Rautaruukki Oyj : Ruukki to significantly grow its special steels business and to reorganise its construction business

Rautaruukki Oyj : Ruukki to significantly grow its special steels business and
                   to reorganise its construction business

Rautaruukki Corporation Stock exchange release 25 April 2013 at 9.05am EEST

Rautaruukki is to accelerate its step change into a company specialising in
steel construction and special steels and is to reorganise its structure. In
addition to the efficiency programmes initiated last year to improve cost
competitiveness and potential for profitable growth, focus within the
company's largest business area, Ruukki Metals, is shifting increasingly more
clearly to special steels. The other business area, Ruukki Construction, is to
divide into two new business areas, Ruukki Building Products and Ruukki
Building Systems. The aim of this is to improve profitability and growth, as
well as to improve manageability, the transformation pace and transparency.

Ruukki is aiming to significantly improve the company's cost competitiveness
and to strengthen the potential for profitable growth in all its business
areas. This is why, last year, Ruukki initiated an efficiency programme aimed
at cost benefits totalling EUR 100 million. Projects under the programme have
progressed as expected and it is currently estimated that that the improvement
in earnings performance pursued will be visible in full from the third quarter
of this year onwards.

"The decisions we have now made are a response to strengthen the company's
performance and especially to the overcapacity prevailing in the standard
steel business in Europe. This overcapacity weakens the profitability of
operations and forces companies to seek new business models and business
opportunities. Within our construction business, we have many segments with
excellent potential for profitable growth also in the future. On the other
hand, we also have a clear need to significantly improve the profitability of
certain parts of the business and to simplify business models. The
specialisation strategy within our steel business has proven effective and
successful. During the first quarter of the year, special steel products
accounted for 32 per cent of net sales in our steel business. We are now
accelerating our transformation and focusing strongly on special steels,
building products and energy-efficient solutions with the aim of being a
leading niche actor in these sectors," outlines Sakari Tamminen, Ruukki's
President & CEO.

Standard steels business being more strongly turned into a special steels

Ruukki's specialisation in the steel business has proven successful.
Profitability of special steels is clearly higher than that of standard
products and price fluctuations are smaller. In recent years Ruukki has built
a platform for specialisation and now has a good market position and strong
special steel brands such as Raex, Optim, Laser and Ramor. Success in the
present business environment calls for increasingly advanced and faster
specialisation. Ruukki's size and flexibility make this possible.

During the course of 2013, the weaker performing standard steel business will
increasingly strongly be turned into a special steels business consisting of
high-strength, wear-resistant and special-coated steels. In addition, the
company will also accelerate global sales of special steels. This means
expanding and diversifying distribution, significantly strengthening the sales
organisation through transfers and recruiting new resources, and by
establishing a presence, during the current year, in many new markets such as
Vietnam, Indonesia and Mexico. Success on this front requires a strong focus
on narrow niche sectors within the limits of which the emphasis is strongly on
identifying new customers and applications. Our future focus will increasingly
be on new applications and markets such as, for example, sales of Optim
high-strength steels to the construction industry, speeding up in general the
approval process and launch of new products and intensifying important OEM
customer relationships. As regards standard products, we will concentrate on
restoring the soundness of our product portfolio. The underperforming part
will be downsized, whereas the share of special steels will grow and
production capacity will be aligned to achieve a more effective utilisation

Construction business to be divided into growth areas and businesses for

Ruukki Construction is to be split into two business areas, Ruukki Building
Products and Ruukki Building Systems. The aim of this is to improve
profitability and growth, as well as to improve manageability, the
transformation pace and transparency by separating profitably growing business
areas from businesses which have clear need for profitability improvement.

Ruukki Building Products consists of roofing, sandwich panel, foundation and
infrastructure products, including services. The profitability of these
sections is at a satisfactory or good level and they show excellent potential
for profitable growth also in the future. Growth in market share of roofing
products will be pursued especially in Russia, Poland and the Nordic countries
by, among other things, strengthening our own distribution and partnership
network, expanding installation and by speeding up the launch of new products
and services onto the market. Our most recent launch was Ruukki Classic Solar
thermal roof, which utilises solar heat. The company will strengthen sales of
sandwich panels, especially energy panels, and piles in the Nordic countries,
actively pursue new markets and focus on developing and the rapid
commercialisation of new, energy-efficient products that utilise renewable
energy sources.

Ruukki Building Systems consists of the building project business, operations
in Russia and the new energy-efficient and functional buildings development
unit. The project business will be turned around to make it profitable during
2013 and the company will withdraw from bridge projects. Use of the entire
production capacity will be optimised to restore competitiveness and
profitability. Construction in Russia offers significant potential for
profitable growth, especially within commercial construction and agriculture.
Work in Russia will continue on developing sales and the product portfolio
driven customer needs. The new unit developing energy-efficient and functional
commercial buildings aims to create a foundation for future growth by
integrating the best of Ruukki's products and know-how.

Corporate Executive Board appointments in conjunction with restructuring

Olavi Huhtala will remain EVP, Ruukki Metals and continue being a member of
the Corporate Executive Board.

Marko Somerma, who is currently Chief Strategy Officer, has been appointed
EVP, Ruukki Building Products with effect from 1 May 2013. Tommi Matomäki, who
is currently EVP, Ruukki Construction, has been appointed EVP, Ruukki Building
Systems. Toni Hemminki, who is currently SVP, Technology, Energy and
Environment, has been appointed Chief Strategy Officer and will retain his
existing responsibilities. The above persons will all continue being members
of the Corporate Executive Board.

Financial reporting revised

With effect from the second quarter onwards, Ruukki will report its operations
as three business areas:
Ruukki Building Products
Ruukki Building Systems
Ruukki Metals

Ruukki will host a Capital Markets Day in Hämeenlinna, Finland on 25-26 June,
where there will be an opportunity to expand on the matters arising here and
on the strategic focus areas and targets of the businesses.

Comparable net sales
 Building Products                                                   478
 Building Systems                                                    262
Comparable net sales, total                                            740
 Items affecting comparability included in reported net sales
Reported net sales                                                     740
Comparable operating profit
 Building Products                                                    18
 Comparable operating profit as % of net sales                    3.7%
 Building Systems                                                    -17
 Comparable operating profit as % of net sales                   -6.3%
Comparable operating profit, total                                       1
 Comparable operating profit as % of net sales                    0.1%
Items affecting comparability included in reported operating profit
 Building Products                                                  -4.1
 Building Systems                                                   -6.5
Reported operating profit                                              -10

For further information, please contact
Sakari Tamminen, President & CEO, tel. +358 20 592 9075.

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 EUR 2.8 billion. The company's share is quoted on
NASDAQ OMX Helsinki (Rautaruukki Oyj: RTRKS). www.ruukki.com

Main media


This announcement is distributed by Thomson Reuters on behalf of Thomson
Reuters clients.

The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other
applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of
information contained therein.

Source: Rautaruukki Oyj via Thomson Reuters ONE
Press spacebar to pause and continue. Press esc to stop.