26 april, 2006
08:00 CET
Rautaruukki corporation interim report January - March 2006
Rautaruukki Corporation Stock Exchange Release 26 April 2006 at 9:00
This interim report has been prepared in accordance with IAS 34 in conformity
with the accounting policies published in the 2005 financial statements.
Net sales and result for January-March 2006 (comparative figures for Jan-Mar
2005)
Consolidated net sales in January-March 2006 were EUR 856 million (1,014), down
16 per cent. The units that were transferred to Ovako were removed from
financial reporting as from 1 May 2005. The comparable net sales in January-
March 2005 were EUR 822 million, on which the growth was 4 per cent. Net sales
were lifted by the good trend in sales by the solutions businesses as well as by
the acquisitions that were made. The solutions businesses accounted for 31 per
cent of net sales in the report period (21). Of net sales, 78 per cent (64) came
from the core market: 32 per cent from Finland (25), 35 per cent from the other
Nordic countries (31) and 11 per cent from central eastern Europe (8). The rest
of Europe accounted for 20 per cent (33) and other countries for 2 per cent (3).
Deliveries of steel products were down about 26 per cent on the same period a
year earlier, owing mainly to the Ovako arrangement. Eliminating the effect of
the units transferred to Ovako, deliveries were down by about 4 per cent.
Average selling prices of Rautaruukki's flat steel products in the report period
were somewhat below the same period of last year, when the price level was
exceptionally high as wholesalers topped up their stocks.
Operating profit in the report period was EUR 95 million (201, comparable
operating profit 163). The costs of share bonus schemes, booked over the first
quarter, came to about EUR 19 million, of which EUR 14 million came from the
rise in the share price in the report period. The average exchange rate of the
US dollar strengthened by about 8 per cent compared with the same period of
2005. The effect of the US dollar on consolidated operating profit, including
hedging, was about EUR 13 million negative (+5) compared with the same period
2005. The net effect of foreign exchange rates on operating profit was a loss of
EUR 5 million (+ 3). The operating profit was also reduced by the dual factors
of lower selling prices of steel products and higher prices of raw materials
used in steel manufacture. The share of the Group's operating profit
attributable to the solutions businesses rose to 34 per cent (16). There was a
seasonal slowdown in construction activity in the first quarter. Order books in
the engineering industry continued to show strength, and this has been reflected
in the positive trend in Rautaruukki's deliveries.
Net financial expenses amounted to EUR 6 million (9). Net interest expenses
amounted to EUR 5 million (8).
The share of associates' profit was EUR 13 million (2), of which Ovako accounted
for EUR 12 million.
The result before taxes was EUR 101 million (194).
The Group's taxes amounted to EUR 24 million (49), including a change in
deferred taxes of EUR -2 million (-1).
Net profit for the report period was EUR 77 million (145).
Diluted earnings per share were EUR 0.56 (1.06).
The return on capital employed over the past twelve months was 29.5 per cent
(33.7) and the return on equity was 30.0 per cent (42.3).
Balance sheet
The Group's total assets increased by EUR 27 million from the end of March of
last year. From the end of 2005, total assets rose by EUR 124 million to EUR
2,825 million.
Cash flow and financing
Cash flow from operating activities was EUR 101 million (154) and cash flow
after investing activities EUR 84 million (131).
Interest-bearing net debt at the end of March totalled EUR 276 million (631). At
the end of 2005, interest-bearing net debt stood at EUR 341 million. Working
capital decreased by EUR 6 million in January-March (+84).
The equity ratio was 50.2 per cent (42.2) and the gearing ratio 19.6 per cent
(53.6). At the end of March the Group's liquid funds amounted to EUR 196 million
and it had a total of EUR 300 million of committed unused revolving credit
facilities with banks. Shareholders' equity stood at EUR 1,408 million at the
end of March (1,177), or EUR 10,31 per share (8.67). The dividends declared by a
resolution of the Annual General Meeting held in March, EUR 191 million in total
amount, were debited from equity and credited to non-current liabilities.
Personnel
The average number of personnel employed by the Group in the January-March
period was 11,903 people (12,132). At the end of March the entire payroll was
11,981 employees (12,132). The change in the number of employees was a decrease
of 151 people. PPTH's staff added about 500 employees to the payroll. During
2005 the payroll was decreased by 1,900 due to Ovako arrangement and increased
by 1,613 due to acquisitions.
Structural changes in the Group
In the report period, two acquisitions were carried out that improved
Rautaruukki's capabilities of making integrated deliveries in the construction
industry, whilst further strengthening the company's project know-how. The
acquisition of PPTH Steelmanagement Oy, which was agreed in September 2005, was
seen to completion in January 2006. Via the deal, Rautaruukki's holding in the
company rose from 20 per cent to 100 per cent. The shares were bought for a
price of about EUR 7 million. As part of the deal, Rautaruukki assumed EUR 24
million of interest-bearing liabilities. PPTH has been consolidated in the
Group's figures as from 1 January 2006. The acquisition of Steel-Mont a.s. of
Slovakia was completed in March for a purchase price of about EUR 10 million.
Steel-Mont was consolidated within Rautaruukki's accounts after the report
period as from 1 April 2006.
In March, Rautaruukki announced an agreement on purchasing the Russian steel
constructer OOO Ventall. The acquisition will strengthen the company's position
in the fast-growing markets in Russia. The deal still requires the approval of
the competition authorities and it is expected to be completed in May 2006. The
shares were bought for a price of EUR 97.5 million. The agreement includes a
provision on a possible additional purchase price which is dependent on the
earnings trend in 2006 and is a maximum of EUR 27.5 million. Payment of this
amount is contingent on a marked improvement in Ventall's profitability from the
level in 2005. Ventall had net sales in 2005 of about EUR 70 million and posted
operating profit of EUR 15.5 million. Net sales in 2006 are estimated to be
about 110 million euros. The company had a payroll of 1,238 employees at the end
of 2005.
Capital expenditure
Investments in tangible and intangible assets in January-March totalled EUR 21
million (23). Disposals of property, plant and equipment during the report
period amounted to EUR 1 million (4). Maintenance investments in production
equipment in 2006 are estimated to come to about EUR 80 million and outlays on
special products and expanding processing capacity will be about EUR 60 million.
In the report period, spending on M&A arrangements totalled EUR 17 million. The
acquisition of PPTH increased the Group's interest-bearing net liabilities by
EUR 22 million. Via the acquisitions, property, plant and equipment increased by
EUR 12 million, working capital by EUR 8 million and goodwill by EUR 9 million.
Steel-Mont was consolidated within Rautaruukki's accounts as from 1 April 2006
Shares and share capital
The trade volume of the Rautaruukki Corporation share on the Helsinki Stock
Exchange in January-March was EUR 1,317 million (520). The share registered a
high of EUR 33.31 in March and a low of EUR 20.50 in January. The volume-
weighted average price was EUR 26.91. The price of the share at the end of the
report period on 31 March 2006 was EUR 30.48 and the company had a market
capitalisation of EUR 4,233 million (1,442).
The company's registered share capital at 31 March 2006 stood at EUR 236.1
million. The number of Series K shares issued was 138,886,445.
Rautaruukki Corporation's Annual General Meeting held on 23 March 2006
authorised the Board of Directors to decide on buying back a maximum of
11,000,000 of the company's own Series K shares (7.92 per cent of the shares
outstanding). The Annual General Meeting furthermore authorised the Board of
Directors to decide on transferring a maximum of 13,592,697 Series K treasury
shares. Under the Board of Directors' existing authorisation, on 23 March 2006
the company transferred 291,000 of its own Series K shares (treasury shares)
without consideration to persons covered by the Group's share bonus scheme.
Following the transfer, the company had 2,301,697 treasury shares. The treasury
shares had a market value at 31 March 2006 of EUR 70 million.
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 2006 approved the proposed dividend
of EUR 1.40 per share. The dividend, to a total amount of EUR 191 million, was
paid out on 4 April 2006.
Corporate governance and auditors
The Annual General Meeting held on 23 March 2006 re-elected Jukka Viinanen
chairman of the company's Board of Directors and Georg Ehrnrooth as vice
chairman. Re-elected to seats on the Board were Christer Granskog, Pirkko
Juntti, Kalle J. Korhonen, Maarit Aarni and Kiuru Schalin. Reino Hanhinen,
Chairman of the Board, YIT-Yhtymä Oyj, was elected as a new member.
The Annual General Meeting re-elected Turo Bergman chairman of the Supervisory
Board and Jouko Skinnari vice chairman. Heikki Allonen, Inkeri Kerola, Miapetra
Kumpula-Natri, Petri Neittaanmäki, Tapani Tölli and Lasse Virén were re-elected
as members. Markku Tynkkynen, Executive Vice President, Resources, UPM-Kymmene
Corporation, was elected as a new member of the Supervisory Board.
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 the next Annual General
Meeting.
Memberships of the Board Committees
The Board of Directors elected the members of the committees from amongst its
number. Pirkko Juntti was elected chairman of the Audit Committee and Maarit
Aarni, Christer Granskog and Reino Hanhinen as members. Jukka Viinanen was
elected chairman of the Compensation Committee and Georg Ehrnrooth and Kiuru
Schalin as members.
Environmental compliance
The EU's internal emissions trading scheme, which was launched in 2005, includes
the following Rautaruukki sites: in Finland, the Raahe Steel Works and the steam
boilers of the Hämeenlinna Works. In Norway, a similar system has been
developed, and it covers the Mo i Rana Steel Works and rolling mills.
In the initial allocation of free emission rights, Rautaruukki received a total
of about 15.4 million tonnes for the period 2005-2007. The confirmed volume of
carbon dioxide emissions for 2005 was 4.83 million tonnes. Last year the
company's steel production was adjusted in line with profitable demand, thereby
also lowering carbon dioxide emissions. The difference between emission rights
according to the initial allocation and actual emissions will be determined
finally only after the close of the three-year period from 2005 to 2007. At this
stage, however, it is not estimated that the purchase of emission rights will
result in significant costs to the company's steel production from the
standpoint of overall operations.
Improvements in cost-effectiveness
Cost savings under the Ruukki United programme aiming at unifying and enhancing
the company's ways of working are expected to contribute about 150 million euros
to consolidated operating profit by the end of 2008. About EUR 70 million worth
of projects has been identified by the end of 2006, of which EUR 16 million had
been implemented by the end of the report period.
The objective of the Ruukki United programme is to permanently free up about EUR
150 million of capital by the end of 2008. Some EUR 70 million of the programme
to reduce tied-up capital had already been realised by the end of the report
period.
The effects on staffing levels will be ascertained on a project-specific basis,
and the reductions are expected to be made primarily by way of retirement and
relocation.
Events after the reporting period
Rautaruukki signed in April an agreement to sell its Nordic reinforcing steel
business to BT Norway AS. The price for the shares is EUR 123 million including
a pre-closing dividend to Rautaruukki. The price equals approximately the book
value of the divested companies and therefore the effect of the transaction is
expected to be neutral to Rautaruukki's consolidated financials. The price will
be adjusted based on the accounts at closing. The divestiture will clarify
Rautaruukki's corporate structure and will complete the arrangements started
last year to exit from long steel products. The reinforcing steel business is a
part Ruukki Metals division and it comprises Fundia Armeringsstål AS and Fundia
Armering AS in Norway, Fundia Betoniteräkset Oy in Finland, Fundia Armering AB
in Sweden and Fundia Armering A/S in Denmark. In 2005, net sales of the business
were EUR 328 million and operating profit EUR 30 million. It had 689 employees
at the end of last year. The transaction is subject to relevant regulatory
approvals and it is expected to close by June 30, 2006.
The company agreed in April to purchase the Ukrainian company AZST-Kolor CJSC,
which owns a colour coating production line in Antratsit, eastern Ukraine. The
purchase price is EUR 4.5 million, plus the company's cash funds when the
transaction is completed, an estimated EUR 0.45 million. The annual colour
coating capacity of the company's production line is 80 000 tonnes. The purchase
of AZST-Kolor serves Rautaruukki's construction customers in the growing markets
of central eastern Europe, Russia and Ukraine. The transaction still requires
the approval of competition authorities and the transaction is expected to be
completed in May 2006.
Near-term outlook
The market situation in the Group's core market areas and main customer
industries has held up well in the early months of the year. The construction
season is getting under way and customers of the engineering industry still have
strong order books. Demand is expected to remain firm within construction and
the engineering industry, and prices of steel products are set to strengthen
further over the spring and summer. Costs of the raw materials used in steel
manufacture are estimated to remain at the level seen in the second half of
2005.
The Group's full-year net sales in 2006 are expected to be higher than
comparable net sales in 2005. Operating profit in the first half of 2006 is
estimated to be at the good level posted in the second half of last year and to
improve somewhat during the latter part of the year. The most significant
factors of uncertainty relate to the way in which the steel product markets in
Asia move and to the general trend in the world economy.
This Interim Report has not been audited.
Helsinki, 26 April 2006
Rautaruukki Corporation
Board of Directors
DIVISIONS
Ruukki Construction
EUR million I/2005 II/2005 III/2005 IV/2005 2005 I/2006
Net sales 88 137 170 155 550 133
Operating profit 9 22 39 17 86 8
- % of net sales 10 16 23 11 16 6
In January-March 2006, Ruukki Construction had net sales of EUR 133 million
(88), an increase of 51 per cent on the same period of 2005. Net sales growth
was driven not only by acquisitions, but also by the active efforts to expand
selected business areas. The division's share of consolidated net sales was 16
per cent (9). The division posted operating profit of EUR 8 million (9).
Sales of systems and integrated systems for industrial, commercial and logistics
premises have grown substantially in central eastern Europe, Russia and Ukraine
compared with the same period a year earlier. The sales growth is the result of
both continued strong demand and the acquisitions that have been carried out.
Demand for roofing products in the entire market area as well as for
infrastructure projects, particularly in Finland, has been slow during the
winter period, as expected. The construction season that will get under way in
the second quarter is expected to generate increased demand within building
construction and infrastructure projects in the entire market area, with
particularly robust demand in central eastern Europe, Russia and Ukraine.
Two acquisitions were completed at the beginning of the current year, bringing
an increase in Ruukki's manufacturing know-how within steel structures and
significantly strengthening design and project expertise in the construction
industry. PPTH, the leading steel constructer in the Nordic countries, was made
a part of Ruukki Construction as from 1 January 2006, and Slovakia's leading
steel constructer, Steel-Mont, was added to the division after the close of the
report period, effective from 1 April 2006.
The purchase of Ventall, Russia's leading steel constructer, was announced at
the end of the report period. The transaction is still contingent on approval by
the competition authorities, and it is expected to be completed in May. Ventall
is a strategically important step in expanding the solutions business. The
company will bring Ruukki a strong position in Russia's growing construction
market as well as a local manufacturing presence within steel structures and
sandwich panels. Ruukki's and Ventall's design expertise in the area of steel
structures and mutually complimentary building components will bring a
significant increase in Ruukki's service ability in the main customer segments
in Russia and will also support growth in Ukraine.
The construction of a new factory that is under way in Hungary has progressed in
line with plans. The factory will significantly increase Ruukki's ability to
deliver key construction components in the strategically important markets of
central eastern Europe.
Ruukki Engineering
EUR million I/2005 II/2005 III/2005 IV/2005 2005 I/2006
Net sales 124 114 101 137 476 132
Operating profit 22 23 23 27 96 25
- % of net sales 18 21 23 20 20 19
Ruukki Engineering had net sales in January-March 2006 of EUR 132 million (124),
up 6 per cent on the same period of 2005. Comparable net sales in 2005 amounted
to EUR 103 million on which growth was 28 per cent. The higher net sales were
attributable both to the continued good market situation and the acquisition
that was made towards the end of 2005. The division accounted for 15 per cent of
consolidated net sales (12, comparable 15). The division reported operating
profit of EUR 25 million (22, comparable 21).
Customers in the lifting, handling and transportation equipment industry had
strong order books, and this was reflected in the good demand for deliveries by
Ruukki. Demand in the paper and wood processing industries has held up well and
there has been strong growth in the wind power plant market. Order inflow in the
marine and off-shore industries has also been at a very good level.
Ruukki's concept for producing and delivering parts, components and systems for
the needs of customers in the engineering industry has awakened growing interest
and, notably, sales of operator cabins have nearly doubled during the first part
of the year compared with the first quarter of 2005. Capacity is presently being
almost doubled to keep up with the increased demand and to boost the efficiency
of operator cabin production. The building of new production facilities in
Kurikka has progressed according to plans and the expanded capacity will come on
stream during April.
Quenching capacity for steel plates will be raised at the production unit in
order to increase deliveries of components made from high-strength steels.
Ruukki Metals
EUR million I/2005 II/2005 III/2005 IV/2005 2005 I/2006
Net sales 802 686 541 596 2625 591
Operating profit 180 147 69 91 486 77
- % of net sales 22 21 13 15 19 13
Ruukki Metals' net sales in January-March 2006 totalled EUR 591 million (802), a
decrease of 26 per cent, due largely to the non-inclusion in the division's
figures, as from 1 May 2005, of the units that were transferred to Ovako.
Comparable net sales in 2005 were EUR 632 million. Compared with this figure,
first-quarter net sales in 2006 were down 6 per cent, owing to lower deliveries
compared with the first quarter of 2005, when deliveries were at a record-high
level as demand was exceptionally high and wholesalers built up their stocks.
The division accounted for 69 per cent of consolidated net sales (79, comparable
77). Operating profit was EUR 77 million (180, comparable 143). The drop in
profitability was attributable to the marked rise in raw material costs as well
as to the somewhat lower price level of flat steel products in relation to the
comparison period.
Demand has held up well in the most important customer industries in all the
core markets. The slowdown in activity within construction and the light
engineering industry in the first quarter was most pronounced in the Baltic and
Russian markets. In central eastern Europe, the market situation was very good.
In western central Europe, stock levels have normalised and the market situation
has strengthened. Improvement of the sales structure is continuing in the West
European market, with a greater emphasis on deliveries of special products.
Capital expenditures aiming at increasing the ability to deliver ultra-high-
strength steels are moving ahead as planned.
Ruukki Production
1000 tonnes I/2005 II/2005 III/2005 IV/2005 2005 I/2006
Steel production 1176 982 765 888 3813 888
- excluding Ovako 883 897 765 888 3434 888
Steel output in January-March was 888,000 tonnes. The comparative figure for
2005, excluding the units transferred to Ovako, was 883,000 tonnes.
Prices of raw materials used in steel manufacture rose significantly in 2005.
The impact of higher prices began to be felt to the full extent towards the end
of the second quarter. In January-March of the current year, raw material costs
were at the level of the latter half of last year. The price of zinc, which is
used in galvanising steel, has risen by 50 per cent from the previous quarter.
About 40,000 tonnes of zinc is used annually. The hedging agreements that have
been taken out will dampen the effect on costs of fluctuations in the market
price.
The ongoing investments at the production unit with the aim of strengthening the
company's ability to deliver ultra-high-strength steels are moving ahead
according to plans. The capital expenditures will give a special boost to Ruukki
Engineering's business in the fast-growing lifting, handling and transportation
equipment industry, and they will also make it possible to increase the
proportion of ultra-high-strength steels in Ruukki Metals' sales. The new coiler
for the hot strip mill will go into operation in August of this year, and the
quenching equipment for heavy plate production will be in use in summer 2007.
TABLES
Individual figures and grand totals presented in the tables have been rounded
off to full millions of euros from exact figures, which mean that when added
together or subtracted they will not always tally. The comparable figures 1-3/05
have been adjusted to correspond to the Group's present treatment of emission
rights. The figures in the tables are unaudited.
CONSOLIDATED PROFIT AND LOSS ACCOUNT (CONDENSED)
EUR million 1-3/06 1-3/05 1-12/05
Net sales 856 1014 3654
Other operating income 5 15 28
Operating expenses -729 -786 -2908
Depreciation -37 -42 -156
Operating profit 95 201 618
Financing income and expenses -6 -9 -30
Share of results in associated companies 13 2 23
Profit before taxes 101 194 612
Taxes -24 -49 -157
Net profit 77 145 455
Attributable to:
Equity holders of the company 77 145 455
Minority interest 0 0 0
Diluted earnings per share, e 0.56 1.06 3.31
Basic earnings per share, e 0.57 1.07 3.35
Operating profit, % of net sales 11.1 19.8 16.9
CONSOLIDATED BALANCE SHEET (CONDENSED) 31.3. 31.3. 31.12.
EUR million 2006 2005 2005
ASSETS
Non-current assets 1 439 1 398 1 476
Current assets
Inventories 473 675 534
Trade and other receivables 559 657 528
Cash and cash equivalents 179 68 163
Non-current assets held for sale* 174
2 825 2 798 2 701
EQUITY AND LIABILITIES
Equity
Capital attributable to the
Company's equity holders 1 408 1 176 1 497
Minority interest 1 1 1
Non-current liabilities
Interest bearing 360 598 372
Other 221 247 194
Current liabilities
Interest bearing 108 101 132
Trade creditors and other liabilities 672 675 505
Liabilities related to non-current
assets held for sale* 56
2 825 2 798 2 701
* As non-current assets held for sale, the Group has classified the Nordic
reinforcing steel business, of which Rautaruukki in April has signed an
agreement to sell.
CASH FLOW STATEMENT (CONDENSED)
EUR million 1-3/06 1-3/05 1-12/05
Net profit 77 145 455
Adjustments 54 113 333
Cash flow before working capital changes 131 258 788
Change in working capital 6 -84 0
Financing items and taxes -36 -20 -137
Cash flow from operations 101 154 652
Cash flow from investing activities -17 -23 -133
Cash flow before financing 84 131 519
Dividends paid 0 0 -109
Other net cash flow from financing -51 -123 -307
Change in cash and cash equivalents 33 9 103
KEY FIGURES 1-3/06 1-3/05 1-12/05
Net sales, Me 856 1014 3654
Operating profit, Me 95 201 618
- % of net sales 11.1 19.8 16.9
Profit before taxes, Me 101 194 612
- % of net sales 11.8 19.1 16.7
Net profit, Me 77 145 455
- % of net sales 9.0 14.3 12.5
Return on capital employed*, % 29.5 33.7 32.8
Return on equity*, % 30.0 42.3 34.7
Equity ratio, % 50.2 42.2 56.0
Gearing ratio, % 19.6 53.6 22.8
Interest-bearing net debt, Me 276 631 341
Equity per share, e 10.31 8.67 10.98
Personnel on average 11,903 12,132 11 684
Number of shares 138,886,445 138,886,445 138,886,445
- not counting own shares 136,584,748 135,813,485 136,293,748
- diluted, average 137,719,905 137,213,485 137,377,120
* Based on previous 12 months
STATEMENT OF CHANGES IN EQUITY 1-3/2006
EUR million
Attributable to equity holders of the Company
ShareFair value Trans- Re-
Share premium and lation tained Minority
capital account other differ- earn- Total interest
reserves ences ings
EQUITY 1.1.
236 220 31 -5 1016 1497 1
Cash flow hedging
Increase (hedging reserve) 32 32
Deferred taxes -8 -8
Share-based compensation 1 1
Treasury shares granted -3 2 0
Change in translation difference 0 0
Dividend distribution -191 -191
Net profit 77 77
EQUITY 31.3. 236 220 54 -5 904 1408 1
STATEMENT OF CHANGES IN EQUITY 1-3/2005
EUR million
Attributable to equity holders of the Company
ShareFair value Trans- Re-
Share premium and lation tained Minority
capital account other differ- earn- Total interest
reserves ences ings
EQUITY 1.1.
236 220 4 -2 670 1126 1
Cash flow hedging
Increase (hedging reserve) 16 16
Deferred taxes -4 -4
Change in translation difference 1 1
Share-based compensation 1 1
Dividend distribution -109 -109
Net profit 145 145
EQUITY 31.3. 236 220 16 -1 705 1176 1
NET SALES BY DIVISION Change
Me 1-3/06 1-3/05 % 2005
Ruukki Construction 133 88 +51 550
Ruukki Engineering 132 124 +6 476
Ruukki Metals 591 802 -26 2625
Other units 0 0 3
Consolidated net sales 856 1014 -16 3654
OPERATING PROFIT BY DIVISION
Me 1-3/06 1-3/05 2005
Ruukki Construction 8 9 86
Ruukki Engineering 25 22 96
Ruukki Metals 77 180 486
Group management and other units -15 -10 -50
Consolidated operating profit 95 201 618
NET SALES BY QUARTER
Me I/05 II/05 IlI/05 IV/05 I/06
Ruukki Construction 88 137 170 155 133
Ruukki Engineering 124 114 101 137 132
Ruukki Metals 802 686 541 596 591
Other units 0 2 0 1 0
Consolidated net sales 1014 939 812 889 856
OPERATING PROFIT BY QUARTER
Me I/05 II/05 III/05 IV/05 I/06
Ruukki Construction 9 22 39 17 8
Ruukki Engineering 22 23 23 27 25
Ruukki Metals 180 147 69 91 77
Group management
and other units -10 -12 -17 -11 -15
Consolidated operating profit 201 180 114 123 95
NET SALES BY QUARTER (PRO FORMA) EXCLUDING UNITS
TRANSFERRED TO OVAKO
Me I/05 II/05 III/05 IV/05 I/06
Ruukki Construction 88 137 170 155 133
Ruukki Engineering 103 107 101 137 132
Ruukki Metals 632 633 541 596 591
Other units 0 2 0 1 0
Consolidated net sales 822 878 812 889 856
OPERATING PROFIT BY QUARTER (PRO FORMA) EXCLUDING UNITS
TRANSFERRED TO OVAKO
Me I/05 II/05 III/05 IV/05 I/06
Ruukki Construction 9 22 39 17 8
Ruukki Engineering 21 24 23 27 25
Ruukki Metals 143 135 69 91 77
Group management
and other units -10 -12 -17 -11 -15
Consolidated operating profit 163 169 114 123 95
NET SALES BY AREA
% OF NET SALES 1-3/06 1-3/05 2005
Finland 32 25 29
Other Nordic countries 35 31 30
Central eastern Europe 11 8 12
Other western Europe 20 33 26
Other countries 2 3 3
CONTINGENT LIABILITIES
Me 3/06 3/05 12/05
Mortgaged real estates 29 27 29
Given as pledges 18 0 19
Collateral given on behalf of
associated companies 2 2 3
others 1 0 2
Leasing and rental liabilities 131 163 141
Other financial liabilities 4 1 4
VALUES OF DERIVATIVE CONTRACTS 31.3.2006, Me
CASH FLOW HEDGES INCLUDED
IN HEDGE ACCOUNTING Nominal value Fair value
Interest rate derivatives
Interest rate swaps 70 -0.2
Zinc derivatives
Forward contracts 35,925* 30.7
Electricity derivatives
Forward contracts 2,173** 36.3
*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.
CASH FLOW HEDGES NOT INCLUDED
IN HEDGE ACCOUNTING Nominal value Fair value
Interest rate derivatives
Interest rate swaps 290 -0.2
Foreign currency derivatives
Forward contracts 587 3.1
Options
Boughts 45 -0.2
Sold 45 0.7
90 0.5
CHANGES IN PROPERTY, PLANT AND EQUIPMENT, Me
1-3/06 1-3/05 1-12/05
Book value at the beginning
of the period 1033 1192 1192
Increases 18 20 84
Increases through acquisitions 11 0 19
Decreases 0 -1 -15
Decreases through divestments 0 0 -105
Depreciation -34 -39 -144
Exchange differences 1 -4 4
Book value at the end of the period 1029 1168 1033
TRANSACTIONS WITH RELATED PARTIES (ASSOCIATED COMPANIES), Me
1-3/06 1-3/05 1-12/05
Sales to associated companies 8 14 59
Purchases from associated companies 14 16 56
Non-current receivables
at the end of the period 38 3 39
Trade receivables and other receivables
at the end of the period 10 11 13
Trade creditors and other liabilities
at the end of the period 8 5 6
INVESTMENT COMMITMENTS* after
Me 31 March 2006
Maintenance investments 70
Development investments and outlays
on special products 62
Total 132
*Investment commitments include the estimated costs of projects that have
received a go-ahead permit.
INFORMATION ON ACQUISITIONS
Acquisition of PPTH Steelmanagement Oy, Me
Acquisition cost 7
Acquired entities' assets and liabilities (book value)
Non-current assets 12
Current assets
Inventories 2
Trade receivables
and other receivables 21
Cash and cash equivalents 2
Total assets 38
Non-current liabilities
Interest-bearing 18
Other 2
Current liabilities
Interest-bearing 6
Other 13
Total liabilities 39
Goodwill from acquisition 9
The acquisition has been recorded on a preliminary basis in the manner permitted
under IFRS 3. The determination of the fair value of assets and liabilities is
still incomplete when the interim report is published.
Steel-Mont has been consolidated in the Group's financial statements from 1
April 2006. The determination of the fair value of assets and liabilities is
still incomplete when the interim report is published.
ADDITIONAL INFORMATION
President and CEO Sakari Tamminen, tel. +358 20 592 9075
CFO Mikko Hietanen, tel. +358 20 592 9030
Rautaruukki Corporation
Taina Kyllönen
VP, Corporate Communications
Ruukki supplies metal-based components, systems and integrated systems to the
construction and mechanical engineering industries. The company has a wide
selection of metal products and services. Ruukki has operations in 23 countries
and employs 12,000 people. Net sales in 2005 totalled EUR 3.7 billion. The
company's share is quoted on the Helsinki Exchanges (Rautaruukki Corporation:
RTRKS). The Corporation has used the marketing name Ruukki since 2004.
DISTRIBUTION
Helsinki Exchanges
Principal Media
www.ruukki.com