Ruukki's Capital Markets Day 1 December 2009: Ruukki primes
operations for future growth
(Thomson Reuters ONE) - Rautaruukki Corporation Stock exchange release 1 December 2009 at9.20Ruukki's annual Capital Markets Day for investors and analysts isbeing held in Helsinki today. The event features a presentation ofthe implementation of Ruukki's strategy in different businesses, areview of the company's financial position and actions to improveprofitability.Summary:- Focus areas of business remain unchanged- Emphasis on product focus and utilisation of investments made inrecent years- Businesses to be balanced to reduce cyclicality- Replicability of products and business concepts key to takingRuukki's strategy forward- Efficiency programme has progressed faster than expected- Positive cash flow before investments- Earnings guidance unchangedThe main focus areas of Ruukki's business remain unchanged, althoughin future operations will be run on a more product-focused drivenbasis than earlier. Recent years have seen Ruukki build a strongmanufacturing and sales network in the emerging markets and completemajor investments to increase the manufacturing capacity of specialsteel products. Utilising these investments is essential in allbusinesses and units.Work is continuing on compacting the production network. This in turnwill increase efficiency and create a platform to improveprofitability. Production and processes are being harmonised toenable customers to be provided with standardised products servicesin different market areas.In future, the focus will also be on products and business concepts,such as cabins and roofing products, which can be replicated from onecountry to another. One of the latest examples on this front isresidential construction concept to enable fast, cost-efficient steelconstruction throughout the year. This solution will be launched onthe Russian market during 2010.Competence development is being highlighted more than earlier atRuukki and applies to all sectors, from product development to sales.To reduce the impact of fluctuations in the economic cycle on thebusinesses, the company is seeking balance also from the markets inWestern Europe and from businesses - such as infrastructure andrenovation construction and residential construction products - thatare less exposed to market cyclicality.Strategic direction remains unchangedIn construction, the company continues to focus on commercial andindustrial construction in the Nordic countries, Central EasternEurope, Russia and Ukraine. Increasing emphasis is also being givento infrastructure and residential construction within theconstruction business.In the engineering business, the key business segments are cabins,booms, windmill towers, and medium-heavy and heavy welded structures.The company intends to strengthen its own design competence inproducts for the engineering industry, in, for example, cabin design.In the steel business, the focus is on cost-efficiency andoperational flexibility. The geographical focus is on the Nordicmarkets and the product focus is on special steel products."The global economic crisis has severely shaken Ruukki's customerindustries and thus considerably weakened both our steel business andsolutions businesses: construction and the engineering industry. Infuture, our focus will increasingly be on businesses - such asinfrastructure, renovation and residential construction products -that are less exposed to market cyclicality. However, despitedifficult market conditions, we have noticeably improved ourefficiency and cost competitiveness. In recent years, we have rampedup capacity serving construction and engineering industry customersin the emerging markets in Central Eastern Europe, Russia and Chinaand invested in the manufacturing capacity of special steel products.This gives us a strong competitive edge when demand picks up again.Our strong balance sheet also enables acquisitions," says President &CEO Sakari Tamminen.Efficiency projects progressing faster than expected and raw materialcosts are lower than during the previous yearRuukki's three-year operational excellence programme Boost hasprogressed faster than expected. The biggest single savings have beenachieved from improving supply chain efficiency, the constructionefficiency programme in Russia and Poland and by a centralisation ofsteel service centre operations in the Nordic countries.Construction operations have been improved by centralising productionon larger units in Finland, Estonia, Poland and Romania. In addition,there are plans to transfer the production of roof and façadeprofiles at Biatorbagy plant in Hungary to larger units.Centralising operations will also strengthen Ruukki's engineeringexpertise in Central Eastern Europe. The manufacture of componentswill be relocated from the Swedish units to Poland by the end of thisyear.The impact of the Boost programme on consolidated operating profitwas around EUR 46 million at the end of September and is estimated toexceed EUR 60 million by the end of the year. The annualised impactof the above efficiency projects already under way is around EUR 80million.Prices of the main raw materials (iron ore and coal) used in steelproduction have fallen during 2009 compared to the previous year. Theimpact of these lower raw material prices is estimated to be aroundEUR 60 million compared to 2008.Positive cash flow before investmentsConsolidated cash and cash equivalents at 30 September 2009 were EUR88 million. A total of EUR 222 million has been released from workingcapital since the start of the year and the company's operative cashflow, before investment activities, by the end of September was EUR69 million. Net gearing at 30 September 2009 was 26 per cent. Thecompany had unused committed financing reserves at the end ofNovember totalling around EUR 700 million.Investments are estimated to remain below EUR 170 million during thecurrent year and to be EUR 160-190 million in 2010.Earnings guidance unchangedThe earnings guidance given in Ruukki's interim report forJanuary-September 2009 remains unchanged. The company estimates therewill be a marked improvement in the result before taxes for thefourth quarter, compared to the third quarter, but that the resultmight remain slightly negative.From the start of 2010, the company will adopt the 21-day silentperiod (currently 14 days) before earnings disclosures.Capital markets day materialsThe Capital Markets Day presentation material is in English and willbe available on 1 December from about 12.30 on the company's websiteat www.ruukki.comFor further information, please contact:Sakari Tamminen, President & CEO, tel. +358 20 592 9075Mikko Hietanen, CFO, tel. +358 20 592 9030Rautaruukki CorporationAnne PiriläSVP, Corporate Communications and Investor RelationsRautaruukki supplies metal-based components, systems and integratedsystems to the construction and engineering industries. The companyhas a wide selection of metal products and services. Rautaruukki hasoperations in 27 countries and employs 12,200 people. Net sales in2008 totalled EUR 3.9 billion. The company's share is quoted onNASDAQ OMX Helsinki (Rautaruukki Oyj: RTRKS). The Corporation usesthe marketing name Ruukki.DISTRIBUTION:NASDAQ OMX HelsinkiMain mediawww.ruukki.comThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 01.12.2009 - 08:20 Uhr
Sprache: Deutsch
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