Ruukki Group Plc, Interim Report 6 May 2008 at 8:45 am.
SUMMARY
GROUP KEY FIGURES (EUR MILLION)
--------------------------------------------------------------------------------
| | Q1/2008 | Q1/2007 | 2007 |
--------------------------------------------------------------------------------
| | 3 months / | 3 months / | 12 months / |
| | 31 Mar | 31 Mar 2007 | 31 Dec 2007 |
| | 2008 | | |
--------------------------------------------------------------------------------
| Revenue | 62.9 | 36.8 | 213.9 |
--------------------------------------------------------------------------------
| EBIT from ongoing business | 4.0 | 3.0 | 19.2 |
--------------------------------------------------------------------------------
| EBIT from Russian investment | -2.5 | -0.9 | -3.5 |
| projects | | | |
--------------------------------------------------------------------------------
| Total operating profit (EBIT) | 1.5 | 2.1 | 15.7 |
--------------------------------------------------------------------------------
| Profit before tax | 4.1 | 2.0 | 19.2 |
--------------------------------------------------------------------------------
| Return on equity, % | 2.5 % | 4.9 % | 5.8 % |
--------------------------------------------------------------------------------
| Return on capital employed, % | 5.4 % | 11.1 % | 8.8 % |
--------------------------------------------------------------------------------
| Equity ratio, % | 76.5 % | 47.2 % | 85.1 % |
--------------------------------------------------------------------------------
| Earnings per share, undiluted, EUR | 0.01 | 0.00 | 0.06 |
--------------------------------------------------------------------------------
| Earnings per share, diluted, EUR | 0.01 | 0.00 | 0.06 |
--------------------------------------------------------------------------------
CEO MATTI VIKKULA:
- ”The most significant development during the first quarter was the decision to
start the process of searching a new location for the sawmill and pulp mill
investment to be carried out in Russia. The investment atmosphere was decisively
changed in Kostroma region, and therefore there were no prerequisites for
further investment preparations in that region. The survey on new location has
progressed well, and there are many possible sites in the areas west of Ural.”
- ”The investment projects related to development of Russian forest industry
have generally progressed slower than expected by the Russian Federation. The
main challenge for large-scale forest industry investments is to guarantee the
availability of wood raw material, and thereby the harvesting rights, as well as
to ensure the development of logistical infrastructure.”
- ”The first quarter was good in the House Building segment; in the Sawmill
Business profitability was lower due to general market conditions of the
sector.”
- ”The comparable first quarter revenue was at the previous year's level, and
profitability as measured by earnings before interest and taxes was lower than
last year's due to expenses related to Russian investment projects and the
declined profitability of the Sawmill Business segment.”
RUUKKI GROUP PLC: INTERIM REPORT, 1 JANUARY - 31 MARCH 2008
SUMMARY OF FINANCIAL PERFORMANCE
Ruukki Group's consolidated revenue 1-3/2008 totalled EUR 62.9 million
(1-3/2007: EUR 36.8 million). Revenue growth was 71 %. Comparable revenue for
the first three months of 2008 was approximately 1 % higher.
The business segments accounted for consolidated January-March revenue as
follows, presented as percentage share of total revenue: Sawmill Business 35 %
(34 %), Furniture Business 33 % (13 %), House Building 23 % (38 %), and Care
Services 8 % (10 %).
Approximately 47 % (1-3/2007: 30 %) of revenue were for exports.
The operating profit (EBIT) for the review period was EUR 1.5 million (1-3/2007:
EUR 2.1 million), or 2.3 % (5.8 %) of revenue. The comparable operating profit
was about EUR 0.2 million (EUR 2.1 million) when taking into account the effect
of corporate restructurings.
During the review period altogether EUR 2.5 million expenses related to Russian
investment projects and their preparation were recognised. These expenses
include EUR 0.7 million impairment on Kostroma investment projects previously
capitalised costs. During the financial year 2007 total expenses on Kostroma
investment projects' preparations were EUR 0.9 million during January - March,
and approximately EUR 3.5 million for the full financial year.
CHANGE IN SEGMENT REPORTING
Due to cancellation of the Kostroma investment project and taking into account
the ongoing surveys on new investment opportunities in Russia, the Board of
Directors of Ruukki Group Plc has decided to change the Group's segment
structure starting from 1 January 2008 so that investments either planned or
implemented in Russia will form a separate segment called Investment Projects.
All other business than the Investment Projects will be referred to as ongoing
business. Every business belonging to the Investment Projects segment will be
moved into the applicable segment of the ongoing business as from the date when
the industrial production or service start-up occurs. The aim of this change in
reporting structure is to increase the precision of investor information.
Previous year's financial information has retroactively been presented according
to the new structure.
Consequently, the reporting segments are from the beginning of 2008 the
following:
- Sawmill Business
- Furniture Business
- House Building
- Care Services
- Investment Projects
Group management, other subsidiaries and associated companies are presented
separately as Other Operations.
Ruukki Group has been evaluating potential structural changes in House Building
and Care Services. As regards House Building segment, surveys have been
discontinued and as of now no structural changes are expected to be implemented.
For the Care Services segment the evaluation is still ongoing.
GROUP STRATEGY AND GUIDANCE FOR 2008
Ruukki Group's strategic aim is to concentrate on wood processing within the
Northern coniferous wood zone. Group business operations will be focused on
mechanical wood processing, and furthermore on pulp business. The target is to
reach revenue of over EUR one billion by the first half of the 2010 decade, and
the Group EBIT percentage should be in excess of the average profitability
within the same industry.
The Group's ongoing business operations excluding the Investment Projects
segment are expected to generate consolidated revenue that will be about 20 % in
excess of the 2007 level. Correspondingly, Group's earnings before interest and
taxes (EBIT), as measured in EUR, is expected to be at par with previous year's
comparable EBIT when excluding Investment Projects segment and any potential
changes in the Group structure. These guidances are based on forecasts made by
the Group's and subsidiaries' management, market prognosis in various industries
and the Group order book at the end of first quarter. Furthermore, the guidance
is valid for the current Group structure, which is assumed to be unchanged
during the full year 2008. The Company has decided that no guidance is given for
profit before taxes of the full financial year, since it is not applicable to
the new segment structure, and hence the previously given guidance for the
profit before taxes of financial year 2008 is no longer valid.
GROUP KEY FIGURES (EUR MILLION)
--------------------------------------------------------------------------------
| | Q1/2008 | Q1/2007 | 2007 |
--------------------------------------------------------------------------------
| | 3 months / | 3 months / | 12 months / |
| | 31 Mar 2008 | 31 Mar 2007 | 31 Dec 2007 |
--------------------------------------------------------------------------------
| Revenue | 62.9 | 36.8 | 213,9 |
--------------------------------------------------------------------------------
| Operating profit (EBIT) | 1.5 | 2.1 | 15.7 |
--------------------------------------------------------------------------------
| % of revenue | 2.3 % | 5.8 % | 7.3 % |
--------------------------------------------------------------------------------
| Earnings before taxes | 4.1 | 2.0 | 19.2 |
--------------------------------------------------------------------------------
| % of revenue | 6.5 % | 5.4 % | 9.0 % |
--------------------------------------------------------------------------------
| Return on equity, % *) | 2.5 % | 4.9 % | 5.8 % |
--------------------------------------------------------------------------------
| Return on capital employed, % *) | 5.4 % | 11.1 % | 8.8 % |
--------------------------------------------------------------------------------
| Equity ratio, % | 76.5 % | 47.2 % | 85.1 % |
--------------------------------------------------------------------------------
| Earnings per share, undiluted, | 0.01 | 0.00 | 0.06 |
| EUR | | | |
--------------------------------------------------------------------------------
| Earnings per share, diluted, EUR | 0.01 | 0.00 | 0.06 |
--------------------------------------------------------------------------------
| Equity per share, EUR | 1.37 | 0.43 | 1.41 |
--------------------------------------------------------------------------------
| Average number of shares, | 290,034 | 137,871 | 217,889 |
| undiluted (1,000) | | | |
--------------------------------------------------------------------------------
| Average number of shares, diluted | 300,084 | 142,336 | 221,432 |
| (1,000) | | | |
--------------------------------------------------------------------------------
| Number of shares outstanding, end | 290,034 | 139,616 | 290,034 |
| of period (1,000) | | | |
--------------------------------------------------------------------------------
*) when three month's financial figures have been annualised
KEY EVENTS DURING AND AFTER THE FIRST QUARTER (1 JAN - 31 MAR 2008)
In January 2008 Ruukki Group acquired a majority interest in Junnikkala Oy and
the group it forms. Junnikkala group practices sawmill business in Kalajoki,
Ostrobothnia, and its subsidiary Juneropt Oy specialises in further processing
of sawn wood targeted especially for prefabricated housing business. As a result
of these arrangements, the annual production capacity of Ruukki Group's Sawmill
Business will increase immediately from approximately 200,000 cubic meters to
nearly 400,000 cubic meters, and by 2010 the total capacity is to reach 500,000
cubic meters level. At the end of the reporting period Junnikkala Oy acquired
from third parties 25 % of its subsidiary Juneropt Oy by a cash consideration of
approximately EUR 0.5 million. After the transaction Junnikkala Oy has owned all
the shares in Juneropt Oy.
During the first quarter of 2008 it appeared to Ruukki Group that the Kostroma
region will not advocate the priority investor status for the Company's sawmill
and pulp mill projects. Since prerequisites for planning and implementation of
the investments in the Kostroma region no longer exists, Ruukki Group decided to
cancel all the preparations and implementation of the Kostroma investment
projects. Furthermore, the Company decided to initiate legal assessment and
related legal processes on the decisions and actions by the Kostroma Oblast and
the negligences of its obligations. Company expects that first legal claims will
be filed by the end of May.
DEVELOPMENT BY BUSINESS SEGMENT
SAWMILL BUSINESS
The Sawmill Business segment specialises in the efficient processing of softwood
logs from Northern Finland into various timber products for both domestic and
export markets. The construction industry forms the business area's main
customer group in both Finland and elsewhere, because the Group's products are
very well suited to house building thanks to their strength properties.
Starting from this interim report all expenses related to Russian investment
projects have been excluded from the Sawmill Business segment.
Revenue and operating profit (EBIT) of the Sawmill Business segment:
--------------------------------------------------------------------------------
| EUR million | 1-3/2008 | 1-3/2007 | 1-12/2007 |
--------------------------------------------------------------------------------
| Revenue | 22.2 | 12.6 | 59.4 |
--------------------------------------------------------------------------------
| EBIT | 0.1 | 1.8 | 6.4 |
--------------------------------------------------------------------------------
| EBIT margin, % of revenue | 0.6 % | 14.2 % | 10.8 % |
--------------------------------------------------------------------------------
Quarterly and annual revenue for the Sawmill Business segment as from 1 Jan
2007:
--------------------------------------------------------------------------------
| EUR million | 1-3/200 | 10-12/2 | 7-9/2007 | 4-6/2007 | 1-3/2007 | 1-12/2007 |
| | 8 | 007 | (3 | (3 | (3 | (12 |
| | (3 | (3 | months) | months) | months) | months) |
| | months) | months) | | | | |
--------------------------------------------------------------------------------
| Revenue | 22.2 | 14.4 | 15.8 | 16.6 | 12.6 | 59.4 |
--------------------------------------------------------------------------------
From March 2007 Oplax Oy, which produces wooden pallets, and from February 2008
Junnikkala subgroup have been consolidated into Sawmill Business segment's
figures.
Quarterly and annual EBIT for the Sawmill Business segment as from 1 Jan 2007:
--------------------------------------------------------------------------------
| EUR million | 1-3/2008 | 10-12/200 | 7-9/2007 | 4-6/200 | 1-3/200 | 1-12/200 |
| | (3 | 7 | (3 | 7 | 7 | 7 |
| | months) | (3 | months) | (3 | (3 | (12 |
| | | months) | | months) | months) | months) |
--------------------------------------------------------------------------------
| EBIT | 0.1 | 0.3 | 1.7 | 2.2 | 1.4 | 6.0 |
| excluding | | | | | | |
| one-off | | | | | | |
| items | | | | | | |
--------------------------------------------------------------------------------
| EBIT, | 0.0 | 0.0 | 0.0 | 0.0 | 0.4 | 0.4 |
| one-off | | | | | | |
| items * | | | | | | |
--------------------------------------------------------------------------------
| Total EBIT | 0.1 | 0.3 | 1.7 | 2.2 | 1.8 | 6.4 |
--------------------------------------------------------------------------------
* the realised insurance compensation, totalling EUR 0.4 million, that was
received in Q1/2007 has been presented as a one-off item above
The volume in cubic meters of sawn wood production (excluding pallet
production):
--------------------------------------------------------------------------------
| | 1-3/2008 | 1-3/2007 | 1-12/2007 |
--------------------------------------------------------------------------------
| ‘000 m3 | 71 | 43 | 180 |
--------------------------------------------------------------------------------
In the Sawmill Business segment sawn wood market prices have declined as from
the end of 2007, which as combined with high capital requirements of the
business, and the level of depreciations thereby, has in its part contributed to
the clear deterioration of relative profitability compared to previous financial
year. The stumpage prices of raw material and related transportation costs have
not decreased to the extent that sales prices have trended down. Market demand
has decreased, and the levels of finished goods inventories have gone up.
During the first quarter the majority in Junnikkala group was acquired, which
has considerably increased segment's revenue from February onwards. The segment
has set a target to utilise more than previously opportunities for intra-group
synergies in purchases, sales and other operations. At the end of March 2008 the
Sawmill Business segment employed a total of 230 employees (31 Mar 2007: 112).
FURNITURE BUSINESS
The Furniture Business segment manufactures wooden, ready-to-assemble furniture
operating mainly as a contract manufacturer for large global furniture chains.
Revenue and operating profit (EBIT) of the Furniture Business segment:
--------------------------------------------------------------------------------
| EUR million | 1-3/2008 | 1-3/2007 | 1-12/2007 |
--------------------------------------------------------------------------------
| Revenue | 21.1 | 5.0 | 68.7 |
--------------------------------------------------------------------------------
| EBIT | 1.6 | -1.2 | 2.6 |
--------------------------------------------------------------------------------
| EBIT margin, % of revenue | 7.4 % | -24.4 % | 3.8 % |
--------------------------------------------------------------------------------
Quarterly and annual revenue for the Furniture Business segment as from 1 Jan
2007 (as subsidiary from 1 Mar 2007):
--------------------------------------------------------------------------------
| EUR million | 1-3/200 | 10-12/2 | 7-9/2007 | 4-6/2007 | 1-3/2007 | 1-12/2007 |
| | 8 | 007 | (3 | (3 | (3 | (12 |
| | (3 | (3 | months) | months) | months) | months) |
| | months) | months) | | | | |
--------------------------------------------------------------------------------
| Revenue | 21.1 | 25.7 | 19.2 | 19.5 | 5.0 | 68.7 |
--------------------------------------------------------------------------------
Quarterly and annual EBIT for the Furniture Business segment as from 1 Jan 2007
(as subsidiary from 1 Mar 2007):
--------------------------------------------------------------------------------
| EUR million | 1-3/200 | 10-12/2 | 7-9/2007 | 4-6/2007 | 1-3/2007 | 1-12/2007 |
| | 8 | 007 | (3 | (3 | (3 | (12 |
| | (3 | (3 | months) | months) | months) | months) |
| | months) | months) | | | | |
--------------------------------------------------------------------------------
| EBIT | 0.7 | 0.8 | -1.0 | -0.2 | -1.2 | -1.6 |
| excluding | | | | | | |
| one-off | | | | | | |
| items | | | | | | |
--------------------------------------------------------------------------------
| EBIT, | 0.9 | 2.3 | 2.0 | 0.0 | 0.0 | 4.3 |
| one-off | | | | | | |
| items * | | | | | | |
--------------------------------------------------------------------------------
| Total EBIT | 1.6 | 3.1 | 1.0 | -0.2 | -1.2 | 2.6 |
--------------------------------------------------------------------------------
* the following items related to mill fire have been presented as one-off items:
in Q1/2008 about EUR 0.9 million insurance compensation, and in financial year
2007 altogether EUR 5.4 million insurance compensation and EUR 1.1 million
impairment
The operating profitability of the first quarter 2008 excluding one-off items
has been positive and liquidity of the subgroup has been better than previously.
There were totally 310 employees employed by the segment at the end of March
2008 (31 Mar 2007: 311).
HOUSE BUILDING
The house building business area specialises in the design, manufacture and
assembly of ready-to-move-in detached wooden houses in the whole of Finland. The
business area's customers are Finnish families and private persons.
The House Building business area has delivered wooden ready-to-move-in houses to
customers as follows:
--------------------------------------------------------------------------------
| 1-3/2008 | 1-3/2007 | 1-12/2007 |
--------------------------------------------------------------------------------
| 105 | 113 | 473 |
--------------------------------------------------------------------------------
Revenue and operating profit (EBIT) of the House Building segment:
--------------------------------------------------------------------------------
| EUR million | 1-3/2008 | 1-3/2007 | 1-12/2007 |
--------------------------------------------------------------------------------
| Revenue | 14.2 | 14.0 | 62.4 |
--------------------------------------------------------------------------------
| EBIT | 2.8 | 2.6 | 13.3 |
--------------------------------------------------------------------------------
| EBIT margin, % of revenue | 19.8 % | 18.3 % | 21.4 % |
--------------------------------------------------------------------------------
The revenue from ready-to-move-in houses delivered by the business area is
recognised upon delivery to the customer, for which reason sites in progress
have no effect on the Group's revenue or profit. The first quarter business was
at the same level as during the first quarter of the previous year. There were
totally 121 employees employed by the segment at the end of March 2008 (31 Mar
2007: 114).
Ruukki Group has been evaluating potential structural changes in House Building
and Care Services. As regards House Building segment, surveys have been
discontinued and as of now no structural changes are expected to be implemented.
CARE SERVICES
The Care Services business area provides high-quality care and rehabilitation
services for municipalities, cities, communities and businesses.
Revenue and operating profit (EBIT) of the Care Services segment:
--------------------------------------------------------------------------------
| EUR million | 1-3/2008 | 1-3/2007 | 1-12/2007 |
--------------------------------------------------------------------------------
| Revenue | 5.0 | 3.9 | 16.8 |
--------------------------------------------------------------------------------
| EBIT | 0.5 | 0.2 | 0.3 |
--------------------------------------------------------------------------------
| EBIT margin, % of revenue | 10.3 % | 4.9 % | 1.6 % |
--------------------------------------------------------------------------------
During the review period segment's business was steady. There were totally 347
employees employed by the segment at the end of March 2008 (31 Mar 2007: 280).
The business area has service units in 21 locations, and the combined number of
these units' customers was about 550 at end of the review period.
Ruukki Group has been evaluating potential structural changes in House Building
and Care Services. For the Care Services segment the evaluation is still
ongoing.
INVESTMENT PROJECTS
The preparations of the Russian investment projects are continued with a target
of a modern integrated industrial facility operating in mechanical wood
processing and pulp business. Besides the investments being planned and
partially being implemented in Kostroma, Ruukki Group's investigations that have
been going on in other areas of the Russian Federation have been continued and
strengthened with a target to carry out the planned forest industry integrate in
some other area. Ruukki Group aims to invest into a sawmill with an annual
capacity of 300,000 - 500,000 cubic meters and into a chemical pulp mill of
600,000 - 800,000 Adt/a capacity. The final technical concept of the forest
industry integrate will be depending e.g. on the available wood resources'
species and quality distribution. The emphasis on the ongoing investigations is
on the European direction from the Ural. There are major uncertainties as to the
results, timetables, expenses, technical and financial concepts and other
details that can to substantial extent affect how the Group's Russian strategy
will be carried out.
Quarterly and annual EBIT for the Investment Projects segment as from 1 Jan
2007:
--------------------------------------------------------------------------------
| EUR million | 1-3/200 | 10-12/2 | 7-9/2007 | 4-6/2007 | 1-3/2007 | 1-12/2007 |
| | 8 | 007 | (3 | (3 | (3 | (12 |
| | (3 | (3 | months) | months) | months) | months) |
| | months) | months) | | | | |
--------------------------------------------------------------------------------
| EBIT | -1,8 | -0,8 | -0,3 | -1,5 | -0,9 | -3,5 |
| excluding | | | | | | |
| one-off | | | | | | |
| items | | | | | | |
--------------------------------------------------------------------------------
| EBIT, | -0,7 | 0,0 | 0,0 | 0,0 | 0,0 | 0,0 |
| one-off | | | | | | |
| items * | | | | | | |
--------------------------------------------------------------------------------
| Total EBIT | -2,5 | -0,8 | -0,3 | -1,5 | -0,9 | -3,5 |
--------------------------------------------------------------------------------
* the one-off items above consist of EUR 0.7 million impairment on previously
capitalised expenses due to the decision to cancel the implementation of
Kostroma investment projects
Despite the decision to abort the Kostroma projects' implementation, Ruukki
Group will purchase the sawmill machinery and equipment, originally designated
for the Kostroma sawmill. This machinery and equipment, which will be
temporarily warehoused, has a total purchase value of approximately EUR 18
million excluding value added taxes. Moreover, the Group will continue its work
on planning and pre-engineering of the sawmill and pulp mill to that extent that
the work is applicable to implementing the forest industry integrate in some
other location in Russia.
OTHER OPERATIONS
As part of the strategy to focus on wood-based industrial businesses, Ruukki
Group sold in January 2008 all shares of its metal industry subsidiary Pan-Oston
Oy in an all-cash transaction. A gain on disposal totalling about EUR 0.7
million was recognised on the transaction. Of the revenue not recognised in
separately reported segment majority relates to the Group's Metal Industry
subgroup. Associated companies have been consolidated in the consolidated
financial statements by applying the equity method. The income from associates
was about EUR 0.2 million in the Group income statement for the first quarter of
2008.
OUTLOOK FOR THE FUTURE
Ruukki Group's strategic aim is to concentrate on wood processing within the
Northern coniferous wood zone. Group business operations will be focused on
mechanical wood processing, and furthermore on pulp business. The target is to
reach revenue of over EUR one billion by the first half of the 2010 decade, and
the Group EBIT percentage should be in excess of the average profitability
within the same industry.
The Group's business operations excluding the Investment Projects segment are
expected to generate consolidated revenue that will be about 20 % in excess of
the 2007 level. Correspondingly, Group's earnings before interest and taxes
(EBIT), as measured in EUR, is expected to be at par with previous year's
comparable EBIT when excluding Investment Projects segment and any potential
changes in group structure. These guidances are based on forecasts by the
Group's and subsidiaries' management, market prognosis in various industries and
the Group order book at the end of first quarter. Furthermore, the guidance is
valid for the current Group structure, which is assumed to be unchanged during
the full year 2008. The Company has decided that no guidance is given for profit
before taxes of the full financial year, since it is not applicable to the new
segment structure, and hence the previously given guidance for the profit before
taxes of financial year 2008 is no longer valid.
Future outlook for each segment's market
Market development in sawmill sector
In case the production volume in house building market declines in the future it
is expected to have negative effect on the deliveries of sawn wood and further
processed products into construction and roof truss industry customers both in
Finland and in export markets.
Referring to the statements by e.g. Finnish Forest Industries Federation, it is
predicted that there will be challenges as to the availability of wood raw
material; this situation is partially underlined by increases in the Russian
roundwood export duties.
It seems to be that the total forest industry capacity in Finland will decrease
further.
Side products, particularly chips, sales affect the profitability of sawmill
sector, which can be negatively affected by close-downs in Finnish pulp
business.
Specialisation and potentially increase in the processing rate in the sector can
be preconditions for adjusting for the market changes.
Raw material prices do not seem to be going down at the same rate as the sales
prices; consequently, the relative profitability in the sector is for the time
being expected to be below 2007 level.
Market development in furniture sector
In general the demand for furniture and interior design on a larger scale has
been significantly growing, but macroeconomic growth slowdown, hikes in
inflation and potential changes in interior design trends can make the
short-term development more difficult, and hence the relative competitiveness
various furniture products can be affected.
For the short-term, the general sector outlook remains fairly stable.
Market development in house building sector
The delivery volumes in the Finnish detached family house sector is expected to
decline from the second half 2008 onwards.
Competition in the house building sector, especially in the ready-to-move-in
market, is predicted to increase due to high capacity level in the sector, which
can affect both the level of marketing expenses and the average unit sales
prices.
The future development of inflation, interest rates and consumer confidence can
further lower the total amount of new sales, even though regional differences
can be substantial.
Market development in care services sector
The bidding competitions and service outsourcing from the public sector to
private operators offer good growth opportunities for the field, particularly in
elderly care and mental health services.
The consolidation in the sector can start soon, which could affect the
competitive position of various units in the sector.
Availability of competent workforce and rise in personnel costs due to given
material rises in salaries are factors that can slow down growth in the field
and affect the short-term profitability.
RISKS RELATED TO OPERATIONS, CHANGES DURING AND AFTER THE REVIEW PERIOD
The preconditions for implementing the planned Kostroma investment projects
changed significantly at the end of February and beginning of March. Therefore
the uncertainties related to the Russian investment projects and their
timetables have considerable increased after the announcement of the 2007
financial statements review even though new locations might provide better
technical and financial conditions and terms than what the Manturovo site in
Kostroma region had. During the review period euro has appreciated against for
example US dollar and rouble, which has weakened the short-term competiveness of
export operations and has lowered the effective yield on rouble-denominated
deposits. The coming surveys and preparatory work on Russian business
opportunities can significantly affect the level of Group's total expenses.
Moreover, it is possible that the investments already made cannot fully be
utilised or that the Group might needs to make additional investments depending
on the future model how the projects will be carried out. If the global sawn
wood and pulp markets, Russian inflation, exchange rates, global prices on
construction materials or any other similar macroeconomic parameter develop
unfavourably for the Group, the profitability on Russian investment projects can
be lower than currently anticipated. Moreover, there might be fundamental
changes in the global competitive environment in the forest industry. In case
the generally prevailing challenging situation in the international financial
markets, partially caused by the so-called subprime crisis, continues that can
have negative effect on the capital structure, as well as on availability and
pricing of the financing for the planned Russian investments or for any other
ongoing production investments.
Potential delays, caused by external market or other factors, affecting business
segments' production, procurement or deliveries can have negative impact on the
estimated full year revenue and earnings. Despite these factors might not affect
the total volumes, the timing of revenue or cost recognition can be altered
thereby. In addition, any potential swift and unexpected changes in demand,
costs of input materials, market or other factors affecting the financial
results, can, if realised, have either directly or indirectly negative effects
on Group's revenue or profit.
In the House Building segment's operations, there are short-term risks on
strongly falling demand and intensification of competition, including also
decline in average sales price per unit, which can decrease the market share and
delivery volume of the group's House Building segment.
The market environment of the Sawmill Business segment is typically cyclical,
and currently the sector is adjusting its operations for the quick and strong
decline in demand from the last year's peak in the cycle and in the market
prices. There have been announcements in the sector of declines in capacity
utilisation rates, and if the raw material prices and availability and/or
end-product prices in the sector do not level off or develop favourably, the
profitability of Group's Sawmill Business segment can lag behind the expected
level. The inventories in the sector have been increasing, and in case market
adjustments are realised by declines in sales prices, there are risks of
potential impairment in the future.
It is expected that the short-term development in the Group's Furniture Business
segment is stable; the potential changes in raw material prices will be
reflected in sales prices. If main customer groups or customers' markets would
suffer from lower demand that can decrease the segment's volume, which might
have adverse effect on the profitability especially during the latter half of
2008.
CHANGES IN PLEDGES AND CONTINGENT LIABILITIES DURING AND AFTER THE REVIEW PERIOD
During the review period 1-3/2008, Group's interest-bearing debt has increased
by a total of about EUR 15.0 million. The interest-bearing debt balance at 31
March 2008 totalled EUR 54.9 million of which EUR 17.4 million was short-term
debt and EUR 37.5 million long-term debt. On 31 March 2008, the Group companies
had given company pledges as collateral for loans and other liabilities
totalling approximately EUR 22.3 million (EUR 13.3 million on 31 Dec 2007). The
total amount of property pledges is approximately EUR 20.7 million (EUR 11.1
million on 31 Dec 2007). Moreover, group companies have pledged machinery as
collateral for machinery and equipment purchases; these machinery pledges have
increased by about EUR 4.4 million during the first quarter of 2008. The group's
parent company has given a total of EUR 4.5 million in direct-liability
guarantees for the financing of group companies (EUR 5.0 million on 31 Dec
2007). The amount of debt and guarantees given has increased to major extent due
to the acquisition of Junnikkala subgroup.
The total commitments at the end of the review period related to rental
agreements made by the Group have increased by about EUR 5.0 million compared to
31 December 2007, which is mainly based on the expansion of the Care Services
business segment.
On 31 March 2008, the net worth of forward exchange rate agreements' nominal
value totalled about EUR 11.2 million (EUR 0.9 million on 31 Dec 2007), and the
related unrealised exchange rate gain was about EUR 0.1 million (on 31 Dec 2007:
EUR 0.0 million).
The total irrevocable contingent liabilities on Ruukki Group's Russian sawmill
and pulp mill projects is about EUR 12 million, of which the majority relates to
the machinery and equipment of the sawmill planned to be constructed in Russia.
The previously mentioned liabilities, mainly based on fixed asset purchases are
expected to be realised fully within the financial year 2008 with the majority
of cash flows occurring during the second quarter. In addition to the previously
described contingent liabilities, the machinery purchases and design work for
the Russian sawmill and pulp mill, excluding administrative and other survey
expenses, have generated a total of EUR 9 million fixed assets under
construction into the consolidated balance sheet at the end of the review
period. The sawmill machinery and equipment will be purchased even though the
implementation of the Kostroma investment projects was cancelled. Consequently,
the Group will temporarily warehouse the equipment with the purpose of placing
it into other sawmill project in Russia to be carried out later. The exact
amount of expenses for transportation and warehousing, as well as the potential
additional investment needs or impairment, are depending on the warehousing
period and other uncertain factors, but group assesses that in the short-term no
sizable extraordinary expenses shall be recognised.
MOST SIGNIFICANT RELATED PARTY TRANSACTIONS
Personnel expenses, excluding the related social expenses, for Ruukki Group
Plc's Board of Directors and top management, including incentive schemes' option
and other expenses, totalled about EUR 0.6 million for the period 1-3/2008
(during 1-3/2007 correspondingly about EUR 0.1 million).
The group's parent company has paid a total of EUR 1.3 million in dividends
(during previous year EUR 1.7 million) to related parties based on the dividend
payout decision by Annual General Meeting on 31 March 2008. Furthermore, group
companies paid about EUR 0.2 million dividends to the related parties that are
minority shareholders of those companies.
The Group's parent company has loan and other receivables from persons belonging
to Group management, from entities controlled by those persons, totalling
approximately EUR 1.6 million, of which the major part is related to the loan
given for the Group's chief executive officer based on his incentive scheme.
During the review period Group's parent company made EUR 10.0 million short-term
deposit where the counterparty was a company controlled by a related party. The
capital and accrued interest has been fully repaid during the review period.
PENDING LEGAL AND ADMINISTRATIVE PROCESSES
The claims by Ruukki Group Plc towards Rautaruukki Plc on the use of Ruukki name
have been dismissed by the Helsinki Court of Appeal in October 2007 and by the
Market Court in February 2008.
In various group companies there are unfinished administrative processes related
to taxation; e.g. partially the group companies have only been given preliminary
tax inspection reports. The final result of these processes, which might be
settled only after long time period, can have adverse effect on Group's
financial position if these processes cause expenses, additional taxes or other
detrimental ramifications.
Due to the premature cancellation of the Kostroma investment projects the Group
has decided to start legal processes against Kostroma region's administration
during the second quarter of 2008.
CHANGES IN THE NUMBER OF SHARES AND SHARE CAPITAL IN 2008
There have been no changes in the number of shares and share capital during
2008.
At 31 March 2008, 31 December 2007 and 31 March 2007 neither Ruukki Group Plc
nor any of its subsidiaries held any Ruukki Group shares. Ruukki Group Plc's
Board of Directors has authorisation, given by the Annual General Meeting of 31
March 2008, to acquire own shares and to transfer the acquired shares up to
10,000,000 shares. This authorisation is valid until 31 March 2009.
On 31 March 2008, the number of registered Ruukki Group Plc shares totalled
290,034,022. The maximum dilution effect of the company's I/2005 option program
is 2,700,000 shares. Of these option rights 675,000 have been granted to the
group management, and of these granted options 225,000 entitle their holders to
exercise the options. The maximum dilution effect of the option rights related
to the share-based incentive scheme 2007, decided by the Board of Directors in
December 2007, is 7,350,000 shares, and moreover according to that scheme the
Board can issue new shares to be subscribed by persons belonging to the scheme.
So far the Board has not made any decisions on granting these options or shares.
Ruukki Group Plc's Board of Directors has authorisation, given by the Annual
General Meeting of 31 March 2008, to issue own shares or special rights to
shares up to 50,000,000 shares. This authorisation is valid until 31 March 2009.
SHAREHOLDERS
On 30 April 2008, the company had a total of 4,173 shareholders, of which 9 were
nominee-registered. The number of shares in issue on 30 April 2008 was
290,034,022.
Largest shareholders, 30 April 2008:
--------------------------------------------------------------------------------
| | Shareholder | Shares | % |
--------------------------------------------------------------------------------
| 1 | Nordea Bank Finland Plc, nominee-registered | 87,128,926 | 30.0 |
--------------------------------------------------------------------------------
| 2 | Nordea Bank Finland Plc | 69,161,100 | 23.8 |
--------------------------------------------------------------------------------
| 3 | Skandinaviska Enskilda Banken, | 37,093,380 | 12.8 |
| | nominee-registered | | |
--------------------------------------------------------------------------------
| 4 | Danske Bank AS Helsinki Branch | 26,994,000 | 9.3 |
--------------------------------------------------------------------------------
| 5 | Evli Bank Plc | 12,351,657 | 4.3 |
--------------------------------------------------------------------------------
| 6 | Kankaala Markku | 9,698,890 | 3.3 |
--------------------------------------------------------------------------------
| 7 | Oy Herttakakkonen Ab | 6,439,827 | 2.2 |
--------------------------------------------------------------------------------
| 8 | Hukkanen Esa | 5,010,100 | 1.7 |
--------------------------------------------------------------------------------
| 9 | Oy Herttaässä Ab | 4,635,410 | 1.6 |
--------------------------------------------------------------------------------
| 10 | Glitnir Plc | 3,644,000 | 1.3 |
--------------------------------------------------------------------------------
| | Subtotal | 262,157,290 | 90.4 |
--------------------------------------------------------------------------------
| | Other shareholders total | 27,876,732 | 9.6 |
--------------------------------------------------------------------------------
| | Total shares registered | 290,034,022 | 100.0 |
--------------------------------------------------------------------------------
COMPANY'S SHARE
Ruukki Group Plc's share (RUG1V) is listed on the Helsinki Stock Exchange. The
company's share is quoted on the OMX Nordic Exchange Helsinki under Mid Cap
segment and in the Industrial Products and Services subgroup.
CHANGES IN SHARE PRICE DURING THE REVIEW PERIOD
During the first quarter of 2008, the price of Ruukki Group's share varied
between EUR 1.59 (1-3/2007: 1.18) and EUR 2.99 (1.99). A total of 128,584,021
(50,510,586) Ruukki Group shares were traded in the review period, representing
44.3 % (36.1 %) of all shares registered at the end of the quarter. The closing
price of the company's share on 31 March was EUR 2.28 (1.75). The market
capitalisation of the Group's entire capital stock at the closing price on 31
March was EUR 661.3 million (244.3).
FINANCIAL TABLES
FINANCIAL DEVELOPMENT BY SEGMENT, SUMMARY (EUR MILLION)
--------------------------------------------------------------------------------
| EUR MILLION | Revenue | Revenue | Revenue |
| | 1-3/2008 | 1-3/2007 | 1-12/2007 |
--------------------------------------------------------------------------------
| Sawmill Business | 22.2 | 12.6 | 59.4 |
--------------------------------------------------------------------------------
| Furniture Business | 21.1 | 5.0 | 68.7 |
--------------------------------------------------------------------------------
| House Building | 14.2 | 14.0 | 62.4 |
--------------------------------------------------------------------------------
| Care Services | 5.0 | 3.9 | 16.8 |
--------------------------------------------------------------------------------
| Investment Projects | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Other Operations | 0.9 | 1.9 | 8.7 |
--------------------------------------------------------------------------------
| Eliminations and | -0.5 | -0.5 | -2.1 |
| unallocated items | | | |
--------------------------------------------------------------------------------
| Group total | 62.9 | 36.8 | 213.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR MILLION | EBIT | EBIT | EBIT |
| | 1-3/2008 | 1-3/2007 | 1-12/2007 |
--------------------------------------------------------------------------------
| Sawmill Business | 0.1 | 1.8 | 6.4 |
--------------------------------------------------------------------------------
| Furniture Business | 1.6 | -1.2 | 2.6 |
--------------------------------------------------------------------------------
| House Building | 2.8 | 2.6 | 13.3 |
--------------------------------------------------------------------------------
| Care Services | 0.5 | 0.2 | 0.3 |
--------------------------------------------------------------------------------
| Investment Projects | -2.5 | -0.9 | -3.5 |
--------------------------------------------------------------------------------
| Other Operations | -0.9 | -0.2 | -3.9 |
--------------------------------------------------------------------------------
| Eliminations and | -0.2 | -0.1 | 0.5 |
| unallocated items | | | |
--------------------------------------------------------------------------------
| Group total | 1.5 | 2.1 | 15.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| % | EBIT margin | EBIT margin | EBIT margin |
| | 1-3/2008 | 1-3/2007 | 1-12/2007 |
--------------------------------------------------------------------------------
| Sawmill Business | 0.6 % | 14.2 % | 10.8 % |
--------------------------------------------------------------------------------
| Furniture Business | 7.4 % | -24.4 % | 3.8 % |
--------------------------------------------------------------------------------
| House Building | 19.8 % | 18.3 % | 21.4 % |
--------------------------------------------------------------------------------
| Care Services | 10.3 % | 4.9 % | 1.6 % |
--------------------------------------------------------------------------------
| Group total | 2.3 % | 5.8 % | 7.3 % |
--------------------------------------------------------------------------------
GOODWILL BY SEGMENT, EUR MILLION
--------------------------------------------------------------------------------
| | 31 Mar | % | 31 Mar | % | 31 Dec | % |
| | 2008 | | 2007 | | 2007 | |
--------------------------------------------------------------------------------
| Sawmill Business | 16.1 | 37 % | 6.2 | 18 % | 6.6 | 19 % |
--------------------------------------------------------------------------------
| Furniture | 1.7 | 4 % | 1.8 | 5 % | 1.7 | 5 % |
| Business | | | | | | |
--------------------------------------------------------------------------------
| House Building | 19.5 | 45 % | 19.3 | 56 % | 19.5 | 56 % |
--------------------------------------------------------------------------------
| Care Services | 5.7 | 13 % | 5.7 | 17 % | 5.7 | 16 % |
--------------------------------------------------------------------------------
| Investment | 0.0 | 0 % | 0.0 | 0 % | 0.0 | 0 % |
| Projects | | | | | | |
--------------------------------------------------------------------------------
| Other Operations | 0.0 | 0 % | 1.5 | 4 % | 1.4 | 4 % |
--------------------------------------------------------------------------------
| Group total | 43.0 | 100 % | 34.5 | 100 % | 34.9 | 100 % |
--------------------------------------------------------------------------------
CONSOLIDATED INCOME STATEMENT SUMMARY, EUR THOUSAND
--------------------------------------------------------------------------------
| 1,000 EUR | 1 Jan - 31 | 1 Jan - 31 | 1 Jan - 31 |
| | Mar 2008 | Mar 2007 | Dec 2007 |
--------------------------------------------------------------------------------
| | 3 months | 3 months | 12 months |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Revenue | 62,932 | 36,792 | 213,910 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other operating income | 1,724 | 500 | 6,874 |
--------------------------------------------------------------------------------
| Operating expenses | -59,858 | -33,062 | -195,431 |
--------------------------------------------------------------------------------
| Depreciation and amortisation | -2,772 | -1,372 | -8,022 |
--------------------------------------------------------------------------------
| Income from associates | 180 | -737 | -623 |
--------------------------------------------------------------------------------
| Impairment | -741 | 0 | -1,034 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 1,465 | 2,122 | 15,674 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial income and expense | 2,620 | -117 | 3,484 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit before tax | 4,085 | 2,005 | 19,158 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income tax | -1,498 | -1,261 | -5,478 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net profit | 2,587 | 743 | 13,680 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit attributable to | | | |
--------------------------------------------------------------------------------
| equity shareholders | 2,441 | 504 | 12,651 |
--------------------------------------------------------------------------------
| minority interests | 146 | 239 | 1,030 |
--------------------------------------------------------------------------------
| | 2,587 | 743 | 13,680 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share (counted from profit attributable to equity |
| shareholders): |
--------------------------------------------------------------------------------
| undiluted (EUR) | 0.01 | 0.00 | 0.06 |
--------------------------------------------------------------------------------
| diluted (EUR) | 0.01 | 0.00 | 0.06 |
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET SUMMARY, EUR THOUSAND
--------------------------------------------------------------------------------
| 1,000 EUR | | 31 Mar | 31 Mar | 31 Dec |
| | | 2008 | 2007 | 2007 |
--------------------------------------------------------------------------------
| ASSETS | | | | |
--------------------------------------------------------------------------------
| Non-current assets | | | | |
--------------------------------------------------------------------------------
| Investments and intangible assets | | | |
--------------------------------------------------------------------------------
| Goodwill | | 42,984 | 34,546 | 33,422 |
--------------------------------------------------------------------------------
| Investments in associates | | 1,848 | 1,607 | 1,702 |
--------------------------------------------------------------------------------
| Other intangible assets | | 9,095 | 7,066 | 5,807 |
--------------------------------------------------------------------------------
| Investments and intangible assets total | 53,928 | 43,219 | 40,931 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Property, plant and | | 70,545 | 35,947 | 37,516 |
| equipment | | | | |
--------------------------------------------------------------------------------
| Other non-current assets | | 2,951 | 1,796 | 3,209 |
--------------------------------------------------------------------------------
| Non-current assets total | | 127,423 | 80,962 | 81,656 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | | |
--------------------------------------------------------------------------------
| Inventories | | 40,693 | 29,381 | 29,635 |
--------------------------------------------------------------------------------
| Receivables | | 34,171 | 17,960 | 29,955 |
--------------------------------------------------------------------------------
| Held-to-maturity investments | 198,648 | 0 | 131,212 |
--------------------------------------------------------------------------------
| Other investments | | 5,032 | 5,234 | 176,112 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | | 138,250 | 14,354 | 48,527 |
--------------------------------------------------------------------------------
| Current assets total | | 416,793 | 66,928 | 415,440 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets held for sale | | 0 | 0 | 2,894 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | | 544,216 | 147,890 | 499,990 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | | |
--------------------------------------------------------------------------------
| Shareholders' equity | | | |
--------------------------------------------------------------------------------
| Share capital | | 23,642 | 23,639 | 23,642 |
--------------------------------------------------------------------------------
| Share premium reserve | | 25,740 | 25,735 | 25,740 |
--------------------------------------------------------------------------------
| Revaluation reserve | | 969 | 0 | 969 |
--------------------------------------------------------------------------------
| Paid-up unrestricted | | 0 | 757 | 0 |
| equity reserve | | | | |
--------------------------------------------------------------------------------
| Retained earnings | 340,690 | 424 | 340,690 |
--------------------------------------------------------------------------------
| Shareholders' equity | | 6,823 | 9,782 | 18,614 |
--------------------------------------------------------------------------------
| | 397,864 | 60,336 | 409,655 |
--------------------------------------------------------------------------------
| Minority interest | | | | |
--------------------------------------------------------------------------------
| Total equity | | 9,598 | 1,831 | 1,995 |
--------------------------------------------------------------------------------
| | | 407,462 | 62,166 | 411,650 |
--------------------------------------------------------------------------------
| Liabilities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | 59,512 | 28,775 | 29,188 |
--------------------------------------------------------------------------------
| Current liabilities | | | | |
--------------------------------------------------------------------------------
| Prepayments | | 11,701 | 16,266 | 16,481 |
--------------------------------------------------------------------------------
| Other current liabilities | | 65,541 | 40,683 | 42,086 |
--------------------------------------------------------------------------------
| Current liabilities total | | 77,242 | 56,949 | 58,567 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities classified as | | | | 585 |
| held for sale | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total liabilities | | 136,754 | 85,724 | 88,340 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total equity and | | 544,216 | 147,890 | 499,990 |
| liabilities | | | | |
--------------------------------------------------------------------------------
SUMMARY OF INTEREST-BEARING RECEIVABLES AND LIABILITIES IN THE CONSOLIDATED
BALANCE SHEET, EUR THOUSAND
--------------------------------------------------------------------------------
| 1,000 EUR | | | |
--------------------------------------------------------------------------------
| Interest-bearing | 31 Mar 2008 | 31 Mar 2007 | 31 Dec 2007 |
| receivables | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current | 198,992 | 5,523 | 131,462 |
--------------------------------------------------------------------------------
| Non-current | 1,725 | 338 | 1,986 |
--------------------------------------------------------------------------------
| Interest-bearing | 200,718 | 5,862 | 133,448 |
| receivables, total | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest-bearing | 31 Mar 2008 | 31 Mar 2007 | 31 Dec 2007 |
| liabilities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current | 17,399 | 14,838 | 15,991 |
--------------------------------------------------------------------------------
| Non-current | 37,462 | 20,758 | 23,958 |
--------------------------------------------------------------------------------
| Interest-bearing | 54,860 | 35,596 | 39,949 |
| liabilities, total | | | |
--------------------------------------------------------------------------------
SUMMARY OF GROUP'S PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS, EUR
THOUSAND
--------------------------------------------------------------------------------
| 1,000 EUR | Property, plant | Intangible |
| | and equipment | assets |
--------------------------------------------------------------------------------
| Acquisition cost 1 Jan 2008 | 49,351 | 44,411 |
--------------------------------------------------------------------------------
| Additions | 33,681 | 15,147 |
--------------------------------------------------------------------------------
| Disposals | -197 | -10 |
--------------------------------------------------------------------------------
| Acquisition cost 31 Mar 2008 | 82,835 | 59,548 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Acquisition cost 1 Jan 2007 | 23,412 | 37,847 |
--------------------------------------------------------------------------------
| Additions | 20,223 | 3,430 |
--------------------------------------------------------------------------------
| Disposals | 0 | 0 |
--------------------------------------------------------------------------------
| Acquisition cost 31 Mar 2007 | 45,376 | 45,116 |
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT SUMMARY, EUR THOUSAND
--------------------------------------------------------------------------------
| 1,000 EUR | 1 Jan - | 1 Jan - | 1 Jan - |
| | 31 Mar | 31 Mar 2007 | 31 Dec 2007 |
| | 2008 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from operating | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Net profit attributable to | 2,441 | 743 | 12,651 |
| shareholders | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Adjustments to net profit | 177 | 2,646 | 7,161 |
--------------------------------------------------------------------------------
| Changes in working capital | 3,510 | -2,246 | -14,029 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash from operating activities | 6,128 | 1,144 | 5,783 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from investing | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries and | -12,706 | -5,359 | -6,487 |
| associates | | | |
--------------------------------------------------------------------------------
| Payment of earn-out liabilities and | 0 | -7,054 | -8,358 |
| exercises of call options related | | | |
| to acquisitions | | | |
--------------------------------------------------------------------------------
| Disposal of subsidiaries and | 2,589 | 2,361 | 7,068 |
| associates | | | |
--------------------------------------------------------------------------------
| Capital expenditures and other | -9,807 | -1,844 | -6,336 |
| investing activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash used in investing | -19,924 | -11,896 | -14,113 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from financing | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Share issues | 0 | 0 | 337,608 |
--------------------------------------------------------------------------------
| Dividends paid | -174 | 0 | -5,493 |
--------------------------------------------------------------------------------
| Deposits | -66,833 | 0 | -133,851 |
--------------------------------------------------------------------------------
| Other investments | 173,056 | 0 | -173,360 |
--------------------------------------------------------------------------------
| Interest received, other than | 294 | 0 | 3,940 |
| operations related | | | |
--------------------------------------------------------------------------------
| Proceeds from borrowings | 3,181 | 889 | 10,630 |
--------------------------------------------------------------------------------
| Repayment of borrowings, and other | -6,004 | -840 | -7,386 |
| financing activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash from financing activities | 103,519 | 49 | 32,088 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net increase in cash and cash | 89,723 | -10,703 | 23,758 |
| equivalents | | | |
--------------------------------------------------------------------------------
SUMMARY OF THE CHANGES IN SHAREHOLDERS' EQUITY OF THE GROUP, IN THOUSAND EUROS
--------------------------------------------------------------------------------
| A = Share capital |
--------------------------------------------------------------------------------
| B = Share premium reserve |
--------------------------------------------------------------------------------
| C = Fair value and revaluation reserves |
--------------------------------------------------------------------------------
| D = Paid-up unrestricted equity reserve |
--------------------------------------------------------------------------------
| E = Translation reserve |
--------------------------------------------------------------------------------
| F = Retained earnings |
--------------------------------------------------------------------------------
| G = Equity attributable to shareholders, total |
--------------------------------------------------------------------------------
| H = Minority interest |
--------------------------------------------------------------------------------
| I = Total equity |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1000 EUR | A | B | C | D | E | F | G | H | I |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholder | 23 | 24 | 0 | 424 | 0 | 9 512 | 57 | 1 | 59 |
| s' equity 1 | 018 | 712 | | | | | 665 | 591 | 256 |
| Jan 2007 | | | | | | | | | |
--------------------------------------------------------------------------------
| Net profit | | | | | | 504 | 504 | 239 | 743 |
| 1-3/2007 | | | | | | | | | |
--------------------------------------------------------------------------------
| Conversions | 621 | 1 | | | | | 1 643 | | 1 643 |
| of | | 023 | | | | | | | |
| convertible | | | | | | | | | |
| bonds | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | | | | | | -233 | -233 | | -233 |
| component | | | | | | | | | |
| of | | | | | | | | | |
| convertible | | | | | | | | | |
| bonds and | | | | | | | | | |
| other | | | | | | | | | |
| changes in | | | | | | | | | |
| equity | | | | | | | | | |
--------------------------------------------------------------------------------
| Fair value | | | 757 | | | | 757 | | 757 |
| on | | | | | | | | | |
| acquisition | | | | | | | | | |
| s of | | | | | | | | | |
| subsidiarie | | | | | | | | | |
| s | | | | | | | | | |
--------------------------------------------------------------------------------
| Shareholder | 23 | 25 | 757 | 424 | | 9 783 | 60 | 1 | 62 |
| s' equity | 639 | 735 | | | | | 336 | 831 | 166 |
| 31 Mar 2007 | | | | | | | | | |
--------------------------------------------------------------------------------
| Free | | | | 1 | | | 1 035 | | 1 035 |
| directed | | | | 035 | | | | | |
| issue | | | | | | | | | |
| 4/2007 | | | | | | | | | |
--------------------------------------------------------------------------------
| Share | | | | 339 | | | 339 | | 339 |
| issues 6/ | | | | 232 | | | 232 | | 232 |
| and 7/2007 | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | | -4 | -4 | -1 | -5 |
| distributio | | | | | | 079 | 079 | 142 | 221 |
| n | | | | | | | | | |
--------------------------------------------------------------------------------
| Net profit | | | | | | 12 | 12 | 791 | 12 |
| 4-12/2007 | | | | | | 147 | 147 | | 937 |
--------------------------------------------------------------------------------
| Translation | | | | | -1 | | -1 | | -1 |
| difference | | | | | 080 | | 080 | | 080 |
--------------------------------------------------------------------------------
| Conversions | 3 | 6 | | | | | 9 | | 9 |
| of | | | | | | | | | |
| convertible | | | | | | | | | |
| bonds | | | | | | | | | |
--------------------------------------------------------------------------------
| Fair value | | | 212 | | | 1 000 | 1 212 | | 1 212 |
| on | | | | | | | | | |
| acquisition | | | | | | | | | |
| s of | | | | | | | | | |
| subsidiarie | | | | | | | | | |
| s | | | | | | | | | |
--------------------------------------------------------------------------------
| Share-based | | | | | | 576 | 576 | | 576 |
| payments | | | | | | | | | |
--------------------------------------------------------------------------------
| Net change | | | | | | | 0 | 516 | 516 |
| in minority | | | | | | | | | |
| interests | | | | | | | | | |
| generated | | | | | | | | | |
| by | | | | | | | | | |
| acquisition | | | | | | | | | |
| s and | | | | | | | | | |
| disposals | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | | | | | | 267 | 267 | | 267 |
| component | | | | | | | | | |
| of | | | | | | | | | |
| convertible | | | | | | | | | |
| bonds and | | | | | | | | | |
| other | | | | | | | | | |
| changes in | | | | | | | | | |
| equity | | | | | | | | | |
--------------------------------------------------------------------------------
| Shareholder | 23 | 25 | 969 | 340 | -1 | 19 | 409 | 1 | 411 |
| s' equity | 642 | 740 | | 690 | 080 | 694 | 655 | 995 | 650 |
| 31 Dec 2007 | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | | -1160 | -11 | -62 | -11 |
| distributio | | | | | | 1 | 601 | | 663 |
| n | | | | | | | | | |
--------------------------------------------------------------------------------
| Net profit | | | | | | 2 441 | 2 441 | 146 | 2 587 |
| 1-3/2008 | | | | | | | | | |
--------------------------------------------------------------------------------
| Translation | | | | | -681 | | -681 | | -681 |
| difference | | | | | | | | | |
--------------------------------------------------------------------------------
| Share-based | | | | | | 368 | 368 | | 368 |
| payments | | | | | | | | | |
--------------------------------------------------------------------------------
| Acquisition | | | | | | -2 | -2 | 7 | 5 202 |
| s and | | | | | | 317 | 317 | 519 | |
| disposals | | | | | | | | | |
| of | | | | | | | | | |
| subsidiarie | | | | | | | | | |
| s | | | | | | | | | |
--------------------------------------------------------------------------------
| Shareholder | 23 | 25 | 969 | 340 | -1 | 8 584 | 397 | 9 | 407 |
| s' equity | 642 | 740 | | 690 | 761 | | 864 | 598 | 462 |
| 31 Mar 2008 | | | | | | | | | |
--------------------------------------------------------------------------------
MERGERS AND ACQUISITIONS DURING THE FIRST QUARTER
In January 2008 Group's Sawmill Business segment acquired majority in Junnikkala
and the group it forms. At the same instance Junnikkala Oy acquired all shares
in Pyyn Saha ja Höyläämö Oy. In addition, later during the first quarter
Junnikkala Oy acquired 25 % stake in its subsidiary Juneropt Oy from third
parties with about EUR 0.5 million cash consideration, which increased the
segment goodwill by approximately EUR 0.1 million and after which Junnikkala Oy
has held all Juneropt Oy shares.
Preliminary purchase price allocation of the Junnikkala acquisition has been
made on the acquisition. The following assets and liabilities were recognised
relating to the acquisition which also gives information about the contribution
of this transaction to the Group balance sheet at the date of the transaction:
--------------------------------------------------------------------------------
| 1,000 EUR | Fair value of | Book value of |
| | acquired assets | assets before |
| | | acquisition |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Intangible assets | | |
--------------------------------------------------------------------------------
| Clientele | 3,869 | 0 |
--------------------------------------------------------------------------------
| Emission allowances | 795 | 0 |
--------------------------------------------------------------------------------
| Order book | 104 | 0 |
--------------------------------------------------------------------------------
| Other intangible assets | 906 | 906 |
--------------------------------------------------------------------------------
| Property, plant and equipment | | |
--------------------------------------------------------------------------------
| Land and water | 7,235 | 7,235 |
--------------------------------------------------------------------------------
| Machinery and equipment | 13,942 | 13,942 |
--------------------------------------------------------------------------------
| Investments | 59 | 59 |
--------------------------------------------------------------------------------
| Other non-current assets | 687 | 687 |
--------------------------------------------------------------------------------
| Current assets | | |
--------------------------------------------------------------------------------
| Inventories | 11,761 | 10,873 |
--------------------------------------------------------------------------------
| Accounts receivable | 4,953 | 4,953 |
--------------------------------------------------------------------------------
| Accruals | 788 | 788 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 415 | 415 |
--------------------------------------------------------------------------------
| Total assets | 45,513 | 39,858 |
--------------------------------------------------------------------------------
| Interest bearing debt | 17,758 | 17,758 |
--------------------------------------------------------------------------------
| Non-interest bearing debt | | |
--------------------------------------------------------------------------------
| Accounts payable | 6,244 | 6,244 |
--------------------------------------------------------------------------------
| Convertible bonds | 400 | 400 |
--------------------------------------------------------------------------------
| Accrued expenses | 1,745 | 1,745 |
--------------------------------------------------------------------------------
| Other liabilities | 2,549 | 2,549 |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 1,470 | 0 |
--------------------------------------------------------------------------------
| Total liabilities | 30,167 | 28,697 |
--------------------------------------------------------------------------------
| Net assets 31 Jan 2008 | 15,346 | 11,161 |
--------------------------------------------------------------------------------
| Acquisition cost | 24,811 | |
--------------------------------------------------------------------------------
| Net assets | 15,346 | |
--------------------------------------------------------------------------------
| Goodwill | 9,465 | |
--------------------------------------------------------------------------------
| Cash flow effect: | | |
--------------------------------------------------------------------------------
| Consideration paid in cash | 5,740 | |
--------------------------------------------------------------------------------
| Acquired cash and cash equivalents | -415 | |
--------------------------------------------------------------------------------
| Cash flow effect | 5,326 | |
--------------------------------------------------------------------------------
OTHER KEY INDICATORS, EUR MILLION
--------------------------------------------------------------------------------
| | Q1/2008 | Q1/2007 | 2007 |
--------------------------------------------------------------------------------
| | 3 months / | 3 months / | 12 months / |
| | 31 Mar 2008 | 31 Mar 2007 | 31 Dec 2007 |
--------------------------------------------------------------------------------
| Gross capital expenditure | 48.8 | 25.6 | 34.4 |
--------------------------------------------------------------------------------
| % of revenue | 77.6 % | 69.6 % | 16.1 % |
--------------------------------------------------------------------------------
| Personnel, average | 997 | 637 | 866 |
--------------------------------------------------------------------------------
| Personnel, at the end of the | 1,036 | 869 | 958 |
| period | | | |
--------------------------------------------------------------------------------
| Lowest share price, EUR | 1.59 | 1.18 | 1.18 |
--------------------------------------------------------------------------------
| Highest share price, EUR | 2.99 | 1.99 | 3.59 |
--------------------------------------------------------------------------------
| Average trade-weighted share | 2.37 | 1.40 | 2.40 |
| price, EUR | | | |
--------------------------------------------------------------------------------
| Market capitalisation | 661.3 | 244.3 | 817.9 |
--------------------------------------------------------------------------------
| Share turnover | 304.5 | 70.5 | 623.2 |
--------------------------------------------------------------------------------
| Share turnover, % | 44.3 % | 36.1 % | 89.7 % |
--------------------------------------------------------------------------------
ACCOUNTING POLICIES
This Interim Report has been prepared in accordance with IFRS principles. Ruukki
Group Plc applies the same accounting principles as in 2007 financial
statements. The reporting segment structure has been redefined starting from 1
January 2008 as explained in this interim report. Group's comparable revenue and
earnings before taxes have been calculated so that the effect of acquisitions
and divestments has been eliminated in both the review period and previous
year's corresponding period. In the segments' financial figures insurance
compensations and impairment losses have been presented as one-off items, but
they have not been excluded when calculated group's comparable financial
figures. The figures in the tables have been rounded off to one decimal point,
which must be considered when calculating totals. Financial ratios and
indicators have been calculated with the same principles as applied in 2007
financial statements. The Interim Report data are unaudited.
PRESS AND ANALYSTS BRIEFING
Ruukki Group Plc holds a press and analysts briefing in Helsinki on Tuesday 6
May 2008 at Tapahtumatalo Bank. The event will start at 12:00 p.m. In the
briefing Matti Vikkula, the CEO of Ruukki Group Plc, will present the interim
report. Moreover there will a conference call at 4:00 pm Finnish time held in
English. Press representatives, investors, analysts and persons interested in
the company are invited to attend the briefing. To attend the briefing and the
conference call, please register via email to marjo.lonka@ruukkigroup.fi.
Further instructions to attend the conference call will be given after
registration.
RUUKKI GROUP PLC
BOARD OF DIRECTORS
Ruukki Group's strategic aim is to concentrate on wood processing within the
Northern coniferous wood zone. Group business operations will be focused on
mechanical wood processing, and furthermore on pulp business. Ruukki Group Plc's
share is listed on OMX Nordic Exchange Helsinki in which the shares of the
Company are traded in the mid cap sector, in the industrials segment.
For any further information, please contact:
Matti Vikkula
Chief Executive Officer
Ruukki Group Plc
Telephone +358 45 6700 606
www.ruukkigroup.fi
This Interim Report is based on translation into English of a document written
in Finnish. In case there would be any potential discrepancies, inconsistencies
or inaccuracies, the Finnish version of the Interim Report shall prevail.
FLAGGING NOTIFICATIONS DURING OR AFTER THE REVIEW PERIOD
Ruukki Group Plc has received the following flagging notifications during or
after the review period 1 Jan - 31 Mar 2008:
- Nordea Bank AB (publ) (Swedish registration number 516406-0120) announced on
21 January 2008 that forward contracts that were due in January have been rolled
forward to longer maturities. Consequently Nordea Bank Finland Plc's ownership
in Ruukki Group Plc has not fallen below 1/10 but is over 1/4. Nordea Bank AB
referred to announcement that was made on December 28 2007. Nordea Bank AB
(publ) announced then that as forward contracts expire in January 2008, the
ownership of its Finnish subsidiary Nordea Bank Finland Plc (business ID
1680235-8) will fall below 1/10 of the share capital and voting rights of
Ruukki Group Plc.
- Moncheur & Cie SA (registration number 660.0.096.997-7, Geneva) announced on
23 January 2008 that as a result of share transactions concluded on 21 January
2008, the ownership of Moncheur & Cie SA in Ruukki Group Plc now exceeds one
twentieth (1/20) of the share capital and voting rights of Ruukki Group Plc.
- Procomex S.A (registration number R.C.Luxembourg B 57.877) announced on 13
February 2008 that its ownership will fall below one tenth (1/10) of the share
capital and voting rights of Ruukki Group Plc based on agreement entered into on
12 February 2008. In case the agreement will be fully implemented the ownership
of Procomex S.A. will fall below one tenth after the share transactions are
finalised. Furthermore, in consequence of the aforementioned agreement, when
fully implemented the combined ownership of Procomex S.A. and Helsingin
Mekaanikontalo Oy (business ID number 1076761-9) will fall below one fifth (1/5)
of the share capital and voting rights of Ruukki Group Plc.
- Russian JSC VTB Bank (state registration number 1027739609391) announced on 15
February 2008 that its or its affiliate's ownership will exceed one tenth (1/10)
of the share capital and voting rights of Ruukki Group Plc based on agreements
entered into on 12 February 2008. In case the agreements will be fully
implemented, the ownership of JSC VTB Bank or its affiliate will exceed one
tenth after the share transactions are finalised.
- RCS Trading Corporation Ltd (company number 65574B, Nassau, Bahamas) announced
on 20 March 2008 that as a result of share transactions executed on 20 March
2008, the ownership of RCS Trading Corporation Ltd in Ruukki Group Plc now
exceeds one twentieth (1/20) of the share capital and voting rights of Ruukki
Group Plc. RCS Trading Corporation Ltd owns 2,777,870 Ruukki Group Plc shares
and forward contracts representing 13,200,000 shares which represents 5.51 % of
the share capital and voting rights of Ruukki Group Plc. The forward contracts
will expire in June 2008.
- Oy Herttakakkonen Ab (business ID 0761602-7) announced on 20 March 2008 that
its ownership falls below one fifth (1/5) of the share capital and voting rights
of Ruukki Group Plc based on share transactions carried out on 20 March 2008. Oy
Herttakakkonen Ab owns 27,439,827 Ruukki Group Plc shares and forward contracts
representing 24,051,100 shares after the 20 March 2008 transactions which
represents approximately 17.75 % of the share capital and voting rights of
Ruukki Group Plc. 5,115,000 of forward contracts will expire on 20 March 2009
and 18,936,000 on 16 May 2008. In addition, Oy Herttaässä Ab owns 4,635,410
Ruukki Group Plc shares which represent 1.6 % of the share capital and voting
rights of Ruukki Group Plc. The combined ownership of Oy Herttakakkonen Ab and
Oy Herttaässä Ab of Ruukki Group's share capital and voting rights is 19.35 %.
- Oy Herttakakkonen Ab (business ID 0761602-7) announced on 25 March 2008 that
it had made the following one-sided unilateral agreement on 20 March 2008: (i)
Oy Herttakakkonen Ab has authorised Mr. Alwyn Smit or person appointed by him to
vote in Ruukki Group Plc's Annual General Meeting on 31 March 2008 with all the
shares and voting rights of Oy Herttakakkonen Ab; and (ii) Oy Herttakakkonen Ab
has given one-sided commitment to sell by 28 March 2008 altogether 21,000,000
Ruukki Group Plc's shares that it owns to RCS Trading Corp Ltd. Moreover, Oy
Herttakakkonen Ab has given one-sided commitment to sell altogether 30,000,000
shares and share forward agreements by 31 May 2008. In case all the
abovementioned commitments will be finalized, Oy Herttakakkonen Ab's ownership
will fall below one twentieth (1/20) of the share capital and voting rights of
Ruukki Group Plc.
- Danske Bank A/S Helsingin Sivukonttori (business ID 1078693-2) announced on 25
March 2008 that its ownership has reached over one twentieth (1/20) of the share
capital and voting rights of Ruukki Group Plc based on share transaction carried
out on 20 March 2008. Furthermore, Danske Bank A/S Helsingin Sivukonttori has
entered into derivative contracts, which according to current information will
expire in May 2008 and in June 2008. In case these derivative agreements are
exercised, Danske Bank A/S Helsingin Sivukonttori's ownership in Ruukki Group
Plc will fall below one twentieth (1/20) by the earliest at the value date 19
June 2008. Danske Bank A/S Helsingin Sivukonttori owns altogether 20,994,000
Ruukki Group Plc's shares, which corresponds to about 7.24 % of the share
capital and voting rights of Ruukki Group Plc.
- Procomex S.A (registration number R.C. Luxembourg B 57.877) announced on 26
March 2008 that it has on 20 March 2008 sold 29,200,000 shares of Ruukki Group
Plc. The holdings of Procomex S.A. decreases under one tenth (1/10) of the share
capital and voting rights of Ruukki Group Plc on 27 March 2008 as the
transaction is settled on the stock exchange. In consequence of the
aforementioned transaction, when settled, the combined holdings of Procomex S.A.
and Helsingin Mekaanikontalo Oy (business ID number 1076761-9) decreases under
one fifth (1/5) of the share capital and voting rights of Ruukki Group Plc. The
ownership of Procomex S.A. and Helsingin Mekaanikontalo Oy in Ruukki Group Plc
will be the following after the transaction is settled: (i) Procomex S.A.:
2,907 shares, forward contracts representing 21,693,508 shares, total
21,696,415 shares, i.e. 7.48 % of the share capital and voting rights; (ii)
Helsingin Mekaanikontalo Oy: 5,000 shares, forward contracts representing
28,937,600 shares, total 28,942,600 shares, i.e. 9.98 % of the share capital
and voting rights. Forward contracts of Procomex S.A. mature in April 2008 and
forward contracts of Helsingin Mekaanikontalo Oy in January 2009. The sale and
purchase of the shares relates to the letter of intent dated and disclosed on
12 February 2008. In connection with the trade, Procomex S.A. and JSC VTB Bank
have agreed on arrangements, applicable in certain situations, regarding the
potential on-sale and redemption of the shares against consideration at least
as high as which has been agreed on today. Inter alia, the shareholders'
agreement which has been entered into provides that if there is an on-sale of
such shares, each party will offer any shares it holds in Ruukki Group Plc
first to the other party, who shall have an option to purchase the shares. Only
thereafter can the shares be offered to any third party (i.e. a right of first
refusal). In addition, the parties have under certain conditions a right and/or
obligation to sell the shares they hold in Ruukki Group Plc to the other party,
or under certain conditions to a third party nominated by the other party if
such party intends to sell its shares (drag along and tag along
rights). In the situations described above, the ownership of Procomex S.A. in
Ruukki Group Plc may decrease below 5 % or exceed 25 % of the shares in the
company. The arrangement is valid until further notice.
- Russian JSC VTB Bank (business ID Code 1027739609391) announced on 26 March
2008 that it has on 26 March 2008 purchased 29,200,000 shares of Ruukki Group
Plc. JSC VTB Bank's holdings exceed one tenth (1/10) of the share capital and
voting rights of Ruukki Group Plc on 27 March 2008 as the transaction is settled
on the stock exchange. The sale and purchase of the shares relates to the letter
of intent dated and disclosed on 12 February 2008. The Russian JSC VTB Bank
purchases under the trade approximately 10.07 % of the shares in Ruukki Group
Plc. This sale and purchase of shares shall be executed on the Helsinki Stock
Exchange. In connection with the trade, JSC VTB Bank and Procomex S.A. have
agreed on arrangements, applicable in certain situations, regarding the
potential on-sale and redemption of the shares against consideration at least
as high as which has been agreed on today. Inter alia, the shareholders'
agreement which has been entered into provides that if there is an on-sale of
such shares, each party will offer any shares it holds in Ruukki Group Plc
first to the other party, who shall have an option to purchase the shares. Only
thereafter can the shares be offered to any third party (i.e. a right of first
refusal). In addition, the parties have under certain conditions a right and/or
obligation to sell the shares they hold in Ruukki Group Plc to the other party,
or under certain conditions to a third party nominated by the other party if
such party intends to sell its shares (drag along and tag along rights). In the
situations described above, the ownership of JSC VTB Bank in Ruukki Group Plc
may exceed 25 % or decrease below 5 % of the shares in the company. The
arrangement is valid until further notice.
- Nordea Bank AB (publ) (Swedish registration number 516406-0120) gave on 26
March 2008 an announcement on which it referred to its announcement on 21
January 2008 related to change in ownership. In that announcement it was
informed that when forward agreements expire in March 2008 Nordea Bank Finland
Plc's, the Finnish subsidiary of Nordea Bank AB (publ), holdings will fall below
three twentieth (3/20) of the share capital and voting rights of Ruukki Group
Plc. Nordea Bank AB (publ) announces that the forward agreements mentioned above
have partially been expired (25,985,400 shares) and partially agreements have
been continued for longer maturities; consequently, Nordea Bank Finland Plc's
ownership in Ruukki Group Plc has not fallen below 3/20 as previously announced
but has fallen below 1/5. Nordea Bank Finland Plc owns 54,138,835 Ruukki Group
Plc's shares which represent 18.67 % of the share capital and voting rights of
Ruukki Group Plc. Furthermore, Nordea Bank Finland Plc has, as previously
announced, made forward agreements on Ruukki Group Plc shares. Nordea Bank
Finland Plc has purchased 2,200 forward agreements (220,000 shares) that will
expire in April 2008 as well as sold forward agreements so that in May 2008
203,151 forward agreements (20,350,100 shares), in June 2008 51,100 forward
agreements (5,110,000 shares) and in January 2009 289,196 forward agreements
28,919,600 shares) will expire. When the forward agreements expire in May 2008,
Nordea Bank Finland Plc's ownership will fall below 1/10, and accordingly when
the forward agreements expire in January 2009, the ownership will fall below
1/20. Nordea Bank Finland Plc has purchased the shares of Ruukki Group Plc as
part of its market making business operations.
- Evli Bank Plc (business ID 0533755-0) announced on 27 March 2008 that based on
transactions carried out on 20 March 2008 its ownership in Ruukki Group Plc's
share capital and voting rights is below one twentieth (1/20). Evli Bank Plc
owns 12,406,557 Ruukki Group Plc's shares which represent about 4.28 % of the
share capital and voting rights of Ruukki Group Plc. Furthermore, Evli Bank Plc
has sold altogether 11,753,200 shares via forward agreements of which 8,774,200
shares related forward agreements expire in April 2008, 2,898,100 shares related
forward agreements expire in June 2008 and 80,900 shares related forward
agreements expire in September 2008. Evli Bank Plc has sold the forward
agreements as part of its market making business operations. The combined net
amount of Evli Bank Plc's ownership in Ruukki Group shares and shares related
forward agreements is 653,357 shares, which corresponds to about 0.23 % of the
share capital and voting rights of Ruukki Group Plc.
- Oy Herttakakkonen Ab (business ID 0761602-7) announced on 31 March 2008 that
its ownership has fallen below three twentieth (3/20) of the share capital and
voting rights of Ruukki Group Plc based on transactions carried out on 28 March
2008. Oy Herttakakkonen Ab owns 6,439,287 Ruukki Group Plc shares and forward
contracts representing 24,051,100 shares, i.e. 30,490,927 shares in total, which
represents 10.51 % of the share capital and voting rights. Of the forward
contracts 18,936,000 will expire on 16 May 2008 and 5,115,000 on 20 March 2009.
In addition, Kai Mäkelä owns personally 20 and Oy Herttaässä Ab 4,635,410 Ruukki
Group Plc shares. The combined ownership of Oy Herttakakkonen Ab, Kai Mäkelä and
Oy Herttaässä Ab of Ruukki Group's share capital and voting rights is 12.11 %.
- Nordea Bank AB (publ) (Swedish registration number 516406-0120) announced on 2
April 2008 that the ownership of its Finnish subsidiary Nordea Bank Finland Plc
(business ID 1680235-8) has on April 1 2008 acquired 15,000,000 Ruukki Group Plc
shares. Simultaneously Nordea Bank Finland Plc has sold 150,000 forward
contracts (15,000,000 shares) which expire in June 2008. Nordea Bank Finland Plc
now holds 69,163,100 Ruukki Group Plc's shares; its ownership exceeds 1/5 and is
23.84 % of the share capital and voting rights of Ruukki Group Plc. Nordea Bank
Finland Plc has bought 2,200 (220,000 shares) Ruukki Group share forward
contracts, which are due in April 2008. It has also sold forward contracts from
which 203,501 (20,350,100 shares) will expire in May 2008, 201,100 (20,110,000
shares) will expire in June 2008, and 289,196 (28,919,600 shares) will expire in
January 2009. As the May 2008 forward contracts expire, the ownership of Nordea
Bank Finland Plc will fall below 1/5, and as the June forward contracts expire,
below 1/10 and as the January 2009 forward contracts expire, below 1/20 of the
share capital and voting rights of Ruukki Group Plc. Nordea Bank Finland Plc
has purchased Ruukki Group shares as a part of its liquidity providing
services.
- RCS Trading Corporation Ltd (company number 65574B, Nassau, Bahamas) announced
on 2 April 2008 that as a result of share transactions executed on 28 March 2008
and forward contract transactions carried out on 31 March 2008, the ownership of
RCS Trading Corporation Ltd in Ruukki Group Plc now exceeds one tenth (1/10) of
the share capital and voting rights of Ruukki Group Plc. RCS Trading Corporation
Ltd owns 551,623 Ruukki Group Plc shares and forward contracts representing
37,844,000 shares, i.e. 38,395,623 shares in total, which represents
approximately 13.24 % of the share capital and voting rights of Ruukki Group
Plc. Of the forward contracts 3,644,000 will expire in April 2008 and 34,200,000
in June 2008.