July 27, 2005
08:00 CET
Rautaruukki Interim Report January-June 2005
Rautaruukki Oyj Stock Exchange Release 27 July 2005 at 9.00
PROFIT BEFORE TAXES OF EUR 376 MILLION; EXCELLENT PROFITABILITY CONTINUED
- Net sales: EUR 1,953 million (1,705 million in January-June 2004).
- Operating profit: EUR 381 million (199 million).
- Share of associated companies' profit: EUR 13 million (1).
- Profit before taxes: EUR 376 million (173).
- Earnings per share (diluted): EUR 2.02 (1.04).
- Gearing ratio: 50.5 per cent (91.0).
Key figures 2005* 2004 2005* 2004 2004
4-6** 4-6 1-6** 1-6 1-12
Net sales, EUR millions 939 911 1953 1705 3564
Operating profit, EUR millions 180 123 381 199 493
Operating profit margin, % 19.2 13.5 19.5 11.7 13.8
Profit before taxes, EUR millions 182 108 376 173 443
Earnings/share, diluted, EUR 0.97 0.69 2.02 1.04 2.40***
*Ovako has been included as an associated company in Rautaruukki's consolidated
financial statements as from 1 May 2005.
**Metalplast has been included in Rautaruukki's consolidated financial
statements as from 1 June.
***The reduction in the deferred tax liability resulting from the change in
Finnish tax legislation increased EPS by EUR 0.13.
Second-quarter highlights
- The market situation in the key customer sectors remained good.
- Selling prices were mainly at the previous quarter's level.
- The Ovako arrangement decreased reported net sales compared with the first
quarter. Excluding the Ovako units, net sales grew somewhat.
- Excellent profitability continued.
- Production was adjusted in line with profitable demand.
- The effect of the US dollar on operating profit was a gain of EUR 12 million
(compared with 4-6/2004).
- Oy Ovako Ab, the new company jointly owned by Rautaruukki, SKF and Wärtsilä,
began operations on 10 May 2005.
- Rautaruukki's stake in Metalplast increased to 99.8 per cent.
President and CEO Sakari Tamminen:
"The market situation has remained strong in Ruukki's key customer sectors.
Construction activity in our main market areas is good, and especially on the
central eastern and eastern European markets the growth of demand is strong. The
order books of the engineering industry customers continue to be strong. The
good market situation has reflected in Ruukki's cabin business in particular,
which has headed for strong growth. The price level of steel products has been
strong in our main market areas and prices are at a significantly higher level
compared with the same period of last year. Due to destocking among wholesalers
the steel product prices are expected to decrease somewhat in the third quarter.
Work on refining our business model is moving ahead and we are continually
developing new components and solutions together with a number of customers. We
are also continuing work to step up the efficiency of the company's business
processes, and the focus of operations is now squarely on the company's main
market areas in the Nordic countries, the Baltic area and central eastern
Europe. During the second quarter we saw two major M&A arrangements to
completion: Oy Ovako Ab began operations on 10 May, and Metalplast was
consolidated in the Group's financial statements as from 1 June.
The Group's full-year earnings outlook is good. In 2005 comparable net sales are
expected to increase on the previous year and comparable operating profit is
estimated to improve clearly on last year's figure. The primary factors of
uncertainty for the earnings trend relate to the normalisation of wholesale
inventories in Europe as well as the trend in demand in the Asian market and its
impact on the 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
July 2005 at 10.30 a.m. at Radisson SAS Royal Hotel, Finland Room, address:
Runeberginkatu 2, 00100 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 July 2005, at 3.00
p.m. Those desiring to participate in the conference call can phone +44 20 7162
0093, password: Rautaruukki, about 5-10 minutes before the conference starts.
The Interim Report for January-June 2005 is available on the company's website,
www.ruukki.com/investors
Rautaruukki Corporation
Taina Kyllönen
VP, Corporate Communications
RAUTARUUKKI CORPORATION INTERIM REPORT JANUARY-JUNE 2005
Transition to international financial reporting standards (IFRS)
Rautaruukki adopted International Financial Reporting Standards (IFRS) from the
beginning of 2005. Additional information and a more detailed discussion of the
effects of the transition on the balance sheet and profit and loss account were
given in the company's stock exchange release of 26 April 2005 and they can be
read on Rautaruukki's website at www.ruukki.com/investors. This Interim Report
has been prepared in accordance with the recognition and measurement rules under
International Financial Reporting Standards (IFRS).
Net sales and result for January-June 2005 (comparative figures for 2004)
Oy Ovako Ab, the new company jointly owned by Rautaruukki Corporation, AB SKF
and Wärtsilä Oyj Abp, began operations on 10 May 2005. Rautaruukki has a 47 per
cent stake in Ovako. Ovako has been included as an associated company in
Rautaruukki's consolidated financial statements as from 1 May 2005. The units
that transferred to Ovako are included in the reported figures up to 30 April
2005.
The company's stake in Metalplast-Oborniki Holding Sp. z o.o increased to 99.8
per cent in the report period. The company has been included in Rautaruukki's
consolidated financial statements as from 1 June.
Consolidated net sales in January-June 2005 were EUR 1,953 million, up 15 per
cent on the net sales reported for January-June 2004 (1,705). Net sales were
boosted by a markedly higher price level. Delivery volumes declined by about 17
per cent compared with the same period a year earlier. The fall in delivery
volumes was attributable to the non-inclusion of the units that transferred to
Ovako in financial reporting as from 1 May 2005 as well as to the company's
internal measures to improve the sales structure and the destocking among
wholesalers that began towards the end of the first quarter. Of net sales, 28
per cent came from Finland (25) and 31 per cent from the other Nordic countries
(28). Central eastern Europe accounted for 9 per cent of net sales (10), the
rest of Europe for 29 per cent (34) and other countries for 3 per cent (3).
Operating profit was EUR 381 million (199), or 19.5 (11.7) per cent of net
sales. Operating profit was lifted by the rise in product prices coupled with an
improvement in the sales structure and cost-effectiveness. Agreements on raw
materials used in steel manufacture were made in the first part of the year at
substantially higher prices than a year ago. The new prices began to affect
earnings in the second quarter. The change in the exchange rate of the US dollar
added EUR 17 million to operating profit compared with the same period a year
earlier.
Net financial expenses amounted to EUR 19 million (27). Net interest expenses
totalled EUR 18 million (23) and the net effect of foreign exchange gains and
losses was EUR 0 million (-1).
The share of associated companies' profit was EUR 13 million (1).
The profit before taxes was EUR 376 million (173).
The Group's taxes amounted to EUR -98 million (-31), including an increase of
EUR 8 million in deferred taxes (13).
Net profit for the financial period was EUR 278 million (142).
Earnings per share were EUR 2.02 (1.04).
The return on capital employed over the past twelve months was 35.2 per cent
(13.7) and the return on equity was 41.3 per cent (19.2).
Balance sheet
Total assets in the consolidated balance sheet grew by EUR 211 million from the
end of June of last year and by EUR 71 million from the turn of the financial
year to stand at EUR 2,783 million.
Cash flow and financing
Cash flow from operations was EUR 258 million (172) and cash flow before
financing was EUR 196 million (147).
Interest-bearing net debt at the end of June totalled EUR 661 million (855). At
the end of 2004, interest-bearing net debt stood at EUR 761 million. Working
capital grew by EUR 142 million in January-June (66) owing to the increase in
trade debtors and stocks.
The equity ratio was 47.3 per cent (36.7) and the gearing ratio 50.5 per cent
(91.0). At the end of June the Group's liquid assets amounted to EUR 63 million
and it had a total of EUR 300 million of committed unused revolving credit
facilities with banks. Shareholders' equity stood at EUR 1,311 million at the
end of June (941), or EUR 9.65 per share (6.93).
Personnel
The average number of personnel employed by the Group in the January-June period
was 11,924 people (12,280). At the end of June the entire payroll was 11,982
employees (13,062). The change in the number of employees was a decrease of
1,080 people. The acquisition of Velsa Oy increased the Group's payroll by 396
employees and the acquisition of Metalplast by 726 employees. The number of
Group staff who transferred to the employ of Ovako was 1,900.
Structural changes in the Group
On 22 April 2005, Rautaruukki Corporation, AB SKF and Wärtsilä Corporation
signed a binding agreement to combine their long steel products businesses into
a jointly owned new company. The European Commission gave its approval for the
arrangement at the beginning of May and the new company, Oy Ovako Ab, began
operations on 10 May. Ovako's owners exchanged their shareholdings in the
transferring companies for Ovako shares. The units that were transferred from
Rautaruukki to Ovako were the long steel products companies Fundia Special Bar,
Fundia Wire and Fundia Bar & Wire Processing with their subsidiaries.
Ovako has been included as an associated company in Rautaruukki's consolidated
financial statements as from 1 May 2005. Rautaruukki has a 47 per cent stake in
Ovako. The capital invested by Rautaruukki in Ovako at 1 May 2005 amounted to
about EUR 278 million. Of this amount, EUR 160 million consists of shareholders'
equity, EUR 38 million is a debenture loan and EUR 80 million comprises other
loan receivables. At the end of June, other loan receivables amounted to EUR 50
million, which according to plans are expected to be returned to Rautaruukki
after Ovako has replaced them with external bank financing. Additional
information on the effects of the arrangement (pro forma) on Rautaruukki's
balance sheet and profit and loss account were given in the company's stock
exchange release of 6 June 2005, which can be accessed on Rautaruukki's website
at www.ruukki.com/investors.
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. The
competition authorities gave their approval for the arrangement in May.
Rautaruukki's stake in Metalplast rose from 16.6 per cent to 68.7 per cent
following a purchase of shares from a private equity group and individual
shareholders on 31 May 2005. In addition, on 23 June 2005 Rautaruukki purchased
the Polish State's 31 per cent holding in Metalplast, raising Rautaruukki's
stake to 99.8 per cent. The remaining 0.2 per cent of the shares are held by
individual shareholders.
Capital expenditure
Total capital expenditure in January-June amounted to EUR 67 million (51), of
which EUR 19 million went for acquisitions. Disposals of property, plant and
equipment during the report period totalled EUR 7 million (8). Full-year net
capital expenditures in 2005 excluding acquisitions are expected to come to less
than EUR 100 million.
During the report period a decision was taken on modernising the direct quench
equipment at the Raahe works. The investment is expected to be completed in 2007
at an estimated cost of about EUR 24 million. The investment will raise the
proportion of high-strength steels within Rautaruukki's steel products palette
and support Ruukki Engineering's business in the fast-growing lifting, handling
and transport equipment sector.
Shares and share capital
The trading volume of the Rautaruukki Oyj share on the Helsinki Stock Exchange
in January-June was EUR 949 million (397). The share registered a high of EUR
12.47 in June and a low of EUR 8.02 in January. The average share price was EUR
10.29. The price of the share at the end of the report period on 30 June 2005
was EUR 12.35 and the company had a market capitalisation of EUR 1,715 million.
The company's registered share capital at 30 June 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 30 June 2005 of EUR 38 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.
Environmental issues
The EU's internal emissions trading started on 1 January 2005. Of Rautaruukki's
plants, Raahe and Hämeenlinna in Finland fall within the scope of the EU's
emissions trading. Smedjebacken in Sweden, Alblasserdam in the Netherlands and
Koverhar in Finland became a part of Oy Ovako Ab, which began operations on 10
May. 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
of about 18.6 million tonnes of carbon dioxide allowances, of which about 6.2
million tonnes were for 2005. Of these, the portion for the units that
transferred to Ovako amounted to a total of 3.2 million tonnes, and the portion
of emissions allowances allocated for 2005 about 1.08 million tonnes. As part of
its efforts to control the carbon dioxide emissions balance, Rautaruukki
Corporation is participating in 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.
Recording of emissions allowances in the profit and loss account and balance
sheet (IFRS)
At its meeting held on 22-23 June, IASB (International Accounting Standards
Board) decided to withdraw the interpretation set out in IFRIC 3 (Emission
rights) concerning the treatment in financial statements of emissions
allowances. As a consequence of this, Rautaruukki has changed its accounting
policy for emissions allowances and reversed the EUR 8 million charge for
emissions allowances made in the first quarter in reporting operating profit for
January-March. In order to cover the obligations related to emissions
allowances, Rautaruukki has booked a provision that is measured at the probable
market price. The difference between actual emissions and the emissions
allowances received is recognised in operating profit. The EUR 86 million
increase in total assets in the consolidated balance sheet at 31 March 2005
resulting from the recording of emissions rights received free of charge in the
initial allocation under the EU emissions trading scheme has been reversed.
January-March figures in accordance with the changed accounting policy:
Previously
EUR millions reported Changed
Operating profit 192 201
Net profit 139 145
Non-current assets 1,484 1,398
Shareholders' equity 1,206 1,165
Current liabilities 834 789
Near term outlook
The demand is expected to remain good in the latter part of the year in the
company's most important customer industries. Construction activity in the
Nordic countries, the Baltic area and central eastern Europe is good, and
customers in the engineering industry have strong order books. Destocking among
wholesalers has lowered deliveries by the steel industry, which has increased
uncertainty regarding the trend in the steel product markets in Europe. The
stock situation is expected to normalise during the autumn. The Group has
prepared to continue to adjust production in line with profitable demand.
The Group's full-year earnings outlook is good. In 2005 comparable net sales are
expected to increase on the previous year. The increased raw material prices
began 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. On the
other hand, the use of purchased steel slabs is forecast to come in this year at
only about a quarter of the volume used last year, thus reducing manufacturing
costs. Steel product prices are expected to decrease somewhat in the third
quarter. Comparable operating profit for the full year is estimated to improve
clearly on last year's figure. The primary factors of uncertainty for the
earnings trend relate to the normalisation of wholesale inventories in Europe as
well as the trend in demand in the Asian market and its impact on the market
prices of basic steel products.
This Interim Report has not been audited.
Helsinki, 27 July 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
accordingly in line with the new organisational structure.
Ruukki Construction
EUR million I/2004 II/2004 III/2004 IV/2004 2004 I/2005 II/2005
Net sales 70 109 124 116 418 103 148
Operating profit 2 17 24 18 61 14 23
as % of net sales 2.2 16.0 19.8 15.5 14.7 13.7 15.8
Net sales in January-June totalled EUR 251 million, up 41 per cent on the same
period a year earlier (179). The division's share of consolidated net sales was
13 per cent. Apart from the buoyant market, net sales have also been lifted by
the active efforts to expand our operations. Operating profit was EUR 37 million
(19). Operating profit was lifted by the good price level coupled with stepped-
up production efficiency and an improved sales structure. Metalplast-Oborniki
Holding Sp. z o.o., Poland's leading manufacturer of metal-based construction
panels has been consolidated as part of the Ruukki Construction division as from
1 June 2005.
The market situation on Ruukki Construction's core markets continued to be good.
The seasonal upswing in construction was also reflected in the division's net
sales and profitability in the second quarter. The commercial construction
market continued to be good, particularly in the countries of central eastern
and eastern Europe, where there is strong growth in the demand for industrial,
retail and logistics buildings. The acquisition, and particularly the sandwich
panel business that received a boost from it, will significantly strengthen
Ruukki Construction's position as well as its delivery and service capability in
the commercial construction markets in central eastern and eastern Europe. There
was stronger demand for total facade deliveries in the Nordic countries too and
sales of total facade packages got off to a good start in the Swedish market.
The division is continually developing deliveries for commercial construction.
Within infrastructure projects, the demand situation was good in the main
markets. Sales of ready-to-install supporting wall structures used in foundation
construction of harbours have shown good progress. In the infrastructure sector,
demand for steel pile foundations and gas pipelines has remained strong. Within
residential construction, the start of the season was postponed from the end of
the first quarter to the start of the second quarter owing to the exceptionally
cold weather in the early winter months. Thereafter the market situation in
residential construction has developed normally.
Ruukki Engineering
EUR million I/2004 II/2004 III/2004 IV/2004 2004 I/2005 II/2005
Net sales 63 78 74 113 329 124 114
Operating profit 9 15 10 19 53 22 23
as % of net sales 14.6 19.3 13.7 16.6 16.2 18.1 20.5
Net sales in January-June totalled EUR 238 million, up 68 per cent on the same
period a year earlier (141). The increase in net sales compared with last year
stemmed not only from the good market situation but also from the integration of
Velsa Oy into Ruukki Engineering from the beginning of November 2004. The units
that transferred to Ovako have been removed from the division's figures as from
1 May 2005. The division's share of consolidated net sales was 12 per cent.
Operating profit was EUR 45 million (24). Operating profit was lifted by higher
prices coupled with efficiency-boosting and an improved sales structure.
The market situation in customer sectors was good during the report period. This
was reflected in Ruukki Engineering's sales, where the cabin business is headed
for especially strong growth. Because of increased demand, and with the aim of
boosting production efficiency, it has been decided to expand cabin production
capacity at the Kurikka unit. The objective is to have the new capacity come on
stream in the first quarter of 2006. Of the other industries, the order books of
European shipyards are at a very good level, and the demand in the pulp and
paper and energy sectors was also good during the report period.
The division has made strong inputs into developing components and turn-key
deliveries together with a number of customers. The second quarter saw the first
deliveries of cabins for underground use in mining vehicles. The cabins were
designed in co-operation with the customer. The operational concept of the
service centres is being developed to be better in line with the challenges
identified in Ruukki's strategy, and investments have also been made in their
machinery.
Ruukki Metals
EUR million I/2004 II/2004 III/2004 IV/2004 2004 I/2005 II/2005
Net sales 659 723 653 773 2809 788 675
Operating profit 72 107 104 136 420 175* 145
as % of net sales 11.0 14.9 16.0 17.6 15.0 22.2* 21.6
*Figures have been adjusted in line with the new accounting policy for recording
emissions allowances.
Net sales in January-June totalled EUR 1,462 million, up 6 per cent on the same
period a year earlier (1,382). The units that transferred to Ovako have been
removed from the division's figures as from 1 May 2005. The division's share of
consolidated net sales was 75 per cent. Operating profit was EUR 320 million
(180). Operating profit was lifted by higher prices coupled with efficiency-
boosting and an improved sales structure.
For the most part, demand held up well. Towards the end of the second quarter,
destocking among wholesalers lowered demand, leading to a drop in deliveries.
The prices of steel products were at a considerably higher level in the report
period than at the same period a year ago. 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. Prices of flat steel products in the second quarter
largely held steady at the level seen in the first quarter or rose slightly. The
fall in the price of recycled steel and destocking among wholesalers depressed
prices of reinforcement products.
Ruukki Metals is pushing ahead with work to improve efficiency and the cost
structure. From the start of the year, the division's steering model has been
based on customer and market-specific performance management. Development of the
sales structure was continued by focusing operations on the core market areas in
the Nordic countries, the Baltic Rim and central eastern Europe and,
additionally, by adjusting the product range to optimise profitability. In areas
outside our core markets, operations are based on a speciality product strategy.
Ruukki Production
1000 tonnes I/2004 II/2004 III/2004 IV/2004 2004 I/2005 II/2005
Steel production 1184 1198 985 1184 4549 1176 982
Output in the January-June period totalled 2,159,000 tonnes (2,382,000). The
units that transferred to Ovako have been removed from the production figures as
from 1 May 2005. Production went smoothly during the report period.
Agreements on raw materials used in steel manufacture were made in the first
part of the year at substantially higher prices than a year ago. The increased
raw material prices began 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. On the other hand, the use of purchased steel slabs is forecast to come
in this year at only about a quarter of the volume used last year, thus reducing
manufacturing costs.
The first stage of the modernised automation system at the Raahe hot rolling
mill went into production 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.
During the report period a decision was taken on modernising the direct quench
equipment at the Raahe works. The investment is expected to be completed in 2007
at an estimated cost of about EUR 24 million. The investment will raise the
proportion of high-strength steels within Rautaruukki's steel products palette
and support Ruukki Engineering's business in the fast-growing lifting, handling
and transport equipment sector.
The Group has prepared to continue to adjust production in line with profitable
demand.
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.
CONSOLIDATED PROFIT AND LOSS ACCOUNT (CONDENSED)
EUR million 4-6/05 4-6/04 1-6/05 1-6/04 2004
Net sales 939 911 1953 1705 3564
Other operating income -3 3 12 8 19
Operating expenses -716 -745 -1503 -1425 -2915
Depreciation -39 -46 -81 -89 -175
Operating profit 180 123 381 199 493
Financing income and expenses -10 -16 -19 -27 -51
Share of results
in associated companies 12 1 13 1 2
Profit before taxes 182 108 376 173 443
Taxes -49 -13 -98 -31 -114
Profit for the period 133 94 278 142 330
Attributable to:
Equity holders of the company 133 94 278 142 329
Minority interest 0 0 0 0 1
EPS, diluted, e 0.97 0.69 2.02 1.04 2.40
EPS, basic, e 0.98 0.69 2.04 1.05 2.42
Operating profit, % of net sales 19.2 13.5 19.5 11.7 13.8
CONSOLIDATED BALANCE SHEET (CONDENSED)
30 Jun 30 Jun 31 Dec
EUR million 2005 2004 2004
ASSETS
Non-current assets 1503 1382 1417
Current assets
Inventories 605 526 651
Trade and other receivables 613 586 584
Cash and cash equivalents 63 77 60
2783 2572 2712
EQUITY AND LIABILITIES
Equity
Capital attributable to
Company's equity holders 1310 940 1126
Minority interest 1 1 1
Non-current liabilities
Interest bearing 440 648 625
Other 235 206 224
Current liabilities
Interest bearing 284 285 195
Other 513 491 541
2783 2572 2712
CASH FLOW STATEMENT (CONDENSED)
EUR million 1-6/05 1-6/04 2004
Profit for the period 278 142 330
Adjustments 199 133 306
Cash flow before working
capital changes 477 275 636
Change in working capital -142 -66 -128
Financing items and taxes -77 -38 -122
Cash flow from operations 258 172 386
Cash flow from investing activities -62 -25 -118
Cash flow before financing 196 147 268
Dividends paid -109 -27 -27
Other net cash flow from financing -84 -92 -231
Change in cash and cash equivalents 3 28 10
KEY FIGURES 4-6/05 4-6/04
Net sales, Me 939 911
Operating profit, Me 180 123
as % of net sales 19.2 13.5
Profit before taxes, Me 182 108
as % of net sales 19.4 11.9
KEY FIGURES 1-6/05 1-6/04 2004
Net sales, Me 1,953 1,705 3,564
Operating profit, Me 381 199 493
as % of net sales 19.5 11.7 13.8
Profit before taxes, Me 376 173 443
as % of net sales 19.2 11.1 12.4
Return on capital employed*, % 35.2 13.7 26
Return on equity*, % 41.3 19.2 33.8
Equity ratio, % 47.3 36.7 41.7
Gearing ratio, % 50.5 91.0 68.0
Interest bearing net debt, Me 661 855 761
Equity per share, e 9.65 6.93 8.29
Personnel on average 11,924 12,280 12,273
Number of shares 138,886,445 138,886,445 138,886,445
- not counting own shares 135,813,485 135,616,445 135,813,485
- diluted 137,213,485 137,016,445 137,213,485
* based on previous 12 months
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 1-6/2004
EUR million
Attributable to equity holders of the Company
Fair value Trans- Re- Minor-
Share Share and lation tained ity
capital premium other Differ- earn- Total inter-
account reserves ences ings est
EQUITY 1.1. 236 220 1 -5 369 820 1
Change in translation difference 1 1
Share based compensation 0 0
Direct bookings
in retained earnings 3 3
Dividend distribution -27 -27
Profit for the period 142 142
EQUITY 30.6. 236 220 1 -4 487 940 1
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 1-6/2005
EUR million
Attributable to equity holders of the Company
Fair value Trans- Re- Minor-
Share Share and lation tained ity
capital premium other Differ- earn- Total inter-
account reserves ences ings est
EQUITY 1.1. 236 220 2 -2 671 1126 1
Changes from IAS 39 and 32:
Cash flow hedging 2 -2 0
ADJUSTED EQUITY 1.1. 236 220 4 -2 670 1126 1
Cash flow hedging
Increase (hedging reserve) 19 19
Deferred taxes' share of
period movements -5 -5
Change in translation difference -4 -4
Share based compensation 2 2
Dividend distribution -109 -109
Profit for the period 278 278
EQUITY 30.6. 236 220 21 -6 839 1310 1
NET SALES BY DIVISION Change
EUR million 1-6/05 1-6/04 % 2004
Ruukki Construction 251 178 +40 418
Ruukki Engineering 238 141 +68 329
Ruukki Metals 1462 1382 +6 2809
Other units 2 3 8
Consolidated net sales 1953 1705 +15 3564
OPERATING PROFIT BY DIVISION
EUR million 1-6/05 1-6/04 2004
Ruukki Construction 37 19 61
Ruukki Engineering 46 24 53
Ruukki Metals 320 180 420
Group management and other units -22 -24 -42
Consolidated operating profit 381 199 493
NET SALES BY QUARTER
EUR million I/04 II/04 III/04 IV/04 I/05 II/05
Ruukki Construction 70 109 124 116 103 148
Ruukki Engineering 63 78 74 113 124 114
Ruukki Metals 659 723 653 773 788 675
Other units 1 1 3 2 0 2
Consolidated net sales 794 911 854 1005 1014 939
OPERATING PROFIT BY QUARTER
EUR million I/04 II/04 III/04 IV/04 I/05 II/05
Ruukki Construction 2 17 24 18 14 23
Ruukki Engineering 9 15 10 19 22 23
Ruukki Metals 72 107 104 136 175* 145
Group management and other units -7 -17 -12 -7 -10 -12
Consolidated operating profit 76 123 128 166 201 180
*Figures have been adjusted in line with the new accounting policy for recording
emissions allowances.
CONTINGENT LIABILITIES Group Rautaruukki Oyj
EUR million 6/05 12/04 6/05 12/04
Mortgaged real estates 27 30 27 27
Collateral given on behalf of
Group companies 104 124
associated companies 17 2 17 2
others 6 2 0
Leasing and rental liabilities 149 166 132 149
Other financial liabilities 1 2 0 1
VALUES OF DERIVATIVE CONTRACTS
30 June 2005, EUR million
CASH FLOW HEDGES INCLUDED
IN HEDGE ACCOUNTING Nominal value Fair value
Interest rate derivatives
Interest rate swaps 115 -1.7
Zinc derivatives
Forward contracts 44,100* 5.7
Electricity derivatives
Forward contracts 2,527** 18.9
DERIVATIVES NOT INCLUDED
IN HEDGE ACCOUNTING Nominal value Fair value
Interest rate derivatives
Interest rate swaps 353 -4.1
Foreign currency derivatives
Forward contracts 568 7.2
Options
Bought 95 2.4
Sold 95 1.7
190 4.1
*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 metal-based components, systems and turnkey deliveries to the
construction and mechanical engineering industries. The company has a wide
selection of metal products and services. Ruukki has operations in 21 countries
and employs 11,000 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