Financial statement bulletin 2009: In very difficult market conditions - weak result. Good cash flow, balance sheet remained strong

Rautaruukki Corporation, Financial statement bulletin, 3 February 2010 at 12 noon

Summary results for 2009 (reference period 2008)

• Consolidated net sales EUR 1,950 million (EUR 3,829 million comparable)
• Consolidated reported negative operating profit was -EUR 323 million and negative operating profit excluding non-recurring items was -EUR 306 million (EUR 584 million comparable, excluding non-recurring items)
• Result before income tax was -EUR 359 million (548)
• Gearing ratio was 22.3 per cent (7.9)
• Cash flow from operating activities was EUR 182 million (382) and cash flow before financing activities was EUR 30 million (169)
• Return on capital employed (rolling 12 months) -14.2 per cent (25.6)
• Earnings per share were -EUR 1.98 (2.93)
• Board of Directors' dividend proposal EUR 0.45 per share (EUR 1.35)
• The company estimates a 15-20 per cent year-on-year growth in net sales in 2010. Profitability is expected to improve significantly compared to the previous year and the full-year result before income tax is estimated to be positive.

2009 in brief:

- Business activity in commercial and industrial construction was low throughout the report period. Net sales of infrastructure construction declined clearly less than those of other construction sectors. Market conditions for residential roofing products during 2009 were much weaker than in earlier years.

- Delivery volumes in the engineering industry fell sharply, especially in the lifting, handling and transportation equipment industry. Except for the fourth quarter, deliveries to equipment manufacturers in the energy industry, both in wind and diesel power plants, continued at a good level compared to other customer groups.

- End-customer demand for steel products was weak and delivery volumes were exceptionally low. Sales of colour-coated and galvanised strip products were better than those of plate products. Sales of special steel products decreased more than those of other product groups because of low activity in the main industrial sectors that use these products, such as the heavy engineering industry.

- The operational excellence programme, Boost, progressed faster than planned and the company's cost structure improved noticeably. The largest single benefits were achieved from the centralisation of steel service centre operations in the Nordic countries, improved supply chain efficiency and from efficiency programmes in the construction business in Russia and Poland. The annualised impact of efficiency projects initiated during 2009 is around EUR 90 million.

- Working capital of EUR 317 million was released and the consolidated balance sheet remained healthy.

President & CEO Sakari Tamminen:

"During the past year we faced major negative changes both as regards market conditions and Ruukki. The company's profitability was very weak, even though it did improve towards the year-end. Weak performance was due mainly to lower sales volumes and selling prices. In addition, the low capacity utilisation rate, especially in steel production, had a major negative impact on the result for the first half of the year, on top of high raw material costs.

We focused on strengthening cash flow and managed to maintain our balance sheet healthy by releasing working capital and cutting capex. We also successfully managed to clearly improve our operating efficiency corporate-wide and Boost, the three-year operational excellence programme initiated in autumn 2008, progressed faster than planned. The company's cost competitiveness is now fundamentally better than at the start of 2009.

We have reviewed the focus of our businesses to strengthen the company's core businesses and to reduce the impact of fluctuations in the economic cycle. Our focus is now much stronger than earlier on products and business concepts that we can replicate from one country to another. Such products include, for example, cabins for mobile machines, as well as roofing products. Transferring our competence from one country or unit to another will enable us to serve our customers with standardised products and services in different market areas. Besides a presence on the Eastern European markets, we are increasing our presence also on the Western European markets. We are also increasing the share of businesses that are less exposed to market cyclicality. Such businesses include, among others, infrastructure and renovation construction, as well as residential construction products, where we already have strong expertise.

During the past few years we have built a strong manufacturing and sales network to serve our construction and engineering customers in the emerging markets in Central Eastern Europe, Russia and China. In addition, we have also made investments to increase the manufacturing capacity of special steel products. Utilisation of these investments provides us with good potential to strengthen our foothold in future growth markets.

The basis for 2010 is much better than for the previous year as market conditions in a number of our customer industries have levelled off and in some businesses there are already signs of improved demand. However, no fast recovery of market conditions can be seen.

We estimate a 15-20 per cent year-on-year growth in net sales in 2010. Profitability is expected to improve significantly compared to the previous year and the full-year result before income tax is estimated to be positive."

For further information, please contact:

Sakari Tamminen, President & CEO, tel. +358 20 592 9075

Mikko Hietanen, CFO, tel. +358 20 592 9030

Rautaruukki has published a Corporate Governance Statement 2009, which is appended to this release. The Statement may also be read on the company's website at www.ruukki.com.

A press conference, in Finnish, for analysts and the media will be held on Wednesday 3 February 2010 at 2.30pm at Ruukki, Suolakivenkatu 1, 00810 Helsinki.

The English webcast and conference call for investors and analysts will begin at 4.30pm EET. The webcast can be viewed live on the company's website at www.ruukki.com/investors. A replay of the webcast can be viewed on the same site from about 8pm Finnish time. To attend the conference call, please call the following number 5-10 minutes before the conference begins: +44 (0)20 7162 0125, password: Rautaruukki

A recording of the conference call can be heard until 8 February 2010 at the following number:

+44 (0)20 7031 4064, access code: 856309

Rautaruukki Corporation

Anne Pirilä

SVP, Corporate Communications and Investor Relations

Rautaruukki supplies metal-based components, systems and integrated systems to the construction and engineering industries. The company has a wide selection of metal products and services. Rautaruukki has operations in 27 countries and employs around 11,700 people. Net sales in 2009 were approximately EUR 2.0 billion. The company's share is quoted on NASDAQ OMX Helsinki (Rautaruukki Oyj: RTRKS). The Corporation uses the marketing name Ruukki.

DISTRIBUTION: NASDAQ OMX Helsinki, Main media, www.ruukki.com

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