0.17 -0.01 -0.22
Return on equity, % p.a. 62.7% -6.2% -19.6%
Return on capital employed, % p.a. 44.2% -3.9% -15.2%
Equity ratio, % 48.9% 51.6% 44.3%
Gearing 11.3% 23.4% 46.6%
Personnel 770 642 19.9% 722
Continuing operations include the Speciality Alloys business segment, the
FerroAlloys business segment and other operations that consist of Group
headquarters and other Group companies, which do not have significant business
operations. Discontinued operations include the house building, pallet and
sawmill businesses.
Commenting on the Q1 results, Thomas Hoyer, CEO, said:
“I am pleased to report an increase in the revenue and improvement in the
profitability of our operations for the quarter. Profitable growth is our key
focus in 2011. Our balance sheet and financial position is strong and our
liquidity improved substantially as a result of the sale of the house building
business.
During the first quarter we continued the implementation of our strategy to
become a fully integrated mining and minerals processing company with the
finalisation of the divestment of our house building business and with the
integration of the Chromex assets, namely the Stellite mine, into our
FerroAlloys business. In addition to progress at our South-African FerroAlloys
business we have also achieved significant growth in revenues and in profits at
our Speciality Alloys business in Turkey and in Germany.
I believe the recent appointment of Theuns de Bruyn as the Group's Chief
Operating Officer, effective 1 July 2011, will further strengthen the executive
management team as we seek to both optimise and grow our FerroAlloys business
in South Africa.”
2011 OUTLOOK
The Board has not changed the outlook after financial statements review was
published on 24 February 2011.
The Board's decision to focus solely on the mining, smelting and metals
processing business and to dispose the wood assets has had a significant impact
on the Group's structure. The Group's area of business will now be dedicated to
the mining and minerals sector and, therefore, the Group's financial
performance will be more dependent on the general market conditions of this
sector, especially in chrome.
2011 will be the year where Ruukki refocuses its operations according to its
growth strategy, further develops its existing mining, smelting and minerals
processing assets and evaluates potential acquisition targets.
There is general uncertainty as to how demand during 2011 will develop.
However, Ruukki expects global demand for the Company's ferroalloys products to
be higher in 2011 compared to that of 2010, which is expected to result in
higher prices and improved financial performance.
Fluctuations of exchange rates between Euro, South African Rand, Turkish Lira
and US Dollar can significantly impact the Company's financial performance.
News conference
A news conference for media and analysts will be held on 11 May 2011 at 15.00
Finnish time, 13.00 UK time, at Hotel Haven, Unioninkatu 17, Helsinki, Finland.
Investor Conference Call
Management will host an investor conference call in English on 11 May 2011 at
16.30 Finnish time, 14.30 UK time. Please dial-in at least 10 minutes
beforehand, quoting the reference: 894909.
Finnish Toll-free +358 (0)9 2313 9202
UK Toll-free +44 (0)207 1620 177
RUUKKI GROUP PLC
Thomas Hoyer
CEO
For additional information, please contact:
Ruukki Group Plc
Thomas Hoyer, CEO, +358 (0)45 6700 491, thomas.hoyer@ruukkigroup.fi
Kalle Lehtonen, General Manager: Finance, +358 (0)400 539 968,
kalle.lehtonen@ruukkigroup.fi
Markus Kivimäki, General Manager: Corporate Affairs, +358 (0)50 3495 687,
markus.kivimaki@ruukkigroup.fi
Investec Bank Plc
Stephen Cooper, +44 (0)20 7597 5104, stephen.cooper@investec.co.uk
RBC Capital Markets
Martin Eales, +44 (0)20 7653 4000, martin.eales@rbccm.com
Peter Barrett-Lennard, +44 (0)20 7653 4000, peter.barrett-lennard@rbccm.com
Financial reports and other investor information are available on the Company's
website.
Ruukki Group is a natural resources company with a mining and minerals business
in southern Europe and southern Africa. The Company is listed on NASDAQ OMX
Helsinki (RUG1V) and the Main Market of the London Stock Exchange (RKKI).
www.ruukkigroup.fi
Distribution:
NASDAQ OMX Helsinki
London Stock Exchange
main media
www.ruukkigroup.fi
RUUKKI GROUP PLC: Q1 INTERIM REPORT, 1 JANUARY-31 MARCH 2011
This Interim Report is prepared in accordance with the IAS 34 standard and is
unaudited. All the figures in this interim report related to the house
building, pallet and sawmill businesses are categorised as discontinued
operations. All the corresponding comparable figures from the first quarter of
2010 are presented in brackets, unless otherwise explicitly stated.
CHANGES IN REPORTING
From beginning of 2011 the Company has two reporting business segments;
FerroAlloys and Speciality Alloys business segments. This new segment reporting
reflects the Company's transformation into a pure mining, smelting and metals
processing company.
The FerroAlloys business segment consists of the South African minerals
business. The Speciality Alloys business segment includes the Southern European
minerals business. The revenue and costs of the Company's sales and marketing
arm RCS, which was previously reported under Southern European minerals
business, will now be allocated to the two new business segments in proportion
to their sales. The Group's other operations, including the Group's
headquarters and other Group companies, which do not have significant business
operations, are presented as unallocated items.
Previously Ruukki reported the Southern European and the South African minerals
businesses as part of the Minerals business segment. Ruukki has recently
announced the sales of its Wood Processing businesses, including the house
building, pallet and sawmill businesses, and those are classified as
discontinued operations.
RUUKKI GROUP'S FINANCIAL PERFORMANCE
REVENUE AND PROFITABILITY
EUR million Q1/2011 Q1/2010 Change % Q1-Q4/2010
Revenue 34.8 30.1 15.6% 123.3
EBITDA 3.5 -0.5 -8.4
EBITDA margin 9.9% -1.8% -6.8%
EBIT -3.6 -6.9 -75.6
EBIT margin -10.2% -22.8% -61.3%
Profit for the period, 43.0 0.8 5,057.0% 14.2
discontinued
operations
Profit for the period 39.9 -4.4 -51.1
Discontinued operations include the house building, pallet and sawmill
businesses.
Revenue for the first quarter was EUR 34.8 (30.1) million representing a growth
of 15.6 percent. This rise in revenue was mainly due to the increased
production volumes and price increases in the Speciality Alloys business.
EBITDA for the quarter was EUR 3.5 (-0.5) million and profit for the period was
EUR 39.9 (-4.4) million, which includes EUR 40.8 million gain on disposal of
the house building business.
Earnings per share was 0.17 (-0.01) and return on capital employed 44.2%
(-3.9%).
BALANCE SHEET, CASH FLOW AND FINANCING
The Group's liquidity, as at 31 March 2011, when taking into account cash and
cash equivalents as well as short-term deposits, increased substantially to EUR
90.0 million (31 December 2010: 19.2), of which EUR 89.2 million relate to
continuing operations (31 December 2010: EUR 8.6 million).
During the review period the Company received EUR 75.4 million cash from
disposal of its house building business. Operating cash flow was EUR 3.8 (4.5)
million. Ruukki's gearing at the end of first quarter decreased significantly
to 11.3% (31 December 2010: 46.6%). Net interest-bearing debt of the continuing
operations was EUR 10.2 (31 December 2010: 98.2) million.
As at 31 March, the Group had an unused credit facility of USD 55 million in
place. The facility is available to be drawn down until 31 December 2011.
Total assets on 31 March 2011 totalled EUR 556.3 (31 December 2010: 557.0)
million. Equity ratio was 48.9% (31 December 2010: 44.3%).
INVESTMENTS, ACQUISITIONS AND DIVESTMENTS
Capital expenditure during the first quarter totalled EUR 0.7 (2.7) million.
The expenditure related primarily to yearly maintenance of the Company's
production plants.
On 20 January 2011 Ruukki signed an agreement to sell its Finnish house
building business, Pohjolan Design-Talo Oy, to funds managed by CapMan. The
sale was completed on 2 March 2011 and all the conditions of the agreement to
complete the transaction were fulfilled. The consideration paid in cash at theclosing was EUR 75.4 million.
On 31 January 2011 Ruukki signed a letter of intent to sell its 51 percent
holding in Junnikkala Oy to Junnikkala Oy's minority shareholders for a total
consideration of EUR 6 million. The signing of the definitive agreements is
subject to a number of conditions, including the availability of financing and
certain corporate approvals including those required for a related party
transaction.
On 1 March 2011 Ruukki signed an agreement to sell the shares of its Finnish
pallet business, Oplax Oy, to a group of investors for a total consideration of
approximately EUR 9 million, paid in cash and with a vendor note of EUR 1.5
million. On 8 April 2011 all the conditions of the agreement were fulfilled to
complete the transaction and the sale was completed.
PERSONNEL
At the end of the first quarter 2011, Ruukki's number of employees in
continuing operations, totalled 770 (642). The number of employees increased
both in Speciality Alloys and FerroAlloys businesses. The average personnel
during first quarter of 2011 was 691 (640).
The number of personnel by segment:
Q1/2011 Q1/2010 Change % Q4/2010
Speciality Alloys 413 355 16.3% 396
FerroAlloys 347 273 27.1% 316
Other operations 10 14 -28.6% 10
Continuing 770 642 19.9% 722
operations total
SAFETY, HEALTH AND SUSTAINABLE DEVELOPMENT
Ruukki's target is to provide a safe and healthy workplace for everyone working
in the mines and production facilities. Ruukki is working constantly to improve
processes and practices to prevent injuries and accidents and this focus will
increase in 2011. The Company is in the process of implementing a lost time
injury metrics system in conformance with the internationally recognised
standards.
Ruukki aims to organise its operations in a sustainable way and preserve the
environment by minimising the environmental impact of its operations and
continuously improving its processes and facilities. Ruukki also has programmes
in place to address its impact on the environment and in 2011 Ruukki continues
environmental studies in its South African processing facilities.
SEGMENT PERFORMANCE
SPECIALITY ALLOYS BUSINESS
The Speciality Alloys business consists of TMS, the mining and beneficiation
operation in Turkey, and EWW, the chromite concentrate processing plant in
Germany. TMS supplies EWW with high quality chromite concentrate which produces
speciality products including Specialised Low Carbon and Ultralow Carbon
Ferrochrome. Excess Chrome Ore is exported from TMS directly to China. As at 31
March 2011, the business had 413 (355) employees.
Production in tonnes:
Tonnes Q1/2011 Q1/2010 Change % Q1-Q4/2010
Mining* 19,998 6,549 205.4% 54,917
Processing 6,881 1,943 254.2% 17,994
* Including both chromite concentrate and lumpy ore production
Production totalled to 26,879 (8,492) metric tonnes in the first quarter of
2011. Increase in production was mainly due new concentration plant in Turkey
which was commenced during the second quarter of 2010 and increased production
of lumpy material.
EUR million Q1/2011 Q1/2010 Change % Q1-Q4/2010
Revenue 20.2 12.1 66.4% 69.0
EBITDA 5.0 -0.2 7.8
EBITDA margin 25.0% -1.9% 11.3%
EBIT 0.7 -4.4 -10.0
EBIT margin 3.2% -36.4% -14.5%
Revenue for the period was EUR 20.2 (12.1) million, representing growth of 66.4
percent. EBITDA for the period was EUR 5.0 (-0.2) million. Growth both in
revenue and EBITDA was driven by increased prices compared to the equivalent
period as well as increased production through new processing plant in Turkey,
which was commenced in second quarter 2010 and increased production of lumpy
material.
FERROALLOYS BUSINESS
The FerroAlloys business consists of the integrated Stellite mine and the alloy
processing plant, Mogale and the Mecklenburg mine development project in South
Africa, as well as the Zimbabwean mine development project Waylox. The business
produces Charge Chrome Ferrochrome, Silico Manganese and Stainless Steel Alloy
(chromium-iron-nickel alloy). As at 31 March, the business had 347 (273)
employees.
Production in tonnes:
Tonnes Q1/2011 Q1/2010 Change % Q1-Q4/2010
Mining* 31,987 N/A N/A
Processing 28,942 21,169 36.7% 65,040
* Including both chromite concentrate and lumpy ore production
Production increased to 60,929 (21,169) tonnes. The increase in production was
mainly due to the mining asset, Stellite, which was acquired in December 2010.
EUR million Q1/2011 Q1/2010 Change % Q1-Q4/2010
Revenue 14.6 17.8 -18.0% 54.0
EBITDA 0.0 2.7 -98.2% -1.0
EBITDA margin 0.3% 15.3% -1.8%
EBIT -2.6 0.6 -50.2
EBIT margin -17.5% 3.3% -93.0%
Revenue for the quarter was EUR 14.6 (17.8) million, representing a decrease of
18.0 percent. EBITDA for the quarter was EUR 0.0 (2.7) million. The decrease in
revenue was mainly driven by stocking of alloy products due to weak price
development in the first quarter and by the postponement of certain deliveries
in mining operations from the first quarter of 2011 to the second quarter of
2011. The EBITDA includes EUR 1.6 (0.0) million costs related to feasibility
studies for the two new DC furnaces and power plant.
DISCONTINUED OPERATIONS
On 2 March 2011 the Group concluded the sale of its house building business
subsidiary Pohjolan Design-Talo Oy and on 8 April 2011 the sale of pallet
business subsidiary Oplax Oy. The Group has also signed a letter of intent to
sell its 51 percent holding in its sawmill business Junnikkala, which were
included in the Wood Processing segment. On the Group's income statement, the
Wood Processing businesses have been presented as a discontinued operation. The
assets related to Oplax and Junnikkala have been presented on the Group's
statement of financial position as assets held for sale. Also the liabilities
related to those assets are shown on a separate line as liabilities held for
sale.
Profit for the period from discontinued operations was EUR 43.0 (0.8) million,
including a EUR 40.8 million gain on disposal of house building business which
was recognised for the review period.
The number of employees of the discontinued operations totalled 163 (256) on 31
March 2011.
UNALLOCATED ITEMS
For the first quarter of 2011, the EBITDA from unallocated items was EUR -1.7
(-3.1) million including a EUR 0.3 (0.1) million non-cash expense for the
share-based payments.
LITIGATION
On 1 March 2011 the Company announced that its subsidiary, LP Kunnanharju Oy
(former Lappipaneli Oy), and Sampo Bank Plc have reached an agreement which
ends proceedings in the Helsinki District Court concerning disagreements
related to currency hedging transactions, dating back to 2008 as announced on 7
July 2009.
LP Kunnanharju Oy will pay compensation amounting to approximately EUR 2.86
million to Sampo Bank Plc in full and final settlement of this dispute. Ruukki
had previously booked a liability of EUR 3.32 million for this dispute and this
settlement will, therefore, have a positive effect of about EUR 0.47 million on
profit.
COMPANY'S SHARE
Ruukki Group Plc's shares are listed on NASDAQ OMX Helsinki (RUG1V) and on the
Main Market of the London Stock Exchange (RKKI).
On 31 March 2011, the registered number of Ruukki Group Plc shares was
248,207,000 (247,982,000) and share capital EUR 23,642,049.60 (23,642,049.60).
As announced on 7 March 2011 950,000 ordinary shares in the Company (“Shares”)
were transferred from the shares held in treasury. The transfer took place
pursuant to the resolution related to the remuneration of the Board approved at
the Annual General Meeting held on 21 April 2010 and the resolution of the
Board of Directors from the board meeting held on 29 May 2010. The Shares have
been released at no cost to the individuals.
The issued shares are subject to a lock-up commitment in accordance with the
resolution of the Annual General Meeting. According to the lock-up commitment,
the Company is entitled to redeem the Initial Shares free of charge, in part or
in full, should the director's term in the Board of Directors end before the
third ordinary general meeting following the approval of this issue. The
redemption will concern all of the issued shares (3/3) if the director's term
at the Board of Directors ends before the first, two-thirds (2/3) if before the
second, and one-third (1/3) if before the third ordinary general meeting
following the approval of this issue.
On 31 March 2011 the Company had altogether 7,790,895 (8,740,895) own shares,
which was equivalent to about 3.14% (3.52%) of all registered shares. The total
amount of shares outstanding, excluding the treasury shares held by the Company
on 31 March 2011 was 240,416,105 (239,466,105).
Based on the resolution by the Annual General Meeting on 21 April 2010, the
Board has currently been authorised for a buy-back of maximum 10,000,000 own
shares. This authorisation is valid until 21 October 2011.
SHAREHOLDER NOTIFICATIONS
Ruukki Group Plc has received the following shareholder notifications during or
after the review period 1 January - 31 March 2011. These notifications can be
found in full on the Company website.
31 March 2011, Hanwa Co. Limited's ownership will fall below 5% of the
registered share capital and voting rights of Ruukki Group Plc, after the
completion of a share transfer agreement signed with Finaline Business Limited
concerning a sale and transfer of 27,000,000 shares in Ruukki Group Plc.
1 April 2011, Finaline Business Limited's ownership will exceed 10% of the
registered share capital and voting rights of Ruukki Group Plc, after the
completion of a share transfer agreement signed with Hanwa Co. Limited
concerning a sale and transfer of 27,000,000 shares in Ruukki Group Plc.
MOST SIGNIFICANT RISKS AND UNCERTAINTIES, CHANGES DURING AND AFTER THE REVIEW
PERIOD
The changes in the key risks and uncertainties are set out below. Further
details of the risks and uncertainties have been published in the Group's
Annual Report 2010.
Through shifting the Group's focus into mining and minerals operations, the
Group has become more exposed to commodity price risks and risks of fluctuating
demand in the minerals sector.
The further expansion into the minerals business and subject to completion of
the disposal of the wood business assets will also increase the absolute and
relative importance of foreign operations and also foreign exchange rate risks,
both directly and indirectly. The changes in exchange rates, if adverse, can
have a substantial negative impact on the Group's profitability, in particular
in relation to changes in USD/ZAR. Changes in ZAR exchange rate also have an
effect on the EUR value of the deferred purchase consideration of Mogale
Alloys.
Since the Group has made and may in the future carry out mergers and
acquisitions, there is a number of implementation and integration related
risks.
The Group is considering some alternative options how to organically grow its
businesses, both at the raw material sourcing and further processing phases,
which can expose the Group to major project risks.
2011 OUTLOOK
The Board's decision to focus solely on the mining, smelting and metals
processing business and to dispose the wood assets has had a significant impact
on the Group's structure. The Group's area of business will now be dedicated to
the mining and minerals sector and therefore the Group's financial performance
will be more dependent on the general market conditions of this sector,
especially in chrome.
2011 will be the year where Ruukki refocuses its operations according to its
growth strategy, further develops its existing mining, smelting and minerals
processing assets and evaluates potential acquisition targets.
There is general uncertainty as to how demand during 2011 will develop.
However, Ruukki expects global demand for the Company's ferroalloys products to
be higher in 2011 compared to that of 2010, which is expected to result in
higher prices and improved financial performance.
Fluctuations of exchange rates between Euro, South-African Rand, Turkish Lira
and US Dollar can significantly impact the Company's financial performance.
EVENTS AFTER THE REVIEW PERIOD
On 8 April 2011 the Company announced it had completed the sale of its Finnish
pallet business, Oplax Oy, to Pallet Invest Oy.
On 15 April 2011 the Company announced an invitation to the Annual General
Meeting to be held on Wednesday 11 May 2011.
On 15 April 2011 the Company announced its head office will move to Kasarmikatu
36, Helsinki on 21 April 2011.
On 28 April 2011 the Company announced that it will report its financial
performance in two new reporting segments from the beginning of 2011;
FerroAlloys and the Speciality Alloys business segments.
Changes in organisation
As announced on 4 May 2011 the Board of Directors has appointed Thomas Hoyer as
Chief Executive Officer, effective immediately. The previous Acting Managing
Director, Dr Danko Koncar, became Enterprise Director and responsible for
Ruukki's strategic direction and new business development. Theuns de Bruyn has
been appointed as Chief Operating Officer, effective from 1 July 2011.
On 4 May 2011 the Company announced that the Nomination Committee has decided
to propose to the Annual General Meeting that Thomas Hoyer, the new CEO, be
elected as new member of the Board of Directors. The Nomination Committee also
proposes that there will be eight (8) members in the Board of Directors for the
period that begins following the Annual General Meeting on 11 May 2011 and ends
in the end of the Annual General Meeting in 2012.
In Helsinki, 10 May 2011
RUUKKI GROUP PLC
BOARD OF DIRECTORS
FINANCIAL REPORTING IN 2011
Silent periods Reporting date
Interim Report Q2/2011 19.7.-18.8.2011 18 August 2011
Interim Report Q3/2011 11.10.-10.11.2011 10 November 2011
FINANCIAL TABLES
FINANCIAL DEVELOPMENT AND ASSETS AND LIABILITIES BY SEGMENT, EUR THOUSAND
1.1.- 31.3.2011 Speciality Ferro Unallocated Eliminations Continuing
3 months Alloys Alloys items operations
EUR '000 total
Revenue 20,172 14,626 0 0 34,798
EBITDA 5,048 48 -1,670 31 3,457
EBIT 652 -2,565 -1,685 31 -3,566
Segment's assets 184,491 231,325 93,770 -12,298 497,288
Segment's 71,883 129,383 54,957 -6,427 249,796
liabilities
1.1.- 31.3.2010 Speciality Ferro Unallocated Eliminations Continuing
3 months Alloys Alloys items operations
EUR '000 total
Revenue 12,121 17,847 129 0 30,097
EBITDA -225 2,727 -3,139 105 -532
EBIT -4,409 583 -3,156 105 -6,877
Segment's assets 187,270 227,219 35,224 -6,009 443,705
Segment's 70,089 111,148 44,341 -5,991 219,587
liabilities
1.1.-31.12.2010 Speciality Ferro Unallocated Eliminations Continuing
12 months Alloys Alloys items operations
EUR '000 total
Revenue 69,017 54,006 324 0 123,347
EBITDA 7,803 -972 -15,369 99 -8,439
EBIT -10,009 -50,216 -15,433 99 -75,559
Segment's assets 182,347 248,011 15,919 -10,616 435,661
Segment's 77,265 136,702 51,918 -6,840 259,045
liabilities
CONSOLIDATED INCOME STATEMENT, SUMMARY, EUR THOUSAND
EUR '000 Q1/2011 Q1/2010 Q1-Q4/2010
Revenue 34,798 30,097 123,347
Other operating income 339 31 1,248
Operating expenses -31,902 -30,660 -133,424
Depreciation and amortisation -7,023 -6,344 -27,023
Impairment 0 0 -40,097
Items related to associates (core) 221 -1 390
Operating profit -3,566 -6,877 -75,559
Financial income and expense -521 137 -595
Items related to associates (non-core) 196 42 -99
Profit before tax -3,891 -6,698 -76,253
Income tax 780 1,424 10,942
Profit for the period from continuing -3,111 -5,273 -65,311
operations
Profit for the period from discontinued 42,987 834 14,186
operations
Profit for the period 39,876 -4,440 -51,125
Profit attributable to
Owners of the parent 39,732 -3,459 -52,611
Non-controlling interests 144 -981 1,486
Total 39,876 -4,440 -51,125
Earnings per share (counted from profit attributable to owners of the parent):
basic (EUR), group total 0.17 -0.01 -0.22
diluted (EUR), group total 0.15 -0.01 -0.22
basic (EUR), continuing operations -0.01 -0.02 -0.27
diluted (EUR), continuing operations -0.01 -0.02 -0.27
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, EUR THOUSAND
EUR ‘000 Q1/2011 Q1/2010 Q1-Q4/2010
Profit for the period 39,876 -4,440 -51,125
Other comprehensive income
Exchange differences on translating foreign -8,619 8,468 19,412
operations
Income tax relating to other comprehensive income 5,059 -3,548 -9,815
Other comprehensive income, net of tax -3,561 4,920 9,597
Total comprehensive income for the period 36,315 480 -41,528
Total comprehensive income attributable to:
Owners of the parent 37,357 738 -44,854
Non-controlling interests -1,042 -258 3,327
CONSOLIDATED STATEMENT OF FINANCIAL POSITION, SUMMARY, EUR THOUSAND
EUR '000 Q1/2011 Q1/2010 Q1-Q4/2010
ASSETS
Non-current assets
Investments and intangible assets
Goodwill 122,845 180,736 129,120
Investments in associates 274 553 284
Other intangible assets 84,949 102,070 94,154
Investments and intangible assets total 208,068 283,359 223,559
Property, plant and equipment 79,688 83,650 87,468
Other non-current assets 39,189 30,909 44,022
Non-current assets total 326,945 397,918 355,050
Current assets
Inventories 49,576 55,034 45,160
Receivables 31,544 46,077 26,853
Other investments 0 313 0
Cash and cash equivalents 29,222 58,976 8,598
Bank deposits 60,000 0 0
Liquid funds total 89,222 58,976 8,598
Current assets total 170,342 160,401 80,611
Assets held for sale 58,268 12,197 110,809
Cash and cash equivalents held for sale 775 0 10,561
Assets held for sale total 59,043 12,197 121,369
Total assets 556,331 570,516 557,030
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 23,642 23,642 23,642
Share premium reserve 25,740 25,740 25,740
Revaluation reserve 2,193 2,193 2,193
Paid-up unrestricted equity reserve 250,849 260,347 250,849
Translation reserves 11,546 10,362 13,921
Retained earnings -64,747 -53,263 -104,772
Equity attributable to owners of the parent 249,224 269,021 211,574
Non-controlling interests 22,924 17,621 24,781
Total equity 272,147 286,643 236,355
Liabilities
Non-current liabilities 199,321 176,723 216,556
Current liabilities
Advances received 0 14,526 0
Other current liabilities 50,476 86,763 42,489
Current liabilities total 50,476 101,289 42,489
Liabilities classified as held for sale 34,387 5,862 61,630
Total liabilities 284,184 283,873 320,675
Total equity and liabilities 556,331 570,516 557,030
SUMMARY OF CASH, INTEREST-BEARING RECEIVABLES AND INTEREST-BEARING LIABILITIES,
EUR THOUSAND
EUR '000 Q1/2011 Q1/2010 Q1-Q4/2010
Liquid funds 89,222 58,976 8,598
Interest-bearing receivables
Current 2,125 2,992 2,200
Non-current 26,550 15,204 28,865
Interest-bearing receivables 28,675 18,196 31,065
Interest-bearing liabilities
Current 4,320 41,995 4,577
Non-current 95,090 78,142 102,244
Interest-bearing liabilities 99,410 120,137 106,821
NET TOTAL 18,487 -42,966 -67,157
Excluding interest-bearing assets and liabilities classified as held for sale
SUMMARY OF GROUP'S PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS, EUR
THOUSAND
EUR '000 Property, plant Intangible
and equipment assets
Acquisition cost 1.1.2011 132,715 354,221
Additions 647 214
Disposals -75 -423
Transfer to assets held for sale -94 -3
Reclass between items 15 0
Effect of movements in exchange rates -4,807 -16,433
Acquisition cost 31.3.2011 128,401 337,577
Acquisition cost 1.1.2010 127,541 337,547
Additions 51,968 8,231*
Disposals -4,044 0
Transfer to assets held for sale -49,614 -26,519
Reclass between items 298 -240
Effect of movements in exchange rates 6,566 35,201
Acquisition cost 31.12.2010 132,715 354,221
* Including changes in earn-out liabilities
CONSOLIDATED STATEMENT OF CASH FLOWS, EUR THOUSAND
EUR '000 Q1/2011 Q1/2010 Q1-Q4/2010
Net profit 39,876 -4,440 -51,125
Adjustments to net profit -33,938 1,837 57,700
Changes in working capital -2,571 7,952 4,604
Discontinued operations 390 -863 -616
Net cash from operating activities 3,758 4,486 10,563
Acquisition of subsidiaries and associates, -2,124 -319 -21,855
net of cash acquired
Acquisition of joint ventures, net of cash 0 0 -20,372
acquired
Payments of earn-out liabilities 0 0 -65
Disposal of subsidiaries and associates, 72,068 0 1,640
net of cash sold
Capital expenditures and other investing -711 -2,712 -14,229
activities
Discontinued operations -166 -23 10,851
Net cash used in investing activities 69,067 -3,054 -44,030
Acquisition of own shares 0 -10 -10
Capital redemption 0 0 -9,570
Dividends paid to non-controlling interests 0 0 -129
Deposits 0 2,500 2,500
Interest received on investments 0 33 9
Proceeds from borrowings 3,323 0 23,312
Repayment of borrowings, and other -4,010 -913 -13,260
financing activities
Discontinued operations -1,184 -189 -6,551
Net cash used in financing activities -1,871 1,422 -3,697
Net increase in cash and cash equivalents 70,953 2,854 -37,165
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY, EUR THOUSAND
A = Share capital
B = Share premium reserve
C = Fair value and revaluation reserves
D = Paid-up unrestricted equity reserve
E = Translation reserve
F = Retained earnings
G = Equity attributable to owners of the parent, total
H = Non-controlling interests
I = Total equity
EUR A B C D E F G H I
'000
Equity 23,642 25,740 2,193 260,357 6,165 -49,953 268,144 17,878
286,022
at
31.12
.2009
Total 4,197 -3,459 738 -258
480
compr
ehensi
ve
income
1-3/2
010
Share- 113 113
113
based
payme
nts
Acquis -10 -10
-10
ition
of
own
shares
Acquis 17 17 1
17
itions
and
dispos
als of
subsid
iaries
Other 20 20
20
chang
es
Equity 23,642 25,740 2,193 260,347 10,362 -53,263 269,021 17,621
286,643
at
31.3.
2010
Divide 0 -357
-357
nd
distr
ibutio
n
Total 3,559 -49,151 -45,593 3,584
-42,008
compr
ehensi
ve
income
4-12/
2010
Share- 1,575 1,575
1,575
based
payme
nts
Share 72 72
72
subsc
riptio
ns
based
on
optio
n
right
s
Capita -9,570 -9,570
-9,570
l
redem
ption
Acquis -3,932 -3,932 3,932
0
itions
and
dispos
als of
subsid
iaries
Equity 23,642 25,740 2,193 250,849 13,921 -104,772 211,574 24,781
236,355
at
31.12
.2010
Divide 0 -550
-550
nd
distr
ibutio
n
Total -2,375 39,732 37,357 -1,042
36,315
compr
ehensi
ve
income
1-3/2
011
Share- 293 293
293
based
payme
nts
Acquis 0 -266
-266
itions
and
dispos
als of
subsid
iaries
Equity 23,642 25,740 2,193 250,849 11,546 -64,747 249,224 22,924
272,147
at
31.3.
2011
RELATED PARTY TRANSACTIONS DURING THE REVIEW PERIOD
During the review period the Group has sold goods and rendered services to
related parties by EUR 2.1 million. The Group has also accrued interest on
loans from a related party amounting to EUR 0.2 million. Interest income from a
joint venture company totalled EUR 0.1 million during the review period.
On 31 March the Group had loan and trade receivables from joint venture
companies totalling EUR 12.1 million and a loan receivable from a related party
amounting to EUR 10 million. The Group's loans from a related party amounted to
EUR 12 million and the Group's joint venture's loans from a related party EUR
10.5 million. The Group also has an acquisition related earn-out liability to a
related party amounting to EUR 35 million.
The Group has an unused credit facility from its major shareholder Kermas Ltd
amounting to USD 55 million. The facility is available to be drawn down until
31 December 2011.
EXCHANGE RATES
The balance sheet date rate is based on exchange rate published by the European
Central Bank for the closing date. The average exchange rate is calculated as
an average of daily rates from the European Central Bank during the year.
The key exchange rates applied in the accounts:
Average rates
Q1/2011 Q1/2010 Q1-Q4/2010
TRY 2.1591 2.0821 1.9965
USD 1.3680 1.3569 1.3257
ZAR 9.5875 10.0589 9.6984
Balance sheet rates
31.3.2011 31.3.2010 31.12.2010
TRY 2.1947 2.0512 2.0694
USD 1.4207 1.3479 1.3362
ZAR 9.6507 9.8922 8.8625
FORMULAS FOR FINANCIAL INDICATORS
Financial ratios and indicators have been calculated with the same principles
as applied in the 2010 financial statements. These principles are presented
below.
Return on equity, % = Profit for the period / Total equity (average for the
period) * 100
Return on capital employed, % = Profit before taxes + financing expenses /
(total assets - interest-free liabilities) average * 100
Equity ratio, % = Total equity / total assets - prepayments received * 100
Gearing, % = (Interest-bearing debt - liquid funds) / Total equity * 100
Net interest-bearing debt = Interest-bearing debt - liquid funds
Earnings per share, basic, EUR = Profit attributable to owners of the parent
company / Average number of shares during the period
Earnings per share, diluted, EUR = Profit attributable to owners of the parent
company / Average number of shares during the period, diluted
Operating profit (EBIT) = Operating profit is the net of revenue plus other
operating income, plus gain/loss on finished goods inventory change, minus
employee benefits expense, minus depreciation, amortisation and impairment and
minus other operating expense. Foreign exchange gains or losses are included in
operating profit when generated from ordinary activities. Exchange gains or
losses related to financing activities are recognised as financial income or
expense.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) =
Operating profit + depreciations + amortisations + impairment losses
Gross capital expenditure = Gross capital expenditure consists of the additions
in the acquisition cost of non-current tangible and intangible assets as well
as additions in non-current assets resulting from acquisitions.
ACCOUNTING POLICIES
This Interim Report is prepared in accordance with the IAS 34 standard. Ruukki
Group Plc applies the same accounting and IFRS principles as in the 2010
financial statements with the exception that from the beginning of 2011 the
Company applies a new reporting business segment structure. The new reporting
business segments are the FerroAlloys and Speciality Alloys. In 2010 the
Company had two reporting segments: Wood Processing Business and Minerals
Business. The Company has published the comparative financial information for
the new segments on 28 April 2011.
The preparation of the Interim Report in accordance with IFRS requires
management to make estimates and assumptions that affect the valuation of the
reported assets and liabilities and other information, such as contingent
liabilities and the recognition of income and expenses in the income statement.
Although the estimates are based on the management's best knowledge of current
events and actions, actual results may differ from the estimates.
The figures in the tables have been rounded off to one decimal point, which
must be considered when calculating totals. Average exchange rates for the
period have been used for income statement conversions, and period-end exchange
rates for balance sheet.
The Interim Report data are unaudited.
Share-related key figures
Q1/2011 Q1/2010 Q1-Q4/2010
Share price development in
London Stock Exchange*
Average share price** EUR 1.80 N/A 1.64
GBP 1.54 N/A 1.39
Lowest share price** EUR 1.79 N/A 1.60
GBP 1.53 N/A 1.36
Highest share price** EUR 1.85 N/A 2.10
GBP 1.58 N/A 1.78
Share price at the end of the EUR 1.73 N/A 1.68
period***
GBP 1.53 N/A 1.45
Market capitalisation at the EUR 429.7 N/A 416.7
end of the period*** million
GBP 379.8 N/A 358.7
million
Share trading development
Share turnover thousand 82 N/A 712
shares
Share turnover EUR 148 N/A 1,168
thousand
Share turnover GBP 127 N/A 990
thousand
Share turnover % 0.0% N/A 0.3%
Share price development in
NASDAQ OMX Helsinki
Average share price EUR 1.87 2.05 1.59
Lowest share price EUR 1.69 1.90 1.00
Highest share price EUR 2.03 2.30 2.30
Share price at the end of the EUR 1.81 2.02 1.70
period
Market capitalisation at the EUR 449.3 500.9 422.0
end of the period million
Share trading development
Share turnover thousand 2,084 2,089 21,042
shares
Share turnover EUR 3,895 4,276 33,414
thousand
Share turnover % 0.8% 0.8% 8.5%
* Ruukki's share has been listed in London Stock Exchange as of 26 July 2010,
thus share information in LSE is available only from that day onwards.
** Share prices have been calculated on the average EUR/GBP exchange rate
published by Bank of Finland.
*** Share price and market capitalisation at the end of the period have been
calculated on the EUR/GBP exchange rate published by Bank of Finland at the end
of the period.
Formulas for share-related key indicators
Average share price = Total value of shares traded in currency / Number of
shares traded during the period
Market capitalisation, million = Number of shares * Share price at the end of
the period
FORWARD LOOKING STATEMENTS
This report contains forward-looking statements. Often, but not always,
forward-looking statements can be identified by the use of forward-looking
terminology, including the terms "believes", "expects", "intends", "may","will" or "should" or, in each case, their negative or other variations or
comparable terminology. By their nature, forward-looking statements involve
uncertainty because they depend on future circumstances, and relate to events,
not all of which are within the Company's control or can be predicted by the
Company.
Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be given that such
expectations will prove to have been correct. Actual results could differ
materially from those set out in the forward-looking statements. Save as
required by law (including the Finnish Securities Markets Acts (495/1989), as
amended, or by the Listing Rules or the Disclosure and Transparency Rules of
the UK Financial Services Authority), the Company undertakes no obligation to
update any forward-looking statements in this report that may occur due to any
changes in the Directors' expectations or to reflect events or circumstances
after the date of this report.
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