2011-02-24 08:00:00 CET
2011-02-24 08:00:07 CET
REGULATED INFORMATION
Ruukki Group Oyj - Financial Statement Release
RUUKKI GROUP PLC'S FINANCIAL STATEMENTS REVIEW FOR 1 JANUARY - 31 DECEMBER 2010
07:00 London, 09:00 Helsinki, 24 February 2011 - Ruukki Group Plc (“Ruukki” or
“the Company”) (LSE: RKKI, OMX: RUG1V) Financial Statements Review
RUUKKI GROUP PLC'S FINANCIAL STATEMENTS REVIEW FOR 1 JANUARY - 31 DECEMBER 2010
The Financial Statements Review is prepared in accordance with the IAS 34
standard and is unaudited. All the figures in the financial statements related
to the house building, pallet and sawmill businesses are categorised as
discontinued operations. All the corresponding comparable figures from the 2009
financial year are presented in brackets, unless otherwise explicitly stated.
2010 HIGHLIGHTS
- As a result of a strategic review performed during the second half of 2010,
the conclusion was that Ruukki will focus future activities on the Minerals
Business and a process to sell the Wood Business assets was initiated. As a
result, the Wood Business is categorised as a discontinued operation and the
related balance sheet items as assets and liabilities held for sale in this
report. Continuing operations include the Minerals Business and Non-segment.
- Revenue from continuing operations was EUR 123.3 (71.0) million, representing
a growth of 73.6 percent
- EBITDA from Minerals Business was EUR 6.8 (10.4) million. Total EBITDA from
continuing operations was EUR -9.4 (1.2) million, including a loss of EUR -16.3
(-9.0) million from other operations.
- Revenue from discontinued operations was EUR 125.1 (122.3) million and EBITDA
was EUR 20.0 (EUR 18.2) million
- EUR 40.1 (19.1) million impairment charge on goodwill of Mogale Alloys was
recognised during Q4 2010
- In 2010 the Company continued to execute its growth strategy. Acquisition of
Chromex Mining plc was completed in December and its balance sheet is
consolidated as of 31 December 2010.
-In 2010 significant steps were taken in order to improve performance at all of
the Group's minerals assets
- Cash flow from operations equalled EUR 10.6 (0.2) million and Earnings per
share (undiluted) were EUR -0.27 (-0.13) from continuing operations and EUR
0.05 (0.05) from discontinued operations
DIVIDEND PROPOSAL
The Board of Directors of Ruukki Group Plc proposes to the Annual General
Meeting that no dividend would be distributed.
GROUP KEY FIGURES, CONTINUING OPERATIONS
CONTINUING OPERATIONS, 12 months ended 12 months ended
EUR million 31.12.2010 31.12.2009
Revenue 123.3 71.0
EBITDA -9.4 1.2
EBITDA Margin -7.6% 1.7%
EBIT -76.5 -39.3
EBIT Margin -62.0% -55.4%
Earnings before taxes -77.2 -40.6
Earnings Margin -62.6% -57.2%
Profit for the period -65.4* -34.8
Return on equity, % p.a. -25.0% -10.8%
Return on capital employed, % p.a. -19.3% -8.3%
Equity ratio, % 44.3% 52.0%
Earnings per share, undiluted, EUR -0.27 -0.13
Earnings per share, diluted, EUR -0.27 -0.13
Equity per share, EUR 0.85 1.03
Average number of shares, undiluted, 1,000 239,363 250,175
Average number of shares, diluted, 1,000 267,629 295,456
Number of shares outstanding, end of period, 248,207 261,034
1,000
* Profit for the period includes an income tax receipt of EUR 11.8 million
mainly due to diminished deferred tax liabilities and a tax refund which was
recognised during the second quarter. A goodwill impairment charge of EUR 40.1
million was recognised in Q4 2010.
ACTING MANAGING DIRECTOR DANKO KONCAR COMMENTS:
“2010 was a pivotal year for Ruukki as the business continued its
transformation from a diversified natural resources company into an integrated
mining and minerals producer supplying specialist products to the expanding
steel and stainless steel industries.
The acquisition of AIM-listed Chromex Mining plc during the fourth quarter,
continued Ruukki's objective of becoming a vertically integrated mining and
minerals producer and provides a springboard for Ruukki's growth ambitions in
the chrome sector.
The Group's two main product categories are speciality alloys, produced at the
German processing plant EWW with chrome ore supplied by the Turkish mining
operation TMS and ferro alloys produced at the Mogale plant, with chrome ore
supplied by the recently acquired Stellite mining operation, both in South
Africa. The products are mainly sold through RCS, the Group's sales and
marketing arm, thus completing the vertical integration.
A strategic review of the Wood Business segment, initiated during the second
half of 2010, resulted in the decision to divest the businesses. Although
negotiations began in late 2010, the sale of the house building was only signed
in January 2011. We also announced in the end of January 2011 that we had
signed a letter of intent to sell the sawmill business and we anticipate the
remaining pallet business will also be divested during 2011.
Looking ahead, the coming year will be very exciting for Ruukki as we bed down
the integration of Chromex into the business, start the implementation of our
organic growth plans by securing a site for the two new DC furnaces and
identifying the location for the planned power plant and commence the
development of Mecklenburg and Waylox into mining operations.”
For additional information, please contact:
Ruukki Group Plc
Thomas Hoyer, CFO, +358 45 6700 491
Markus Kivimäki, Head of Corporate Affairs, +358 50 3495 687
Investec Bank plc
Stephen Cooper, +44 (0)20 7597 5104
RBC Capital Markets
Martin Eales, +44 (0)20 7653 4000
Peter Barrett-Lennard, +44 (0)20 7653 4000
Ruukki Group is a natural resources company, with a mining and minerals
business in southern Europe and South Africa. The Company is listed on NASDAQ
OMX Helsinki and the Main Market of the London Stock Exchange.
www.ruukkigroup.fi
RUUKKI GROUP PLC: FINANCIAL STATEMENTS REVIEW, 1 JANUARY - 31 DECEMBER 2010
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.
KEY EVENTS DURING THE FINANCIAL YEAR 2010
On 5 February 2010 Ruukki Group's Turkish subsidiary, Türk Maadin Sirketi A.S.,
acquired 99.00% of the shares in Intermetal Madencilik ve Ticaret A.S.. The
rationale of the transaction was to expand the Group's chrome ore resource base
in Turkey.
Ilona Halla was nominated CFO of Ruukki Group Plc in February 2010 after the
Group's Deputy CEO Jukka Havia, responsible for finance and acquisitions,
resigned from the Company and moved on to new responsibilities outside Ruukki
Group.
In March 2010 Dr Alistair Ruiters was appointed as Executive Chairman of Mogale
Alloys (Pty) Ltd, in order to take over certain management functions from the
Mogale board, and to consider potential expansion opportunities for the South
African minerals processing business. In addition, Mr. Callie Pienaar was
elected as acting Chief Operating Officer of Mogale.
During the second quarter, Ruukki further developed the Company's governance
and the Ruukki Board established a Safety and Sustainable Development
Committee. The main function of this Committee is to review matters related to
safety and sustainability in order to ensure that the Group's operations are
carried out in a safe and sustainable manner. Ruukki's Board of Directors also
decided to establish Nomination and Remuneration Committees.
The expansion of the Turkish subsidiary's chromite concentrate processing plant
proceeded according to plan and the new plant commenced operations in May 2010.
Due to the installation of the latest generation of shacking tables, the plant
can now be fed with low grade material and reach a production of high grade
concentrate of approximately 40,000 tons per year. The set up of the new plant
will enable greater flexibility to process low grade as well as high grade run
of mine material and will reduce processing costs.
In May 2010 Company paid the second tranche, 200 million South African rand, of
the purchase price to the vendors of Mogale.
On 26 July 2010, Ruukki announced the admission of its ordinary shares to the
premium segment of the official list of the UK Listing Authority and to trading
on the main market of the London Stock Exchange under the stock code LSE: RKKI.
No new shares were issued with the admission. The ordinary shares remain listed
on the NASDAQ OMX Helsinki Oy stock exchange. As securities issued by non-UK
companies cannot be held or transferred in the CREST system, the Company
arranged for Capita IRG Trustees Limited to issue depositary interests in
respect of the underlying ordinary shares to allow trading and settlement in
CREST.
On 11 August 2010, at the Extraordinary General Meeting, Mr Alwyn Smit and Dr
Danko Koncar were appointed to the Company's Board of Directors. Subsequently,
on 14 October 2010, Mr Smit resigned as CEO, and Dr Koncar was appointed Acting
Managing Director until the appointment of a new CEO is announced.
On 31 August 2010 Terence McConnachie resigned as a non-executive director of
the Company.
On 1 September 2010 Ruukki announced the signing of two framework agreements
with Metallurgical Group Corporation Ltd for the construction of two DC chrome
furnaces and a 250 megawatt power plant in South Africa. This is part of
Ruukki's strategy to grow the smelting and mineral processing business in South
Africa through increasing production, capacity and expanding market share.
On 24 September 2010 Ruukki announced that the Company had received
notification that certain vendors of Mogale Limited have commenced legal
actions in South Africa against the Company relating to the payment of the
remaining ZAR 600 million (EUR 63.6 million), which represents 30% of the full
purchase price for Mogale, along with a claim for interest of ZAR 88.2 million
(EUR 9.3 million). Ruukki has already recorded the majority of the claimed
amount as a liability in its consolidated balance sheet. The result of the
court case is, therefore, not expected to have any significant negative effect
on the financial status of the Company in any event.
On 30 September 2010 Ruukki announced that it has reached an agreement with the
Board of Chromex Mining plc on the terms of a recommended offer, by the joint
venture company Synergy Africa Limited, to acquire the entire issued and to be
issued share capital of Chromex Mining for approximately GBP 37 million (EUR 43
million).
On 14 October 2010, Ruukki announced that Thomas Hoyer had been appointed Chief
Financial Officer. At the same time the Company announced a new Executive
Management Team comprising: Dr Danko Koncar, Acting Managing Director, Thomas
Hoyer, CFO and CEO of the Wood Processing Business, Dr Alistair Ruiters, CEO of
Ruukki South Africa, Dr Stefano Bonati, CEO of RCS, Kalle Lehtonen, Head of
Finance and Markus Kivimäki, Head of Corporate Affairs.
On 9 December 2010 Ruukki announced that the offer to acquire Chromex was
declared unconditional in all respects.
KEY EVENTS AFTER THE FINANCIAL YEAR 2010
On 20 January 2011 Ruukki announced that it had signed an agreement to sell its
Finnish house building business, Pohjolan Design-Talo Oy, to funds managed by
CapMan. The total consideration for the shares of the company is approximately
EUR 76 million in cash. The transaction is expected to be completed by the end
of February 2011.
On 31 January 2011 Ruukki announced that it had 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. Ruukki anticipates
that the signing of the definitive agreements will take place by the end of
March 2011.
DEVELOPMENT BY BUSINESS SEGMENT
MINERALS BUSINESS
Ruukki Group's Minerals Business has operations in southern Europe and South
Africa. The southern European minerals business is focused on speciality
alloys, consisting of TMS, the mining and beneficiation operation in Turkey,
and EWW, the chromite concentrate processing plant in Germany.
The South African business is producing ferro alloys and consisting of the
Stellite mining operation, the Mecklenburg mine development project and the
Zimbabwean mine development project Waylox acquired in December 2010 and the
alloy processing plant, Mogale, in South Africa.
The products produced by the Group are mainly sold through RCS, the Group's
sales and marketing arm, thus completing the vertical integration.
At the product level, the Group is primarily involved in the processing of ore
concentrate and raw ore into a range of products, including specialised low
carbon and ultralow carbon ferrochrome, charge chrome ferrochrome, silico
manganese and chromium-iron-nickel alloy (stainless steel alloy).
In the income statement of the segment, EUR 40.1 (19.1) million impairment on
goodwill has been recognised during Q4 2010. Impairments have been recognised
due to external and internal indications and based on future cash flow
forecasts under the current market situation.
Revenue and profitability:
EUR million 12 months ended 12 months ended Q4 2010 Q4 2009
31.12.2010 31.12.2009
Revenue 123.0 71.0 24.8 27.3
EBITDA 6.8 10.4 -4.3 7.8
EBITDA margin 5.5% 14.6% -17.5% 28.6%
EBIT -60.2 -30.1 -51.5 -17.5
EBIT margin -49.0% -42.3% -208.0% -64.0%
The 2010 Minerals segment EBIT was considerably affected by the EUR 40.1 (19.1)
million impairment of Mogale Alloys goodwill.
Quarterly revenue and profitability of the Minerals Business:
EUR million 2010
Q4 Q3 Q2 Q1
Revenue 24.8 29.0 39.3 30.0
EBITDA -4.3 1.4 7.3 2.5
EBITDA margin -17.5% 4.7% 18.6% 8.3%
EBIT -51.5 -5.7 0.9 -3.8
EBIT margin -208.0% -19.7% 2.2% -12.8%
Production (in metric tons):
Mt 12 months ended 12 months ended Q4 2010 Q4 2009
31.12.2010 31.12.2009
Production - TMS * 54 917 25 774 16 848 7 615
Production - EWW 17 994 14 074 4 947 5 382
Production -- Mogale ** 65 040 N/A 12 088 N/A
* Including both chromite concentrate and lumpy ore production
** Mogale Alloys was acquired in May 2009
The Minerals Business was loss-making in the fourth quarter of 2010. The main
reasons for the negative EBITDA were a sharp increase in raw material prices, a
labour dispute stopping production at the Mogale plant and costs related to
studies for the construction of two new furnaces and a power plant in South
Africa. The financial performance was also negatively impacted by the
strengthening of South African rand against US dollar and, to a certain extent,
a planned stock build up of finished goods in anticipation of more favourable
market conditions and product pricing in 2011.
During the fourth quarter the Group acquired Chromex Mining plc, a UK company
with mining operations and prospecting rights in South Africa and Zimbabwe.
This acquisition strengthens the vertical integration of operations as it
secures Ruukki's ore supplies, widens the Group's chrome ore products portfolio
and consolidates Ruukki's position in one of the world's premier chrome ore
mining regions. Chromex has been integrated in the Minerals Business unit and
it has been consolidated in the financial reporting of the Group starting 31
December 2010.
The number of employees of the Minerals segment was 712 (629) on 31 December
2010.
Southern European minerals business
Key financial performance indicators for the southern European minerals
business:
EUR million 12 months ended 12 months ended Q4 2010 Q4 2009
31.12.2010 31.12.2009
Revenue
Business area's products 70.7 44.1 17.0 14.9
Mogale products 47.2 13.2 7.6 8.6
Total revenue 117.9 57.3 24.6 23.5
EBITDA 9.8 10.0 2.4 5.3
EBITDA margin 8.3% 17.4% 9.9% 22.5%
EBIT -8.0 -6.9 -2.1 1.1
EBIT margin -6.8% -12.0% -8.6% 4.6%
Revenues and volumes continued to grow compared to the equivalent period in
2009. The decrease in the EBITDA margin for 2010, compared to the equivalent
period in 2009, was due to a combination of factors including a sharp increase
in the price of strategic raw materials which was not totally compensated for
by the equivalent price increase in finished goods.
The new chromite concentrate processing plant for processing low grade ores at
the Turkish subsidiary TMS has been performing according to management's
expectations during the second half of the year.
South African minerals business
Key financial performance indicators for the South African minerals business:
EUR million 12 months ended 7 months ended Q4 2010 Q4 2009
31.12.2010 31.12.2009
Revenue 52.6 28.2 8.5 14.3
EBITDA -2.7 0.4 -7.3 2.5
EBITDA margin -5.2% 1.6% -86.6% 17.6%
EBIT -52.0 -23.1 -50.0 -18.6
EBIT margin -98.9% -82.1% -590.6% -130.1%
The 2010 South African minerals business EBIT was considerably affected by the
EUR 40.1 (19.1) million impairment of Mogale Alloys goodwill.
The performance of the South African business during the fourth quarter was
impacted by the planned rebuild and modification of the two submerged arc
furnaces, an industrial dispute at Mogale Alloys and studies related for
construction of two new furnaces and power plant in South Africa. The
combination of the plant modifications and industrial dispute impacted
production volumes for the year.
DISCONTINUED OPERATIONS
After the end of the 2010 financial year, the Group signed an agreement to sell
its house building business subsidiary Pohjolan Design-Talo Oy and signed a
letter of intent to sell its 51 percent holding in its sawmill business
Junnikkala, which were included in the Wood Processing segment. Consequently,
the Ruukki Board has decided to classify above mentioned businesses and also
pallet business as assets held for sale in the financial statements for 2010.
The tangible assets related to these companies 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. On the Group's income statement, the Wood Processing businesses
have been presented as a discontinued operation.
Revenue and profitability:
EUR million 12 months ended 12 months ended Q4 2010 Q4 2009
31.12.2010 31.12.2009
Revenue 125.4 122.3 41.4 32.9
EBITDA 20.1 18.0 7.1 11.7
EBITDA margin 16.0% 14.7% 17.1% 35.7%
EBIT 15.9 14.5 6.1 12.3
EBIT margin 12.6% 11.9% 14.8% 37.5%
Revenue and operating profit for the 2010 financial year were higher than the
equivalent period in 2009. This was due to the strong performance by the house
building business which resulted in growing revenues and profits compared to
the 2009 financial year.
Quarterly revenue and profitability of the discontinued operations:
EUR million 2010
Q4 Q3 Q2 Q1
Revenue 41.4 28.6 30.9 24.4
EBITDA 7.1 4.7 5.2 3.1
EBITDA margin 17.1% 16.6% 16.9% 12.6%
EBIT 6.1 3.9 4.2 1.7
EBIT margin 14.8% 13.6% 13.4% 6.8%
EBITDA for the Q4 2010 was higher than the equivalent period in 2009, excluding
a non-recurring Junnikkala put option related gain recorded in 2009. This was
especially due to the strong performance by the house building business which
resulted in growing revenues compared to the 2009 financial year.
The number of employees of the discontinued operations totalled 308 (252) on 31
December 2010.
House building business
Key financial performance indicators for the house building business:
EUR million 12 months ended 12 months ended Q4 2010 Q4 2009
31.12.2010 31.12.2009
Revenue 56.2 31.8 23.1 8.5
EBITDA 12.4 7.2 6.0 2.4
EBITDA margin 22.1% 22.6% 26.1% 28.7%
EBIT 12.1 6.8 5.9 2.3
EBIT margin 21.5% 21.5% 25.5% 27.5%
Wooden ready-to-move-in house deliveries (number of houses):
2010 2009
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
148 68 81 62 66 27 49 96
The number of houses delivered to customers increased considerably during the
fourth quarter and amounted to 148, compared to 66 for the corresponding period
in 2009.
Pallet business
Key financial performance indicators for the pallet business:
EUR million 12 months ended 12 months ended Q4 2010 Q4 2009
31.12.2010 31.12.2009
Revenue 11.2 9.4 3.0 2.9
EBITDA 2.4 1.5 0.5 0.6
EBITDA margin 21.3% 16.0% 15.8% 20.6%
EBIT 1.2 0.5 0.2 0.3
EBIT margin 10.8% 5.5% 5.6% 10.5%
The pallet business performed well during the 2010 financial year in terms of
volumes and margins. The number of pallets delivered to customers during
financial year 2010 totalled 1,026,907 compared to 1,002,793 for the equivalent
period in 2009.
Delivered pallets per quarter (number of pallets):
2010 2009
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
257,693 255,131 283,773 230,310 261,632 246,994 246,225 247,942
Sawmill business
Key financial performance indicators for the sawmill business:
EUR million 12 months ended 12 months ended Q4 2010 Q4 2009
31.12.2010 31.12.2009*
Revenue 59.7 82.6 15.8 22.1
EBITDA 5.3 9.3 0.6 8.7
EBITDA margin 8.9% 11.2% 3.8% 39.3%
EBIT 2.6 7.2 0.1 9.7
EBIT margin 4.4% 8.7% 0.6% 43.8%
* The financial indicators for 2009 include also Lappipaneli and Tervolan Saha
ja Höyläämö Group which were disposed in late 2009. The sawmill business's
EBITDA for 2009, excluding a non-recurring Junnikkala put option related gain,
was EUR 4.0 million, which corresponds to about 4.8% of revenue. The sawmill
business EBIT was EUR 0.2 million negative (-0.2% of revenue) for 2009
financial year when both the Junnikkala put option termination and Lappipaneli
related reversal of impairment are excluded.
At Junnikkala Oy, performance in 2010 improved compared to the 2009 financial
year. Sales volumes increased in all product groups, with deliveries to
domestic house factories showing especially strong growth. The revenue and
profit of the business is positive compared to 2009, when taking into account
the asset disposals described above. The sawmill business EBIT for 2010
financial year includes EUR 0.6 million impairment on disposed assets.
The volume of sawn timber production:
2010 2009*
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
1 000 m3 59 48 51 54 50 35 46 40
* The effect of the disposal of Lappipaneli Oy and Tervolan Saha ja Höyläämö
Group has been eliminated
OTHER OPERATIONS
For the fourth quarter of 2010 the Group's other operations, not included in
the separately reported segments, generated a negative EBITDA of EUR 2.8
million. For the 2010 financial year, the total negative EBITDA of the other
operations was EUR 16.3 million. This was mainly related to the Group's
headquarters and the London listing.
The Group's parent company recognised a EUR 0.5 million non-cash option expense
for the 2010 financial year. In addition, based on the directed free issue of
shares to the Board approved by the Annual General Meeting, EUR 1.2 million
expenses were recorded. In relation to the London listing, EUR 5.2 million of
expenses were recognised for the 2010 financial year. The income from
associated companies had only a minor effect on the results.
The sawmill equipment acquired for the terminated Russian project has been
classified as an asset held for sale on the consolidated statement of financial
position at 31 December 2010.
The Group's liquidity, when taking into account cash and cash equivalents as
well as short-term held-to-maturity deposits, totalled EUR 19.2 million at the
end of the 2010 financial year, of which EUR 8.6 million relate to continuing
operations (30 September 2010: EUR 21.1 million; 31 December 2009: EUR 55.9
million).
RISKS AND UNCERTAINTIES, CHANGES DURING AND AFTER THE REVIEW PERIOD
A summary of the key risks and uncertainties is set out below. Further details
of the risks and uncertainties have been set out in the Group's listing
prospectus dated 30 June 2010 and will be published in the Annual Report 2010.
Through the acquisition of the chrome ore and ferrochrome businesses in October
2008 and by the expansion into South African minerals sector via Mogale Alloys
acquisition in May 2009 and Chromex Mining acquisition in December 2010, the
Group has become more exposed to commodity price risks and risks of fluctuating
demand in the minerals sector.
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.
There remains uncertainty in regards to the total purchase consideration
payable for some of the Group's acquisitions, both related to options' exercise
prices and to earn-out purchase components, as they can only be verified when
the total purchase considerations are finally settled, which to some extent
takes place only after a few years.
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.
The Group is considering some alternative options how to organically grow its
Minerals Business, both at the raw material sourcing and further processing
phases, which can expose the Group to major project risks.
In relation to the acquisition of Chromex Mining plc, environmental liabilities
on the Group's statement of financial position have increased by EUR 2.0
million.
Based on studies and surveys carried out during Q4 2010 at Mogale Alloys, the
Group has increased environmental provision by EUR 2.3 million from EUR 8.5
million to EUR 10.8 million. Preliminary results of environmental studies
carried out during Q4 2010 also indicate that liabilities related to future
operations may be higher than previously indicated value of ZAR 226 million.
Ruukki will continue studies and surveys during first half of 2011 in order to
determine more precise value of the future liabilities.
MINERALS
The medium-term success of the Group's Minerals Business is to a large extent
dependant on the global demand for stainless steel of which ferrochrome is one
key raw material. There is general uncertainty as to how demand during 2011
will develop. Ruukki expects the demand for its ferroalloys products in general
to be higher in 2011 compared to that of 2010.
Since the Minerals operations, in particular in the smelting processes, require
a considerable amount of electricity and power, the availability and price of
electricity can have a significant effect on the Minerals profitability. In
particular in South Africa, there is a substantial risk of an increase in the
unit price of electricity.
RELATED PARTY TRANSACTIONS
Group's Minerals Business segment has during the financial year 2010 sold its
products and rendered services to related parties for a total value of EUR 5.5
million.
On 27 May 2010, Ruukki agreed a new USD 55 million standby facility with Kermas
Ltd, a major shareholder of Ruukki Group Plc, for working capital purposes. An
amendment agreement was entered into on 30 June 2010 under which Kermas agreed
to provide security over USD 25 million as collateral in respect of its
obligations under the facility agreement. A pledge agreement was also entered
into on 30 June 2010 between Kermas and the Company. The facility was
originally available to be drawn down for a period of two years from the date
of the agreement, although this has now been amended to a period ending on 31
December 2011. The pledge agreement is in effect until 31 December 2011. At the
end of the financial year 2010, the Group has not drawn down any of the loan.
On 30 September 2010 Ruukki made an announcement regarding the recommended cash
offer to be made by Synergy Africa Limited, a company 51 per cent. owned by
Ruukki Group Plc and 49 per cent. owned by Kermas Limited, to acquire the
entire issued and to be issued share capital of Chromex Mining plc. While
Kermas holds about 28.5 per cent. of Ruukki's issued shares, under the Listing
Rules, the arrangements between Kermas and Ruukki constitute a related party
transaction requiring the approval of Ruukki Shareholders (other than Kermas).
An Extraordinary General Meeting held on 17 November approved all the
arrangements between the Company, Kermas Limited and Synergy Africa Limited
relating to the formation and financing of the acquisition vehicle Synergy
Africa Limited and the acquisition and subsequent holding of shares in Chromex
Mining plc.
Related to Chromex acquisition Ruukki Holdings has entered into a facility
agreement of USD 20.3 million with Kermas, in accordance with the terms and
conditions disclosed in the related party circular published on 22 October
2010. At the end of the financial year 2010, Ruukki Holdings has fully drawn
down the loan.
Related to Chromex acquisition Synergy Africa Ltd, a joint venture company of
Ruukki Group and Kermas, has also entered into a facility agreement of USD 32.2
million with Kermas, in accordance with the terms and conditions disclosed in
the related party circular published on 22 October 2010. At the end of the
financial year 2010, Synergy Africa has drawn down USD 29.1 million of the
loan.
There have not been any other significant related party transactions during the
review period.
LITIGATION
As announced on 24 September 2010, Ruukki has received a notification that
certain vendors of Mogale Alloys have commenced legal actions in South Africa
against the Company relating to the remaining ZAR 600 million (EUR 63.6
million), which represents 30% of the full purchase price for Mogale Alloys,
along with a claim for interest of ZAR 88.2 million (EUR 9.3 million). Payment
of the remaining ZAR 600 million, due under the acquisition agreement is only
triggered when the last, remaining condition in relation to each of the four
furnaces acquired with Mogale Alloys has been met. Ruukki has every intention
to comply with its obligations, as and when they arise.
Furthermore ZAR 12 million (EUR 1.3 million), of the remaining ZAR 600 million,
was erroneously paid to the vendors after the vendors falsely alleged that one
of the furnaces had met all of the conditions. It is Ruukki's intention to
claim this amount back. Once Ruukki ascertained independent legal and
environmental expert opinion, which clearly concluded that the vendors have not
complied with all the conditions, Ruukki informed the vendors that the
outstanding payment amount would not be due and payable until all of the
conditions are met, as specified in the acquisition agreement.
Ruukki has already recorded the majority of the claimed amount as a liability
in Ruukki's consolidated balance sheet. The result of the court case is,
therefore, not expected to have any significant negative effect on the
financial status of the Company in any event.
FINANCIAL TABLES
FINANCIAL DEVELOPMENT BY SEGMENT, EUR THOUSAND
1.1.-31.12.2010 Mineral Non-segm Continuing Disconti Adjustment Continuing
EUR '000 s ents operations nued s and
total operatio and discontinu
ns eliminatio ed ns total
Revenue
From external 123 023 324 123 347 125 107 0 248 454
customers
From other 0 16 192 16 192 268 -16 460 0
segments
Segment's 123 023 16 516 139 539 125 374 -16 460 248 454
revenue
Profit
Segment's 6 823 -16 306 -9 438 20 111 5 10 633
EBITDA
Segment's EBIT -60 233 -16 370 -76 603 15 853 5 -60 744
Segment's -57 358 4 179 -53 178 2 059 -6 -51 125
profit
1.1.-31.12.2009 Mineral Non-segm Continuing Disconti Adjustment Continuing
EUR '000 s ents operations nued s and
total operatio and discontinu
ns eliminatio ed
ns total
Revenue
From external 71 035 13 71 048 122 312 0 193 359
customers
From other 0 247 247 9 -255 0
segments
Segment's 71 035 259 71 294 122 320 -255 193 359
revenue
Profit
Segment's 10 380 -9 009 1 372 17 991 0 19 363
EBITDA
Segment's EBIT -30 066 -9 088 -39 154 14 537 0 -24 617
Segment's -31 888 9 610 -22 278 8 195 -8 644 -22 727
profit
1.10.-31.12.201 Mineral Non-segm Continuing Disconti Adjustment Continuing
0 s ents operations nued s and
EUR '000 total operatio and discontinu
ns eliminatio ed
ns total
Revenue
From external 24 780 0 24 780 41 421 0 66 200
customers
From other 0 6 375 6 375 0 -6 375 0
segments
Segment's 24 780 6 375 31 155 41 421 -6 375 66 200
revenue
Profit
Segment's -4 343 -2 772 -7 115 7 079 7 -30
EBITDA
Segment's EBIT -51 547 -2 786 -54 333 6 149 7 -48 177
Segment's -46 517 7 059 -39 457 -5 004 5 -44 456
profit
1.10.-31.12.200 Mineral Non-segm Continuing Disconti Adjustment Continuing
9 s ents operations nued s and
EUR '000 total operatio and discontinu
ns eliminatio ed
ns total
Revenue
From external 27 305 13 27 318 32 860 0 60 178
customers
From other 0 103 103 9 -111 0
segments
Segment's 27 305 115 27 420 32 868 -111 60 178
revenue
Profit
Segment's 7 802 -3 797 4 005 11 727 0 15 732
EBITDA
Segment's EBIT -17 479 -3 814 -21 293 12 338 0 -8 955
Segment's -17 110 5 714 -11 397 5 741 -3 339 -8 994
profit
ASSETS BY SEGMENT, EUR THOUSAND
ASSETS Minerals Non-segmen Continuing Discontinu Adjustments Continuin
EUR '000 ts operations ed and g
total operations elimination and
s discontin
ued
total
31.12.2010 415 806 364 747 780 554 125 728 -349 251 557 030
31.12.2009 390 005 375 426 765 432 114 989 -317 223 563 198
CONSOLIDATED INCOME STATEMENT, SUMMARY, EUR THOUSAND
CONTINUING AND DISCONTINUED TOTAL
EUR '000 12 months 12 months Q4 2010 Q4 2009
ended ended
31.12.2010 31.12.2009
Revenue 248 454 193 359 66 200 60 178
Other operating income 1 854 7 587 584 6 537
Operating expenses -240 065 -181 590 -66 987 -51 024
Depreciation and amortisation -30 652 -26 960 -8 051 -7 667
Impairment -40 726 -17 020 -40 097 -17 020
Items related to associates 390 6 173 42
(core)
Operating profit -60 744 -24 617 -48 177 -8 955
Financial income and expense -1 880 -3 435 -393 -3 077
Items related to associates -99 -284 4 -380
(non-core)
Profit before tax -62 724 -28 336 -48 566 -12 413
Income tax * 11 599 5 609 4 110 3 418
Profit for the period -51 125 -22 727 -44 456 -8 994
Profit attributable to
Owners of the parent -52 611 -19 744 -44 486 -9 727
Non-controlling interests 1 486 -2 983 30 733
Total -51 125 -22 727 -44 456 -8 994
Earnings per share (counted from profit attributable to owners of the parent):
basic (EUR) -0.22 -0.08
diluted (EUR) -0.22 -0.08
* The Group has recognised tax income due to tax refunds and diminished
deferred tax liabilities.
CONTINUING OPERATIONS
EUR '000 12 months 12 months Q4 2010 Q4 2009
ended ended
31.12.2010 31.12.2009
Continuing operations
Revenue 123 347 71 048 24 780 27 318
Other operating income 1 248 509 532 -106
Operating expenses -134 361 -70 386 -37 713 -23 320
Depreciation and amortisation -27 023 -21 446 -7 122 -6 219
Impairment -40 097 -19 079 -40 097 -19 079
Items related to associates (core) 390 6 173 42
Operating profit -76 496 -39 348 -54 447 -21 365
Financial income and expense -585 -1 013 -121 -583
Items related to associates -99 -284 4 -380
(non-core)
Profit before tax -77 180 -40 645 -54 564 -22 328
Income tax 11 800 5 853 2 796 4 012
Profit for the period from -65 381 -34 792 -51 768 -18 316
continuing operations
Discontinued operations
Profit for the period from 14 256 12 065 7 312 9 322
discontinued operations
Profit for the period -51 125 -22 727 -44 456 -8 994
Profit attributable to
Owners of the parent -52 611 -19 744 -44 486 -9 727
Non-controlling interests 1 486 -2 983 30 733
Total -51 125 -22 727 -44 456 -8 994
Earnings per share (counted from profit attributable to owners of the parent):
basic (EUR), continuing operations -0.27 -0.13
diluted (EUR), continuing operations -0.27 -0.13
basic (EUR), discontinued operations 0.05 0.05
diluted (EUR), discontinued 0.05 0.05
operations
STATEMENT OF COMPREHENSIVE INCOME, EUR THOUSAND
12 months 12 months Q4 2010 Q4
ended ended 2009
31.12.2010 31.12.2009
Profit for the period -51 125 -22 727 -44 456 -8 994
Other comprehensive income
Exchange differences on translating 19 412 9 534 6 586 2 958
foreign operations
Income tax relating to other -9 815 -3 518 -4 364 -1 173
comprehensive income
Other comprehensive income, net of 9 597 6 016 2 222 1 786
tax
Total comprehensive income for the -41 528 -16 711 -42 234 -7 210
year
Total comprehensive income
attributable to:
Owners of the parent 3 327 -14 038 5 172 -8 254
Non-controlling interests -44 854 -2 673 -47 406 1 044
CONSOLIDATED STATEMENT OF FINANCIAL POSITION, SUMMARY, EUR THOUSAND
EUR '000 31.12.2010 31.12.2009
ASSETS
Non-current assets
Investments and intangible assets
Goodwill 129 120 172 850
Investments in associates 284 507
Other intangible assets 94 154 103 063
Investments and intangible assets total 223 559 276 421
Property, plant and equipment 87 468 80 655
Other non-current assets 44 022 29 506
Non-current assets total 355 050 386 583
Current assets
Inventories 45 160 55 951
Receivables 26 853 49 283
Held-to-maturity investments 0 2 500
Other investments 0 314
Cash and cash equivalents 8 598 55 852
Current assets total 80 611 163 900
Assets held for sale 110 809 12 714
Cash and cash equivalents held for sale 10 561 0
Assets held for sale total 121 369 12 714
Total assets 557 030 563 198
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 23 642 23 642
Share premium reserve 25 740 25 740
Revaluation reserve 2 193 2 193
Paid-up unrestricted equity reserve 250 849 260 357
Translation reserves 13 921 6 165
Retained earnings -104 772 -49 953
Equity attributable to owners of the parent 211 574 268 144
Non-controlling interests 24 781 17 878
Total equity 236 355 286 022
Liabilities
Non-current liabilities 216 556 169 318
Current liabilities
Advances received 0 13 480
Other current liabilities 42 489 88 097
Current liabilities total 42 489 101 577
Liabilities classified as held for sale 61 630 6 280
Total liabilities 320 675 277 175
Total equity and liabilities 557 030 563 198
SUMMARY OF CASH, INTEREST-BEARING RECEIVABLES AND INTEREST-BEARING LIABILITIES,
EUR THOUSAND
31.12.2010 31.12.2009
Cash and cash equivalent 8 598 55 852
Interest-bearing receivables
Current 2 200 5 265
Non-current 13 264 15 194
Interest-bearing receivables 15 464 20 459
Interest-bearing liabilities*
Current 4 577 39 008
Non-current 102 244 75 506
Interest-bearing liabilities 106 821 114 514
NET TOTAL -82 759 -38 203
* Excluding interest-bearing liabilities classified as held for sale
SUMMARY OF GROUP'S PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS, EUR
THOUSAND
Property, plant and Intangible assets
equipment
Acquisition cost 1.1.2010 127 541 337 547
Additions 53 076 9 929*
Disposals -3 922 -1 541
Transfer to assets held for sale -49 614 -26 942
Acquisition cost 31.12.2010 127 081 318 993
Acquisition cost 1.1.2009 118 012 185 429
Additions 35 814 162 181
Disposals -12 272 -23 691*
Transfer to assets held for sale -15 454 -101
Effect of movements in exchange rates 1 442 13 729
Acquisition cost 31.12.2009 127 541 337 547
* Including changes in earn-out liabilities
CONSOLIDATED STATEMENT OF CASH FLOWS, EUR THOUSAND
EUR '000 12 months 12 months
ended ended
31.12.2010 31.12.2009
Net profit -51 125 -22 727
Adjustments to net profit 54 569 39 630
Payment to trust fund to provide for future 0 -6 479
remuneration in relation to acquisition
Changes in working capital 7 119 -10 239
Net cash from operating activities 10 563 185
Acquisition of subsidiaries and associates -1 233 -102 514
Acquisition of joint ventures -20 372 0
Payments of earn-out liabilities -65 -438
Disposal of subsidiaries and associates 1 640 6 321
Sale of business 11 840 0
Capital expenditures and other investing -15 219 -10 811
activities
Net cash used in investing activities -23 408 -107 443
Acquisition of own shares -10 -57 714
Capital redemption -9 570 -10 055
Dividends paid -485 -479
Deposits 2 500 184 230
Interest received, other than operations related 9 1 233
Proceeds from borrowings 27 731 9 417
Repayment of borrowings, and other financing -44 495 -8 926
activities
Net cash used in financing activities -24 319 117 706
Net increase in cash and cash equivalents -37 165 10 449
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 2 193 328 025 -434 -30 224 348 943 7 768 356
710
at
31.12.
2008
Divide 0 -479
-479
nd
distri
bution
Total 6 599 -20 637 -14 038 -2 673 -16
711
compre
hensiv
e
income
Share- 908 908
908
based
paymen
ts
Acquis -57 614 -57 614 -57
614
ition
of own
shares
Capita -10 055 -10 055 -10
055
l
redemp
tion
Acquis 0 13 263 13
263
itions
and
dispos
als
of
subsid
iaries
Equity 23 642 25 740 2 193 260 357 6 165 -49 953 268 144 17 878 286
022
at
31.12.
2009
Divide 0 -357
-357
nd
distri
bution
Total 7 756 -52 611 -44 854 3 327 -41
528
compre
hensiv
e
income
Share- 1 688 1 688 1
688
based
paymen
ts
Share 72 72
72
subscr
iption
s
based
on
option
rights
Acquis -10 -10
-10
ition
of own
shares
Capita -9 570 -9 570 -9
570
l
redemp
tion
Acquis -3 916 -3 916 3 933
17
itions
and
dispos
als
of
subsid
iaries
Other 20 20
20
change
s
Equity 23 642 25 740 2 193 250 849 13 921 -104 772 211 574 24 781 236
355
at
31.12.
2010
OTHER KEY INDICATORS, CONTINUING OPERATIONS
12 months ended 12 months ended
31.12.2010 31.12.2009
Gross capital expenditure (EUR million) 53.8 203.7
% of revenue 43.6% 286.7%
Personnel, average 677 529
Personnel, at the end of the period 722 641
FORMULAS FOR FINANCIAL INDICATORS
Financial ratios and indicators have been calculated with the same principles
as applied in the 2009 financial statements. These principles are presented
below.
Return on equity, % = Net profit / Total equity (average for the period) * 100
Return on capital employed, % = Profit before taxes + financing expenses /
(balance sheet total - non-interest bearing liabilities) average * 100
Equity ratio, % = Total equity / balance sheet - prepayments received * 100
Earnings per share, undiluted, 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
Equity per share, EUR = Equity attributable to owners of the parent company /
Average number of shares during the period
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) = EBIT
+ 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.
ACQUISITIONS AND DIVESTMENTS
Chromex acquisitionDuring the fourth quarter the Group acquired Chromex Mining plc, a UK company
with mining operations and prospecting rights in South Africa and Zimbabwe. The
acquisition was carried out by the Group's joint venture company Synergy Africa
Ltd, which is 51% consolidated into the Group's financial statement applying
proportional consolidation.
The preliminary purchase price allocation of the acquisition is presented
below. The figures on the table represent the 51 per cent share of the assets
and liabilities of Chromex which is consolidated into Ruukki Group's financial
statements.
EUR '000 Book Value Fair Value Fair Value
adjustments
Assets
Non-current assets 4 889 30 575 35 464
Machinery and equipment 3 445 411 3 856
Mineral resources -- 29 541 29 541
Other tangible assets 19 -- 19
Intangible assets 486 714 1 200
Deferred tax asset 939 -- 939
Current assets 1 485 43 1 528
Order book -- 3 3
Inventories 914 40 954
Trade and other receivables 329 -- 329
Cash and cash equivalents 242 -- 242
Total assets 6 375 30 618 36 992
Non-current liabilities 4 130 8 528 12 658
Loans and borrowings 2 137 -- 2 137
Provisions 1 993 -- 1 993
Deferred tax liability -- 8 528 8 528
Current liabilities 2 222 -- 2 222
Total liabilities 6 352 8 528 14 880
Net assets 23 22 090 22 111
Cost of acquisition 22 111
Net assets acquired 22 111
Goodwill 0
Cash flow effect: *
Cash consideration paid -20 525
Cash acquired 242
Net cash flow -20 283
* Cash flow effect has been calculated on the exchange rate at the date of
acquisition
Intermetal acquisition
A 99% stake in Intermetal, a Turkish company, was acquired in the beginning of
February 2010. The revised preliminary purchase price allocation of the
acquisition has been presented in the first quarter Interim Report.
Lappipaneli disposal of assets
Lappipaneli concluded in April the transfer of its fixed assets to Pölkky Oy,
Pölkky Metsä Kmo Oy and Kitkawood Oy. Inventories were sold already in October
2009. The consideration was partly paid during the fourth quarter of 2009 and
the remaining during 2010.
ACCOUNTING POLICIES
This Financial Statements Review is prepared in accordance with the IAS 34
standard. Ruukki Group Plc applies the same accounting and IFRS principles as
in the 2009 financial statements. In 2010 the Group has had two reporting
segments: Wood Processing Business and Minerals Business.
The preparation of the financial statements 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 treasury shares acquired are presented as a deduction in the parent
company's paid-up unrestricted equity reserve.
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.
Other changes
The Group decided in conjunction with the 2009 financial statements to change
the way it presents its share of associated profits, sales gains and losses
related to associates, and impairment on associates' shares and receivables, to
the extent they relate to associated companies owned by the Group parent
company and not belonging to business segments. Hence, from 2009 onwards these
items are presented in finance items below EBIT, when previously they have been
presented above EBIT in various lines. The comparatives have been changed
accordingly. The rationale behind the change in presenting these items is that
these associated companies are not material and that they are classified as
non-core assets.
From 31 December 2009, with retroactive implementation, the Group has presented
realised and unrealised gains and losses in relation to emission rights in
other operating income and expenses above EBIT, whereas earlier those items
have been included in finance income and finance expense.
Ruukki acquired in October 2008 the Southern European minerals business,
consisting of RCS, TMS and EWW. The business is based on EWW's niche smelter
operations. Many of EWW's products are tailor made sophisticated products
integrated into RCS's customers' supply chains. The exact product composition
is critical for many of those customers' quality assurance programmes for their
own production and the Group is often the only supplier of the exact product
required. Ruukki Group initially identified customer relationships and
technology as separate assets, but has subsequently reconsidered that these two
components are embedded and non separable. Therefore it will from 2010 onwards
combine these assets and rename them as "customer relationships and
technology", recognising the value of the long-term customer relationship and
deeply integrated products of a niche manufacturer. In interim reporting, both
assets have been presented as other intangible assets. The change in the asset
description does not change the interim reporting form from prior reporting.
Acquisition-related liabilities, both conditional and unconditional items, have
from 31 December 2009 been retroactively presented in interest-bearing
liabilities to the extent those liabilities are to be settled with cash
regardless whether the payments are fixed in nominal terms or whether there are
interest determined in the transaction documentation. The earn-out liabilities
where the payment is in the form of the Company's shares, no reclassification
has been carried out, and hence those items are shown in the non-interest
bearing liabilities category.
The Financial Statements Review data are unaudited.
In Espoo, 23 February 2011
RUUKKI GROUP PLC
BOARD OF DIRECTORS
OTHER NOTES TO FINANCIAL STEMENTS REVIEW
SHAREHOLDERS
On 31 December 2010, the Company had a total of 3,749 shareholders, of which 9
were nominee-registered. The registered number of shares was 248,207,000 on 31
December 2010.
Largest shareholders, 31 December 2010:
Shareholder Shares %
1 Kermas Limited 70 766 500 28.5
2 Atkey Limited 51 426 401 20.7
3 Hanwa Company Limited 30 000 000 12.1
4 Nordea Bank Finland Plc nominee-registered 25 088 901 10.1
5 Evli Bank Plc nominee-registered 16 077 500 6.5
6 Hino Resources Co. Ltd 11 947 191 4.8
7 Kankaala Markku 8 077 533 3.3
8 Ruukki Group Plc 7 890 895* 3.2
9 Moncheur & Cie SA 7 435 672 3.0
10 Skandinaviska Enskilda Banken nominee-registered 5 058 644 2.0
---------------------------------------------------------------------
Total 233 769 237 94.2
Other Shareholders 14 437 763 5.8
---------------------------------------------------------------------
Total shares registered 248 207 000 100.0
* In addition 850,000 shares are as depositary interests in London Stock
Exchange
CHANGES IN THE NUMBER OF SHARES AND SHARE CAPITAL DURING OR AFTER 2010
On 31 December 2009, the registered number of Ruukki Group Plc shares was
261,034,022. In February 2010 altogether 13,052,022 shares were cancelled, and
the registered amount of shares changed to 247,982,000.
On 20 July 2010, Ruukki Group Plc issued 225,000 new shares pursuant to the
subscriptions made by I/2005 A series option rights. According to the terms of
the Option Program, the subscription period ended on 30 June 2010 and the
subscription price was EUR 0.32 per share. The subscription price of the new
shares was registered in the Company's unrestricted equity reserve. Share
capital remained unchanged, totalling EUR 23,642,049.60. The new shares were
admitted to trading on the Official List of NASDAQ OMX Helsinki Ltd on 21 July
2010 and to trading on the London Stock Exchange on 27 July 2010, following
admission of the other shares to trading on the London Stock Exchange on 26
July 2010. The number of the Company's shares after subscription is 248,207,000
shares. The shares are in a single series, and each share entitles the holder
to one vote at the Annual General Meeting.
The new shares issued pursuant to the share issue and the subscriptions made by
option rights have been registered in the trade register and the Company's
shareholder register. They entitle the holder to a dividend for financial year
2010 and to other shareholder rights.
The share subscriptions made have changed the potential dilution from option
rights as compared to the information presented in the Group's 2009 Annual
Report.
On 31 December 2010 the Company had altogether 8,740,895 (21,787,917) own
shares, which was equivalent to about 3.52% (8.35%) of all registered shares.
The total amount of shares outstanding, excluding the treasury shares held by
the Company on 31 December 2010 was 239,466,105 (239,246,105).
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.
SHARE-BASED COMPENSATION
The Group has directed an issue of shares at no cost to the members of the
Board of Directors as approved by the Annual General Meeting on 21 April 2010.
The Board decided on 30 May on a directed share issue at no cost to the Board
member Barry Rourke in accordance with the Board's statement presented at the
AGM. In respect of its terms, this share issue corresponds to the share issue
which the Annual General Meeting of 21 April 2010 decided to allocate to the
other members of the Board of Directors. The compensation plan is settled in
shares and is accordingly recognised as equity-settled in the Group's IFRS
financial statements. The terms of the directed share issue at no cost have
been published in entirety by a stock exchange release in conjunction with the
resolutions of the AGM on 21 April and on 1 June concerning the share issue at
no cost to Barry Rourke.
GENERAL MEETINGS
Ruukki Group Plc's Annual General Meeting was held in Espoo on Wednesday 21
April 2010. The Board of Directors' as well as shareholders' proposals for the
Annual General Meeting have been published in entirety by a stock exchange
release on 31 March 2010, and in addition the amendment to shareholders'
proposal on the election of the members of the Board of Directors was published
by a stock exchange release on 9 April 2010.
The Annual General Meeting adopted the financial statements and the
consolidated financial statements for the financial year 1 January 2009 - 31
December 2009. Deviating from the previously given information the financial
statements were dated on 31 March 2010. The Annual General Meeting resolved, in
accordance with the Board of Directors' proposal, not to pay dividend from the
financial period that ended on 31 December 2009. The Annual General Meeting
discharged the Board of Directors and the Chief Executive Officer from
liability for the financial year 2009.
The Annual General Meeting resolved that the Chairman of the Board shall be
paid EUR 7,500 per month, the new Board members EUR 6,500 per month and the
continuing Board members EUR 5,000 per month. In addition, those members of the
Board that are members of the Audit Committee shall be paid for their work at
the Audit Committee as follows: the chairman of the Audit Committee EUR 1,000
per Audit Committee's meeting and the other members EUR 500 per Audit
Committee's meeting. For any other committees, the chairman shall be paid EUR
600 per committee meeting and the other members shall be paid EUR 300 per
committee meeting. The Annual General Meeting resolved that the Company will
pay the fee to the auditor against an invoice. The Annual General Meeting
resolved that the Board of Directors shall be composed of seven members. Markku
Kankaala, Jelena Manojlovic and Terence McConnachie were re-elected to the
Board of Directors and Philip Baum, Paul Everard, Chris Pointon and Barry
Rourke were elected as new members to the Board of Directors. The new Board of
Directors convened after the Annual General Meeting and re-elected Jelena
Manojlovic as the Chairman of the Board of Directors. Authorized Public
Accountant Firm Ernst & Young Oy was re-elected as the auditor of the Company.
Ernst & Young Oy has put forward APA Tomi Englund as principal auditor.
The Annual General Meeting resolved, in accordance with the proposal of the
Board of Directors, to amend the provision concerning the notice period of the
Annual General Meeting (Article 8). The Annual General Meeting resolved, in
accordance with the proposal of the Board of Directors, that the Company shall
make a capital repayment from the paid-up un-restricted equity reserve to the
shareholders in such a way that assets shall be distributed EUR 0.04 per share.
The Annual General Meeting resolved, in accordance with the proposal of the
Board of Directors, to issue a maximum of 800,000 shares from the Company's
treasury shares, by a directed free issue to the members of the Board of
Directors. The shares will be issued free of charge and derogating from the
pre-emptive subscription right of the shareholders for an especially weighty
financial reason, as the shares will form an essential part of the remuneration
package for the work at the Board of Directors. The Annual General Meeting
authorised the Board of Directors to decide upon share issue and upon issuing
of stock options and other special rights that entitle to shares. By virtue of
the authorisation shares could be emitted in one or more tranches in total a
maximum of 100,000,000 new shares or shares owned by the Company. The Board of
Directors would by virtue of the authorisation be entitled to decide on the
share issues and on the issuing of stock options and other special rights that
entitle to shares. The Annual General Meeting authorised the Board of Directors
to decide on the acquiring of Company's own shares. By virtue of the
authorisation concerning the acquiring of own shares, a maximum of 10,000,000
own shares can be acquired with the funds from the Company's unrestricted
shareholders' equity.
Ruukki Group held an Extraordinary General Meeting in Espoo on Wednesday 17
November 2010. The arrangements between the Company, Kermas Limited and Synergy
Africa Limited relating to the formation and financing of the acquisition
vehicle Synergy Africa Limited and the acquisition and subsequent holding of
shares in Chromex Mining plc were all approved. The Board of Directors was also
authorised to take all the necessary steps to implement the transactions. The
resolutions of the Extraordinary General Meeting have been published in
entirety that day by a stock exchange release.
COMPANY'S SHARE
Ruukki Group Plc's shares are listed on NASDAQ OMX Helsinki (RUG1V) in which
the shares of the Company are traded in the mid cap segment, in the industrials
sector. As of 26 July, the Company's shares have been listed on the main market
of the London Stock Exchange (RKKI).
Share-related key figures
12 months 12 months Q4 Q4
ended ended 2010 2009
31.12.2010 31.12.2009
Share price development in
London Stock Exchange *
Average share price** EUR 1.64 N/A 1.59 N/A
GBP 1.39 N/A 1.37 N/A
Lowest share price** EUR 1.60 N/A 1.58 N/A
GBP 1.36 N/A 1.36 N/A
Highest share price** EUR 2.10 N/A 1.90 N/A
GBP 1.78 N/A 1.63 N/A
Share price at the end of EUR 1.68 N/A 1.68 N/A
the period***
GBP 1.45 N/A 1.45 N/A
Market capitalisation at EUR million 416.7 N/A 416.7 N/A
the end of the period***
GBP million 358.7 N/A 358.7 N/A
Share trading development
Share turnover 1,000 shares 712 N/A 639 N/A
Share turnover EUR '000 1 168 N/A 1 032 N/A
Share turnover GBP '000 990 N/A 875 N/A
Share turnover % 0.3% N/A 0.3% N/A
Share price development in
NASDAQ OMX Helsinki
Average share price EUR 1.59 1.67 1.72 2.03
Lowest share price EUR 1.00 1.04 1.57 1.79
Highest share price EUR 2.30 2.68 1.89 2.68
Share price at the end of EUR 1.70 2.14 1.70 2.14
the period
Market capitalisation at EUR million 422.0 558.6 422.0 558.6
the end of the period
Share trading development
Share turnover 1,000 shares 21 042 328 119 2 136 47 304
Share turnover EUR '000 33 414 547 018 3 681 96 103
Share turnover % 8.5% 125.7% 0.9% 18.1%
* 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
FLAGGING NOTIFICATIONS DURING OR AFTER THE REVIEW PERIOD
Ruukki Group Plc has received the following flagging notifications during or
after the review period 1 January - 31 December 2010. The notifications can be
found in full on the Company website at
http://www.ruukkigroup.fi/In_English/News/Flaggings.iw3.
- 19 January 2010: Ruukki Group Plc => treasury shares held by the Company
below 5%
- 20 January 2010: Atkey Limited => based on Ruukki Group's announcement of the
Board's decision to cancel altogether 13,052,022 treasury shares held by Ruukki
Group Plc Atkey Limited's ownership will exceed 20% of the registered share
capital and voting rights of Ruukki Group Plc after the cancellation has been
registered at the Trade Register
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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