Interim Review Q1 2006

Transcription

1 Interim Review Q April 26, 2006 April 26,

2 Strategy Moving Ahead Recent Structural Changes Business Environment Financials 1-3/2006 Near-term Outlook Summary 2 April 26,

3 Strategy Moving Ahead

4 Ruukki today Ruukki supplies metal-based products, components, systems and integrated systems Customer industries in focus: construction mechanical engineering Net sales in 2005 EUR 3.7 billion Approx. 12,000 employees in 23 countries Production Processing Sales and service 4 April 26,

5 Ruukki delivers a comprehensive range of solutions to customers needs Metal based products, parts and components Manufactured parts, components, systems and integrated systems which are used in Construction Mechanical engineering 5 April 26,

6 Our vision: solutions for specific segments based on customer needs Construction Construction Engineering Solutions Metal Products Solutions Metal Products Engineering Solutions Service Metal Products 2003 Reliable steel producer The most desired solution supplier 6 April 26,

7 Recent Structural Changes

8 Acquisition and Divestments Acquired companies net sales Velsa ~50 Me engineering Nov 2004 Metalplast ~65 Me construction May 2005 Weibulls ~50 Me engineering June 2005 PPTH ~100 Me construction and engineering Aug 2005 Sept April 26, Steel-Mont ~25 Me construction Oct 2005 Ruukki Metals Froh Housetech -10 Me restructuring of long products (Ovako) about -600 Me Dec 2005 Ventall* ~110(e) Me construction Mar 2006 Ruukki Engineering sale of Halikko unit about -10 Me Apr 2006 *) agreements awaiting for regulatory approvements divestment* of reinforcing steel ~330 Me Divested companies net sales

9 Acquisition of OOO Ventall*, Russia * The transaction still requires the approval of competition authorities and is expected to be finalised in May 2006

10 Ventall* the leading steel constructor in Russia Key figures in 2005 net sales EUR 70 million EBIT EUR 15.5 million employees 1,238 Estimated net sales in 2006 EUR 110 million Designs, manufactures and supplies steel frame structures and sandwich elements Most of the EUR 30 million expansion program completed triples production capacity and enables significant growth * The transaction still requires the approval of competition 10 April 26, authorities and is expected to be finalised in May 2006

11 Ventall* strengthens our delivery capabilities in Russia and Ukraine Ruukki s existing focus on construction markets in Nordic, Baltic and CEE countries Ventall brings strong market presence and manufacturing in Russia designs and supplies steel frame structures and sandwich elements Combined design expertise and product range significant increase in our delivery capabilities in Russia and Ukraine 11 April 26, * The transaction still requires the approval of competition authorities and is expected to be finalised in May 2006

12 Acquisition strengthens our delivery capabilities in Russia and Ukraine prefabricated wall elements load-bearing profiles roofing products steel frames Nordic, Baltic and CEE countries + Ventall in Russia facades steel frames 12 April 26, sandwich panels * The transaction still requires the approval of competition authorities and is expected to be finalised in May 2006 sandwich panels

13 Commercial construction growing considerably in Russia Russian steel construction market estimated at about EUR 700 million Ventall s* market share about 7 per cent in sandwich elements Ventall s* market share about 15 per cent Ventall* more than doubles Ruukki s net sales in Russia (EUR 70 million in 2005) +1% +2% +5% +9% +3% +6% +10% +5% +7% +7% +X% Market growth, 2006e Total construction output in the area EUR 210 bn/2006e +10% +10% +5% +7% Source: Euroconstruct, VTT, Buildecon 13 April 26, * The transaction still requires the approval of competition authorities and is expected to be finalised in May 2006

14 Ruukki s construction operations have been strengthened by acquisitions Metalplast, Poland net sales EUR ~65 million complementing sandwich panels deliveries PPTH, Finland net sales EUR ~100 million steel structures and project management Steel-Mont, Slovakia net sales EUR ~25 million steel structures Ventall*, Russia net sales EUR ~110 million (2006e) steel frame structures and sandwich elements 14 April 26, * The transaction still requires the approval of competition authorities and is expected to be finalised in May 2006

15 Divestment* of Nordic Reinforcing Business *)The transaction is subject to relevant regulatory approvals and it is expected to close by June 30, 2006

16 Streamlining the corporate structure Net sales in 2005 EUR 328 million Employees 689 Significant Nordic player in reinforcing steel Currently part of Ruukki Metals (* Oslo Ølstykke Vännäs Mo i Rana, Norway reinforcing steel 0,5 Mt billets 0,15 Mt Åminnefors/Espoo Västerås Halmstad Distribution and manufacturing service companies Finland, Sweden, Norway and Denmark *) Fundia Armeringsstål AS, Fundia Betoniteräkset Oy, Fundia Armering AB, Fundia Armering AS ja Fundia Armering A/S 16 April 26,

17 Divestment* of non-strategic operation The majority of the long steel products were spun off into Oy Ovako Ab already in 2005 Current restructuring completes the arrangements to exit from long steel business further gears the company operations towards solutions business Reinforcing has no operational synergies with the solution businesses Transaction value corresponds to the book value of EUR 123 million at the end of March, April 26, *)The transaction is subject to relevant regulatory approvals and it is expected to close by June 30, 2006

18 Business Environment

19 Overall demand continued good Underlying demand in construction developing well normal low season in construction activity during the first quarter business expected to pick up during the second quarter Continued strong order books in engineering industry demand in Lifting, Handling and Transportation very strong strong order books in Marine and Offshore Steel product markets strengthening demand and prices improving inventory levels low/normal 19 April 26,

20 Financials 1-3/2006

21 Profitability was at a good level but decreased compared with year before Rolling 12-month s ROCE 29.5 % (33.7) Gearing 19,6 % Comparable net sales increased by 4 % Share of the solution businesses increased to 31 % (21) of net sales Profitability decreased from 1-3/2005 average sales prices decreased steel making raw material costs increased first quarter 2005 exceptionally strong US-dollar EUR -13 million Other items share bonus schemes EUR -19 million (of which EUR -14 million due to share price increase during the first quarter) 21 April 26,

22 Net sales, Group total m I/2005 I/2006 Years according to FAS and from 2004 according to IFRS. 822 Excluding Ovako Comparable with April 26,

23 Group net sales by division Q1/2006 (Q1/2005) Ruukki Construction 133 m (88 m ) 16 % (9 %) Ruukki Engineering 132 m (124 m ) 15 % (12 %) Ruukki Metals 591 m (802 m ) 69 % (79 %) 23 April 26,

24 Group net sales by area Q1/2006 (Q1/2005) Other countries 2 % (3 %) Other Western Europe 20 % (33 %) Finland 32 % (25%) CEE-countries 11 % (8 %) Other Nordic 35 % (31 %) 24 April 26,

25 Quarterly net sales, Group total m Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Years according to FAS and from 2004 according to IFRS. Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 without Ovako 25 April 26,

26 EBIT and profit before taxes 2000 Q1/2006 m I/2005 I/2006 EBIT Profit before taxes Years according to FAS and from 2004 according to IFRS. 26 April 26,

27 Quarterly EBIT and profit before taxes, Group total m % 14.9% 13.5% % % % % % % of sales 20.0% 18.0% 16.0% 14.0% 12.0% 11.1% 10.0% 8.0% 6.0% % % 0 Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q % Operating profit Pre-tax profit Operating profit-% Operating profit margin target (right-hand scale) without Ovako 27 April 26,

28 12-Month rolling EBIT Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 m 12-month rolling EBIT excl. Ovako 28 April 26,

29 Earnings per share I/2005 I/2006 Years according to FAS and from 2004 according to IFRS. 29 April 26,

30 Quarterly earnings per share Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q April 26,

31 Return on equity ROCE % % Strategic target 15 % I/2005 I/ I/2005 I/2006 Year according to FAS and from 2004 according to IFRS. 31 April 26,

32 Net debt, equity, gearing m % Target < 80 % /03/ Net debt, m Equity, m Years according to FAS and from 2004 according to IFRS. 32 April 26, Gearing %

33 Cash flow m I/2005 I/2006 Cash flow from operations Cash flow before financing Year according to FAS and from 2004 according to IFRS. 33 April 26,

34 Capex vs. depreciation m *) I/2006 Gross capex Net capex Depreciation Years according to FAS and from 2004 according to IFRS. *) Excl. value reductions 33 m 34 April 26,

35 Acquisitions m I/2006 Fixed assets Working capital Goodwill Column 4 Years according to FAS and from 2004 according to IFRS. 35 April 26,

36 Near-term Outlook

37 Near-term outlook Demand is expected to remain firm within construction and engineering industry Prices of steel products are set to strengthen further over the spring and summer Raw material costs estimated to remain at the level seen in the second half of 2005 Full-year net sales in 2006 are expected to be higher than comparable net sales in 2005 The first half EBIT 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 37 April 26,

38 Summary

39 Summary First major step to utilise growth opportunities in Russia Contract of reinforcing steel divestment Strong demand expected to continue in the main customer industries and steel prices strengthening The first half EBIT 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 39 April 26,

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