Rautaruukki Corporation Interim report H1/2013:

Rautaruukki Corporation Stock exchange release 8 August 2013 at 9am EEST April-June 2013 (Q2/2012) - Net cash from operating activities was EUR 54 million (-5). - Order intake was down 9% at EUR 644 million (711). - Comparable net sales were down 8% at EUR 633 million (688). - Comparable operating profit was EUR 17 million (10). - Comparable result before taxes was EUR 6 million (2). January-June 2013 (H1/2012) - Net cash from operating activities was EUR 77 million (49). - Order intake was down 8% at EUR 1,235 million (1,343). - Comparable net sales were down 9% at EUR 1,222 million (1,339). - Comparable operating profit was EUR 21 million (-1). - Comparable result before taxes was EUR 2 million (-19). Guidance for 2013 remains unchanged Comparable net sales in 2013 are estimated to be at the same level as in 2012. Comparable operating profit is estimated to improve compared to 2012 and to be positive. Net sales and operating profit for 2012 have been restated for reasons of structural comparability.  Part of Ruukki Engineering's business was divested at the end of 2012. The units excluded from the arrangement have been part of Ruukki Metals since the start of 2013. Ruukki Engineering units transferred to Fortaco and other Ruukki Engineering units have been eliminated from comparable figures. KEY FIGURES -------------------------------------------------------------------------------   Q2/13 Q2/12 Q1-Q2/13 Q1-Q2/12 2012 ------------------------------------------------------------------------------- Comparable figures ------------------------------------------------------------------------------- Comparable net sales, EUR m 633 688 1 222 1 339 2 597 ------------------------------------------------------------------------------- Comparable operating profit, EUR m 17 10 21 -1 -50 ------------------------------------------------------------------------------- Comparable operating profit as % of net sales 2,6 1,5 1,7 -0,1 -1,9 ------------------------------------------------------------------------------- Comparable result before income tax, EUR m 6 2 2 -19 -88 ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- Reported figures ------------------------------------------------------------------------------- Reported net sales, EUR m 633 742 1 223 1 444 2 796 ------------------------------------------------------------------------------- Reported operating profit, EUR m 16 -6 20 -22 -101 ------------------------------------------------------------------------------- Reported result before income tax, EUR m 5 -14 1 -40 -139 ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- Net cash from operating activities, EUR m 54 -5 77 49 172 ------------------------------------------------------------------------------- Net cash before financing activities, EUR m 31 -30 38 2 78 ------------------------------------------------------------------------------- Earnings per share, EUR -0,01 -0,08 -0,03 -0,22 -0,85 ------------------------------------------------------------------------------- Return on capital employed (rolling 12 months),%     -3,0 -4,1 -4,9 ------------------------------------------------------------------------------- Return on capital employed (annualised), %     2,1 -1,9 -4,9 ------------------------------------------------------------------------------- Gearing ratio, %     74,2 71,5 71,2 ------------------------------------------------------------------------------- Equity ratio, %     43,6 46,0 45,6 ------------------------------------------------------------------------------- Personnel on average 9 271 11 692 9 074 11 521 11 214 ------------------------------------------------------------------------------- President & CEO Sakari Tamminen: "Economic development was weak in the eurozone also during the second quarter of the year and Europe was in recession. Economic development continued to show regional differences. The situation in Europe is difficult and it is hard to see any basis for growth during the second half of the year either. The emerging markets and the United States are forecast to continue maintaining global growth despite growing uncertainty, especially with regard to China's ability to achieve its growth forecasts. Concerning Ruukki's most important markets, Sweden and Russia are expected to show better development than other markets. The situation in Finland gives particular cause for concern because we have lost much export manufacturing industry and the change is structural rather than a question of business cycles. Ruukki's second quarter largely reflected the market situation described above. Order intake was down 9% and comparable net sales were down 8% year on year. This was in particular attributable to weaker market prices for standard steel products driven by overcapacity in the steel industry in Europe and declining prices of the main steelmaking raw materials. Current market conditions for steel products are better reflected, however, by delivery volumes of our steel products, which remained unchanged year on year. Given market conditions, demand was good in the Ruukki Building Products and Ruukki Building Systems business areas. Comparable operating profit was up both year on year and quarter on quarter at EUR 17 million. During the second quarter, cash flow from operating activities was EUR 54 million. Better cash flow was achieved through improved earnings performance as net working capital to sales was practically unchanged compared to the previous quarter. Despite the dividend payout made during the second quarter, net debt was at the same level as during the first quarter. We achieved the targets we set for our efficiency projects initiated during the first half of last year and, at the end of June, the annualised impact of these projects on earnings improvement was slightly over EUR 100 million. Ruukki Building Products improved operating profit year on year, mostly as a result of the efficiency programme and better gross margin. Order intake for residential roofing products was at the previous year's level and in line with general growth expectations. A positive note in current market conditions was that order intake for building components was up 5% year on year. Orders and net sales for infrastructure construction were down clearly year on year, which is consistent with the trend in building permits granted and low investment activity in the Nordic countries. Ruukki Building Systems successfully achieved its aim to reduce the operating loss year on year. This was mainly achieved as a result of the efficiency programme. We are heading in the right direction, but need to accelerate the speed in the change process for the rest of the year. Except for a single order worth more than EUR 30 million received in spring last year, order intake was at the same level as a year earlier. Order intake was up especially in agricultural concept buildings in Russia. The order book at the end of the report period was 4% higher than a year earlier. Ruukki Metals' operating profit was lower than for the previous quarter. This was because of disruptions to production and higher raw material costs. In terms of tonnes, delivery volumes were down, but the product mix improved. Sales of special steel products rose quarter on quarter to account for 34% (32%) of comparable net sales in our steel business. Net sales of special steel products were up 10% quarter on quarter. Compared to a year earlier, Ruukki Metals' total order intake was down 7% in terms of value, but order volumes showed slight growth. The value of order intake of special steel products was at the same level as a year earlier, but order volumes were up clearly. This underpins our strategy to considerably grow the volume of special steel products and our target to achieve sales of special steels of EUR 850 million in 2015. Special steel products are notably more profitable than standard products and their prices fluctuate less during business cycles. We are not aiming to increase our total steel output through increased sales of special steels, but as the share of special steels grows the goal is to scale down sales volumes of less profitable, underperforming standard steel. We do not expect any significant change in demand for steel products in Europe during second half of the year compared to the second quarter. The prevailing overcapacity in the steel industry in Europe means that price development for the whole year, especially with regard to standard steel products, depends not just on demand, but also on the price development of main raw materials. There are good prospects for Ruukki to grow its share of special steels because our product portfolio and standard of quality, together with the investment this year in our sales and distribution network, provide a strong platform for growth. We aim to further grow the special steel business through new customers and applications, our entry into new market areas and product launches is progressing well. This was already slightly reflected in order volumes during the second quarter. The Building Products business area has a good market position and is seeking growth especially from energy-efficient products and residential roofing products. We are also focusing on repeatable products and processes, and seeking new business opportunities for our good infrastructure construction products to improve profitability. In Ruukki Building Systems, our main aim is to turn the business back to profitability by the end of the year. My expectations for 2013 are somewhat optimistic thanks to our actions to improve efficiency and the business choices we have made, even though we still cannot expect any significant help from a pick-up in the market. Comparable net sales in 2013 are estimated to be at the same level as in 2012. Comparable operating profit is estimated to improve compared to 2012 and to be positive." Rautaruukki Corporation's full interim report for January-June 2013 is attached to this release. For further information, please contact Sakari Tamminen, President & CEO, tel. +358 20 592 9075 Markku Honkasalo, CFO, tel. +358 20 592 8840 News conference for analysts and the media A joint news conference in English both for analysts and the media will be hosted on Thursday 8 August at 10.30 am at Ruukki's head office, Suolakivenkatu 1, 00810 Helsinki. A live webcast of the event and the presentation by the company's President & CEO Sakari Tamminen may be followed online on the company website at www.ruukki.com/Investors starting at 10.30 am EEST. This event can also be attended through a conference call by dialling the number below 5-10 minutes before the scheduled time: +44 207 1620 177 (calls outside Finland) +358 9 2313 9202 (calls inside Finland) Access code: 934316 A replay of the webcast can be viewed on the company's website from approximately 4pm EEST. A replay of the conference call will be available until 16 August 2013 at: +44 20 7031 4064 (calls outside Finland) +358 9 2314 4681 (calls inside Finland) Access code: 934316 Rautaruukki Corporation Taina Kyllönen SVP, Marketing and Communications Ruukki specialises in steel and steel construction. We provide customers with energy-efficient steel solutions for better living, working and moving. We have around 9,000 employees and an extensive distribution and dealer network across some 30 countries including the Nordic countries, Russia and elsewhere in Europe and the emerging markets, such as India, China and South America. Net sales in 2012 totalled €2.8 billion. The company's share is quoted on NASDAQ OMX Helsinki (Rautaruukki Oyj: RTRKS). www.ruukki.com DISTRIBUTION: NASDAQ OMX Helsinki Main media www.ruukki.com [HUG#1721910]