2009-05-07 07:00:00 CEST
2009-05-07 07:00:44 CEST
REGULATED INFORMATION
Ruukki Group Oyj - Interim report (Q1 and Q3)
RUUKKI GROUP PLC'S INTERIM REPORT FOR 1 JANUARY-31 MARCH 2009
Ruukki Group Plc, Interim Report, 7 May 2009 at 08:00 a.m. RUUKKI GROUP PLC'S INTERIM REPORT FOR 1 JANUARY-31 MARCH 2009 GROUP KEY FIGURES, CONTINUING OPERATIONS -------------------------------------------------------------------------------- | | Q1/2009 | Q1/2008 | 2008 | -------------------------------------------------------------------------------- | CONTINUING OPERATIONS, EUR million | 3 months | 3 months | 12 months | | | 31.3.2009 | 31.3.2008 | 31.12.2008 | -------------------------------------------------------------------------------- | Revenue | 44.5 | 36.9 | 158.7 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EBITDA | -0.2 | 1.7 | 2.3 | -------------------------------------------------------------------------------- | % of revenue | -0.5% | 4.7% | 1.5% | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EBIT | -5.8 | -0.8 | -46.7 | -------------------------------------------------------------------------------- | % of revenue | -13.1% | -2.0% | -29.4% | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings before taxes | -6.5 | 2.1 | -41.5 | -------------------------------------------------------------------------------- | % of revenue | -14.6% | 5.6% | -26.2% | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit for the period | -5.6 | 0.7 | -41.4 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Return on equity, % p.a. | -6.6% | 0.7% | -10.8% | -------------------------------------------------------------------------------- | Return on capital employed, % p.a. | -4.6% | 3.3% | -8.1% | -------------------------------------------------------------------------------- | Equity ratio, % | 62.9% | 76.5% | 64.8% | -------------------------------------------------------------------------------- | Earnings per share, undiluted | -0.01 | 0.00 | -0.14 | | (EUR) | | | | -------------------------------------------------------------------------------- | Earnings per share, diluted (EUR) | -0.01 | 0.00 | -0.14 | -------------------------------------------------------------------------------- | Equity per share, EUR | 1.23 | 1.37 | 1.20 | -------------------------------------------------------------------------------- | Average number of shares, | 264 988 | 290 034 | 288 749 | | undiluted (1,000) | | | | -------------------------------------------------------------------------------- | Average number of shares, diluted | 310 314 | 300 084 | 303 891 | | (1,000) | | | | -------------------------------------------------------------------------------- | Number of shares outstanding, end | 261 034 | 290 034 | 290 034 | | of period (1,000) | | | | -------------------------------------------------------------------------------- The figures in the table above represent continuing operations; all the effects of the discontinued operations are excluded. HIGHLIGHTS Q1/2009 - Group Revenue EUR 44.5 million (1-3/2008: EUR 36.9 million) - Group EBITDA EUR -0.2 (1.7) million - Wood Processing segment EBITDA EUR 3.4 million, mainly based on good performance in the house building business - Minerals segment EBITDA EUR 0.7 million, which included a EUR 2.0 million negative IFRS-adjustment on finished goods inventory - Cash flow from operations equalling EUR 3.8 (6.1) million, especially strong for the Minerals segment - Net cash position EUR 187.5 million on 31 March 2009 (EUR 213.1 million on 31 December 2008), change in net cash position to major extent related to acquisition of own shares in January and March - Amount of shares outstanding, netting out the treasury shares held by the Company: 258,977,496 on 31 March 2009 (279,349,022 on 31 December 2008) CEO COMMENTS According to Alwyn Smit, Chairman and CEO of Ruukki Group Plc: - “The global economic crisis is severely affecting our industrial operations in Finland and abroad. Moreover, since the banking sector is in turmoil, the tight availability of credit requires the generation of positive operating cash flow or alternatively the use of own cash resources. We have adjusted, and will be critically looking at, our capacity utilisation rates in various operational units to match supply with demand.” - “Ruukki is actively investigating transactions to expand its existing business both geographically and into new products. To the extent possible transactions are targeted to be paid by using Ruukki Group shares thereby limiting the use of cash. The cash has predominantly been earmarked for acquisitions and capital expenditure into the minerals segment.” PRESS AND ANALYSTS BRIEFING Company holds a conference call on 7 May 2009 at 2:00 p.m. Finnish time in English. Chairman and CEO Alwyn Smit will present the interim report. Please register via email to marjo.lonka@ruukkigroup.fi to attend the call. Further instructions will be given after registration. For any further information, please contact: Alwyn Smit Chairman of the Board and CEO Ruukki Group Plc Telephone +358 50 442 1663 / +41 7960 19094 www.ruukkigroup.fi Ruukki Group Plc's shares are listed on Nasdaq OMX Helsinki in which the shares of the Company are traded in the mid cap segment, in the industrials sector. This Interim Report is based on translation into English of a document written in Finnish. In case there would be any potential discrepancies, inconsistencies or inaccuracies, the Finnish version shall prevail. RUUKKI GROUP PLC: INTERIM REPORT, 1 JANUARY-31 MARCH 2009 KEY EVENTS DURING THE FIRST QUARTER 2009 Integration of the chrome ore and ferrochrome businesses, acquired in October 2008, was continued, and it was decided that the Group will start an investment project in Turkey to build a chromite concentrate beneficiation plant specifically directed to utilising tailings of old mining operations. Due to low market demand and in order to maximise the Group's operative cash flows, the German ferrochrome furnace, which has a toll manufacturing agreement with the Group's Minerals segment, stopped all of its ferrochrome production in December 2008. The production was restarted in April 2009. Russian pulp mill and sawmill preparations, which were originally started in the Kostroma region with a target of investing over one billion euro into an integrated pulp mill - sawmill - harvesting operations and which generated major losses, were discontinued by the decision made by the Board at the end of February. DEVELOPMENT BY BUSINESS SEGMENT WOOD PROCESSING BUSINESS General market conditions in mechanical wood processing business have been very difficult during 2009. A number of competitors have been closing down mills, recognising losses or downsizing their operations, which has somewhat alleviated the negative effects of the declining trend in demand. Market prices in the log and sawn timber markets have steadily fallen due to lower demand. According to various market sources, such as industry unions, the overall delivery volume of the detached housing market in Finland is expected to be about 50% lower in 2009 than the volume realised during 2008. The downward trend in demand has had negative effect on order book and will affect house delivery volumes in the latter half of 2009 and thereafter. During Q1/2009 Ruukki Group's house building business generated good profit margin and positive cash flow. In the sawmill sector the relative competitiveness of Finnish sawmills in general has deteriorated especially compared to the Swedish competitors due to e.g. exchange rate changes. During Q1/2009 Ruukki Group's sawmills have decreased their capacity utilisation rates, but despite those measures the Group's sawmills recognised losses and their finished goods inventories rose, which led to a negative operating cash flow. During the first quarter the Oulainen mill was restarted after capital expenditures were finalised, but it has been run only at about half the capacity. The pallet business has also faced difficulties since its customers, especially in paper industry, have suffered from the global recession. Revenue and profitability of the Wood Processing business segment: -------------------------------------------------------------------------------- | EUR million | 1-3/2009 | 1-3/2008 | 1-12/2008 | -------------------------------------------------------------------------------- | Revenue | 31.7 | 36.1 | 144.9 | -------------------------------------------------------------------------------- | EBITDA | 3.4 | 4.6 | 14.6 | -------------------------------------------------------------------------------- | EBITDA margin | 10.7% | 12.8% | 10.1% | -------------------------------------------------------------------------------- | EBIT | 2.1 | 2.9 | -13.6 | -------------------------------------------------------------------------------- | EBIT margin | 6.6% | 8.1% | -9.4% | -------------------------------------------------------------------------------- Wooden ready-to-move-in house deliveries (number of houses): -------------------------------------------------------------------------------- | 1-3/2009 | 1-3/2008 | 1-12/2008 | -------------------------------------------------------------------------------- | 96* | 105 | 342 | -------------------------------------------------------------------------------- * Of the Q1/2009 deliveries 22 houses relate to Suomutunturi project The volume of sawn timber production: -------------------------------------------------------------------------------- | | 1-3/2009 | 1-3/2008 | 1-12/2008 | -------------------------------------------------------------------------------- | 1 000 m3 | 79 | 50 | 312 | -------------------------------------------------------------------------------- On 31 March 2009 the business segment employed a total of 277 employees (31 March 2008: 322). MINERALS BUSINESS After the acquisition of RCS Limited and Türk Maadin Sirketi A.S. was closed at the end of October 2008, Ruukki Group has been concentrating on post-acquisition integration procedures. During the first quarter of 2009, global stainless steel market demand was very low, and that had negative impact on the Minerals business segment's operations and profitability. However, the segment's operative cash flow was particularly strong due to de-stocking of ferrochrome inventories, since the German furnace operation was closed for all of the quarter and only restarted its production in April. Based on the preliminary purchase price allocation conducted at the acquisition date on October, there was about EUR 2.0 million non-cash inventory valuation adjustments that decreased the reported first quarter EBITDA. Net income was negative, mainly due to amortisation of intangible assets recognised on the acquisition date in 2008. The preliminary purchase price allocation has not been adjusted during the review period. Turkish mining operations have been run at almost full capacity during Q1/2009, which has increased the chrome ore and chromite concentrate inventories. The Group has committed to construct a new concentrate plant within the next twelve months to utilise the on-ground tailings resources. The total investment is estimated to be around EUR 7 million, and is targeted to be finalised during the first quarter of 2010. This will increase the Group's chromite ore concentrate production capacity and is targeted to enhance its cost competitiveness. During the first quarter an additional environmental due diligence analysis was carried out in Turkey, the outcome of which did not lead to any changes in the environmental liabilities already previously recognised. At the end of the first quarter RCS Limited was transferred in an intra-group transaction to become a subsidiary of Ruukki Holdings Limited, another Maltese subsidiary of Ruukki Group, with no effect on the Group income statement. Revenue and profitability of the Minerals business segment: -------------------------------------------------------------------------------- | EUR million | 1-3/2009 | 11-12/2008 | | | 3 months | 2 months | -------------------------------------------------------------------------------- | Revenue | 12.8 | 12.3 | -------------------------------------------------------------------------------- | EBITDA | 0.7 | 1.9 | -------------------------------------------------------------------------------- | EBITDA margin | 5.4% | 15.3% | -------------------------------------------------------------------------------- | EBIT | -3.6 | -1.0 | -------------------------------------------------------------------------------- | EBIT margin | -28.1% | -8.1% | -------------------------------------------------------------------------------- The number of employees totalled 388 on 31 March 2009 in the Maltese, Turkish and German entities. OTHER OPERATIONS For the first quarter of 2009 the Group's other operations, not included in the two separately reported segments, generated a negative EBITDA of EUR -4.3 million of which EUR -2.6 million related to Russian investment projects and the rest to major extent to the Group's parent company. The Group's parent company recognised EUR 0.4 million non-cash option expenses for the first quarter of 2009. Based on the Board's resolution to discontinue Russian pulp mill and sawmill projects, Russian projects have been recognised into the Other operations from the beginning of 2009. During Q1/2009, mainly due to the disposal of Russian subsidiaries' shares and loan receivables, a net EBITDA loss of EUR 2.6 million has been recognised. The income from associated companies had only very minor effect to the first quarter results. Ruukki Group has during the first quarter of 2009 fully terminated all of its deposits in Russian banks. These deposits were to major extent denominated in EUR terms, at the end of 2008 amounting to about EUR 28 million, and consequently that exposure has been fully erased. The Group deposits its liquidity into short-term deposits with a number of financial institutions to diversify risk and to have operational flexibility. FUTURE OUTLOOK General Even though the customers within the Group's key market areas have generally been destocking their inventories, future demand is very difficult to forecast. In all of the Group's business areas, cash costs will be cut where possible, but decreasing volumes can create further losses and require bridge financing for the businesses. The production at the Group's facilities is still to be adjusted with foreseen demand, which will keep the inventories at low levels at all times. No major new competitors are expected to enter the market niche where the Group operates. Wood Processing business The Wood Processing business segment's short-term outlook remains weak due to slow-down of economic activity almost everywhere. The reduction in industry supply, especially in sawmill sector, and decreasing trend in log prices can to some extent alleviate the problem. However, it is estimated that for the short-term no major positive recovery is to take place. House building markets are generally expected to decline significantly in Finland, but the ready-to-move-in market can gain market share. Competition might become fiercer due to continued oversupply. Probably certain consolidation actions will be carried out within the Finnish house building sector. Short-term profitability outlook for house building remains positive. The Group's sawmills are assumed to face challenges to cope with changes in its main markets, such as housing and construction industries, and to manage the cash flows due to capital-intensive nature of business. Minerals business Due to major difficulties in global automotive and aerospace industries, the demand and average sales prices of the ferrochrome business have rapidly and significantly fallen, and it is not foreseen that any substantial recovery would take place in the short future. In the special grade ferrochrome products, which are the market niche where Ruukki Group operates, volumes are expected remain at low level. However, due to the Group's products' high quality relative competitiveness is expected to remain good. GUIDANCE 2009 The Group has given, as published on 26 February 2009, the following guidance which will still be valid: - EBITDA guidance 1-12/2009: consolidated Group EUR 10.0 million, Wood Processing EUR 5.0 million, Minerals EUR 10.0 million - Emphasis on positive cash flow RISKS AND UNCERTAINTIES, CHANGES DURING OR AFTER THE REVIEW PERIOD On top of the risks described in the Group's 2008 annual report, there are certain additional risks described below that are valid for the prevailing situation. If the tight situation on global banking market continues for a prolonged period, that can limit the Group's ability to grow via acquisitions and to invest capital into expansion projects within its current businesses. Moreover, the cost of financing can increase considerably compared to historical situation. For the last months one key development has been a decrease in commercial supply within the Group's business segments, which has mainly been initiated by the biggest competitors. If the relevant products markets would recover, there is a risk that additional supply will be put out to the market pushing market prices down. Moreover, it might be possible that for cash generation purposes some competitors might have to dump their products at low prices, which could directly and indirectly affect the Group's profitability. In case the market prices in the Group's key markets, like ferrochrome and sawn timber, continue trending down, and if there is no pick-up in demand, there is a risk that in the future review periods the Group's inventories might have to be re-valued, which would cause additional accounting losses. The risk in relation to the availability of skilled workforce has generally decreased due to the lay-offs and dismissals carried out by industry peers. The ongoing economic recession has changed the payment behaviour of some of the Group's customers and they have prolonged their payments. The risk of payment defaults or even credit losses has therefore increased during the review period. RELATED PARTY TRANSACTIONS There have not been significant related party transactions during the review period. FINANCIAL TABLES FINANCIAL DEVELOPMENT BY SEGMENT, CONTINUING OPERATIONS, EUR THOUSAND -------------------------------------------------------------------------------- | 1.1.-31.3.2009 | Wood | Minerals | Non-segm | Adjustments | Group | | EUR '000 | Processin | | ents | and | | | | g | | | eliminations | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Revenue | | | | | | -------------------------------------------------------------------------------- | From external | 31 674 | 12 814 | 0 | 0 | 44 488 | | customers | | | | | | -------------------------------------------------------------------------------- | From other | 0 | 0 | 1 | -1 | 0 | | segments | | | | | | -------------------------------------------------------------------------------- | Segment's | 31 674 | 12 814 | 1 | -1 | 44 488 | | revenue | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit | | | | | | -------------------------------------------------------------------------------- | Segment's EBITDA | 3 390 | 693 | -4 287 | 0 | -204 | -------------------------------------------------------------------------------- | Segment's EBIT | 2 086 | -3 598 | -4 307 | 0 | -5 818 | -------------------------------------------------------------------------------- | Segment's profit | -705 | -1 685 | -3 248 | 0 | -5 638 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 1.1.-31.3.2008 | Wood | Minerals | Non-segm | Adjustments | Group | | EUR '000 | Processin | | ents | and | | | | g | | | eliminations | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Revenue | | | | | | -------------------------------------------------------------------------------- | From external | 35 941 | 0 | 936 | 0 | 36 878 | | customers | | | | | | -------------------------------------------------------------------------------- | From other | 116 | 0 | 2 | -118 | 0 | | segments | | | | | | -------------------------------------------------------------------------------- | Segment's | 36 057 | 0 | 938 | -117 | 36 878 | | revenue | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit | | | | | | -------------------------------------------------------------------------------- | Segment's EBITDA | 4 621 | 0 | -2 766 | -140 | 1 715 | -------------------------------------------------------------------------------- | Segment's EBIT | 2 934 | 0 | -3 547 | -140 | -752 | -------------------------------------------------------------------------------- | Segment's profit | 1 838 | 0 | -908 | -246 | 685 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 1.1.-31.12.2008 | Wood | Minerals | Non-segm | Adjustments | Group | | EUR '000 | Processin | | ents | and | | | | g | | | eliminations | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Revenue | | | | | | -------------------------------------------------------------------------------- | From external | 144 066 | 12 308 | 2 308 | -16 | 158 665 | | customers | | | | | | -------------------------------------------------------------------------------- | From other | 840 | 0 | 381 | -1 221 | 0 | | segments | | | | | | -------------------------------------------------------------------------------- | Segment's | 144 906 | 12 308 | 2 689 | -1 237 | 158 665 | | revenue | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit | | | | | | -------------------------------------------------------------------------------- | Segment's EBITDA | 14 567 | 1 880 | -13 176 | -930 | 2 342 | -------------------------------------------------------------------------------- | Segment's EBIT | -13 634 | -999 | -31 121 | -930 | -46 684 | -------------------------------------------------------------------------------- | Segment's profit | -23 872 | -49 | -15 590 | -1 857 | -41 367 | -------------------------------------------------------------------------------- ASSETS BY SEGMENT, EUR THOUSAND -------------------------------------------------------------------------------- | ASSETS | Wood | Minerals | Non-segm | Adjustments | Group | | EUR '000 | Processin | | ents | and | | | | g | | | eliminations | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 31 March 2009 | 83 769 | 189 697 | 422 836 | -168 245 | 528 058 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 31 December 2008 | 85 676 | 57 943 | 453 102 | -33 446 | 563 275 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- GOODWILL BY SEGMENT, EUR THOUSAND -------------------------------------------------------------------------------- | EUR '000 | 31.3.2009 | % | 31.12.2008 | % | Change | -------------------------------------------------------------------------------- | Continuing | | | | | | | Operations | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Wood Processing | 25 418 | 29.0 % | 25 418 | 29.1 % | 0 | -------------------------------------------------------------------------------- | Minerals Business | 62 133 | 71.0 % | 61 830 | 70.9 % | 303 | -------------------------------------------------------------------------------- | Total Continuing | 87 551 | 100.0 % | 87 248 | 100.0 % | 303 | | Operations | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- CONSOLIDATED INCOME STATEMENT, SUMMARY, CONTINUING OPERATIONS, EUR THOUSAND -------------------------------------------------------------------------------- | | 1.1.- | 1.1.- | 1.1.- | | | 31.3.2009 | 31.3.2008 | 31.12.2008 | -------------------------------------------------------------------------------- | EUR '000 | 3 months | 3 months | 12 months | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Continuing operations | | | | -------------------------------------------------------------------------------- | Revenue | 44 488 | 36 878 | 158 665 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other operating income | 158 | 722 | 1 273 | -------------------------------------------------------------------------------- | Operating expenses | -44 839 | -36 065 | -157 766 | -------------------------------------------------------------------------------- | Depreciation and amortisation | -5 614 | -1 726 | -10 839 | -------------------------------------------------------------------------------- | Share of profit of associates | -11 | 180 | 171 | -------------------------------------------------------------------------------- | Impairment | 0 | -741 | -38 187 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | -5 818 | -752 | -46 684 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial income and expense | -674 | 2 831 | 5 143 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit before tax | -6 492 | 2 079 | -41 541 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Income tax | 855 | -1 394 | 174 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit for the period from | -5 638 | 685 | -41 367 | | continuing operations | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Discontinued operations | | | | -------------------------------------------------------------------------------- | Profit for the period from | 0 | 1 902 | 8 680 | | discontinued operations | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit for the period | -5 638 | 2 587 | -32 687 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit attributable to: | | | | -------------------------------------------------------------------------------- | Owners of the parent | -3 572 | 2 441 | -31 386 | -------------------------------------------------------------------------------- | Non-controlling interests | -2 065 | 146 | -1 301 | -------------------------------------------------------------------------------- | Total | -5 638 | 2 587 | -32 687 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share (counted from profit attributable to owners of the | | parent): | -------------------------------------------------------------------------------- | basic (EUR), continuing | -0,01 | 0,00 | -0,14 | | operations | | | | -------------------------------------------------------------------------------- | diluted (EUR), continuing | -0,01 | 0,00 | -0,14 | | operations | | | | -------------------------------------------------------------------------------- | basic (EUR), discontinued | - | 0,01 | 0,03 | | operations | | | | -------------------------------------------------------------------------------- | diluted (EUR), discontinued | - | 0,01 | 0,03 | | operations | | | | -------------------------------------------------------------------------------- STATEMENT OF COMPREHENSIVE INCOME, EUR THOUSAND -------------------------------------------------------------------------------- | Other comprehensive income | 1.1.- | 1.1.- | 1.1.- | | | 31.3.2009 | 31.3.2008 | 31.12.2008 | -------------------------------------------------------------------------------- | Exchange differences on | 428 | -863 | 1 026 | | translating foreign operations | | | | -------------------------------------------------------------------------------- | Income tax relating to other | -193 | 182 | -379 | | comprehensive income | | | | -------------------------------------------------------------------------------- | Other comprehensive income, | 234 | -681 | 646 | | net of tax | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total comprehensive income for | -5 403 | 1 906 | -32 041 | | the year | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total comprehensive income | | | | | attributable to: | | | | -------------------------------------------------------------------------------- | Owners of the parent | -3 331 | 1 760 | -30 739 | -------------------------------------------------------------------------------- | Non-controlling interests | -2 072 | 146 | -1 301 | -------------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF FINANCIAL POSITION, SUMMARY, EUR THOUSAND -------------------------------------------------------------------------------- | EUR '000 | 31.3.2009 | 31.3.2008 | 31.12.2008 | -------------------------------------------------------------------------------- | ASSETS | | | | -------------------------------------------------------------------------------- | Non-current assets | | | | -------------------------------------------------------------------------------- | Investments and intangible assets | | | | -------------------------------------------------------------------------------- | Goodwill | 87 551 | 42 984 | 87 248 | -------------------------------------------------------------------------------- | Investments in associates | 1 728 | 1 848 | 1 770 | -------------------------------------------------------------------------------- | Other intangible assets | 68 397 | 9 095 | 72 137 | -------------------------------------------------------------------------------- | Investments and intangible assets | 157 676 | 53 928 | 161 155 | | total | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Property, plant and equipment | 70 706 | 70 545 | 69 633 | -------------------------------------------------------------------------------- | Other non-current assets | 23 415 | 2 951 | 23 366 | -------------------------------------------------------------------------------- | Non-current assets total | 251 797 | 127 423 | 254 154 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current assets | | | | -------------------------------------------------------------------------------- | Inventories | 31 632 | 40 693 | 40 419 | -------------------------------------------------------------------------------- | Receivables | 35 860 | 34 171 | 36 672 | -------------------------------------------------------------------------------- | Held-to-maturity investments | 144 292 | 198 648 | 186 485 | -------------------------------------------------------------------------------- | Other investments | 245 | 5 032 | 133 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 64 232 | 138 250 | 45 413 | -------------------------------------------------------------------------------- | Current assets total | 276 261 | 416 793 | 309 121 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total assets | 528 058 | 544 216 | 563 275 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 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 | 969 | 2 193 | -------------------------------------------------------------------------------- | Paid-up unrestricted equity | 304 263 | 340 690 | 328 025 | | reserve | | | | -------------------------------------------------------------------------------- | Retained earnings | -33 628 | 6 823 | -30 658 | -------------------------------------------------------------------------------- | Equity attributable to owners | 322 210 | 397 864 | 348 943 | | of the parent | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-controlling interests | 5 696 | 9 598 | 7 768 | -------------------------------------------------------------------------------- | Total equity | 327 906 | 407 462 | 356 710 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current liabilities | 142 634 | 59 512 | 140 925 | -------------------------------------------------------------------------------- | Current liabilities | | | | -------------------------------------------------------------------------------- | Advances received | 6 538 | 11 701 | 13 215 | -------------------------------------------------------------------------------- | Other current liabilities | 50 980 | 65 541 | 52 425 | -------------------------------------------------------------------------------- | Current liabilities total | 57 519 | 77 242 | 65 640 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total liabilities | 200 152 | 136 754 | 206 565 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total equity and liabilities | 528 058 | 544 216 | 563 275 | -------------------------------------------------------------------------------- The Group's raw material inventories have been written down to net realisable value on 31 March which had an effect of EUR 0.5 million. During the first quarter of 2009 the Group's sawmill and pallet business subsidiaries have taken interest-bearing debt from financial institutions. Due to these new debt facilities, the total amount of collateral given to financial institutions has increased by a net total of EUR 4.0 million, of which EUR 0.9 million are in the form of company pledges and EUR 3.1 million in the form of property and machinery pledges. The capital expenditure commitments not paid at the end of review period, total about EUR 7.1 million. SUMMARY OF CASH, INTEREST-BEARING RECEIVABLES AND INTEREST-BEARING LIABILITIES, EUR THOUSAND -------------------------------------------------------------------------------- | | 31.3.2009 | 31.3.2008 | 31.12.2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash and cash equivalent | 64 232 | 138 250 | 45 413 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Interest-bearing receivables | | | | -------------------------------------------------------------------------------- | Current | 144 369 | 198 992 | 186 571 | -------------------------------------------------------------------------------- | Non-current | 17 337 | 1 725 | 17 337 | -------------------------------------------------------------------------------- | Interest-bearing receivables | 161 707 | 200 718 | 203 909 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Interest-bearing liabilities | | | | -------------------------------------------------------------------------------- | Current | 11 283 | 17 399 | 13 092 | -------------------------------------------------------------------------------- | Non-current | 27 144 | 37 462 | 23 095 | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 38 427 | 54 860 | 36 187 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET TOTAL | 187 511 | 284 107 | 213 135 | -------------------------------------------------------------------------------- SUMMARY OF GROUP'S PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS, EUR THOUSAND -------------------------------------------------------------------------------- | | Property, plant | Intangible | | | and equipment | assets | -------------------------------------------------------------------------------- | Acquisition cost 1 Jan 2009 | 118 012 | 185 429 | -------------------------------------------------------------------------------- | Additions | 6 165 | 132 | -------------------------------------------------------------------------------- | Disposals | -4 787 | -373 | -------------------------------------------------------------------------------- | Acquisition cost 31 Mar 2009 | 119 390 | 185 188 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Acquisition cost 1 Jan 2008 | 49 351 | 45 871 | -------------------------------------------------------------------------------- | Additions | 80 428 | 148 706 | -------------------------------------------------------------------------------- | Disposals | -11 767 | -9 148 | -------------------------------------------------------------------------------- | Acquisition cost 31 Dec 2008 | 118 012 | 185 429 | -------------------------------------------------------------------------------- CONSOLIDATED CASH FLOW STATEMENT SUMMARY, EUR THOUSAND -------------------------------------------------------------------------------- | EUR '000 | 1.1.- | 1.1.- | 1.1.- | | | 31.3.2009 | 31.3.2008 | 31.12.2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net profit | -5 638 | 2 587 | -32 687 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Adjustments to net profit | 9 293 | 31 | 26 736 | -------------------------------------------------------------------------------- | Changes in working capital | 164 | 3 510 | 4 999 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net cash from operating | 3 819 | 6 128 | -952 | | activities | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Acquisition of subsidiaries and | -1 | -12 706 | -89 162 | | associates | | | | -------------------------------------------------------------------------------- | Payment of earn-out liabilities | 0 | 0 | -403 | | and exercises of call options | | | | | related to acquisitions | | | | -------------------------------------------------------------------------------- | Disposal of subsidiaries and | -393 | 2 589 | 11 111 | | associates | | | | -------------------------------------------------------------------------------- | Capital expenditures and other | -4 731 | -9 807 | -39 879 | | investing activities | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net cash used in investing | -5 124 | -19 924 | -118 334 | | activities | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Share buy-back | -23 324 | 0 | -12 273 | -------------------------------------------------------------------------------- | Dividends paid | 0 | -174 | -12 433 | -------------------------------------------------------------------------------- | Deposits | 42 109 | -66 833 | -52 770 | -------------------------------------------------------------------------------- | Other investments | 0 | 173 056 | 173 056 | -------------------------------------------------------------------------------- | Interest received, other than | 820 | 293 | 14 741 | | operations related | | | | -------------------------------------------------------------------------------- | Proceeds from borrowings | 6 653 | 3 181 | 16 731 | -------------------------------------------------------------------------------- | Repayment of borrowings, and | -6 105 | -6 004 | -10 839 | | other financing activities | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net cash used in financing | 20 154 | 103 519 | 116 214 | | activities | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net increase in cash and cash | 18 848 | 89 723 | -3 071 | | equivalents | | | | -------------------------------------------------------------------------------- SUMMARY OF THE CHANGES IN SHAREHOLDERS' EQUITY OF THE GROUP, IN THOUSAND EUROS -------------------------------------------------------------------------------- | 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 shareholders, total | -------------------------------------------------------------------------------- | H = Minority interest | -------------------------------------------------------------------------------- | I = Total equity | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR '000 | A | B | C | D | E | F | G | H | I | -------------------------------------------------------------------------------- | Sharehold | 23 | 25 | 969 | 340 | -1 | 19 | 409 | 1 | 411 | | ers' | 642 | 740 | | 690 | 080 | 694 | 655 | 995 | 650 | | equity 31 | | | | | | | | | | | Dec 2007 | | | | | | | | | | -------------------------------------------------------------------------------- | Dividend | | | | | | -11 | -11 | -62 | -11 | | distribut | | | | | | 601 | 601 | | 664 | | ion | | | | | | | | | | -------------------------------------------------------------------------------- | Total | | | | | -681 | 2 441 | 1 760 | 146 | 1 906 | | comprehen | | | | | | | | | | | sive | | | | | | | | | | | income | | | | | | | | | | | 1-3/2008 | | | | | | | | | | -------------------------------------------------------------------------------- | Share-bas | | | | | | 368 | 368 | | 368 | | ed | | | | | | | | | | | payments | | | | | | | | | | -------------------------------------------------------------------------------- | Acquisiti | | | | | | -2 | -2 | 7 | 5 202 | | ons and | | | | | | 317 | 317 | 519 | | | disposals | | | | | | | | | | | of | | | | | | | | | | | subsidiar | | | | | | | | | | | ies | | | | | | | | | | -------------------------------------------------------------------------------- | Sharehold | 23 | 25 | 969 | 340 | -1 | 8 584 | 397 | 9 | 407 | | ers' | 642 | 740 | | 690 | 761 | | 864 | 598 | 462 | | equity 31 | | | | | | | | | | | Mar 2008 | | | | | | | | | | -------------------------------------------------------------------------------- | Dividend | | | | | | -432 | -432 | -923 | -1 | | distribut | | | | | | | | | 355 | | ion | | | | | | | | | | -------------------------------------------------------------------------------- | Total | | | | | 1 | -33 | -32 | -1 | -33 | | comprehen | | | | | 327 | 826 | 499 | 447 | 946 | | sive | | | | | | | | | | | income | | | | | | | | | | | 4-12/2008 | | | | | | | | | | -------------------------------------------------------------------------------- | Share-bas | | | | | | 510 | 510 | | 510 | | ed | | | | | | | | | | | payments | | | | | | | | | | -------------------------------------------------------------------------------- | Acquisiti | | | | -12 | | | -12 | | -12 | | on of own | | | | 665 | | | 665 | | 665 | | shares | | | | | | | | | | -------------------------------------------------------------------------------- | Acquisiti | | | 1 | | | -5 | -3 | 540 | -3 | | ons and | | | 224 | | | 061 | 837 | | 297 | | disposals | | | | | | | | | | | of | | | | | | | | | | | subsidiar | | | | | | | | | | | ies | | | | | | | | | | -------------------------------------------------------------------------------- | Sharehold | 23 | 25 | 2 | 328 | -434 | -30 | 348 | 7 | 356 | | ers' | 642 | 740 | 193 | 025 | | 224 | 943 | 768 | 710 | | equity 31 | | | | | | | | | | | Dec 2008 | | | | | | | | | | -------------------------------------------------------------------------------- | Total | | | | | 434 | -3 | -3 | -2 | -5 | | comprehen | | | | | | 765 | 331 | 072 | 403 | | sive | | | | | | | | | | | income | | | | | | | | | | | 1-3/2009 | | | | | | | | | | -------------------------------------------------------------------------------- | Share-bas | | | | | | 361 | 361 | | 361 | | ed | | | | | | | | | | | payments | | | | | | | | | | -------------------------------------------------------------------------------- | Acquisiti | | | | -23 | | | -23 | | -23 | | on of own | | | | 762 | | | 762 | | 762 | | shares | | | | | | | | | | -------------------------------------------------------------------------------- | Sharehold | 23 | 25 | 2 | 304 | 0 | -33 | 322 | 5 | 327 | | ers' | 642 | 740 | 193 | 263 | | 629 | 210 | 696 | 906 | | equity 31 | | | | | | | | | | | Mar 2009 | | | | | | | | | | -------------------------------------------------------------------------------- OTHER KEY INDICATORS, CONTINUING OPERATIONS, EUR MILLION -------------------------------------------------------------------------------- | | Q1/2009 | Q1/2008 | 2008 | -------------------------------------------------------------------------------- | | 3 months | 3 months | 12 months | | | 31.3.2009 | 31.3.2008 | 31.12.2008 | -------------------------------------------------------------------------------- | Gross capital expenditure | 6.3 | 47.8 | 235.4 | -------------------------------------------------------------------------------- | % of revenue | 14.2% | 129.6% | 148.4% | -------------------------------------------------------------------------------- | Personnel, average | 708 | 339 | 418 | -------------------------------------------------------------------------------- | Personnel, at the end of the | 678 | 379 | 721 | | period | | | | -------------------------------------------------------------------------------- | Lowest share price, EUR | 1.04 | 1.59 | 1.02 | -------------------------------------------------------------------------------- | Highest share price, EUR | 1.70 | 2.99 | 2.99 | -------------------------------------------------------------------------------- | Average trade-weighted share | 1.41 | 2.37 | 2.03 | | price, EUR | | | | -------------------------------------------------------------------------------- | Market capitalisation | 417.7 | 661.3 | 333.5 | -------------------------------------------------------------------------------- | Share turnover | 174.5 | 304.5 | 884.6 | -------------------------------------------------------------------------------- | Share turnover, % | 47.3% | 44.3% | 149.9% | -------------------------------------------------------------------------------- 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 2008 financial statements with the exception that the Group has changed the presentation of operational segments in accordance with IFRS 8. Starting from 1 January 2009, the Group has had two reporting segments: Wood Processing business and Minerals business. Moreover, the presentation and terminology of financial statements has changed somewhat due to changes in the IAS 1 standard. 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. Comparative financial information presented in this Interim Report for the financial year 2008 include only continuing operations. Operations divested during financial year 2008 are not included and therefore the comparative financial information does not equal the information reported previously. Earnings before interest, taxes, depreciation and amortisation (EBITDA) are defined to equal the following formula: EBITDA = EBIT + Depreciations + Amortisations + Impairment losses Moreover, the share of associated companies' profits is included in both EBITDA and EBIT. The treasury shares acquired are presented as deduction in the Group'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. Financial ratios and indicators have been calculated with the same principles as applied in the 2008 financial statements. The Interim Report data are unaudited. In Espoo, 7 May 2009 RUUKKI GROUP PLC BOARD OF DIRECTORS NOTES TO INCOME STATEMENT AND BALANCE SHEET AND OTHER DATA SHAREHOLDERS On 30 April 2009, the Company had a total of 4,014 shareholders, of which 11 were nominee-registered. The registered number of shares was 261,034,022 on 30 April 2009. Largest shareholders, 30 April 2009: -------------------------------------------------------------------------------- | | Shareholder | Shares | % | -------------------------------------------------------------------------------- | 1 | Kermas Limited | 38 711 200 | 14.8 | -------------------------------------------------------------------------------- | 2 | Nordea Bank Finland Plc | 35 265 411 | 13.5 | -------------------------------------------------------------------------------- | 3 | Hanwa Company Limited | 30 000 000 | 11.5 | -------------------------------------------------------------------------------- | 4 | Atkey Limited | 26 581 401 | 10.2 | -------------------------------------------------------------------------------- | 5 | Nordea Bank Finland Plc | 26 358 328 | 10.1 | | | nominee-registered | | | -------------------------------------------------------------------------------- | 6 | Djakov Aida nominee-registered | 20 462 500 | 7.8 | -------------------------------------------------------------------------------- | 7 | FIM Bank Ltd | 13 000 000 | 5.0 | -------------------------------------------------------------------------------- | 8 | Bassanio Services Limited | 11 900 000 | 4.6 | -------------------------------------------------------------------------------- | 9 | Kankaala Markku | 9 104 186 | 3.5 | -------------------------------------------------------------------------------- | 10 | Hino Resources Co. Ltd | 8 169 300 | 3.1 | -------------------------------------------------------------------------------- | | Total | 219 552 326 | 84.1 | -------------------------------------------------------------------------------- | | Other shareholders | 41 481 696 | 15.9 | -------------------------------------------------------------------------------- | | Total shares registered | 261 034 022 | 100.0 | -------------------------------------------------------------------------------- CHANGES IN THE NUMBER OF SHARES AND SHARE CAPITAL IN REVIEW PERIOD On 31 December 2008, the registered number of Ruukki Group Plc shares was 290,034,022. In January 2009 the Company continued the share buy-back program started in December 2008, based on shareholders meeting authorisation to the Board. On 17 February, based on the Board resolution, altogether 29,000,000 treasury shares held by the Company, equalling 9.99% of all shares, were cancelled. After that the registered number of shares has been 261,034,022. Based on the resolution by the Extraordinary General Meeting on 24 February 2009, the Board has currently been authorised for an additional buy-back of maximum 26,000,000 shares. This authorisation is valid until 24 February 2010. By the end of April 2009 altogether 8,690,000 shares were acquired based on this authorisation. There have been no changes as to the potential dilution from option rights as compared to the information presented on the Group's 2008 annual report. GENERAL MEETINGS On 24 February, Extraordinary General Meeting gave the Board authorisation to issue up to 100,000,000 shares, share options and other special rights that entitle to shares. Moreover, the Extraordinary General Meeting decided to authorise the Board of Directors to decide on the acquiring of the Company's own shares for a maximum amount of 26,000,000 shares with the funds from the Company's unrestricted shareholders' equity. The Board proposed to the Annual General Meeting, which will be held on 7 May 2009, that no dividend would be distributed and that a EUR 0.04 per share capital redemption would be paid out to the shareholders. As announced in the middle of April, the Board of Directors proposed to the Annual General Meeting to be held on 7 May 2009 that Ernst & Young would be elected as the new auditors of the Company. Certain shareholders have also proposed that the Board should have five members, and of the current directors Alwyn Smit, Terence McConnachie, Jelena Manojlovic, Thomas Hoyer and Markku Kankaala would be re-elected. The other proposals to the AGM relate to technical changes to the terms of the Company's option schemes to take capital redemptions into account. COMPANY'S SHARE Ruukki Group Plc's shares (RUG1V) are listed on Nasdaq OMX Helsinki in which the shares of the Company are traded in the mid cap segment, in the industrials sector. During the first quarter, the price of Ruukki Group's share varied between EUR 1.04 (1-3/2008: 1.59) and EUR 1.70 (2.99). A total of 123,368,810 (128,584,021) Ruukki Group shares were traded in the review period, representing 47.3% (44.3%) of all shares registered at the end of the review period. The closing price of the Company's share on 31 March was EUR 1.60 (2.28). The market capitalisation of the Group's entire capital stock 261,034,022 (290,034,022) shares at the closing price on 31 March was EUR 417.7 million (661.3). 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 March 2009. The notifications can be found in full on the company website at http://www.ruukkigroup.fi/in_English/Releases/Flagging_Notifications.iw3. - 16 January 2009: RCS Trading Corporation Ltd => below 5% - 19 January 2009: Kermas Limited => above 25% - 19 January 2009: Danske Bank A/S Helsingin Sivukonttori => above 5% (later to fall below 5% if derivative agreements exercised) - 19 January 2009: Nordea Bank AB (publ) => below 15% (in June 2009 to fall below 5% when forward contracts expire) - 27 January 2009: combined ownership of Kai Mäkelä, Oy Herttakakkonen Ab and Oy Herttaässä Ab => below 5% - 5 February 2009: based on Ruukki Group's announcement of the Board's decision to cancel treasury shares, Atkey Limited potentially above 10% - 20 February 2009: Danske Bank A/S Helsingin Sivukonttori => still above 5% (later to fall below 5% if derivative agreements exercised) - 24 March 2009: Danske Bank A/S Helsingin Sivukonttori => below 5%
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