Rautaruukki Oyj : Rautaruukki Corporation Financial statement bulletin for
2012: Steel business made a loss in a difficult market environment, clear
improvement in consolidated cash flow
Rautaruukki Corporation Financial statement bulletin 15 February 2013 at 9am
October-December 2012 (Q4/2011)
- Net cash from operating activities was EUR 79 million (163)
- Order intake was EUR 651 million (651)
- Comparable net sales were down 6% at EUR 676 million (718)
- Comparable operating profit was -EUR 39 million (-40), equating to -6% of
- Comparable result before taxes was -EUR 48 million (-50), equating to -7% of
January-December 2012 (2011)
- Net cash from operating activities was EUR 172 million (114)
- Order intake was up 3% at EUR 2,767 million (2,675)
- Comparable net sales were EUR 2,789 million (2,797)
- Comparable operating profit was -EUR 65 million (56), equating to -2% of net
- Comparable result before taxes was -EUR 103 million (22), equating to -4% of
The Board of Directors proposes payment of a dividend of EUR 0.20 per share
(0.50), to make a total dividend payout of EUR 28 million (69).
Estimate of the financial outlook for 2013
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
Q4/12 Q4/11 2012 2011
Comparable net sales, EUR m 676 718 2,789 2,797
Comparable operating profit,
EUR m -39 -40 -65 56
Comparable operating profit
as % of net sales -5.8 -5.6 -2.3 2.0
Comparable result before
income tax, EUR m -48 -50 -103 22
Reported net sales, EUR m 677 718 2,796 2,798
Reported operating profit, EUR m -58 -47 -99 22
Reported result before
income tax, EUR m -67 -56 -137 -12
Net cash from operating activities, EUR m 79 163 172 114
Net cash before financing activities, EUR m 56 126 78 -57
Earnings per share, EUR -0.41 -0.30 -0.83 -0.07
Dividend per share, EUR 0.20* 0.50
Return on capital employed, % -4.8 1.3
Gearing ratio, % 71.4 60.4
Equity ratio, % 45.5 48.5
Personnel on average 10,468 11,493 11,214 11,821
*Board of Directors' proposal
President & CEO Sakari Tamminen:
Ruukki's business environment over the past year was overshadowed by the
European downturn, low utilised capacity following weakened competitiveness in
the manufacturing industry in Europe and, during the autumn, a slowdown in
economic growth in China. All these factors resulted in a marked decrease year
on year in demand for steel in Europe. The economic outlook has picked up a
little as confidence is gradually being restored in the financial markets in
Europe and economic growth in China is showing signs of picking up.
Nevertheless, the European economy is not expected to return to the growth
track until the second half of the current year. As regards Ruukki's main
markets, the German and Scandinavian economies are expected to show moderate
growth during 2013, economic activity in Finland is expected to remain at the
same level as in 2012 and growth in Russia is expected to continue to outpace
global growth. Activity in the construction markets developed reasonably well
during the early part of last year, but weakened towards the end of the year,
especially in commercial construction, and the rest of the year was weak.
Residential construction activity was better.
Characteristic for 2012 was that in a weak business environment, the prices of
steel products in Europe fell practically in pace with the fall in the prices
of raw materials. In our steel business, raw material costs are reflected
after a delay of about one quarter, which is why the operating result showed a
loss. As was the case for the previous quarter, Ruukki posted a loss for the
fourth quarter mostly because of lower average prices in the steel business.
Comparable operating profit for the entire year was negative at -EUR 65
million. Order intake during the fourth quarter was at the same level as a
year earlier, but order intake for the year as a whole was up slightly year on
year in both the construction and the steel businesses. Consolidated net sales
for 2012 were almost at the same level as for the previous year. Net cash from
operating activities was good at EUR 172 million, a clear improvement compared
to the previous year.
In the prevailing uncertain market environment, the past year clearly showed
the necessity of the efficiency projects we initiated earlier in the year in
our steel and construction businesses. These projects have progressed in line
with expectations and last year delivered around EUR 20 million of our total
savings target of EUR 100 million. We currently anticipate achieving the full
target and the ensuing improvement in earnings performance is expected to be
reflected in full by the third quarter of the current year onwards.
On top of the efficiency projects, we have also focused on those businesses
where we believe we are able to build a competitive edge and also future
profitable growth in the long term. The Fortaco arrangement means our business
structure is more focused than earlier. Towards the end of last year, we
agreed with funds managed by CapMan to combine units of Komas and units of
Ruukki Engineering to form a new company, Fortaco. In future, our own strategy
will focus on construction and developing the special steels business, where
we will be pursuing profitability and selected growth. We must improve our
competitive position in all our chosen business areas as we aim for market
leadership or second position in chosen products. This also requires better
management of the value chain, improved distribution and service, direct
contact with end customers and a focus on fewer products.
Residential roofing products, the Nordic and Polish markets and Russia, which
offers growth potential in many product groups, have a key role in our
construction strategy. There is also growing demand in many of our market
areas for new energy-efficient construction products and solutions, which
either save energy or utilise renewable energy. This is especially so in the
Nordic countries, where we aim to strengthen our good market position and to
specialise through services and innovations. Last year we launched numerous
energy-saving and recyclable construction products, such as Ruukki energy
panels for commercial and industrial construction. In addition, we also rolled
out products and solutions - such as solar panels and ground-source heat
solutions for foundations - that utilise renewable energy.
Construction activity is expected to either remain at the same level as in
2012 or to show a slight decline in all our main market areas, with the
positive exception of Russia, where commercial and industrial construction, an
important sector for us, is expected to grow compared to the previous year.
Our focus on our own distribution channel for residential roofing products was
reflected in these products outperforming market growth in 2012 and there is
good potential for this to continue also during the current year.
In the steel business, the emerging markets are the growth drivers. The "new
normal" in Europe is reflected as about twenty million tonnes of steel
overcapacity and steel prices following great fluctuations in the global price
development of raw materials. In the steel business, our focus areas are on
increasing the share of special steel products and developing our distribution
and partnership network in the emerging markets, including Russia, Asia and
South America. It is still important for us to continue to improve cost
efficiency in all our operations.
The sharp fall in the prices of main raw materials in the steel business
resulted in steel end-customers and steel wholesalers destocking. This was
reflected in a clear decline in demand for steel, especially during the second
half of 2012. A sharp rise in the market price of iron ore during January 2013
was visible in order activity picking up and a rise in the prices of steel
products. In our steel business, we expect service centre sales to remain at a
good level during 2013. However, general economic development gives rise to
much uncertainty as regards demand from mill customers.
The global economic outlook continues to be uncertain and we cannot expect any
significant help from a pick-up in the market. However, my expectations for
2013 are cautiously positive and I believe our actions to improve efficiency
and the business choices we have made will pave the way for a clear
improvement in profitability. Comparable nets 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 financial statement bulletin for 2012 is
attached to this bulletin.
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 Friday 15 February 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 EET. 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
Access code: 927935
A replay of the webcast can be viewed on the company's website from
approximately 4pm EET. A replay of the conference call will be available until
23 February 2013 at:
+44 20 7031 4064 (calls outside Finland), +358 9 2314 4681 (calls inside
Access code: 927935
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 EUR 2.8 billion. The company's share is quoted on
NASDAQ OMX Helsinki (Rautaruukki Oyj: RTRKS).
NASDAQ OMX Helsinki
Rautaruukki Financial statement bulletin 2012
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Source: Rautaruukki Oyj via Thomson Reuters ONE
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