27 april, 2005
08:00 CET
Rautaruukki's Interim Report January-March 2005
Rautaruukki Oyj Stock Exchange Release 27 April 2005 at 9.00
PROFIT BEFORE TAXES EUR 185 MILLION - MARKET OUTLOOK STILL POSITIVE
- Net sales EUR 1,014 million (1-3/2004: EUR 794 million).
- Operating profit EUR 192 million (76).
- Profit before taxes EUR 185 million (66).
- Earnings per share EUR 1.00 (0.35).
- Gearing 52 per cent (113).
- Rautaruukki's interim report has been compiled according to IFRS standards.
Key figures 2005 2004 2004
1-3 1-3 1-12
Net sales, Me 1014 794 3564
Operating profit, Me 192 76 493
- as % of net sales 19,0 9,5 13,8
Profit before taxes, Me 185 66 443
EPS, diluted, e 1,00 0,35 2,40*
* includes EUR 0.13 resulting from an EUR 18 million reduction in the deferred
tax liability due to the change in Finnish tax legislation
Transition to International Financial Reporting Standards (IFRS)
Rautaruukki adopted International Financial Reporting Standards (IFRS) from the
beginning of 2005. The IFRS 1 transitional standard has been applied in making
the changeover. IFRS 5 (Non-current assets held for sale and discontinued
operations) as well as IAS 32 and 39 (Financial instruments) have been applied
as from 1 January 2005. These did not have any significant effect on capital and
reserves in the opening balance of 1 January 2005. Additional information and a
more detailed discussion of the effects of the transition on the balance sheet
and income statement were given in the company's stock exchange release of 26
April 2005. The bulletin is available on Ruukki's website at
www.ruukki.com/investors.
Rautaruukki observes the IFRIC 3 interpretation in the financial reporting
treatment of emissions allowance trading that got started from the beginning of
2005.
First-quarter highlights
- Overall demand remained good.
- Selling prices rose further on the previous quarter.
- Net sales grew somewhat, delivery volumes remained at the previous quarter's
level.
- Profitability was improved by higher prices coupled with continued work to
enhance the sales structure and cost-effectiveness.
- Rautaruukki, Wärtsilä and SKF agreed upon merging their long steel businesses.
President and CEO Sakari Tamminen:
"The current year has started off in line with our expectations. A favourable
market situation has continued in Ruukki's key customer sectors in the
construction and engineering industries. There has been good demand for steel
products in the first part of the year and product prices are at a significantly
higher level than in the same period of last year. Measures aimed at improving
the sales structure caused a decrease in delivery volumes compared with the
corresponding period in 2004: the company's efforts have centred on key customer
segments and the chosen core market area with an eye to profitability. During
the report period we continued our inputs into developing the business model and
we announced that we combine our long steel products business into a jointly
owned new company that will be formed together with Wärtsilä and SKF. We
furthermore announced our intention to raise our holding in Metalplast, Poland.
The outlook for the current year is expected to remain good. The demand is
expected to hold up well in the company's most important customer sectors and
main market areas. The construction season is getting under way and the
engineering industry customers have strong order books. The winding down of
inventories by stockists is expected to bring a decrease in the demand for steel
products in the current quarter. The company has prepared to adjust its
production according to profitable demand. In the second quarter, prices of
steel products are forecast to hold steady or rise slightly and inventory levels
are expected to normalise over the summer.
The Group's full-year net sales in comparable terms are expected to increase on
the previous year. Higher raw material prices will begin to have an impact on
earnings towards the end of the second quarter, though the lower volumes of
purchased slabs will be compensating this effect. Full-year comparable operating
profit is estimated to exceed the last year's level thanks to the rise in
product prices, an improved sales structure as well as internal measures to
improve cost-effectiveness. The biggest uncertainty regarding the earnings trend
is in the demand on Asian markets and its effects on market prices of basic
steel products."
FOR ADDITIONAL INFORMATION, CONTACT
President and CEO Sakari Tamminen, tel. +358 20 592 9075
CFO Mikko Hietanen, tel. +358 40 579 4359
Press conference
Rautaruukki will arrange a press conference regarding the Interim Report on 27
April 2005 at 10.30 a.m. at the company's head office, address: Suolakivenkatu
1, 00810 Helsinki.
Webcast and conference call
The webcast and conference call for investors and analysts can be viewed live on
the company's website at www.ruukki.com/investors today 27 April 2005, at 2.00
p.m. Those desiring to participate in the conference call can phone +44 20 7162
0184, password: Rautaruukki, about 5-10 minutes before the conference starts.
The Interim Report for January-March 2005 is available on the company's website,
www.ruukki.com/investors
Rautaruukki Corporation
Taina Kyllönen
VP, Corporate Communications
RAUTARUUKKI CORPORATION'S INTERIM REPORT JANUARY-MARCH 2005
Transition to International Financial Reporting Standards (IFRS)
Rautaruukki adopted International Financial Reporting Standards (IFRS) from the
beginning of 2005. The IFRS 1 transitional standard has been applied in making
the changeover. IFRS 5 (Non-current assets held for sale and discontinued
operations) as well as IAS 32 and 39 (Financial instruments) have been applied
as from 1 January 2005. These did not have any significant effect on capital and
reserves in the opening balance of 1 January 2005. Additional information and a
more detailed discussion of the effects of the transition on the balance sheet
and income statement were given in the company's stock exchange release of 26
April 2005. The bulletin is available on Ruukki's website at
www.ruukki.com/investors.
Rautaruukki observes the IFRIC 3 interpretation in the financial reporting
treatment of emissions allowance trading that got started from the beginning of
2005.
Net sales and result for January-March 2005 (comparative figures for 2004)
Consolidated net sales in January-March 2005 were EUR 1,014 million, up 28 per
cent on the net sales in January-March 2004 (794). Net sales increased on the
same period of 2004 thanks to markedly higher prices. Delivery volumes were down
about 10 per cent on the first quarter of last year owing to measures carried
out to improve the sales structure. Of net sales, 25 per cent came from Finland
(24) and 31 per cent from the other Nordic countries (28). Central Eastern
Europe accounted for 8 per cent of net sales (8), the rest of Europe for 33 per
cent (37) and other countries for 3 per cent (3).
Operating profit was EUR 192 million (76), or 19.0 per cent (9.5) of net sales.
Operating profit was boosted by the rise in product prices, an improved sales
structure as well as internal measures to improve cost-effectiveness. Prices of
the raw materials used in steel manufacture have risen considerably compared
with the same period a year ago, but by means of the above-mentioned
profitability-improving measures, the Group has succeeded in offsetting higher
raw material costs in the report period. The change in the exchange rate of the
US dollar added EUR 5 million to operating profit compared with the same period
of 2004. The net effect on operating profit during the report period of the free
emissions allowances that were received was a charge of EUR 8 million.
Net financial expenses amounted to EUR 7 million (10) including the share of
associated companies' profit EUR 2 million (1). Net interest expenses totalled
EUR 8 million (12) and the net effect of foreign exchange gains and losses was
EUR 0 million (3).
Profit before taxes was EUR 185 million (66).
The Group's taxes amounted to EUR -47 million (-18), including a decrease of EUR
1 million in deferred taxes (increase 1).
Net profit for the period was EUR 139 million (48).
Earnings per share were EUR 1.00 (0.35). The temporary effect on earnings per
share arising from booking the costs of emissions trading was EUR 0.06 negative.
The return on capital employed was 33.0 per cent (9.5) and the return on equity
41.1 per cent (11.6).
The Group's total assets were EUR 2,885 million. The total assets increased by
EUR 306 million from the end of March 2004 and by EUR 173 million from the end
of 2004. Of the increase, EUR 86 million resulted from the accounting treatment
of the free emissions allowances that were received in the EU's initial
allotment.
Cash flow and financing
Cash flow from operations was EUR 154 million (36) and cash flow before
financing EUR 131 million (26).
Interest-bearing net debt at the end of March totalled EUR 631 million (953). At
the end of 2004, interest-bearing net debt stood at EUR 761 million. Working
capital increased in January-March by EUR 84 million (61) owing to the increase
in trade debtors and stocks.
The equity ratio was 42.1 per cent (32.9) and the gearing ratio 52 per cent
(113). At the end of March the Group's liquid funds amounted to EUR 68 million
and it had a total of EUR 245 million of committed unused revolving credit
facilities with banks. Capital and reserves stood at EUR 1,206 million (845), or
EUR 8.88 per share (6.22).
Personnel
The average number of personnel employed by the Group in the January-March
period was 12,132 people (11,982). At the end of March the entire payroll was
12,132 employees (11,971). The increase in personnel was 161. The acquisition of
Velsa Oy added 396 people to the Group's payroll.
Capital expenditures and structural changes
Gross capital expenditures in January-March totalled EUR 23 million (24).
Disposals of fixed assets during the report period totalled EUR 4 million. Full-
year net capital expenditures in 2005 are expected to come to about EUR 100
million.
Rautaruukki Oyj announced in January that it was exercising its pre-emptive
right under the Articles of Association to acquire the 50 per cent holding of an
international private equity group in Metalplast-Oborniki Holding Sp. z o.o,
which is Poland's leading manufacturer of metal-based construction panels. On
completion, the deal will increase Rautaruukki's holding to 66.7 per cent.
Approval of the authorities is required for finalising the transaction.
Rautaruukki has furthermore made a tender offer for the Polish State's 31 per
cent holding and given a commitment to make a tender offer for the shares held
by the company's management and personnel with the objective of raising the
holding in Metalplast to 100 per cent.
On 17 February 2005, Rautaruukki Corporation, AB SKF and Wärtsilä Corporation
signed a Memorandum of Understanding in which the companies agreed to combine
their long steel products businesses into a jointly owned new company.
Rautaruukki's long products companies Fundia Special Bar, Fundia Wire and Fundia
Bar & Wire Processing with their subsidiaries will be transferred to the new
company. The Group's reinforcing business will remain a part of the Ruukki
Metals division. Rautaruukki's holding in the new company will be 47.0 per cent,
with SKF having a stake of 26.5 per cent and Wärtsilä 26.5 per cent. The balance
sheet value of the operations that are to be transferred to the new company is a
total of about EUR 420 million and invested capital will come to EUR 280
million. The effect of the arrangement on Rautaruukki's total assets is a
decrease of about EUR 140 million. 1,900 employees will transfer to the new
company. The definitive agreement was signed on 22 April 2005. The closing of
the transaction is subject to regulatory approvals.
Shares and share capital
Turnover in the Rautaruukki Oyj share on the Helsinki Stock Exchange in January-
March was EUR 520 million (175). The share registered a high of EUR 11.70 in
March and a low of EUR 8.02 in January. The average share price was EUR 9.60.
The price of the share at the end of the report period on 31 March 2005 was EUR
10.38 and the company had a market capitalisation of EUR 1,442 million.
The company's registered share capital at 31 March 2005 stood at EUR 236.1
million. The number of Series K shares issued was 138,886,445. The company held
3,072,960 of its own shares (treasury shares). The treasury shares had a market
value at 31 March 2005 of EUR 32 million.
Rautaruukki Corporation's Annual General Meeting held on 23 March 2005
authorised the Board of Directors to decide on buying back a maximum of
3,800,000 of the company's own Series K shares (2.74 per cent of the shares
outstanding). The Annual General Meeting furthermore authorised the Board of
Directors to decide on transferring a maximum of 6,872,960 Series K treasury
shares. The Board of Directors has not exercised these authorisations to date.
In addition to the above, the Board of Directors does not have a valid
authorisation to issue convertible bonds and/or bonds with warrants or to
increase the company's share capital.
Dividend
The Annual General Meeting held on 23 March 2005 approved the proposed dividend
of EUR 0.80 per share. The dividend was paid out on 6 April 2005 and the total
amount of the dividend was EUR 109 million.
Corporate governance and auditors
The Annual General Meeting held on 23 March 2004 re-elected Jukka Viinanen,
President & CEO, Orion Group, chairman of the company's Board of Directors and
Georg Ehrnrooth, former President & CEO, Metra Corporation, as vice chairman.
The Annual General Meeting re-elected as members Christer Granskog, President
and CEO, Kalmar Industries AB, Pirkko Juntti, LL.M. and Maarit Arni, Vice
President, Phenol Business Unit, Borealis Group. The new members elected to the
Board were Kalle J. Korhonen, Director General, Ministry of Trade and Industry,
and Kiuru Schalin, Senior Vice President, AGA, Region Europe North.
The Annual General Meeting re-elected Turo Bergman, Lic. (Pol. Sc.), chairman of
the Supervisory Board and Member of Parliament Jouko Skinnari vice chairman. The
following persons were re-elected to seats on the Supervisory Board: Heikki
Allonen, President and CEO, Fiskars Oyj Abp; Ole Johansson, President and CEO,
Wärtsilä Corporation; Tauno Matomäki, former President & CEO, UPM-Kymmene
Corporation; as well as Members of Parliament Inkeri Kerola, Miapetra Kumpula,
Petri Neittaanmäki, Tapani Tölli, and Lasse Virén.
The Annual General Meeting re-elected as auditors the firm of independent public
accountants Ernst & Young Oy, with Pekka Luoma, Authorised Public Accountant,
acting as principal auditor.
The Annual General Meeting furthermore passed a resolution to set up a
Nomination Committee to prepare proposals concerning the members of the Board of
Directors and their emoluments for presentation to subsequent Annual General
Meeting.
Memberships of Board Committees
At its organisations meeting, the Board of Directors elected Pirkko Juntti
chairman of the Audit Committee and Maarit Aarni and Christer Granskog as its
members. Jukka Viinanen was elected chairman of the Compensation Committee and
Georg Ehrnrooth and Kiuru Schalin as members.
Environmental issues
The EU's internal emissions trading started on 1 January 2005. Of Rautaruukki's
plants, the following units fall within the scope of the EU's emissions trading:
Smedjebacken in Sweden, Alblasserdam in the Netherlands as well as Raahe,
Koverhar and Hämeenlinna in Finland. A similar system has been developed in
Norway, and it will be linked to the EU's emissions trading. The Norwegian
system will apply to the Mo i Rana Works.
In the initial allocation of emissions allowances, Rautaruukki received a total
allowance of about 18.6 million tonnes, of which about 6.2 million tonnes were
for 2005. As part of its efforts to control the carbon dioxide emissions
balance, Rautaruukki Corporation has joined the World Bank's "Community
Development Carbon Fund" by taking a four million dollar stake in the fund. The
CDCF fund produces certified emission reductions according to the Kyoto Protocol
that can be converted into emissions allowances under the EU emissions trading
system.
Events after the close of the report period
On 22 April, Rautaruukki, SKF and Wärtsilä signed a definitive agreement to
merge their long steel businesses. The closing of the transaction is subject to
regulatory approvals.
In April, the company signed a EUR 300 million committed revolving credit
facility. The term of the facility is five years and it will be used to
refinance the company's existing facilities.
Saku Sipola, 36, M.Sc. (Eng.) will take over as head of the Ruukki Construction
division and become a member of the Management Group on 1 May 2005. He comes to
Rautaruukki from YIT Corporation, where he was Senior Vice President of the
Business Premises Division at YIT Construction Ltd.
Near-term outlook
The outlook for the current year is expected to remain good. Demand is expected
to hold up well in the company's most important customer industries and main
market areas. The construction season is getting under way and the engineering
industry customers have strong order books. The winding down of inventories by
stockists is expected to bring a decrease in the demand for steel products in
the current quarter. The company has prepared to adjust its production according
to profitable demand. In the second quarter, prices of steel products are
forecast to hold steady or rise slightly and inventory levels are expected to
normalise over the summer.
The Group's full-year net sales in comparable terms are expected to increase on
the previous year. Higher raw material prices will begin to have an impact on
earnings towards the end of the second quarter, though the lower volumes of
purchased slabs will be compensating this effect. Full-year comparable operating
profit is estimated to exceed the last year's level thanks to the rise in
product prices, an improved sales structure as well as internal measures to
improve cost-effectiveness. The biggest uncertainty regarding the earnings trend
is in the demand on Asian markets and its effects on market prices of basic
steel products.
This interim report has not been audited.
Helsinki, 27 April 2005
Rautaruukki Corporation
Board of Directors
DIVISIONS
The Ruukki Fabrication functions were made a part of the other divisions as from
1 January 2005. The 2004 figures for the individual divisions have been adjusted
in line with the new organisational structure.
Ruukki Construction
EUR million I/2004 II/2004 III/2004 IV/2004 2004 I/2005
Net sales 70 109 124 116 418 103
Operating profit 2 17 24 18 61 14
- % of net sales 2.2 16.0 19.8 15.5 14.7 13.7
Net sales in January-March totalled EUR 103 million, up 47 per cent on the same
period a year earlier (70). Operating profit was EUR 14 million (2). The
division's share of consolidated net sales was 10 per cent. Operating profit was
lifted by the good price level coupled with the measures carried out to improve
production efficiency and the sales structure.
Demand in Ruukki Construction's core market area was good during the report
period in comparison with both the season of the year and the same period a year
earlier. The biggest increase in net sales was registered in commercial
construction in central eastern Europe and eastern Europe. The area has a large
need for new industrial, commercial and logistics buildings, and this has been
instrumental in boosting deliveries of steel halls as well as facades. Within
infrastructure construction, demand was good for the season concerned,
especially for foundation construction and traffic infrastructure in Finland and
Sweden. The business model for selling foundation and traffic infrastructure
projects has been developed to make possible more extensive integrated
deliveries, an example of which is ready-to-install deliveries of supporting
wall structures for the Kotka and Naantali harbours. The seasonality of
construction showed up most clearly in residential building. The winter was
exceptionally cold in the countries of central eastern Europe and the start of
the season was postponed from the end of the first quarter to the start of the
second quarter. Within residential construction a determined effort has been
made to develop the solutions-oriented business. During the report period a
light-structured steel-based extra storey solution was brought out on the market
and the first deliveries of extra storeys have got started in Finland, with
completion of the jobs scheduled during the spring.
Rautaruukki Corporation is increasing its holding in Metalplast, Poland's
leading manufacturer of metal-based construction panels. On completion, the
acquisition will strengthen the division's delivery and service ability in the
strategically important market area of central Europe, Ukraine and Russia, which
is a booming commercial construction area.
Ruukki Engineering
EUR million I/2004 II/2004 III/2004 IV/2004 2004 I/2005
Net sales 63 78 74 113 329 124
Operating profit 9 15 10 19 53 22
- % of net sales 14.6 19.3 13.7 16.6 16.2 18.1
Net sales in January-March totalled EUR 124 million, up 95 per cent on the first
quarter of 2004 (63). The increase in net sales compared with last year also
stemmed from the integration of Velsa Oy into Ruukki Engineering from the
beginning of November 2004. The division's share of consolidated net sales was
12 per cent. Operating profit was EUR 22 million (9). Net sales were lifted by
higher prices coupled with efficiency-boosting and an improved sales structure.
The good demand situation in customer industries was reflected in Ruukki
Engineering's sales in the report period. The division furthermore made strong
inputs into developing its operations. Demand for mobile machine cabins has been
very good in the first part of the year, and the business is heading for robust
growth. The customer base of cabin business has expanded, in addition to which
the unit is developing new integrated components and solutions together with a
number of customers. The order books of European shipyards began growing in the
latter half of 2004 and they are now at a very good level. In the pulp and paper
and energy sectors too there was solid demand during the report period. In the
first part of the year, Ruukki Engineering made an agreement on materials and
components to be delivered for the protective dome of the Olkiluoto nuclear
power plant. Most of the components will be manufactured at Ruukki's Halikko
Works.
The service centres in Seinäjoki and Tampere, which manufacture parts for the
engineering industry, were transferred to Ruukki Engineering from the beginning
of 2005. Furthermore, a new service centre is being started up in Raahe to
provide additional capacity. A key focus of the effort to develop service centre
operations is to support the lifting, handling and transport equipment business,
which is one of the Group's priority areas.
Ruukki Metals
EUR million I/2004 II/2004 III/2004 IV/2004 2004 I/2005
Net sales 659 723 653 773 2809 788
Operating profit 72 107 104 136 420 166
- % of net sales 11.0 14.9 16.0 17.6 15.0 21.1
Net sales in January-March totalled EUR 788 million, up 20 per cent on the same
period a year earlier (659). Operating profit was EUR 166 million (72). The
division's share of consolidated net sales was 78 per cent. Apart from higher
prices, net sales were lifted by the measures aiming at improving internal
efficiency and the sales structure.
The price level for steel products was considerably higher in the report period
than at the same time last year. Notably, prices of flat metal products
continued to move upward during the report period, also compared with the
previous quarter. A factor that contributed to raising the average price level
was the entry into effect of new annual agreements at the beginning of the year.
Price fluctuations for recycled steel and the seasonal slow-down in construction
impacted prices of reinforcement products in the report period, causing them to
reduce slightly. There was continued good demand for steel products in the main
market area.
Ruukki Metals pushed ahead with its work to improve the sales structure, and net
sales growth centred on the division's core market areas in the Nordic countries
and central eastern Europe. With a view to improving internal efficiency, from
the beginning of the year the division's steering model has been based on market-
specific performance management instead of the previous product-centred
operating model. From the beginning of 2005, most of Ruukki Fabrication's
functions were transferred to Ruukki Metals.
Ruukki Production
1000 tonnes I/2004 II/2004 III/2004 IV/2004 2004 I/2005
Steel production 1184 1198 985 1184 4549 1176
Steel output in January-March amounted to 1,176,000 tonnes (1,184,000).
Production went smoothly during the report period.
Deliveries for this year of the most important raw materials needed in
production have been agreed with suppliers. The world market prices of iron ore,
iron pellets and coking coal used in making steel rose significantly. The use of
steel slabs purchased outside the company is forecast to come in this year at
only about 40 per cent of the volume used last year, thus reducing manufacturing
costs. The new prices will begin to have an effect on earnings in the second
quarter and the impact will show up in profits to the full extent beginning in
the third quarter.
The first stage of the modernised automation system at the Raahe hot rolling
mill went into production use in February and a new slab heating furnace became
operational at the beginning of April. Both capital expenditures will improve
the quality-producing ability of the production line significantly.
PROFIT AND LOSS ACCOUNT
EUR million 1-3/05 1-3/04 2004
Net sales 1014 794 3564
Other operating income 15 6 19
Operating expenses -795 -681 -2915
Depreciation -42 -43 -175
Operating profit 192 76 493
Financing income -7 -10 -49
Profit before taxes 185 66 443
Taxes -47 -18 -114
Profit after taxes 139 48 330
Minority interests 0 0 -1
Frofit for the period 139 48 329
EPS, diluted, e 1.00 0.35 2.40
EPS, basic, e 1.01 0.36 2.42
Operating profit, % of net sales 19.0 9.5 13.8
BALANCE SHEET, EUR million 31.3. 31.3. 31.12.
Assets 2005 2004 2004
non-current assets 1484 1409 1417
Inventories 675 494 651
Debtors 657 587 584
Cash in hand and at banks 68 89 60
2885 2579 2712
Liabilities
Capital and reserves 1206 845 1127
Provisions 54 32 38
Non-current interest bearing creditors 598 693 625
Non-current non-interest bearing creditors 193 190 186
Current interest bearing creditors 101 349 195
Current non-interest bearing creditors 732 470 541
2885 2579 2712
CASH FLOW STATEMENT
EUR million 1-3/05 1-3/04 2004
Cash flow before working capital changes 258 107 636
Change in working capital -84 -61 -128
Financing items and taxes -20 -10 -122
Cash flow from operations 154 36 386
Cash flow from investing activities -23 -10 -118
Cash flow before financing 131 26 268
Dividends paid 0 0 -27
Other net cash flow from financing -123 13 -231
Change in liquid assets 9 39 10
KEY FIGURES 1-3/05 1-3/04 2004
Net sales, Me 1,014 794 3,564
Operating profit, Me 192 76 493
as % of net sales 19.0 9.5 13.8
Profit before taxes, Me 185 66 443
as % of net sales 18,2 8.3 12.4
Return on capital employed, % 33.0 9.5 26
Return on equity, % 41.1 11.6 33,8
Equity ratio, % 42.0 32.9 41.7
Gearing ratio, % 52 113 68
Interest bearing net debt, Me 631 953 761
Equity per share, e 8.88 6.22 8.29
Personnel on average 12,132 11,982 12,273
Number of shares 138,886,450 138,886,450 138,886,450
- not counting own shares 135,813,485 135,616,445 135,813,485
- diluted 137,213,485 137,016,445 137,213,485
CHANGE IN CAPITAL AND RESERVES 1-3/2004
EUR million Re-
Share FairRevalu- Trans-tained
Share premium value ation Hedging lation earn-
capital accountreservereserve reservereserve ings Total
CAPITAL AND RESERVES 1.1. 236 220 1 0 0 -5 369 820
Investments available
for sale
Transferred to
profit and loss account 0 0
Change in translation
difference -1 -1
Direct bookings
in retained earnings 3 3
Profit for the period 48 48
CAPITAL AND RESERVES 31.3.236 220 1 0 0 -6 393 844
CHANGE IN CAPITAL AND RESERVES 1-3/2005
EUR million Re-
Share FairRevalu- Trans-tained
Share premium value ation Hedging lation earn-
capital accountreservereserve reservereserve ings Total
CAPITAL AND RESERVES 1.1 236 220 2 0 0 -2 671 1126
Changes from IAS 39 and 32 2 -2 0
ADJUSTED CAPITAL AND
RESERVES 1.1. 236 220 2 0 2 -2 670 1126
Cash flow hedging
Increase (hedging reserve) 16 16
Deferred taxes' share of
period movements -4 -4
Investments available
for sale
Transferred to
profit and loss account 1 1
Revaluation
Profit of fair value
revaluation 36 36
Change in translation
difference 1 1
Profit for the period 139 139
Dividend distribution -109 -109
CAPITAL AND RESERVES 31.3.236 220 2 36 14 -1 700 1206
NET SALES BY DIVISION Change
Me 1-3/05 1-3/04 % 2004
Ruukki Construction 103 70 +47 418
Ruukki Engineering 124 63 +97 329
Ruukki Metals 788 659 +20 2809
Other units 0 1 8
Consolidated net sales 1014 794 +28 3564
OPERATING PROFIT BY DIVISION
Me 1-3/05 1-3/04 2004
Ruukki Construction 14 2 61
Ruukki Engineering 22 9 53
Ruukki Metals 166 72 420
Group management and other units -10 -7 -42
Consolidated operating profit 192 76 493
NET SALES BY QUARTER
Me I/04 II/04 III/04 IV/04 I/05
Ruukki Construction 70 109 124 116 103
Ruukki Engineering 63 78 74 113 124
Ruukki Metals 659 723 653 773 788
Other units 1 1 3 2 0
Consolidated net sales 794 911 854 1005 1014
OPERATING PROFIT BY QUARTER
Me I/04 II/04 III/04 IV/04 I/05
Ruukki Construction 2 17 24 18 14
Ruukki Engineering 9 15 10 19 22
Ruukki Metals 72 107 104 136 166
Group management and other units -7 -17 -12 -7 -10
Consolidated operating profit 76 123 128 166 192
CONTINGENT LIABILITIES Group Rautaruukki Oyj
Me 3/05 12/04 3/05 12/04
Mortgaged real estates 27 30 27 27
Collateral given on behalf of
Group companies 115 124
associated companies 2 2 2 2
others 0 2 0 0
Leasing and rental liabilities 163 166 140 149
Other financial liabilities 1 2 1 1
VALUES OF DERIVATIVE CONTRACTS 31.3.2005, Me
CASH FLOW HEDGES, WHICH ARE
INCLUDED IN HEDGE ACCOUNTING Nominal value Fair value
Interest rate derivatives
Interest rate swaps 200 -2.8
Zinc derivatives
Forward contracts 42,225* 11.8
Electricity derivatives
Forward contracts 3,082** 9.0
DERIVATIVES, WHICH ARE NOT
INCLUDED IN HEDGE ACCOUNTING Nominal value Fair value
Interest rate derivatives
Interest rate swaps 309 -2.7
Foreign currency derivatives
Forward contracts 464 2.1
Options
Bought 110 -1,9
sold 110 0,3
220 -1,6
*tonnes
**GWh
The unrealised profit/loss of the cash flow hedges are booked to equity, if the
hedge is effective. Other fair value changes are booked to profit and loss.
Rautaruukki Corporation
Taina Kyllönen
VP, Corporate Communications
Ruukki supplies components, systems and total solutions to the construction and
mechanical engineering industries. The company has a wide selection of metal
products and services. Ruukki has operations in 24 countries and employs 12,000
people. Net sales in 2004 totalled EUR 3.6 billion. The company's share is
quoted on the Helsinki Exchanges (Rautaruukki Corporation: RTRKS).
DISTRIBUTION
Helsinki Exchanges
Principal Media
www.ruukki.com