2007-08-14 08:56:59 CEST
2007-08-14 08:56:59 CEST
REGULATED INFORMATION
Ruukki Group Oyj - Quarterly report
RUUKKI GROUP PLC: INTERIM REPORT, 1 JANUARY - 30 JUNE 2007
SUMMARY
FINANCIAL PERFORMANCE
- Ruukki Group's consolidated revenue 1-6/2007 totalled EUR 93.0 million
(1-6/2006: EUR 60.8 million). Comparable revenue for the first half of 2007 was
approximately 21 % higher than in 1-6/2006.
- The business segments accounted for consolidated January-June revenue as
follows (% of total revenue): house building 30% (42%), sawmill business 31%
(21%), furniture business 26% (24%), care services 9% (7%).
- Approximately 39% (22%) of revenue were for exports.
- EBITDA for the first half of 2007 totalled EUR 10.1 million (7.3).
- The operating profit (EBIT) for the review period was EUR 5.4 million
(1-6/2006: EUR 5.4 million), or 5.8% (8.8%) of revenue. The comparable operating
profit was about EUR 6.0 million.
- Ruukki Group's order book at the end of the review period was EUR 49.8 million
(39.4).
- In June and July, the parent company Ruukki Group Plc executed a directed paid
share offering and related over-allotment share issue.
- By the share issues the company gathered a net total of approximately EUR 337
million in equity.
- The funds thus accumulated are intended for use primarily in financing part of
planned new investments in the forest industry in Kostroma, Russia.
PLANNED KOSTROMA FOREST INDUSTRY INVESTMENTS
- In accordance with the extension of the investment agreement agreed upon and
registered in the second quarter of 2007, Ruukki Group has the opportunity to
invest either in a bleached kraft pulp (BKP) mill with an annual output capacity
of 800,000 tons or alternatively to a BCTMP mill with 300,000 - 500,000 tons
capacity, and moreover in a sawmill as agreed previously.
- In the same context, it was agreed that the annual harvesting rights included
in the investment agreements will be increased to 6.0 million cubic meters per
year.
- A letter of intent signed with Heinolan Sahakoneet Oy for a delivery of the
main machinery of a sawmill line of up to 500,000 cubic metre annual capacity.
- Ruukki Group's Russian subsidiary has made a rental agreement in Kostroma, the
city of Manturovo, for a land plot to be used for both the planned sawmill and
pulp mill.
- Mr. Tapio Särkkä been appointed to be the Head of the Kostroma investment
projects.
REVENUE AND EBIT FORECAST 2007
- With the current business structure, Ruukki Group's consolidated revenue in
2007 is expected to be close to EUR 200 million, and the Group's
euro-denominated operating profit (EBIT) for 2007 is expected to exceed that of
2006, when excluding the expenses arising from the Kostroma projects.
GROUP KEY INDICATORS (EUR MILLION)
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| | Q2/2007 | Q2/2006 | 2006 |
--------------------------------------------------------------------------------
| | 6 mths / 30 | 6 mths / 30 | 12 mths / 31 |
| | Jun 2007 | Jun 2006 | Dec 2006 |
--------------------------------------------------------------------------------
| Revenue | 93.0 | 60.8 | 125.5 |
--------------------------------------------------------------------------------
| Operating profit (EBIT) | 5.4 | 5.4 | 13.0 |
--------------------------------------------------------------------------------
| % of revenue | 5.8 % | 8.8 % | 10.4 % |
--------------------------------------------------------------------------------
| Profit/loss before tax | 4.8 | 4.9 | 12.2 |
--------------------------------------------------------------------------------
| % of revenue | 5.2 % | 8.0 % | 9.7 % |
--------------------------------------------------------------------------------
| Return on equity (ROE), % | 2.0 % | 15.4 % | 19.1 % |
--------------------------------------------------------------------------------
| Return on investment (ROI), % | 3.2 % | 16.2 % | 17.7 % |
--------------------------------------------------------------------------------
| Equity ratio, % | 81.9 % | 43.5 % | 60.1 % |
--------------------------------------------------------------------------------
| Earnings per share, EUR (basic) | 0.01 | 0.03 | 0.07 |
--------------------------------------------------------------------------------
| Earnings per share, EUR (diluted) | 0.01 | 0.02 | 0.06 |
--------------------------------------------------------------------------------
| Equity per share, EUR | 1.30 | 0.43 | 0.42 |
--------------------------------------------------------------------------------
| Average issue-adjusted number of | 146,165 | 108,134 | 118,052 |
| shares during the period, basic | | | |
| (1,000) | | | |
--------------------------------------------------------------------------------
| Average issue-adjusted number of | 149,751 | 129,929 | 135,996 |
| shares during the period, diluted | | | |
| (1,000) | | | |
--------------------------------------------------------------------------------
| Issue-adjusted number of shares | 270,534 | 123,301 | 135,964 |
| at the end of the period (1,000) | | | |
--------------------------------------------------------------------------------
KEY EVENTS DURING THE SECOND QUARTER (1 April - 30 June 2007)
Key events for the first quarter of 2007 (1 January - 31 March 2007) can be
found in the interim report published by Ruukki Group Plc on 15 May 2007. That
Q1/2007 interim report can be found in e.g. www.ruukkigroup.fi.
Expansion of the Kostroma investment agreements
In February 2007, Ruukki Group Plc announced that it had registered investment
agreements concerning a sawmill and a chemi-mechanical market pulp (bleached
chemi thermo mechanical pulp, BCTMP) mill in the investment project register of
the Kostroma region. In May 2007, Ruukki Group made an agreement with the
administration of the Kostroma region to expand the BCTMP mill investment
agreement with a new agreement that was registered by the Kostroma region's
administration at the end of June.
In accordance with the investment agreement registered previously in February
2007, Ruukki Group has the opportunity to invest in a BCTMP mill with an annual
production capacity of 300,000-500,000 tons. Pursuant to the expanded investment
agreement concluded in May and registered in June, Ruukki Group can either
invest in a chemical pulp mill (BKP, bleached kraft pulp) with an annual
production capacity of 800,000 tons or alternatively in the BCTMP mill agreed
upon earlier.
The combined total wood consumption of the 800,000-ton BKP mill now planned by
Ruukki Group and the conifer sawmill will, if realised, reach over four million
cubic meters of industrially usable wood per year. To enable this, it has been
agreed that the annual harvesting rights included in the investment agreements
can be increased from the previously agreed 2.5-3.1 million cubic meters to a
total of 6.0 million cubic meters per year. This increase in harvesting rights
also provides an opportunity to expand the annual sawmill capacity clearly over
the planned 300,000 cubic meters.
According to plan, bleached softwood kraft pulp (BSKP) will account for half of
the BKP mill's output, while bleached hardwood kraft pulp (BHKP) will account
for the other half. Ruukki Group has commissioned Pöyry Forest Industry
Consulting Oy to conduct a feasibility study on both alternatives. The
preliminary estimates of this study show that the production costs of a BKP mill
would be on a competitive level compared with, for example, new BKP pulp mills
operating at low production costs in South America.
Based on current information and calculations, Ruukki Group estimates the total
investments in the BKP mill and sawmill and in the necessary harvesting and
transport machinery to be approximately EUR 1.1 billion, compared with the
previously announced BCTMP mill investment option totalling an estimated EUR 0.5
billion. The total investment will essentially depend on the technical set-up
and the annual production capacity of the pulp mill. If the pulp mill is
decided to be implemented as a BKP mill, then the mill investment will be
substantially affected, for example, by the price development of special steels
during the investment implementation period.
The extension of the investment agreement is not expected to considerably change
the schedule of the investment projects. The sawmill is expected to start
production late in 2008, and the pulp mill's initial start-up is expected to
take place late in 2010. The planned location for the pulp mill and sawmill is
the city of Manturovo on the Unzha river in the Kostroma region some 500 km
northeast of Moscow.
The final implementation of the investments also depends on obtaining
environmental and other official permits in Russia, as well as a number of other
factors. At this time, no assurance can be given that such permits will be
obtained or that favourable decisions will be made by the relevant authorities.
Approximately EUR 2.4 million in expenses arising from examinations and
preparations relating to the investments planned in Russia were recognised in
the consolidated income statement for the review period 1 January - 30 June
2007. The amount of corresponding expenses in the comparison period of 2006 was
very small.
General Meetings of Shareholders
The Annual General Meeting held in April decided to pay out a dividend of EUR
0.03 per share, partly amend the Articles of Association, execute a bonus share
offering to pay for the additional transaction price liabilities relating to old
share exchange agreements and update the terms and conditions of the I/2005
option program as enabled by the new Companies Act. The Annual General Meeting
re-elected the existing Board in its entirety and the auditors. Additionally,
the Annual General Meeting authorised the Board to decide on a share issue and
on granting options and other special rights that give entitlement to shares. By
virtue of this authorisation, the maximum number of shares to be issued in one
or more lots is 25,000,000 new shares or Ruukki Group shares already held in the
company's treasury, corresponding to approximately 8.6 per cent of the total
number of shares registered on 14 August 2007. Based on this authorisation the
board of directors has issued 300,000 shares to Matti Vikkula in June 2007. The
authorisation is valid until 20 April 2009.
An Extraordinary General Meeting held in June decided, in accordance with the
Board proposal, to execute a paid share offering and related over-allotment
share issue option primarily to finance part of planned investments in Russia.
Arno Pelkonen and Timo Poranen were elected as new members to Ruukki Group Plc's
Board of Directors, and Fredrik Danielsson and Timo Honkala left the Board. The
company's Articles of Association were amended in part, for example, by adding
Ruukki Group Plc as the company's English business name.
Share issue
Ruukki Group Plc's Extraordinary General Meeting on 12 June 2007 decided on a
directed paid share offering, in which a minimum of 100,000,000 and a maximum of
130,000,000 new shares were to be offered. In accordance with the share
offering's terms and conditions, the reception of subscription commitments ended
on 20 June 2007. The share offering's success met the company's expectations,
and the number of subscription commitments clearly exceeded the number of new
shares to be offered. Ruukki Group Plc's Board of Directors decided on 21 June
2007, in accordance with the general meeting decision, to execute the share
offering. In addition, Ruukki Group's Board decided in June, in accordance with
the share offering's terms and conditions, to give Evli Bank Plc, the manager of
the issue, the right to subscribe for up to 19,500,000 new shares at a
subscription price of EUR 2.30 per share to cover the over-allotment. Based on
the subscription commitments submitted by institutional investors in the book
building process, the final subscription price was confirmed at EUR 2.30 per
share. Resulting from the offering of 130,000,000 shares and less the estimated
costs, Ruukki Group received new funds totalling approximately EUR 294 million.
In the same context, the company's Board approved the allocation of new shares
to investors who had made subscription commitments, the total number of whom at
the final subscription price level was 363. In accordance with the share
offering's terms and conditions, at least one third of the minimum amount of new
shares offered were reserved for the company's current shareholders and
comparable parties (“shareholder offering”). The subscription commitments made
in the shareholder offering cover a total of 70,359,005 new shares. The Board
decided that the shareholder offering should comprise 50,745,086 new shares. The
Board also decided that the number of new shares to be allocated to the 297
investors who had made subscription commitments in the shareholder issue would
correspond to no more than 55 per cent of the number of the company's shares
held by the respective investors as per 1 June 2007. The rest of the new shares
were offered to institutional investors (“institutional offering”). In the
institutional offering, a total of 98,754,914 new shares were allocated to 81
investors, with approximately 20 per cent allocated to Finnish investors and
approximately 80 percent to foreign investors. The number of subscription
commitments made in the institutional offering exceeded the number of new shares
allocated in the institutional offering by 1.5 times. The above investor group
specific allocation amounts include the shares allocated to investors on the
basis of over-allotment options.
In accordance with the terms and conditions of the issue, the subscription price
was recognised in full in the paid-up unrestricted equity fund.
Revision of dividend distribution policy
In May 2007, Ruukki Group Plc's Board decided to revise the company's dividend
distribution policy. The number of dividends distributed by the Company in the
future will depend on the Company's financial status, need for capital and other
factors. The planned investments to Russia will restrict the company's
possibility to distribute dividends in the coming years. It is possible that no
dividend at all will be distributed on the company's shares in the next few
years.
Changes in Group management
In June, Ruukki Group Plc's Board appointed Matti Vikkula, M.Sc. (Econ.) as the
company's new CEO. He will commence as CEO no later than the beginning of
September 2007. At the same time, the company's Board decided, pursuant to the
share offering authorisation given by the Annual General Meeting, on a bonus
offering of 300,000 shares to Matti Vikkula to increase his commitment in the
company. These shares that were issued in July come with a restriction on the
right of disposal, ending on 15 December 2008.
The Extraordinary General Meeting of 12 June 2007 elected Timo Poranen, M.Sc.
(Eng.) and Arno Pelkonen, M.Sc. (Econ.) as new members of the company's Board.
Strengthening the management and the Board improves the company's prerequisites
to successfully carry out the selected Group strategy.
Ruukki Group Plc's Board of Directors decided in May 2007 to establish an Audit
Committee. In August Matti Lainema (committee chairman), Mikko Haapanen and Timo
Poranen were appointed as members of the Audit Committee.
Acquisition of a majority holding in Pohjolan Design-Sähkö Oy
In June, Pohjolan Design-Talo Oy, the parent company of Ruukki Group Plc's house
building business area, acquired a majority holding in Pohjolan Design-Sähkö Oy,
a non-Group electrical contractor company, at a price of EUR 1.5 million.
Pohjolan Design-Sähkö is a long-term subcontractor and partner of Pohjolan
Design-Talo. The acquired company is domiciled in Ii, Finland. According to
Kimmo Kurkela, Managing Director of Pohjolan Design-Talo, the acquisition
strengthens the company's delivery chain, as the company will gain control of
previously outsourced electrical contracting.
After the transaction, Pohjolan Design-Talo Oy has a 70.1% holding in Pohjolan
Design-Sähkö Oy (Ruukki Group's effective holding approximately 63,2%). The
company's operating management retains a minority holding in the company.
Pohjolan Design-Sähkö Oy's revenue in the 2006 financial year were approximately
EUR 3.8 million. The acquisition is estimated to increase Ruukki Group's revenue
in the 2007 financial year by almost EUR 2 million and have a positive profit
impact.
It was also agreed to divest the current HVAC business of Pohjolan Design-Talo
Oy to the acquired subsidiary Pohjolan Design-Sähkö Oy, whose business name has
been changed to RG Design-Talotekniikka Oy. This arrangement is aimed at
ensuring quality and increasing operating efficiency in the house building
business area. The HVAC and electrical operations of the house building business
area currently employ 41 persons.
Fire at Hirviset Oy's Lestijärvi production plant
A fire occurred in late June in Lestijärvi at the furniture factory of Hirviset
Oy, a subsidiary of Incap Furniture that effectively forms the furniture
business area of Ruukki Group, destroying a large proportion of the Lestijärvi
plant's production facilities and equipment. There were personnel present when
the fire broke out, but no damage was inflicted on persons. The plant employed
about 70 persons.
The damage caused by the fire is expected to amount to EUR 7-8 million. Property
and business interruption insurance will cover most of the direct damage. The
production interruption resulting from the fire will cause a slight drop in
Ruukki Group's revenue in 2007, unless an optional location can be found for the
destroyed plant's production.
MAIN EVENTS AFTER 30 JUNE 2007
Over-allotment share subscription
Evli Bank Plc exercised the over-allotment option granted to it in accordance
with the terms and conditions and the placing agreement of the offering and, on
16 July 2007, subscribed for the additional new shares in full at the
subscription price of the issue, EUR 2.30 per share to cover the
over-allotments. The company's Board approved the subscription made by Evli Bank
Plc on the same date. Following the exercise of the over-allotment option, the
Ruukki Group issued a total of 19,500,000 new shares. In accordance with the
terms and conditions of the offering, the subscription price was recognised in
full in the paid-up unrestricted equity fund. Following the subscription of
additional shares, Ruukki Group's total net proceeds from the offering are
approximately EUR 337 million, which has been invested in euro-denominated fixed
income instruments, mainly in diversified short-term fixed income funds, during
June and July.
Planned Kostroma forest industry investments
The preparations for the planned forest industry investments in the Kostroma
region have been going forwards as planned. In August the sawmill business
segment has entered into a letter of intent with Heinolan Sahakoneet Oy for a
delivery of sawmill line into Kostroma based on plans of up to 500,000 cubic
metre annual capacity.
Mr. Tapio Särkkä, M.Sc. (Eng.), having extensive background in Russian forest
industry operations, has been recruited to be the Head of Kostroma investment
project. He will start in the beginning of September.
Ruukki Group's Russian subsidiary has made a rental agreement in Kostroma, the
city of Manturovo, for a land plot to be used for both the planned sawmill and
pulp mill.
During the second half of 2007, wood harvesting operations are targeted to be
started. Moreover, by the end of 2007 ground foundations and infrastructure
investments in the land plot for saw mill should be done if everything goes
according to the plan.
EUR 2.4 million expenses have been recognised in the interim period (the
corresponding expenses in 1-6/2006 being only very limited and in 1-12 totalling
about EUR 0.5 million).
The fixed assets in the balance sheets of the Russian subsidiaries totalled EUR
0.1 million and the number of employees eight people at the end of the interim
period.
DEVELOPMENT BY BUSINESS AREA
HOUSE BUILDING
The house building business area has delivered wooden ready-to-move-in houses to
customers as follows:
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| 1-6/2007 | 1-6/2006 | 4-6/2007 | 4-6/2006 | 1-12/2006 |
--------------------------------------------------------------------------------
| 221 | 221 | 108 | 94 | 458 |
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The house building business area's key figures for the review period were as
follows:
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| EUR | | 1-6/2007 | 1-6/2006 | 4-6/2007 | 4-6/2006 | 1-12/2006 |
| million | | | | | | |
--------------------------------------------------------------------------------
| Revenue | | 28.1 | 25.3 | 14.0 | 11.3 | 53.7 |
--------------------------------------------------------------------------------
| EBIT | | 5.6 | 6.6 | 3.0 | 3.1 | 13.4 |
--------------------------------------------------------------------------------
| EBIT-% | 19.8 % | 26.1 % | 21.4 % | 27.8 % | 24.9 % |
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The revenue from ready-to-move-in houses delivered by the business area are
recognised as income upon delivery to the customer, for which reason sites in
progress have no effect on the Group's revenue or profit.
The steep and rapid climb of the costs of raw materials and supplies in the
review period 1 January - 30 June 2007 weakened the EBIT margin, and will
probably keep the second half's profitability at a lower level than previous
year. During the review period, the number of houses delivered to customers
remained unchanged from the previous year's corresponding period, but the
business area's revenue changed owing to an increase in the average selling
price of houses. Deliveries in the house building business are generally very
seasonal, which in practice means that more deliveries are made during the
first, and particularly the fourth, quarters than over the summer. However, it
is expected that in the 2007 financial year the timing of deliveries will differ
slightly from the normal seasonal variation.
In June a 70.1 per cent holding in Pohjolan Design-Sähkö Oy, long-term partner
and supplier of this business segment, was acquired, mainly in order better
manage and optimize the supply change and to ensure quality in electricity
assemblies.
The business area's order book excluding VAT stood at approximately EUR 27.7
million at the end of the review period (EUR 23.0 million on 30 June 2006). The
order book contains no significant risks. At the end of the review period, the
house building area's personnel totalled 151 (80 on 30 June 2006).
SAWMILL BUSINESS
The sawmill business area specialises in the efficient processing of softwood
logs from Northern Finland into various timber products for both domestic and
export markets. The construction industry forms the business area's main
customer group in both Finland and elsewhere, because the Group's products are
extremely well suited to house building thanks to their strength properties.
Included in the business area through an acquisition as from March 2007 is Oplax
Oy, a fully-owned manufacturer of packaging pallets for the Finnish industry.
The sawmill business area's key figures for the review period were as follows:
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| EUR | | 1-6/2007 | 1-6/2006 | 4-6/2007 | 4-6/2006 | 1-12/2006 |
| MILLION | | | | | | |
--------------------------------------------------------------------------------
| Revenue | | 29.2 | 12.8 | 16.6 | 6.4 | 27.8 |
--------------------------------------------------------------------------------
| EBIT | | 4.0 | 0.7 | 2.2 | 0.2 | 1.4 |
--------------------------------------------------------------------------------
| EBIT-% | 13.8 % | 5.7 % | 13.5 % | 3.7 % | 4.9 % |
--------------------------------------------------------------------------------
In the sawmill business, both the market prices of end products and the stumpage
prices of timber and raw material transportation costs have increased, as a net
effect of which the business area's profit has increased in the short term. The
operating profit includes a non-recurring gain of EUR 0.4 million.
At the end of the review period, the area's order book excluding VAT stood at
approximately EUR 13.6 million (EUR 10.2 million on 30 June 2006). The sawmill
business area employed altogether 117 people at the review period's end (39
people on 30 June 2006).
The softwood sawmill planned for the Kostroma region in Russia is still in the
planning stage, and the only expenses arising from it in the review period were
related to some preparatory activities.
FURNITURE BUSINESS
The furniture business area manufactures wooden, ready-to-assemble furniture at
four production plants in Finland.
The furniture business area's key figures for the review period were as follows:
--------------------------------------------------------------------------------
| EUR | | 1-6/2007 | 1-6/2006 | 4-6/2007 | 4-6/2006 | 1-12/2006 |
| million | | | | | | |
--------------------------------------------------------------------------------
| Revenue | | 24.5 | 14.5 | 19.5 | 11.6 | 25.7 |
--------------------------------------------------------------------------------
| EBIT | | -1.4 | -1.3 | -0.2 | -0.7 | -5.3 |
--------------------------------------------------------------------------------
| EBIT-% | -5.9 % | -8.7 % | -1.2 % | -5.8 % | -20.8 % |
--------------------------------------------------------------------------------
In the above table the EBIT includes both the shares of profit relating to
holdings in associated companies corresponding with the Group's respective
holdings and all income statement items corresponding with holdings in
subsidiaries. No revenue has been recognised from the associated company period,
due to which the above EBIT percentage is only indicative, except for the period
4-6/2007. In January and February 2007 the furniture business company Incap
Furniture and all of its subsidiaries were an associated company of Ruukki
Group, and from March 2007 onwards treated as a subsidiary. In February and
March 2006 Incap Furniture Oy was an associated company, while the Hirviset Oy
subgroup was a Group subsidiary for the entire period 1-3/2006 and also in
4/2006. In the period 5-9/2006 Incap Furniture was considered a subsidiary based
on potential voting power and in the period 10/12/2006 as an associated company.
The business environment of the furniture has continued to be very challenging,
and the result remains a loss. At the end of the review period, the area's order
book excluding VAT stood at approximately EUR 7.4 million (EUR 4.9 million on 30
June 2006). Restructuring and efficiency improvement measures have been actively
continued. On 30 June 2007, the segment employed a total of 329 people (333 on
30 June 2006). The Board of Incap Furniture changed in spring 2007, and the
company appointed a new Managing Director who assumed his duties on 15 May 2007.
In June there was a fire at the group's Lestijärvi furniture factory whereby
most of the production equipment was destroyed. The insurance processes are
still open and ongoing. As a consequence of the fire, a total of EUR 1.1 million
impairment of inventory and fixed assets has been recognised, but on the other
hand insurance income for the equal amount has been accrued for, therefore, the
fire has not affected the interim period profit. The fire may cause both direct
and indirect consequences, the magnitude and effect of which are not known as of
now.
As part of a change in management at Incap Furniture Oy, a subsidiary of Incap
Furniture Oy acquired a number of shares in its parent company in late June,
corresponding to 0.96% of all Incap Furniture Oy shares. These shares are only
intended to be held temporarily by the Group. As a result of this transaction,
Ruukki Group's holding has effectively increased by 0.7 percentage points to
71.0%.
CARE SERVICES
The care services business area provides high-quality care and rehabilitation
services for municipalities, cities, communities and businesses.
The key figures for the care services in the review period were as follows:
--------------------------------------------------------------------------------
| EUR | | 1-6/2007 | 1-6/2006 | 4-6/2007 | 4-6/2006 | 1-12/2006 |
| million | | | | | | |
--------------------------------------------------------------------------------
| Revenue | | 8.0 | 4.0 | 4.1 | 2.0 | 9.8 |
--------------------------------------------------------------------------------
| EBIT | | 0.3 | 0.4 | 0.1 | 0.1 | 0.6 |
--------------------------------------------------------------------------------
| EBIT-% | 4.1 % | 9.8 % | 3.4 % | 5.0 % | 6.2 % |
--------------------------------------------------------------------------------
The business area's operations remained stable in the review period. The
operations of the new units acquired and started up during the final quarter of
the preceding financial year have substantially increased the business area's
volumes. At the end of the review period, the business area employed 289 persons
(140 on 30 June 2006). A merger was carried out at the end of the second
quarter, in which a substantial part of the sub-group's companies were merged
with Mikeva Oy. The business area has service unit in twenty locations, and the
combined number of these unit's customers was about 480 at the end of the first
half.
The comparable increase in the revenue of the care services business area was
approximately 38%, when eliminating the effect of the acquisition of
Terveyspalvelut Mendis Oy during the 2006 financial year. Correspondingly, the
comparable change in operating profit is about -19%.
OTHER OPERATIONS
The volume and profitability of the Ruukki Group's metal industry business
operations have been at the same level as in the comparison period of last year:
in the period 1 January - 30 June 2007, the metal industry sub-group's revenue
were EUR 4.0 million (EUR 3.9 million in 1-6/2006) and operating profit EUR 0.0
million (EUR 0.2 million in 1-6/2006). As from the 2007 financial year, the
metal industry business area is not reported as a separate segment.
Ruukki Group Plc also has, both directly and through its subsidiaries, minority
holdings in a number of Finnish businesses. Associates have been consolidated in
the consolidated financial statements by applying the equity method. The
combined profit effect of associates, excluding the effect of Incap Furniture Oy
that is presented as part of the furniture business area and Oplax Oy presented
within sawmill business, was approximately EUR 0.1 million positive for the
first half of 2007.
OUTLOOK FOR THE FUTURE
The company's Board has decided to focus the Group's business more intensively
on wood-based operations so that the future industrial operations and
investments will be focused on Russia in particular and on a substantially
larger scale than before. Considering the Group's size, the planned projects,
particularly relating to the planned pulp business, are extremely large and
entail a number of different kinds of risks.
With the current business structure the Group's revenue in 2007 is expected to
be close to EUR 200 million. At the same time, the Group's euro-denominated
operating profit for 2007 is expected to exceed that of 2006, without taking
into account the expenses arising from the Kostroma projects. The expectations
are based on the estimates calculated by group's and subsidiaries' management,
on market prognosis for various businesses and on the order book at the end of
the review period.
Future outlook by business segment:
House building
- The sector is typically cyclical and has grown rapidly in recent years,
although the production of detached houses has generally levelled off to some
extent; this may have negative effect on the number of deliveries during next
year, but the effects might be different in various sub-segment and in various
geographical areas
- The competitive situation may change especially in the production of
ready-to-move-in houses, and affect the volume of marketing efforts and the
average sales prices
- The situation with zoning and plots and any changes in these as well as
changes in market interest rates will affect future growth potential in the
sector
- Costs of production-related raw materials and goods and labour expenses have
risen rapidly in recent times, and the situation is not expected to change
substantially over the short term, which may have a negative impact on
profitability
- Rises in market interest rates can cause the general level of house building
activity to fall, which could have a negative effect on the short-term and
long-term prospects of the business
Sawmill business
- The sawmill sector is typically cyclical, and cyclicality is expected to
continue in the future as well
- After the positive markets and rapid hike in the sales price, the future
market situation in medium-term is expected to be challenging in respect to
maintaining the current sales price levels and output volumes
- The recent rise in stumpage prices for timber is expected to slow down or
level off, but the proportion of raw material imported to Finland from Russia
will probably decrease generally in the sector, which may have an effect on raw
material availability and price in the future for Finnish sawmills
- The production capacity of the sector's different areas and its geographical
distribution is expected to change, and the focus on new investments will
probably be on Finland's neighbouring areas
Furniture business
- In 2007, the operating environment is expected to be very challenging due to
the increased raw material costs
- The rationalisation measures carried out and the coming restructuring will
have a substantial effect during 2007, but profitability will remain weak at
least during 2007
Care services
- The care services business area is expected to grow both organically and
through acquisitions
- The bidding competitions and service outsourcing from the public sector to
private operators offer good growth opportunities for the field, particularly in
elderly care and mental health services; additionally, demographic development
will affect the demand for elderly care services in the coming years
- Availability of a competent workforce and pressures on personnel cost are
factors that will slow down growth in the field, particularly in certain areas,
and may also have an effect on the profitability of operations
BUSINESS RISKS AND CHANGES IN THEM DURING AND AFTER THE REVIEW PERIOD
No substantial changes have taken place in the competitive situation after the
balance sheet date, but the competition in house building sector may be fiercer
in the future. The announced upcoming changes to customs duties for timber from
Russia may cause substantial changes with respect to the operators in, and
structures of, the wood processing sector in Finland both in the short and long
term, which is exemplified in possible reductions in pulp production, at least
temporarily. These changes may have a substantial, though partly just regional,
effect on the Group's risks related to house building, the sawmill business and
the furniture business.
The price and availability risks related to raw materials are still essential,
and their future development is difficult to forecast. Alongside the price and
availability problems relating to timber, there have also been indications of
quality problems on the Finnish market. If timber prices continue to increase,
it will have a negative effect on the profitability of the Group's house
building and furniture businesses. It may be more difficult to secure competent
personnel in the future, a risk that can be seen in the care services sector,
for example, in given geographical areas. Moreover, forest industry related
logistics, procurement and subcontracting services may face risks to an
increasing extent.
The recent strengthening of the euro in relation to a number of leading
international currencies such as the U.S. dollar and the Japanese yen will
weaken the Group's ability to compete with prices on export markets, if this
change trend in currency exchange rates is a permanent one and unless the
effects of currency exchange rates can be eliminated by price rises.
The interest rate risks related to the Group's loan financing have been somewhat
increased and to some extent realised due to the rise of market rates and also
because the Group's loan capital has increased after the review period
particularly on account of financing an acquisition related to the Group's
sawmill business area. Moreover, the consolidation of the furniture business in
the Group at the end of February 2007 has significantly increased
interest-bearing debt in the consolidated balance sheet. On the other hand, the
Group's balance sheet structure has changed substantially as a result of the
share offerings implemented in June-July, and the Group's net indebtedness will
be negative before the capital in Russian investments is tied up to a
substantial extent. In case there are essential changes in market interest rates
or variation in the liquidity of interest rate instruments, it might have
adverse effect on the value of the group's assets presented as cash equivalents.
There are permit risks and other process administration risks relating to the
advance of the investment projects planned for Kostroma, Russia, which must be
borne before the projects can be successfully completed. With respect to these
risks, Ruukki Group's Russian projects have progressed in the planning process
closer to implementation, as a result of which the weight of the various risks
related to the Russian operations has increased. Furthermore, the organisation
and gathering of needed know-how and employees will set additional new demands
on Group operations, if and when the planned operations start. Additionally, the
loan financing required for the planned Kostroma investments will increase the
availability and interest rate risk related to the Group's financing
substantially, and possibly lead to an increase in the gearing ratio over the
longer term, especially if the pulp mill will be implemented as a chemical BKP
mill. In addition to the above factors, key risks related to the Russian
business are the general political risk related to Russia, the risk related to a
successful and timely completion of permit, license and register projects, and
the market risks related to the pulp sector - a sector that is new to the Group.
CHANGES IN PLEDGES AND CONTINGENT LIABILITIES DURING AND AFTER THE REVIEW PERIOD
During the review period, Group's interest-bearing debt has increased by a total
of about EUR 28.1 million. The interest-bearing debt balance at 30 June 2007
totalled EUR 41.8 million of which EUR 16.2. was short-term debt and EUR 25.6
million long-term debt.
To finance an acquisition carried out during the review period, Ruukki Group Plc
has drawn a EUR 4.5 million long-term loan from a financial institution. The
loan has been covered by pledging the purchased subsidiary shares, and there are
covenant terms relating to the loan both at the level of the Group and the
acquired company. The mergers and acquisitions made during 2007 have no
additional purchase price obligations relating to them.
A change in the financing and ownership structure of the furniture business area
has increased Ruukki Group Plc's direct liabilities, but at the same time
reduced various guarantee liabilities relating to the business area, which means
that the net amount of the parent company's financial liabilities has not
changed materially. However, the Group's total liabilities increased
substantially particularly due to the Incap Furniture transaction: On 30 June
2007, the Incap Furniture group had loans from financial institutions totalling
approximately EUR 20.6 million, subordinated loans from outside Ruukki Group
companies totalling approximately EUR 2.3 million and leasing liabilities
totalling approximately EUR 2.8 million. Loans from financial institutions have
been collateralised with company and property pledges and equipment, for
example.
On 30 June 2007, Group companies had given company pledges as collateral for
loans and other liabilities totalling approximately EUR 14.8 million (EUR 5.7
million on 31 December 2006). The total amount of property pledges is
approximately EUR 4.1 million (EUR 2.2 million on 31 December 2006). The Group's
parent company had given a total of EUR 4.8 million in direct-liability
guarantees for the financing of Group companies (EUR 6.6 million on 31 December
2006).
On 30 June 2007, the net worth of forward exchange agreements in terms of
nominal value totalled about EUR 0.9 million (EUR 1.9 million on 30 June 2006),
and the related unrealised exchange rate gain was about EUR 0.2 million (0.3).
RELATED PARTY TRANSACTIONS
Salaries and other remuneration paid to the Board and management of the Group's
parent company totalled approximately EUR 0.1 million during the review period.
Additionally, salary expenses of EUR 0.1 million relating to the above persons'
options and shares acquired through the bonus share offering were allocated for
the period. In paid share offerings carried out during or after the review
period, related parties or entities controlled by them have subscribed for a
total of 44,217,038 new shares in the company. Additionally, after the review
period a total of 300,000 new shares in the company have been issued to Matti
Vikkula, who will later during the year take on the CEO position of Ruukki Group
Plc, , and these shares have a disposal restriction relating to them effective
until 15 December 2008.
The group parent company paid a total of EUR 1.7 million in dividends to related
parties between 1 January - 30 June 2007. Furthermore, group companies paid
about EUR 1.1 million dividends to the related parties being minority
shareholders of those companies.
During the review period, a related party subscribed for 1,561,000 shares with a
convertible capital loan. Approximately EUR 3 thousand in interest expenses
relating to the convertible capital loan were recognised for the related party.
Ruukki Group has paid a total of approximately EUR 8.2 million in
acquisition-related earn-out payments to persons, or their related parties,
belonging or having belonged to management of the Group's business areas
relating to acquisitions made by the Group.
The parent company has approximately EUR 0.1 million in short-term receivables
from a person belonging to the Group management or an entity controlled by this
person.
LITIGATION
Ruukki Group Plc's appeals to and processes in the Market Court and the Helsinki
Court of Appeal against Rautaruukki Corporation are still open and pending. The
company and its Group companies have a number of legal disputes and mainly
taxation-related administrative processes pending that might have negative
effect on the group financial position if these processes would end up with
additional expenses, taxes or other negative aspects.
CHANGES IN THE NUMBER OF SHARES AND SHARE CAPITAL IN 2007
--------------------------------------------------------------------------------
| Changes in share | Share capital | Number of shares | Share capital |
| capital | increase | after | (EUR) after |
| | (EUR) | registration | registration |
--------------------------------------------------------------------------------
| Share capital | | 135,963,737 | 23,017,809.60 |
| 31.12.2006 | | | |
--------------------------------------------------------------------------------
| Conversion of | 620,840.00 | 139,615,737 | 23,638,649.60 |
| convertible bonds | | | |
| (13.2.2007) | | | |
--------------------------------------------------------------------------------
| Free directed share | 0.00 | 140,214,022 | 23,638,649.60 |
| offering (3.5.2007) | | | |
--------------------------------------------------------------------------------
| Conversion of | 3,400.00 | 140,234,022 | 23,642,049.60 |
| convertible bonds | | | |
| (29.6.2007) | | | |
--------------------------------------------------------------------------------
| Paid directed share | 0.00 | 270,234,022 | 23,642,049.60 |
| offering (29.6.2007 | | | |
--------------------------------------------------------------------------------
| Free directed share | 0.00 | 270,534,022 | 23,642,049.60 |
| offering (6.7.2007) | | | |
--------------------------------------------------------------------------------
| Paid directed share | 0.00 | 290,034,022 | 23,642,049.60 |
| offering (18.7.2007) | | | |
--------------------------------------------------------------------------------
At the end of the above review periods, neither Ruukki Group Plc nor any of its
subsidiaries held any shares in Ruukki Group Plc. At the end of June 2007, a
subsidiary of Ruukki Group's furniture business segment held approximately 1.0%
of Incap Furniture Oy's shares.
On 30 June 2007, the number of registered Ruukki Group Plc shares totalled
270,234,022. Two changes in the number of shares were registered in July 2007:
300,000 new shares were issued and registered through a directed free share
offering, and 19,500,000 new shares were issued through a directed paid
over-allotment share issue. The convertible bond issued by the company in 2004
was entirely converted to company shares in the first half of 2007. The maximum
dilution effect of the company's I/2005 option program is 2,700,000 shares on 14
August 2007. The company's Board has a share issue authorisation granted by the
Annual General Meeting on 20 April 2007, based on which the Board decided in
June 2007 to issue 300,000 shares. The unused authorisation thus stands at
24,700,000 shares. The authorisation is valid until 20 April 2009.
SHAREHOLDERS
On 31 July 2007, the company had a total of 4,542 shareholders, of which 13 were
nominee-registered. The number of shares in issue on 31 July 2007 was
290,034,022.
Largest shareholders, 31 July 2007:
--------------------------------------------------------------------------------
| | Shareholder | Shares | % |
--------------------------------------------------------------------------------
| 1 | Nordea Bank Finland Plc nominee-registered | 66,438,399 | 22.9 |
--------------------------------------------------------------------------------
| 2 | Nordea Bank Finland Plc | 63,782,853 | 22.0 |
--------------------------------------------------------------------------------
| 3 | Oy Herttakakkonen Ab | 41,075,297 | 14.2 |
--------------------------------------------------------------------------------
| 4 | Skandinaviska Enskilda Banken | 40,234,794 | 13.9 |
| | nominee-registered | | |
--------------------------------------------------------------------------------
| 5 | Evli Bank Plc | 10,323,041 | 3.6 |
--------------------------------------------------------------------------------
| 6 | Svenska Handelsbanken Ab nominee-registered | 9,948,155 | 3.4 |
--------------------------------------------------------------------------------
| 7 | Kankaala Markku | 9,449,259 | 3.3 |
--------------------------------------------------------------------------------
| 8 | Hukkanen Esa | 5,007,500 | 1.7 |
--------------------------------------------------------------------------------
| 9 | Procomex S.A. | 4,629,215 | 1.6 |
--------------------------------------------------------------------------------
| 10 | Moncheur & Cie | 2,795,489 | 1.0 |
--------------------------------------------------------------------------------
| | Total | 253,684,002 | 87.5 |
--------------------------------------------------------------------------------
| | Other shareholders | 36,350,020 | 12.5 |
--------------------------------------------------------------------------------
| | Total shares registered | 290,034,022 | 100.0 |
--------------------------------------------------------------------------------
CHANGES IN SHARE PRICE DURING THE REVIEW PERIOD
During the period under review, the price of Ruukki Group's share varied between
EUR 1.18 (1-6/2006: 0.64) and EUR 2.80 (0.91). A total of 127,582,546
(43,628,324) Ruukki Group shares were traded in the review period, representing
47.2% (35.4%) of all shares registered at the end of the review period. The
closing price of the company's share on 30 June 2007 was EUR 2.58 (0.85). The
market capitalisation of the Group's entire capital stock of 270,234,022
(123,300,880) shares at the closing price on 30 June 2007 was EUR 697.2 million
(104.8).
DISCLOSURES DURING OR AFTER THE REVIEW PERIOD
The Ruukki Group has received the following disclosures during or after the
review period 1 January - 30 June 2007:
- Mandatum Securities Oy's ownership of the share capital and voting rights of
Ruukki Group Plc exceeded one twentieth (1/20) on 2 January 2007.
- Mandatum Securities Oy's ownership of the share capital and voting rights of
Ruukki Group Plc fell below one twentieth (1/20) on 16 March 2007.
- Nordea Bank Finland Plc's ownership of the share capital and voting rights of
Ruukki Group Plc exceeded three twentieths (3/20) on 16 March 2007. At the time
of this disclosure, Nordea Bank Finland Plc also announced that its ownership
will fall below one tenth (1/10) as the forward contracts mature in April 2007.
- Nordea Bank Finland Plc acquired Ruukki Group Plc shares and made forward
contracts concerning the shares on 20 April 2007, with the forward agreements
maturing in June 2007, December 2007 and January 2008. As the forward contracts
mature in January 2008, the ownership of Nordea Bank Finland Plc will fall below
one twentieth (1/20).
- Evli Bank Plc's ownership of the share capital and voting rights of Ruukki
Group Plc fell below one twentieth (1/20) upon the transaction made on 21 June
2007.
- Markku Kankaala's ownership of the share capital and voting rights of Ruukki
Group Plc fell below one twentieth (1/20) upon the transaction made on 21 June
2007.
- Oy Herttakakkonen Ab's ownership of the share capital and voting rights of
Ruukki Group Plc fell below one fifth (1/5) as a result of the share issue
decisions and share subscriptions made on 21 June 2007.
- The combined ownership of Helsingin Mekaanikontalo Oy and Procomex S.A. of the
share capital and voting rights of Ruukki Group Plc fell below one quarter (1/4)
as a result of share issue decisions and share subscriptions made on 21 June
2007. At the same time, Helsingin Mekaanikontalo Oy announced that its ownership
of the share capital and voting rights of Ruukki Group Plc fell below one tenth
(1/10).
- Nordea Bank Finland Plc's ownership of the share capital and voting rights of
Ruukki Group Plc fell below three twentieths (3/20) upon the share lending
agreement made on 25 June 2007. As the forward contracts mature in January 2008,
the ownership will fall below one twentieth (1/20).
- JPMorgan Chase & Co has announced that its subsidiaries have acquired
12,666,818 Ruukki Group Plc shares in a share issue commencing on 25 June 2007.
JPMorgan Chase & Co's ownership of the share capital and voting rights of Ruukki
Group Plc fell below one twentieth (1/20) as a result of the transaction.
- Nordea Bank Finland Plc's ownership of the share capital and voting rights of
Ruukki Group Plc has, upon the share transaction made on 26 June 2007 and
considering the share lending agreement concerning 9,500,500 Ruukki Group Plc's
RUG1V shares made on 25 June 2007 with a value date of 29 June 2007, exceeded
three twentieths (3/20). Upon the maturity of the forward contracts maturing in
December 2007, the ownership will fall below three twentieths (3/20). Upon the
maturity of Ruukki Group Plc's forward contracts in January 2008, the ownership
will fall below one tenth (1/10).
- Nordea Bank Finland Plc announced on 16 July 2007 that its ownership of the
share capital and voting rights of Ruukki Group Plc has exceeded one fifth
(1/5). Upon the maturity of forward contracts maturing in December 2007, the
ownership of Nordea Bank Finland Plc will fall below three twentieths (3/20),
and upon the maturity of forward contracts maturing in January 2008 the
ownership will fall below one twentieth (1/20).
- Moncheur & Cie SA (registration number 660.0.096.997-7, Geneva) and Pierre
Moncheur announced in August that as a result of share transactions concluded on
27 June 2007, the combined ownership of Moncheur & Cie SA, Pierre Moncheur and
their
controlled or related parties in Ruukki Group Plc now represents less than one
twentieth (1/20) of the share capital and voting rights of Ruukki Group Plc.
FINANCIAL DEVELOPMENT BY SEGMENT, SUMMARY (EUR MILLION)
--------------------------------------------------------------------------------
| MEUR | Revenue | Revenue | Revenue | Revenue | Revenue |
| | 1-6/2007 | 1-6/2006 | 4-6/2007 | 4-6/2006 | 1-12/2006 |
--------------------------------------------------------------------------------
| House building | 28,1 | 25,3 | 14,0 | 11,3 | 53,7 |
--------------------------------------------------------------------------------
| Sawmill business | 29,2 | 12,8 | 16,6 | 6,4 | 27,8 |
--------------------------------------------------------------------------------
| Furniture | 24,5 | 14,5 | 19,5 | 11,6 | 25,7 |
| business | | | | | |
--------------------------------------------------------------------------------
| Care services | 8,0 | 4,0 | 4,1 | 2,0 | 9,8 |
--------------------------------------------------------------------------------
| Other operations | 4,1 | 4,4 | 2,2 | 2,3 | 8,8 |
--------------------------------------------------------------------------------
| Eliminations and | -0,9 | -0,1 | -0,3 | 0,0 | -0,4 |
| unallocated | | | | | |
| items | | | | | |
--------------------------------------------------------------------------------
| Group total | 93,0 | 60,8 | 56,2 | 33,7 | 125,5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | EBIT | EBIT | EBIT | EBIT | EBIT |
| | 1-6/2007 | 1-6/2006 | 4-6/2007 | 4-6/2006 | 1-12/2006 |
--------------------------------------------------------------------------------
| House building | 5,6 | 6,6 | 3,0 | 3,1 | 13,4 |
--------------------------------------------------------------------------------
| Sawmill business | 4,0 | 0,7 | 2,2 | 0,2 | 1,4 |
--------------------------------------------------------------------------------
| Furniture | -1,4 | -1,3 | -0,2 | -0,7 | -5,3 |
| business | | | | | |
--------------------------------------------------------------------------------
| Care services | 0,3 | 0,4 | 0,1 | 0,1 | 0,6 |
--------------------------------------------------------------------------------
| Other operations | -3,4 | -0,7 | -2,2 | -0,2 | 2,9 |
--------------------------------------------------------------------------------
| Eliminations and | 0,2 | -0,4 | 0,3 | -0,1 | 0,1 |
| unallocated | | | | | |
| items | | | | | |
--------------------------------------------------------------------------------
| Group total | 5,4 | 5,4 | 3,3 | 2,5 | 13,0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| % | EBIT | EBIT | EBIT | EBIT | EBIT |
| | 1-6/2007 | 1-6/2006 | 4-6/2007 | 4-6/2006 | 1-12/2006 |
--------------------------------------------------------------------------------
| House building | 19,8 | 26,1 | 21,4 | 27,8 | 24,9 |
--------------------------------------------------------------------------------
| Sawmill business | 13,8 | 5,7 | 13,5 | 3,7 | 4,9 |
--------------------------------------------------------------------------------
| Furniture | -5,9 | -8,7 | -1,2 | -5,8 | -20,8 |
| business | | | | | |
--------------------------------------------------------------------------------
| Care services | 4,1 | 9,8 | 3,4 | 5,0 | 6,2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Group total | 5,8 | 8,8 | 5,8 | 7,5 | 10,4 |
--------------------------------------------------------------------------------
* Other operations includes approximately EUR 0.4 million in non-recurring sales
gains recognised as a result of ownership changes in Group companies during the
review period of Q1/2006 (the ownership change in the house building business
area is included in the income statement under Other operating income) and
approx. EUR 0.6 million in non-recurring sales loss (Metal industry, Operating
expenses).
* The furniture business area's EBIT margin is only indicative in nature,
because EBIT also includes the share of profit from the period of minority
ownership, but the revenue from the corresponding minority ownership period is
not included.
GOODWILL BY SEGMENT, EUR MILLION
--------------------------------------------------------------------------------
| | 30.6.2007 | % | 30.6.2006 | % | 31.12.2006 | % |
--------------------------------------------------------------------------------
| House | 19.5 | 56 % | 17.8 | 62 % | 19.3 | 62 % |
| building | | | | | | |
--------------------------------------------------------------------------------
| Sawmill | 6.4 | 18 % | 4.5 | 16 % | 4.8 | 15 % |
| business | | | | | | |
--------------------------------------------------------------------------------
| Furniture | 1.7 | 5 % | 1.5 | 5 % | 0.0 | 0 % |
| business | | | | | | |
--------------------------------------------------------------------------------
| Care services | 5.7 | 16 % | 3.5 | 12 % | 5.7 | 18 % |
--------------------------------------------------------------------------------
| Other | 1.5 | 4 % | 1.4 | 5 % | 1.4 | 4 % |
| operations | | | | | | |
--------------------------------------------------------------------------------
| TOTAL | 34.8 | 100 % | 28.7 | 100 % | 31.2 | 100 % |
--------------------------------------------------------------------------------
CONSOLIDATED INCOME STATEMENT SUMMARY, EUR THOUSAND
--------------------------------------------------------------------------------
| | 1 Jan - | 1 Jan - | 1 Apr - | 1 Apr - | 1 Jan - |
| | 30 Jun | 30 Jun | 30 Jun | 30 Jun | 31 Dec |
| | 2007 | 2006 | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
| 1000 EUR | 6 months | 6 months | 3 months | 3 months | 12 |
| | | | | | months |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Revenue | 93 006 | 60 764 | 56 214 | 33 678 | 125 460 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other operating | 1 800 | 1 173 | 1 300 | 721 | 5 712 |
| income | | | | | |
--------------------------------------------------------------------------------
| Operating expenses | -84 088 | -54 656 | -51 026 | -30 673 | -112 399 |
--------------------------------------------------------------------------------
| Depreciation and | -3 523 | -1 780 | -2 151 | -1 263 | -4 403 |
| amortisation | | | | | |
--------------------------------------------------------------------------------
| Share of profit of | -657 | -145 | 79 | 56 | -968 |
| associates | | | | | |
--------------------------------------------------------------------------------
| Impairment | -1 149 | 0 | -1 149 | 0 | -354 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 5 389 | 5 356 | 3 268 | 2 519 | 13 048 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial income and | -564 | -489 | -447 | -254 | -891 |
| expense | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit before tax | 4 825 | 4 867 | 2 821 | 2 264 | 12 156 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income tax | -2 725 | -1 879 | -1 463 | -888 | -4 177 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net profit | 2 101 | 2 988 | 1 358 | 1 376 | 7 979 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit attributable | | | | | |
| to | | | | | |
--------------------------------------------------------------------------------
| equity shareholders | 1 574 | 2 724 | 1 070 | 1 376 | 8 442 |
--------------------------------------------------------------------------------
| minority interests | 527 | 264 | 288 | 0 | -464 |
--------------------------------------------------------------------------------
| | 2 101 | 2 988 | 1 358 | 1 376 | 7 979 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share (counted from profit attributable to equity | |
| shareholders): | |
--------------------------------------------------------------------------------
| basic (EUR) | 0,01 | 0,03 | | | 0,07 |
--------------------------------------------------------------------------------
| diluted (EUR) | 0,01 | 0,02 | | | 0,06 |
--------------------------------------------------------------------------------
* During the review period certain Group companies recognised taxable profits
and certain companies taxable losses. On the part of the loss-making companies,
no deferred tax assets related to these realised losses have been recognised,
either because the Group considers that there is no certainty whether these
losses can be utilised in the respective company's income taxation in the near
future, or because the possibilities of reconciliation of profit within the
Group, for example, through Group contributions are limited due to ownership or
for other reasons. This recognition practice is in line with principles applied
previously by the Group, and for this reason the effective income tax rate in
the consolidated income statement has been high.
* During the review period 1 January - 30 June 2007, approximately EUR 0.5
million impairment on inventory and about EUR 0.6 million one-off depreciation
have been recognised due the fire in the production facility of the furniture
business segment's subsidiary. Both of these items are presented as impairment
in the table above. Correspondingly, the expected insurance compensation of EUR
1.1 million has been booked as other operating income.
CONSOLIDATED BALANCE SHEET SUMMARY, EUR THOUSAND
--------------------------------------------------------------------------------
| 1000 EUR | | 30 Jun | 30 Jun | 31 Dec |
| | | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
| ASSETS | | | | |
--------------------------------------------------------------------------------
| Non-current assets | | | | |
--------------------------------------------------------------------------------
| Investments and intangible assets | | | |
--------------------------------------------------------------------------------
| Goodwill | | 34 829 | 28 667 | 31 237 |
--------------------------------------------------------------------------------
| Investments in associates | | 1 671 | 7 465 | 5 568 |
--------------------------------------------------------------------------------
| Other intangible assets | | 6 690 | 4 719 | 4 001 |
--------------------------------------------------------------------------------
| Investments and intangible assets | 43 190 | 40 851 | 40 807 |
| total | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Property, plant and | | 34 633 | 31 852 | 15 855 |
| equipment | | | | |
--------------------------------------------------------------------------------
| Other non-current assets | | 825 | 383 | 528 |
--------------------------------------------------------------------------------
| Non-current assets total | | 78 647 | 73 086 | 57 189 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | | |
--------------------------------------------------------------------------------
| Inventories | | 31 243 | 21 702 | 17 057 |
--------------------------------------------------------------------------------
| Receivables | | 26 457 | 14 931 | 9 805 |
--------------------------------------------------------------------------------
| Other investments | | 7 518 | 0 | 7 271 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | | 307 892 | 26 966 | 24 768 |
--------------------------------------------------------------------------------
| Current assets total | | 373 111 | 63 599 | 58 901 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | | 451 758 | 136 685 | 116 089 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | | |
--------------------------------------------------------------------------------
| Shareholders' equity | | | | |
--------------------------------------------------------------------------------
| Share capital | | 23 642 | 20 961 | 23 018 |
--------------------------------------------------------------------------------
| Share premium reserve | | 25 740 | 21 707 | 24 712 |
--------------------------------------------------------------------------------
| Revaluation reserve | | 757 | 0 | 0 |
--------------------------------------------------------------------------------
| Fair value reserve | | 17 | 0 | 0 |
--------------------------------------------------------------------------------
| Paid-up unrestricted equity reserve | 295 104 | 0 | 424 |
--------------------------------------------------------------------------------
| Retained earnings | | 7 200 | 7 206 | 9 511 |
--------------------------------------------------------------------------------
| Shareholders' equity | | 352 460 | 49 874 | 57 665 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Minority interest | | 2 302 | 3 155 | 1 591 |
--------------------------------------------------------------------------------
| Total equity | | 354 762 | 53 028 | 59 256 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | 34 634 | 41 355 | 13 489 |
--------------------------------------------------------------------------------
| Current liabilities | | | | |
--------------------------------------------------------------------------------
| Deferred income | | 18 625 | 14 701 | 17 576 |
--------------------------------------------------------------------------------
| Other current liabilities | | 43 737 | 27 602 | 25 769 |
--------------------------------------------------------------------------------
| Current liabilities total | | 62 362 | 42 303 | 43 345 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total liabilities | | 96 996 | 83 657 | 56 834 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total equity and | | 451 758 | 136 685 | 116 089 |
| liabilities | | | | |
--------------------------------------------------------------------------------
SUMMARY OF INTEREST-BEARING RECEIVABLES AND LIABILITIES IN THE CONSOLIDATED
BALANCE SHEET, EUR THOUSAND
--------------------------------------------------------------------------------
| | 30 Jun 2007 | 30 Jun 2006 | 31 Dec 2006 |
--------------------------------------------------------------------------------
| Interest-bearing | | | |
| receivables | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current | 7,305 | 113 | 7,271 |
--------------------------------------------------------------------------------
| Non-current | 333 | 170 | 453 |
--------------------------------------------------------------------------------
| Interest-bearing | 7,638 | 283 | 7,724 |
| receivables, total | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest-bearing | | | |
| liabilities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current | 16,190 | 10,359 | 4,510 |
--------------------------------------------------------------------------------
| Non-current | 25,594 | 30,382 | 9,205 |
--------------------------------------------------------------------------------
| Interest-bearing | 41,784 | 40,740 | 13,715 |
| liabilities, total | | | |
--------------------------------------------------------------------------------
SUMMARY OF GROUP'S PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS, EUR
THOUSAND
--------------------------------------------------------------------------------
| | Property, plant | Intangible |
| | and equipment | assets |
--------------------------------------------------------------------------------
| Acquisition cost 1 Jan 2007 | 23 412 | 37 847 |
--------------------------------------------------------------------------------
| Additions | 21 965 | 7 269 |
--------------------------------------------------------------------------------
| Disposals | 0 | 0 |
--------------------------------------------------------------------------------
| Acquisition cost 30 June 2007 | 45 376 | 45 116 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Acquisition cost 1 Jan 2006 | 16 056 | 34 020 |
--------------------------------------------------------------------------------
| Additions | 21 532 | 3 162 |
--------------------------------------------------------------------------------
| Disposals | 0 | -2 614 |
--------------------------------------------------------------------------------
| Acquisition cost 30 June 2006 | 37 588 | 34 568 |
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT SUMMARY, EUR THOUSAND
--------------------------------------------------------------------------------
| | 1 Jan - | 1 Jan - | 1 Jan - |
| | 30 Jun | 30 Jun | 31 Dec 2006 |
| | 2007 | 2006* | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from operating | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Net profit | 2 101 | 2 988 | 8 442 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Adjustments to net profit | 5 521 | 1 560 | 10 794 |
--------------------------------------------------------------------------------
| Changes in working capital | -6 249 | -1 222 | -12 178 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash from operating activities | 1 373 | 3 326 | 7 058 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from investing | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries and | -5 543 | -8 902 | -13 401 |
| associates | | | |
--------------------------------------------------------------------------------
| Payment of earn-out liabilities and | -7 167 | -5 827 | -8 875 |
| exercises of call options related | | | |
| to acquisitions | | | |
--------------------------------------------------------------------------------
| Disposal of subsidiaries and | 2 361 | 2 312 | 4 183 |
| associates | | | |
--------------------------------------------------------------------------------
| Capital expenditures and other | -2 651 | -2 698 | -3 203 |
| investing activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash used in investing | -13 000 | -15 115 | -21 296 |
| activities ** | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from financing | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Share issues | 293 967 | 21 218 | 21 218 |
--------------------------------------------------------------------------------
| Dividends paid | -5 154 | -1 866 | -3 146 |
--------------------------------------------------------------------------------
| Proceeds from borrowings | 7 064 | 2 527 | 5 561 |
--------------------------------------------------------------------------------
| Repayment of borrowings, and other | -1 142 | -1 116 | -2 611 |
| financing activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash used in financing | 294 734 | 20 763 | 21 022 |
| activities ** | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net increase in cash and cash | 283 107 | 8 974 | 6 784 |
| equivalents | | | |
--------------------------------------------------------------------------------
* With the change in a mutual fund investment realised in Q1/2006 (EUR 8,579
thousand) presented in Change in liquid assets
** With the presentation method of the payments of additional purchase price
liabilities and the implementation of previously agreed purchase options changed
from the previous so that these are presented under Cash flow used in investing
activities, while they were previously under Cash flow from/used in financing
activities
STATEMENT OF CHANGES IN EQUITY, EUR THOUSAND
--------------------------------------------------------------------------------
| | | | Equity attributable to | Mino | Total |
| | | | shareholders | -rit | equit |
| | | | | y | y |
| | | | | inte | |
| | | | | -res | |
| | | | | t | |
--------------------------------------------------------------------------------
| 1000 EUR | Sha | Sha | Sha | Fair | Paid- | Reta | Total | | |
| | re | re | re | valu | up | in-e | | | |
| | cap | iss | pre | e | unre- | d | | | |
| | i-t | ue | miu | and | stric | ear- | | | |
| | al | | m | reva | ted | ning | | | |
| | | | res | lua- | equit | s | | | |
| | | | erv | tion | y | | | | |
| | | | e | rese | reser | | | | |
| | | | | r-ve | ve | | | | |
| | | | | s | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' | 14 | 4 | 2 | 9 | 0 | 3 | 24 | | 24 |
| equity 1 Jan | 584 | 340 | 144 | | | 380 | 457 | | 457 |
| 2006 | | | | | | | | | |
--------------------------------------------------------------------------------
| Bonus issue | 87 | | -87 | | | | 0 | | 0 |
| 1/2006 | | | | | | | | | |
--------------------------------------------------------------------------------
| Share issue | 1 | -4 | 3 | | | | 0 | | 0 |
| 12/2005 | 190 | 340 | 150 | | | | | | |
--------------------------------------------------------------------------------
| Share issue | 5 | | 16 | | | | 21 | | 21 |
| 3/2006 | 100 | | 118 | | | | 218 | | 218 |
--------------------------------------------------------------------------------
| Minority | | | | | | | 0 | 2 | 2 891 |
| interest | | | | | | | | 891 | |
| generated by | | | | | | | | | |
| acquisition | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividends | | | | | | -1 | -1 | | -1 |
| paid, AGM | | | | | | 866 | 866 | | 866 |
| 4/2006 | | | | | | | | | |
--------------------------------------------------------------------------------
| Net profit | | | | | | 2 | 2 724 | 264 | 2 988 |
| 1-6/2006 | | | | | | 724 | | | |
--------------------------------------------------------------------------------
| Equity | | | | -9 | | 3 | 3 341 | | 3 341 |
| component of | | | | | | 349 | | | |
| convertible | | | | | | | | | |
| bonds and | | | | | | | | | |
| other changes | | | | | | | | | |
| in equity | | | | | | | | | |
--------------------------------------------------------------------------------
| Shareholders' | 20 | 0 | 21 | 0 | 0 | 7 | 49 | 3 | 53 |
| equity 30 Jun | 961 | | 325 | | | 588 | 874 | 154 | 028 |
| 2006 | | | | | | | | | |
--------------------------------------------------------------------------------
| Free directed | | | | 424 | | | 424 | | 424 |
| issue 10/2006 | | | | | | | | | |
--------------------------------------------------------------------------------
| Conversions | 2 | | 3 | | | | 5 444 | | 5 444 |
| of | 057 | | 387 | | | | | | |
| convertible | | | | | | | | | |
| bonds | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividends | | | | | | -1 | -1 | | -1 |
| paid, GM | | | | | | 282 | 282 | | 282 |
| 10/2006 | | | | | | | | | |
--------------------------------------------------------------------------------
| Net profit | | | | | | 5 | 5 718 | -728 | 4 991 |
| 7-12/2006 | | | | | | 718 | | | |
--------------------------------------------------------------------------------
| Net change in | | | | | | | | -836 | |
| minority | | | | | | | | | |
| interests | | | | | | | | | |
| generated by | | | | | | | | | |
| acquisitions | | | | | | | | | |
| and disposals | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | | | | | | -2 | -2 | | -2 |
| component of | | | | | | 513 | 513 | | 513 |
| convertible | | | | | | | | | |
| bonds and | | | | | | | | | |
| other changes | | | | | | | | | |
| in equity | | | | | | | | | |
--------------------------------------------------------------------------------
| Shareholders' | 23 | 0 | 24 | 424 | 0 | 9 | 57 | 1 | 59 |
| equity 31 Dec | 018 | | 712 | | | 512 | 665 | 591 | 256 |
| 2006 | | | | | | | | | |
--------------------------------------------------------------------------------
| Free directed | | | | | 1 035 | | 1 035 | | 1 035 |
| issue 4/2007 | | | | | | | | | |
--------------------------------------------------------------------------------
| Share issue | | | | | 293 | | 293 | | 293 |
| 6/2007 | | | | | 645 | | 645 | | 645 |
--------------------------------------------------------------------------------
| Dividends | | | | | | -4 | -4 | | -4 |
| paid, AGM | | | | | | 079 | 079 | | 079 |
| 4/2007 | | | | | | | | | |
--------------------------------------------------------------------------------
| Net profit | | | | | | 1 | 1 574 | 711 | 2 285 |
| 1-6/2007 | | | | | | 574 | | | |
--------------------------------------------------------------------------------
| Conversions | 624 | | 1 | | | | 1 652 | | 1 652 |
| of | | | 028 | | | | | | |
| convertible | | | | | | | | | |
| bonds | | | | | | | | | |
--------------------------------------------------------------------------------
| Fair value | | | | 757 | | | 757 | | 757 |
| generated by | | | | | | | | | |
| acquisitions | | | | | | | | | |
--------------------------------------------------------------------------------
| Fair value of | | | | 17 | | | 17 | | 17 |
| investments | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | | | | | | 194 | 194 | | 194 |
| component of | | | | | | | | | |
| convertible | | | | | | | | | |
| bonds and | | | | | | | | | |
| other changes | | | | | | | | | |
| in equity | | | | | | | | | |
--------------------------------------------------------------------------------
| Shareholders' | 23 | 0 | 25 | 1 | 294 | 7 | 352 | 2 | 354 |
| equity 30 Jun | 642 | | 740 | 198 | 680 | 200 | 460 | 302 | 762 |
| 2007 | | | | | | | | | |
--------------------------------------------------------------------------------
* Expenses related to the March-April 2006 share issue have been retroactively
presented in share premium reserve in the table above
MERGERS AND ACQUISITIONS IN THE SECOND QUARTER
Acquisition of Pohjolan Design-Sähkö Oy (house building), June 2007
In June 2007, the house building business area acquired a 70.1% holding in
Pohjolan Design-Sähkö Oy (Ruukki Group's effective holding approximately 63,2%),
an electrical contractor company. If this acquisition had taken place with a
corresponding holding already on 1 January 2007, this would have changed the
consolidated figures reported by Ruukki Group for the review period 1 January -
30 June 2007 as follows: The consolidated revenue would have increased by about
EUR 1,828 thousand (+2%), the consolidated EBIT would have increased by about
EUR 221 thousand (+4%), and the consolidated net profit would have increased by
about EUR 175 thousand (all these figures compared with the review period
figures reported by the Group).
The following assets and liabilities were recognised relating to the acquisition
of Pohjolan Design-Sähkö Oy, also indicating the magnitude of the acquisition's
balance sheet effect:
--------------------------------------------------------------------------------
| EUR 1,000 | Fair value of | Book value before |
| | acquired assets | acquisition |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Intangible assets | | |
--------------------------------------------------------------------------------
| Intangible rights | 2 | 2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Property, plant and equipment | | |
--------------------------------------------------------------------------------
| Machinery and equipment | 93 | 93 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other assets | | |
--------------------------------------------------------------------------------
| Inventories | 687 | 662 |
--------------------------------------------------------------------------------
| Trade receivables | 670 | 670 |
--------------------------------------------------------------------------------
| Other receivables | 44 | 44 |
--------------------------------------------------------------------------------
| Accrued income | 152 | 152 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Marketable securities | 316 | 302 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 431 | 422 |
--------------------------------------------------------------------------------
| Total assets | 2,395 | 2,346 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-interest bearing liabilities | | |
--------------------------------------------------------------------------------
| Trade payables | 52 | 52 |
--------------------------------------------------------------------------------
| Other liabilities | 123 | 123 |
--------------------------------------------------------------------------------
| Accruals | 292 | 292 |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 13 | 0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total liabilities | 479 | 466 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net assets | 1,916 | 1,880 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Acquisition cost | 1,524 | |
--------------------------------------------------------------------------------
| Net assets 15 June 2007 (70.1%) | 1,343 | |
--------------------------------------------------------------------------------
| Goodwill | 181 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow effect: | | |
--------------------------------------------------------------------------------
| Consideration paid in cash | 1,500 | |
--------------------------------------------------------------------------------
| Acquired cash and cash equivalents | -431 | |
--------------------------------------------------------------------------------
| Cash flow | 1,069 | |
--------------------------------------------------------------------------------
OTHER KEY INDICATORS
--------------------------------------------------------------------------------
| | Q2/2007 | Q2/2006 | 2006 |
--------------------------------------------------------------------------------
| | 6 mths / 30 | 6 mths / 30 | 12 mths / 31 |
| | Jun 2007 | Jun 2006 | Dec 2006 |
--------------------------------------------------------------------------------
| Gross capital expenditure (EUR | 26.1 | 24.7 | 14.3 |
| million) | | | |
--------------------------------------------------------------------------------
| % of revenue | 28.1 % | 40.6 % | 11.4 % |
--------------------------------------------------------------------------------
| Personnel, average | 777 | 490 | 570 |
--------------------------------------------------------------------------------
| Personnel, at the end of the | 942 | 649 | 452 |
| period | | | |
--------------------------------------------------------------------------------
| Dividends (EUR million) | 4.1 | 1.9 | 3.1 |
--------------------------------------------------------------------------------
| Dividend per share, EUR | | | 0.03 |
--------------------------------------------------------------------------------
| Dividend per earnings, % | | | 41.9 % |
--------------------------------------------------------------------------------
| Effective dividend yield, % | | | 2.5 % |
--------------------------------------------------------------------------------
| Price to earnings (P/E), EUR | 119.8 | 28.3 | 16.8 |
--------------------------------------------------------------------------------
| Lowest share price, EUR | 1.18 | 0.64 | 0.64 |
--------------------------------------------------------------------------------
| Highest share price, EUR | 2.80 | 0.91 | 1.23 |
--------------------------------------------------------------------------------
| Average trade-weighted share | 1.95 | 0.76 | 0.84 |
| price, EUR | | | |
--------------------------------------------------------------------------------
| Market capitalisation (EUR | 697.2 | 104.8 | 163.2 |
| million) | | | |
--------------------------------------------------------------------------------
| Share turnover (EUR million) | 248.2 | 33.1 | 84.8 |
--------------------------------------------------------------------------------
| Share turnover, % | 47.2 % | 35.4 % | 86.0 % |
--------------------------------------------------------------------------------
ACCOUNTING POLICIES
This Interim Report has been prepared in accordance with IAS 34. Ruukki Group
Plc has applied the same accounting policies as in the 2006 financial
statements, with the following exception. Based on a decision of the company's
Board of Directors, the sawmill and furniture businesses have been reported as
separate primary segments since the beginning of the 2007 financial year, rather
than as the wood product industry segment as in the reporting for the 2006
financial year. The figures in the tables have been rounded off to one decimal
point, which must be considered when calculating totals. The Interim Report data
are unaudited.
RUUKKI GROUP PLC
BOARD OF DIRECTORS
Ruukki Group is a multi-sector industrial group having mainly majority ownership
interests in various small and medium-sized companies in e.g. house building,
sawmilling business, furniture business and care services. Ruukki Group share
(RUG1V) is listed on OMX Nordic Exchange's so-called mid cap category.
For further information, please contact:
Antti Kivimaa
CEO
Ruukki Group Plc
Telephone +358 400 501780
www.ruukkigroup.fi
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 of the interim report shall prevail.
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