Rautaruukki Oyj : Ruukki's management opens up strategic focus areas at the
Capital Markets Day in Hämeenlinna
Rautaruukki Corporation Stock exchange release 25 June 2013 at 12.30pm EEST
Rautaruukki's management will open up the strategic focus areas of the
businesses and the actions taken to achieve them at the company's Capital
Markets Day which started today in Hämeenlinna, Finland. Ruukki's aim is to
accelerate its transformation into a company focusing on energy-efficient
steel construction and special steels. The company aims at increase annual
sales of special steel products to EUR 850 million in 2015 (2012: EUR 550
million). Ruukki Building Products is pursuing profitable growth especially by
specialising in energy-efficient solutions in its product portfolio and from
roofing products. The main goal for Ruukki Building Systems is to turnaround
the business back to profitability by the end of the current year.
Today, at the company's Capital Markets Day taking place in Hämeenlinna,
Finland, Rautaruukki's management will expand on the strategic focus areas and
aims of the businesses and the actions taken to achieve those aims. Ruukki's
aim is to accelerate its transformation into a company focusing on
energy-efficient steel construction and special steels. To promote this
transformation, this spring saw Ruukki restructure and, from the second
quarter of the year onwards, the company reports its operations as three
Ruukki Building Products
Ruukki Building Systems
"Given the current market environment, we must significantly accelerate our
transformation into a company focusing on energy-efficient steel construction
and special steel products. We firmly believe that the strategic choices we
have made and our efficiency actions currently under way will enable us to
achieve this change. Acquisitions or divestments cannot be ruled out to
achieve our target. Actions taken to this end are based on the assumption that
no major changes for the better are expected in our business environment,"
says Sakari Tamminen, President & CEO.
"Our focus is on growing sales of special steels to EUR 850 million in 2015.
We have the capacity to significantly increase the volume of our special steel
products and at the same time to cut back on the volume of poor profitability
standard steels. With an annual output of around 2.3 million tonnes at a
capacity utilisation rate of around 80 per cent, we are of a right size and
have the flexibility to specialise. Profitable growth in building products
will be pursued by focusing on functional and energy-efficient products and by
growing sales of roofing products, especially in Russia, Poland and the Nordic
countries," Tamminen points out.
The projects under the efficiency programme Ruukki initiated last year have
progressed as expected. It is estimated that the cost benefits totalling
around EUR 100 million being pursued will be visible in full from the third
quarter of this year onwards. Significant growth in sales volumes of special
steel products, cutting down on the volume of standard steel products - where
price competition is greater - and a focus on energy-efficient products
utilising renewable energy in construction also create better conditions to
retain the cost benefits achieved.
In special steel products, the sales growth target is based on their
profitability being clearly higher than that of standard products. In
addition, prices of special steel products are less volatile within business
cycles. Ruukki has invested in special steels expertise and production
capacity in recent years. At the same time, the company has achieved a good
market position and customer base, and has also built a distribution system
and strong product brands. These are good foundations on which to accelerate
sales growth. Growth is also being pursued through new customer relationships
and applications, new market areas and by launching new products. The special
steels global sales network is being expanded by establishing new distribution
channels and sales offices, as well as by recruiting over 40 experts to
strengthen sales and technical customer support, especially in the growing
markets of Asia, Africa and North and Latin America. The European network will
also be strengthened. The aim is for a sales and partnership network covering
all main market areas.
In standard steel products, the main goal is to further improve operational
cost efficiency and to reorganise the product portfolio by cutting back on
underperforming products. It is important to further develop customer-specific
services, delivery accuracy and the entire supply chain to maintain and
improve cost competitiveness. Ruukki's strength in the Nordic markets is its
extensive service network. In addition, Ruukki is the only steel tube
manufacturer in the Nordic countries with an extensive selection of tubular
products and profiles to meet the needs of the construction and manufacturing
industries. There are also growing opportunities to use special steel grades
in tubular products.
In the Construction business, restructuring is aimed at improving
profitability and growth, as well as to improve business manageability, the
transformation pace and transparency. Construction is Ruukki's most important
customer sector and accounts for around half of corporate sales.
Ruukki Building Products' competitive edges are a strong brand and
distribution channels, together with a focus on energy-efficient products and
on products which harness renewable energy. Ruukki Building Products'
(roofing, wall panel, foundation and infrastructure products) profitability
is, depending on product, at a good or a satisfactory level. To further
improve profitability, Ruukki is focusing on repeatable products and on
developing distribution and installation services for roofing products. The
aim is robust, profitable growth in roofing products - especially in the
Russian, Polish and Nordic markets - as well as to identify new business
opportunities in the foundation and infrastructure product markets, and to
increase the share of functional products in the product portfolio.
Specialisation of the building components product portfolio into
energy-efficient products, among others, will enable improved profitability.
The most recent product launches are Ruukki Classic Solar thermal roof, which
is flexibly designed for the roof of an ordinary single-family home, and
Ruukki Solar panel, which produces solar power and can be installed on the
walls of buildings.
Ruukki Building Systems' main aim is to turnaround the business back to
profitability by the end of the current year. Poor performance by the business
has been mainly attributable to single unprofitable project deliveries, loss
making bridge operations, unused capacity and too high general and
administrative costs. Ruukki Building Systems will be turned around to
profitability by strengthening and improving the efficiency of project
management, optimising production capacity and by completing the efficiency
programme currently under way in line with targets. In addition, the business
area has already withdrawn from bridge projects. Construction in Russia offers
significant potential for profitable growth, especially in commercial and
industrial construction and in agriculture. Work will continue on developing
sales and the product portfolio in Russia driven by customer needs, as well as
on improving the supply chain.
Growing demand for energy-efficient construction solutions create opportunites
for companies such as Ruukki. Ruukki has established a new unit to develop
energy-efficient, functional commercial buildings. This unit aims to create a
foundation for future profitable growth by integrating the best of Ruukki's
products and know-how. Ruukki's products can help to lower the energy and
lifecycle costs of buildings and increase the value of a building.
Capital Markets Day presentations can be followed by live webcast on Ruukki's
website at www.ruukki.com/Investors from around 12.20pm-4.30pm EEST. After the
CMD, the presentations, in English, will be published in the Investor section
of the company's website in the Reports and presentations archive.
For more information, please contact:
Sakari Tamminen, President & CEO, tel. +358 20 592 9075
Markku Honkasalo, CFO, tel. +358 20 592 8840
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
NASDAQ OMX Helsinki
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