Quarterly Report • Sep 30, 2012
Quarterly Report
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07:00 London, 09:00 Helsinki, 7 November 2012 - Ruukki Group Plc ("Ruukki" or "the Company") (LSE: RKKI, OMX: RUG1V) Interim Report
| KEY FIGURES (EUR million) | Q3/12 | Q3/11 | Change | Q1- Q3/12 |
Q1- Q3/11 |
Change | FY/11 |
|---|---|---|---|---|---|---|---|
| Revenue | 28.1 | 42.4 | -33.8% | 106.1 | 121.8 | -12.8% | 159.1 |
| EBITDA | -1.8 | -2.7 | 4.9 | 2.5 | 96.9% | 1.4 | |
| EBITDA margin | -6.5% | -6.3% | 4.6% | 2.0% | 0.9% | ||
| EBIT | -8.9 | -9.6 | -15.7 | -18.5 | -26.5 | ||
| EBIT margin | -31.8% | -22.5% | -14.8% | -15.2% | -16.6% | ||
| Earnings before taxes | -9.3 | -8.4 | -14.4 | -18.2 | -25.4 | ||
| Earnings margin | -33.1% | -19.9% | -13.6% | -15.0% | -16.0% | ||
| Profit for continuing operations | -6.2 | -6.5 | -10.5 | -13.5 | -18.4 | ||
| Profit for discontinued operations | 0.0 | -0.2 | 0.0 | 46.9 | -100.0% | 41.1 | |
| Profit | -6.2 | -6.7 | -10.5 | 33.4 | 22.7 | ||
| Earnings per share, basic, EUR | -0.02 | -0.03 | -0.04 | 0.14 | 0.10 |
Continuing operations include the Speciality Alloys and the FerroAlloys business segments and unallocated items that consist of Group headquarters and other Group companies, which do not have significant business operations. Discontinued operations include the house building, pallet and sawmill businesses which were divested in 2011.
"I am pleased that we have successfully resolved our dispute with the vendors of Mogale Alloys, which we purchased in May 2009. This is expected to positively impact our goodwill and equity and will also reduce our debt by approximately EUR 51 million. All of the conditions, other than the share issue which is conditional on South African Reserve Bank approval, have now been met and we can focus on the further development of the business.
The global macroeconomic environment continued to stagnate during the third quarter, driven by the unresolved crisis in the Eurozone, the ongoing slump in the US and a continued slowdown in Chinese growth. This situation continued to exert downward pressure across the world markets for chrome-related products and we do not expect any immediate improvement during Q4 2012 as customers maintain a tight control over their stock levels.
As expected, the quarter proved to be challenging as production was impacted by the annual maintenance shutdowns and we fought to preserve our product prices and margins against a significant decline in demand, as evidenced by the lowest European Benchmark Price for Ferrochrome for the past three years. However, initiatives taken have improved our overall efficiency and despite a significant drop in year on year revenues our loss was smaller than in Q3 2011.
As a niche speciality alloy business, unlike many other chrome producers who chose to chase volume over price, we remained disciplined and took the decision not to compromise our sales prices or margins. As we enter the final quarter of the year, we will continue to be disciplined with our pricing and, if market conditions require, we will adjust our production and product mix accordingly.
We remain firm believers in the long-term demand for our commodity which, unlike some other commodities, is ideally placed to take advantage of the move from investment-led demand to consumption-led demand in emerging economies as the growing urbanised populations seek to improve their living standards with chrome-related products."
The global economic outlook for the coming quarter is uncertain as the Eurozone crisis continues and demand for commodities remains weak. After a period of very high fluctuations on the ferroalloy market it is now expected to be less volatile going forward but with prices continuing at relatively low levels. The market for higher value speciality products is expected to be more positive and the Group will continue to optimise its production levels and product mix accordingly.
The Board has updated the outlook for the Company's financial performance for 2012. Ruukki still expects its financial performance for the full year 2012 to be better than in 2011 because of more stable market conditions, improved cost efficiency across the operations, and favourable exchange rates. Based on the view that prices of the Company's main products will slightly improve in the mid-term, a decision has been taken to focus on disciplined pricing of products. This is expected to result in an increase in finished goods inventory levels, and will thereby have a negative impact on revenues in the last quarter of 2012. Therefore, Ruukki now expects revenue for the full year 2012 to be lower than in 2011.
Fluctuations of exchange rates between the Euro, the South African Rand, the Turkish Lira and the US Dollar can significantly impact the Company's financial performance.
The previous outlook, published in the second quarter interim results on 16 August 2012, was:
The global economic outlook for 2012 is uncertain as the Eurozone crisis continues and demand for commodities, primarily driven by Chinese consumption, remains weak. After a period of very high fluctuations on the ferroalloy market it is now expected to be less volatile going forward. The Group remains prepared for price fluctuations and will continue to adapt its production levels and product mix accordingly. The market for speciality alloy products is estimated to be more stable, although some uncertainty remains.
Ruukki expects its revenue for the full year 2012 to be in line with 2011 and the Company's financial performance for the full year 2012 to be better than 2011 because of more stable market conditions, improved cost efficiency across the operations and favourable exchange rates. Due to the seasonal nature of the business, the Company's performance for Q3 2012 is not expected to be as positive as Q2 2012.
Fluctuations of exchange rates between the Euro, the South African Rand, the Turkish Lira and the US Dollar can significantly impact the Company's financial performance.
Ruukki follows the disclosure procedure enabled by Standard 5.2b published by the Finnish Financial Supervision Authority, and hereby publishes its Q3 Interim Report enclosed to this stock exchange release. The Q3 Interim Report is attached to this release and is also available on the Company's website at www.ruukkigroup.com.
Management will host an investor conference call in English on 7 November 2012 at 12.00 Finnish time, 10.00 UK time. Please dial-in at least 10 minutes beforehand, quoting the reference: 924857.
Finnish number +358 (0)9 2313 9202
UK number +44 (0)207 1620 177
RUUKKI GROUP PLC Thomas Hoyer CEO
For additional information, please contact:
Thomas Hoyer, CEO, +358 (0)10 440 7000, [email protected] Kalle Lehtonen, General Manager: Finance, +358 (0)400 539 968, [email protected] Markus Kivimäki, General Manager: Corporate Affairs, +358 (0)50 3495 687, [email protected]
Neil Elliot, +44 (0)20 7597 5970, [email protected] George Price, +44 (0)20 7597 5970, [email protected]
Martin Eales, +44 (0)20 7653 4000, [email protected] Peter Barrett-Lennard, +44 (0)20 7653 4000, [email protected]
Financial reports and other investor information are available on the Company's website: www.ruukkigroup.com.
Ruukki Group is a chrome mining and minerals producer focused on delivering sustainable growth with a speciality alloys business in southern Europe and a ferro alloys business in southern Africa. The Company is listed on NASDAQ OMX Helsinki (RUG1V) and the Main Market of the London Stock Exchange (RKKI). www.ruukkigroup.com
Distribution: NASDAQ OMX Helsinki London Stock Exchange main media www.ruukkigroup.com
This Interim Report is prepared in accordance with the IAS 34 standard and is unaudited. All the figures in this Interim Report related to the house building, pallet and sawmill businesses are categorised as discontinued operations. All the corresponding comparable figures of 2011 are presented in brackets, unless otherwise explicitly stated.
The Group's sales from processing, which includes all the products produced at the Mogale Alloys and EWW processing plants, were 11,051 (Q3/2011: 25,443) tonnes, a decrease of 56.6% compared to the equivalent period in 2011. In light of the weak demand, the Group adjusted its production and built up its finished product inventory to preserve sales prices and margins.
Sales from processing:
| Tonnes | Q3/12 | Q3/11 | Q1-Q3/12 | Q1-Q3/11 | FY/11 |
|---|---|---|---|---|---|
| Processing, Speciality Alloys | 5,251 | 5,955 | 22,775 | 18,677 | 24,292 |
| Processing, FerroAlloys | 5,800 | 19,488 | 33,656 | 66,627 | 82,663 |
| Processing, Total | 11,051 | 25,443 | 56,432 | 85,304 | 106,955 |
Reviewing the global ferrochrome market for the quarter, a few key observations can be made:
The global economic situation has severely dented global stainless steel demand, which is expected to increase marginally this year. However in the medium term, consumption is forecast to grow as the growing economies of Asia and South America move away from investment-led demand to consumption-led demand.
The November meeting of the Chinese communist party is expected to confirm the country's economic stimulus programme for the coming year, which is forecast to provide a positive boost across the commodity industry.
The world's second largest chrome producer, South Africa, suffered unprecedented labour disputes across its mining industry. While this disrupted supplies, the instability did not support prices but prevented alloy quotations from going down any further and did not impact on supply volume in Europe, USA, nor Asia. Several chrome producers are focused on reducing their stocks before year end and have adopted a "quantity" marketing position which is further negatively impacting prices.
Turning to end-users, a lot of these customers are also closely monitoring their stock levels and only buying the minimum quantity they need in light of the extremely weak demand ahead of year end as credit remains tight and banks have been encouraging destocking.
| EUR million | Q3/12 | Q3/11 | Change | Q1- Q3/12 |
Q1- Q3/11 |
Change | FY/11 |
|---|---|---|---|---|---|---|---|
| Revenue | 28.1 | 42.4 | -33.8% | 106.1 | 121.8 | -12.8% | 159.1 |
| EBITDA | -1.8 | -2.7 | 4.9 | 2.5 | 96.9% | 1.4 | |
| EBITDA margin | -6.5% | -6.3% | 4.6% | 2.0% | 0.9% | ||
| EBIT | -8.9 | -9.6 | -15.7 | -18.5 | -26.5 | ||
| EBIT margin | -31.8% | -22.5% | -14.8% | -15.2% | -16.6% | ||
| Profit for discontinued operations |
0.0 | -0.2 | 0.0 | 46.9 | -100.0% | 41.1 | |
| Profit | -6.2 | -6.7 | -10.5 | 33.4 | 22.7 |
Discontinued operations include the house building, pallet and sawmill businesses which were divested in 2011.
Revenue for the third quarter 2012 decreased by 33.8% to EUR 28.1 (42.4) million compared to the equivalent period in 2011. The decrease in revenue was mainly attributable to the decline in demand for ferrochrome and the decision to increase finished products inventories instead of compromising sales prices. Even though revenue was down compared to equivalent period in 2011, the Company was still able to minimise its losses through improved profitability margin in the Speciality Alloys segment and through decreased expenses from unallocated items. EBITDA for the third quarter 2012 was EUR -1.8 (-2.7) million.
Earnings per share was EUR -0.02 (-0.03).
The Group's liquidity, as at 30 September 2012, was EUR 40.4 (74.2) (30 June 2012: 45.0) million. Operating cash flow in the third quarter was EUR -3.2 (-5.4) million. Ruukki's gearing at the end of the third quarter was 12.8% (6.4%) (30 June 2012: 11.3%). Net interest-bearing debt was EUR 29.2 (15.8) (30 June 2012: 26.8) million.
Total assets on 30 September 2012 were EUR 379.1 (457.9) (30 June 2012: 394.0) million. The equity ratio was 60.3% (54.3%) (30 June 2012: 60.3%).
Capital expenditure for the third quarter of 2012 was EUR 0.8 (1.2) million and related primarily to sustaining capital expenditure at the Speciality Alloys segment as well as to some environmental improvements at the European processing plant.
At the end of the third quarter 2012, Ruukki had 752 (799) employees. The average number of employees during the third quarter of 2012 was 757 (785).
Number of employees by segment:
| 30.9.2012 | 30.9.2011 | Change | 31.12.2011 | |
|---|---|---|---|---|
| Speciality Alloys | 428 | 436 | -1.8% | 442 |
| FerroAlloys | 314 | 353 | -11.2% | 345 |
| Other operations | 10 | 10 | 0.0% | 10 |
| Continuing operations total | 752 | 799 | -5.9% | 797 |
The Group's target this year is to introduce standardised health, safety and environmental policies and procedures across the Group's operations and continue its programme focused on pro-active safety and environmental measurements as part of its aim to achieve "Zero Harm". This standardisation process will take the majority of the year to roll out as it involves a specific training programme for the Group's employees and contractors.
Ruukki aims to conduct its business in a sustainable way and to preserve the environment by minimising the environmental impact of its operations. Ruukki has programmes in place to monitor and address its impact on the environment.
The Speciality Alloys business consists of TMS, the mining and beneficiation operation in Turkey, and EWW, the chromite concentrate processing plant in Germany. TMS supplies EWW with high quality chromite concentrate which produces speciality products including Specialised Low Carbon and Ultra Low Carbon Ferrochrome. Excess chrome ore from TMS is exported. As at 30 September 2012, the business had 428 (436) employees.
Production:
| Tonnes | Q3/12 | Q3/11 | Change | Q1-Q3/12 | Q1-Q3/11 | Change | FY/11 |
|---|---|---|---|---|---|---|---|
| Mining* | 19,066 | 21,958 | -13.2% | 56,049 | 62,588 | -10.4% | 82,154 |
| Processing | 5,166 | 5,247 | -1.6% | 19,390 | 19,337 | 0.3% | 25,908 |
* Including both chromite concentrate and lumpy ore production
Production decreased to 24,231 (27,205) tonnes for the third quarter 2012, compared to the equivalent period in 2011. This was mainly due to a prolonged planned maintenance shutdown at EWW in July, following the Group's acquisition of the plant, to address some vital preventative work. Mining at TMS operated at normal levels.
| EUR million | Q3/12 | Q3/11 | Change | Q1-Q3/12 | Q1-Q3//11 | Change | FY/11 |
|---|---|---|---|---|---|---|---|
| Revenue | 17.9 | 21.9 | -18.4% | 61.4 | 63.2 | -2.7% | 83.6 |
| EBITDA | 1.8 | 2.0 | -7.7% | 9.5 | 10.5 | -10.1% | 13.8 |
| EBITDA margin | 10.1% | 9.0% | 15.4% | 16.7% | 16.5% | ||
| EBIT | -2.8 | -2.4 | -3.7 | -2.8 | -3.8 | ||
| EBIT margin | -15.4% | -11.2% | -6.0% | -4.4% | -4.6% |
Revenue for the third quarter decreased by 18.4% to EUR 17.9 (21.9) million and EBITDA decreased by 7.7% to EUR 1.8 (2.0) million compared to the equivalent period in 2011. The decrease in revenue was due to lower sales volumes. Even though sales prices increased slightly compared to same period in previous year, it was not enough to compensate for the reduced sales volumes.
The FerroAlloys business consists of the Stellite mine, the alloy processing plant Mogale, the Mecklenburg mine development project in South Africa, and the Zimbabwean mine development project Waylox. The business produces chrome ore, Charge Chrome and Silico Manganese for sale to global markets. As at 30 September 2012, the business had 314 (353) employees.
| Tonnes | Q3/12 | Q3/11 | Change | Q1-Q3/12 | Q1-Q3/11 | Change | FY/11 |
|---|---|---|---|---|---|---|---|
| Mining* | 22,783 | 46,006 | -50.5% | 116,161 | 113,663 | 2.2% | 159,455 |
| Processing | 15,404 | 13,189 | 16.8% | 36,166 | 71,471 | -49.4% | 86,445 |
* Including both chromite concentrate and lumpy ore production
Overall production for the segment decreased 35.5% to 38,187 (59,195) tonnes in the third quarter and was unaffected by the labour unrest in South Africa. Production at the Stellite mine was down substantially compared to the equivalent period in 2011 in response to lower chrome ore prices and an oversupply in the global chrome ore market. Production at Mogale operated at normal levels outside the planned annual maintenance shutdown, which was driven by the increased electricity prices during the winter months in South Africa. Work also began on the Mecklenburg mine development project, which is scheduled to commence commissioning during Q4 2012.
| EUR million | Q3/12 | Q3/11 | Change | Q1-Q3/12 | Q1-Q3/11 | Change | FY/11 |
|---|---|---|---|---|---|---|---|
| Revenue | 10.2 | 20.5 | -50.4% | 44.7 | 58.6 | -23.8% | 75.4 |
| EBITDA | -2.2 | -2.1 | 0.4 | -2.0 | -3.9 | ||
| EBITDA margin | -21.9% | -10.3% | 1.0% | -3.4% | -5.2% | ||
| EBIT | -4.7 | -4.6 | -6.9 | -9.6 | -14.0 | ||
| EBIT margin | -46.5% | -22.3% | -15.5% | -16.4% | -18.6% |
Revenue for the third quarter decreased to EUR 10.2 (20.5) million compared to the equivalent period in 2011, representing a decrease of 50.4%. The decrease in revenue was driven by the substantial decline in demand for both Charge Chrome and Silico Manganese and the Company decided to increase inventory levels rather than compromise margins and lower the sales prices. EBITDA for the third quarter decreased to EUR -2.2 (-2.1) million. Although sales prices were marginally higher than the previous quarter and the
equivalent period in 2011, this was not sufficient to compensate for the significant decrease in sales volumes.
For the third quarter of 2012, the EBITDA from unallocated items was EUR -1.4 (-2.3) million including a EUR 0.2 (0.2) million non-cash expense for the share-based payments.
On 11 October Ruukki announced it had agreed to settle its dispute with the vendors (the "Vendors") of Mogale Alloys, which was acquired by Ruukki in May 2009. The key terms of the agreement, which will not have a material impact on the Company's 2012 financial results, include:
The share issue to the Vendors is conditional upon the receipt of South African Reserve Bank approval, which is expected to take up to 90 days. If this is not received, Ruukki has undertaken to procure that the shares are disposed of at fair value in accordance with the instructions of the Vendors and the resultant proceeds paid to the Vendors.
Once completed the arrangement will have the following impact on Ruukki's balance sheet:
On 16 August 2012 Ruukki announced that Mr. Philip Baum had resigned from his position as a non Executive Directors of the Board to pursue other interests.
Ruukki Group Plc's shares are listed on NASDAQ OMX Helsinki (RUG1V) and on the Main Market of the London Stock Exchange (RKKI).
On 30 September 2012, the registered number of Ruukki Group Plc shares was 248,432,000 (248,432,000) and the share capital was EUR 23,642,049.60 (23,642,049.60).
On 30 September 2012, the Company had 4,414,682 (4,814,682) own shares in treasury, which was equivalent to 1.78% (1.94%) of the issued share capital. The total amount of shares outstanding, excluding the treasury shares held by the Company on 30 September 2012, was 244,017,318 (243,617,318).
At the beginning of the period under review, the Company's share price was EUR 0.89 on NASDAQ OMX Helsinki and GBP 0.88 on the London Stock Exchange. At the end of the review period, the share price was EUR 0.48 and GBP 0.38 respectively. During the third quarter of 2012 the Company's share price on NASDAQ OMX Helsinki ranged from EUR 0.38 to 0.71 per share and the market capitalisation, as at 30 September 2012, was EUR 119.2 (1.1.2012: 221.1) million. For the same period on the London Stock Exchange the share price range was GBP 0.32 to 0.53 per share and the market capitalisation was GBP 94.4 (1.1.2012: 218.6) million, as at 30 September 2012.
Based on the resolution at the AGM on 10 May 2012, the Board is authorised to buy-back up to a maximum of 15,000,000 of its own shares. This authorisation is valid until 10 November 2013. The Company did not carry out any share buy-backs during the first nine months of 2012.
On 19 July 2012 Ruukki received a notification that Philip Baum, Non-executive Director, has sold 150,000 ordinary shares in the Company at the price of GBP 0.55 per share on 12 July 2012. The trades were made on the London Stock Exchange. Accordingly, Philip Baum holds now no shares in Ruukki Group Plc.
The changes in the key risks and uncertainties are set out below. Further details of the risks and uncertainties have been published in the Group's 2011 Annual Report.
Ruukki´s financial performance is dependent on the general market conditions of the mining, smelting and minerals processing business. Global financial markets have been very volatile, exacerbated by the Eurozone crisis, and there is uncertainty as to how commodity prices will respond in 2012 and which could considerably impact the Company's revenue and financial performance in 2012.
Changes in foreign exchange rates, if adverse, could have a substantial negative impact on the Group's profitability, in particular changes in US Dollar/South African Rand. In order to better manage its foreign exchange US Dollar/South African Rand exposure, the Group has entered into forward contract arrangements.
Ruukki's processing operations in Germany and South Africa are intensive users of energy, primarily electricity. Fuel and energy prices globally have been characterised by volatility and cost inflation. In South Africa the majority of the electricity supply, price and availability are controlled by one entity, Eskom. Increased electricity prices and/or reduced or uncertain electricity supply or allocation may negatively impact Ruukki's current operations, which could have an impact on the Group's financial performance.
The global economic outlook for the coming quarter is uncertain as the Eurozone crisis continues and demand for commodities remains weak. After a period of very high fluctuations on the ferroalloy market it is now expected to be less volatile going forward but with prices continuing at relatively low levels. The market for higher value speciality products is expected to be more positive and the Group will continue to optimise its production levels and product mix accordingly.
The Board has updated the outlook for the Company's financial performance for 2012. Ruukki still expects its financial performance for the full year 2012 to be better than in 2011 because of more stable market conditions, improved cost efficiency across the operations, and favourable exchange rates. Based on the view that prices of the Company's main products will slightly improve in the mid-term, a decision has been taken to focus on disciplined pricing of products. This is expected to result in an increase in finished goods inventory levels, and will thereby have a negative impact on revenues in the last quarter of 2012. Therefore, Ruukki now expects revenue for the full year 2012 to be lower than in 2011.
Fluctuations of exchange rates between the Euro, the South African Rand, the Turkish Lira and the US Dollar can significantly impact the Company's financial performance.
The previous outlook, published in the second quarter interim results on 16 August 2012, was:
The global economic outlook for 2012 is uncertain as the Eurozone crisis continues and demand for commodities, primarily driven by Chinese consumption, remains weak. After a period of very high fluctuations on the ferroalloy market it is now expected to be less volatile going forward. The Group remains prepared for price fluctuations and will continue to adapt its production levels and product mix accordingly. The market for speciality alloy products is estimated to be more stable, although some uncertainty remains.
Ruukki expects its revenue for the full year 2012 to be in line with 2011 and the Company's financial performance for the full year 2012 to be better than 2011 because of more stable market conditions, improved cost efficiency across the operations and favourable exchange rates. Due to the seasonal nature of the business, the Company's performance for Q3 2012 is not expected to be as positive as Q2 2012.
Fluctuations of exchange rates between the Euro, the South African Rand, the Turkish Lira and the US Dollar can significantly impact the Company's financial performance.
On 11 October Ruukki announced it had agreed to settle its dispute with the vendors of Mogale Alloys, which was acquired by Ruukki in May 2009. The key terms of the agreement, which will not have a material impact on the Company's 2012 financial results, include:
The share issue to the Vendors is conditional upon the receipt of South African Reserve Bank approval, which is expected to take up to 90 days. If this is not received, Ruukki has undertaken to procure that the shares are disposed of at fair value in accordance with the instructions of the Vendors and the resultant proceeds paid to the Vendors.
Once completed the arrangement will have the following impact on Ruukki's balance sheet:
| Closed period | Reporting date | |
|---|---|---|
| Full Year Results 2012 | 1.1.-14.2.2013 | 14 February 2013 |
| Q1 Interim Report 2013 | 8.4.-8.5.2013 | 8 May 2013 |
| Q2 Interim Report 2013 | 16.7.-15.8.2013 | 15 August 2013 |
| Q3 Interim Report 2013 | 9.10.-8.11.2013 | 8 November 2013 |
| Q1-Q3/12 9 months EUR '000 |
Speciality Alloys |
Ferro Alloys |
Unallocated items |
Eliminations | Continuing operations total |
|---|---|---|---|---|---|
| Revenue | 61,438 | 44,657 | 628 | -600 | 106,123 |
| EBITDA | 9,484 | 440 | -5,067 | 17 | 4,874 |
| EBIT | -3,673 | -6,918 | -5,098 | 17 | -15,672 |
| Segment's assets | 162,826 | 198,984 | 24,305 | -7,004 | 379,111 |
| Segment's liabilities | 41,646 | 108,797 | 6,132 | -6,011 | 150,564 |
| Q1-Q3/11 | Speciality | Ferro | Unallocated | Eliminations | Continuing |
| 9 months | Alloys | Alloys | items | operations | |
| EUR '000 | total | ||||
| Revenue | 63,160 | 58,608 | 522 | -522 | 121,768 |
| EBITDA | 10,549 | -2,003 | -6,070 | 1 | 2,476 |
|---|---|---|---|---|---|
| EBIT | -2,775 | -9,621 | -6,111 | 1 | -18,507 |
| Segment's assets | 188,393 | 206,232 | 71,795 | -15,755 | 450,665 |
| Segment's liabilities | 61,069 | 114,036 | 47,719 | -13,439 | 209,385 |
| FY/11 | Speciality | Ferro | Unallocated | Eliminations | Continuing |
| 12 months | Alloys | Alloys | items | operations | |
| EUR '000 | total | ||||
| Revenue | 83,637 | 75,448 | 698 | -696 | 159,087 |
| EBITDA | 13,811 | -3,886 | -8,529 | 7 | 1,404 |
| EBIT | -3,837 | -14,038 | -8,596 | 7 | -26,464 |
| Segment's assets | 171,511 | 219,205 | 49,226 | -18,135 | 421,807 |
Segment's liabilities 56,168 116,760 25,501 -16,779 181,649
| Q1- | Q1- | ||||
|---|---|---|---|---|---|
| EUR '000 | Q3/12 | Q3/11 | Q3/12 | Q3/11 | FY/11 |
| Continuing operations Revenue |
28,077 | 42,432 | 106,123 | 121,768 | 159,087 |
| Other operating income | 445 | 267 | 9,263 | 902 | 1,173 |
| Operating expenses | -30,343 | -45,419 | -110,518 | -120,461 | -159,128 |
| Depreciation and amortisation | -7,095 | -6,891 | -20,546 | -20,982 | -27,853 |
| Impairment | 0 | 0 | 0 | 0 | -15 |
| Items related to associates (core) | 1 | 61 | 6 | 267 | 272 |
| Operating profit | -8,915 | -9,550 | -15,672 | -18,507 | -26,464 |
| Financial income and expense | -386 | 1,120 | 1,274 | 106 | 830 |
| Items related to associates (non-core) | 0 | 0 | 0 | 196 | 196 |
| Profit before tax | -9,301 | -8,430 | -14,398 | -18,205 | -25,439 |
| Income tax | 3,150 | 1,930 | 3,908 | 4,725 | 7,081 |
| Profit for the period from continuing | |||||
| operations | -6,151 | -6,499 | -10,489 | -13,480 | -18,358 |
| Discontinued operations | |||||
| Profit for the period from | |||||
| discontinued operations | 0 | -207 | 0 | 46,917 | 41,086 |
| Profit for the period | -6,151 | -6,707 | -10,489 | 33,437 | 22,729 |
| Profit attributable to: | |||||
| Owners of the parent | -5,574 | -6,162 | -8,919 | 33,741 | 23,664 |
| Non-controlling interests | -577 | -545 | -1,570 | -304 | -935 |
| Total | -6,151 | -6,707 | -10,489 | 33,437 | 22,729 |
| basic (EUR), Group total | -0.02 | -0.03 | -0.04 | 0.14 | 0.10 |
| diluted (EUR), Group total | -0.02 | -0.03 | -0.04 | 0.12 | 0.09 |
| basic (EUR), continuing operations | -0.02 | -0.02 | -0.04 | -0.05 | -0.07 |
| diluted (EUR), continuing operations | -0.02 | -0.02 | -0.04 | -0.05 | -0.07 |
| EUR '000 | Q3/12 | Q3/11 | Q1- Q3/12 |
Q1- Q3/11 |
FY/11 |
|---|---|---|---|---|---|
| Profit for the period | -6,151 | -6,707 | -10,489 | 33,437 | 22,729 |
| Other comprehensive income | |||||
| Exchange differences on | |||||
| translating foreign operations | -3,189 | -4,976 | -2,640 | -15,495 -13,785 | |
| Income tax relating to other | |||||
| comprehensive income | 330 | 1,117 | 691 | 6,553 | 6,640 |
| Other comprehensive income, net of tax | -2,859 | -3,859 | -1,949 | -8,941 | -7,145 |
| Total comprehensive income for the period | -9,010 | -10,566 | -12,438 | 24,496 | 15,583 |
| Total comprehensive income attributable to: | |||||
| Owners of the parent | -8,108 | -8,796 | -10,679 | 27,487 | 18,738 |
| Non-controlling interests | -903 | -1,770 | -1,759 | -2,991 | -3,154 |
| EUR '000 | 30.9.2012 | 30.9.2011 | 31.12.2011 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Investments and intangible assets | |||
| Goodwill | 100,191 | 113,829 | 96,269 |
| Investments in associates | 77 | 63 | 77 |
| Other intangible assets | 50,817 | 68,731 | 65,215 |
| Investments and intangible assets total | 151,086 | 182,623 | 161,561 |
| Property, plant and equipment | 69,428 | 70,318 | 71,902 |
| Other non-current assets | 43,689 | 44,202 | 47,840 |
| Non-current assets total | 264,203 | 297,142 | 281,303 |
| Current assets | |||
| Inventories | 45,527 | 44,605 | 44,011 |
| Receivables | 29,021 | 34,713 | 30,616 |
| Cash and cash equivalents | 40,361 | 34,205 | 65,878 |
| Bank deposits | 0 | 40,000 | 0 |
| Liquid funds total | 40,361 | 74,205 | 65,878 |
| Current assets total | 114,909 | 153,522 | 140,504 |
| Assets held for sale | 0 | 7,239 | 0 |
| Assets held for sale total | 0 | 7,239 | 0 |
| Total assets | 379,111 | 457,904 | 421,807 |
| EQUITY AND LIABILITIES | |||
| Equity attributable to owners of the parent | |||
| Share capital | 23,642 | 23,642 | 23,642 |
| Share premium reserve | 25,740 | 25,740 | 25,740 |
| Paid-up unrestricted equity reserve | 245,128 | 245,128 | 245,128 |
| Translation reserves | 7,236 | 7,668 | 8,995 |
| Retained earnings | -83,141 | -68,173 | -77,695 |
|---|---|---|---|
| Equity attributable to owners of the parent | 218,605 | 234,005 | 225,811 |
| Non-controlling interests | 9,942 | 14,514 | 14,348 |
| Total equity | 228,547 | 248,519 | 240,158 |
| Liabilities | |||
| Non-current liabilities | |||
| Deferred tax liabilities | 26,224 | 32,882 | 33,506 |
| Provisions | 16,629 | 15,549 | 15,700 |
| Pension liabilities | 11,010 | 10,813 | 10,838 |
| Financial liabilities | 68,693 | 112,687 | 90,281 |
| Non-current liabilities total | 122,555 | 171,931 | 150,326 |
| Current liabilities | |||
| Advances received | 195 | 350 | 550 |
| Other current liabilities | 27,814 | 37,104 | 30,773 |
| Current liabilities total | 28,009 | 37,454 | 31,323 |
| Total liabilities | 150,564 | 209,385 | 181,649 |
| Total equity and liabilities | 379,111 | 457,904 | 421,807 |
| EUR '000 | 30.9.2012 | 30.9.2011 | 31.12.2011 |
|---|---|---|---|
| Liquid funds | 40,361 | 74,205 | 65,878 |
| Interest-bearing receivables | |||
| Current | 3,081 | 420 | 1,124 |
| Non-current | 33,807 | 31,778 | 33,896 |
| Interest-bearing receivables | 36,888 | 32,198 | 35,021 |
| Interest-bearing liabilities | |||
| Current | 894 | 7,628 | 1 109 |
| Non-current | 68,639 | 82,368 | 84 334 |
| Interest-bearing liabilities | 69,534 | 89,996 | 85,443 |
| NET TOTAL | 7,715 | 16,407 | 15,455 |
| EUR '000 | Property, plant and equipment |
Intangible assets |
|---|---|---|
| Acquisition cost 1.1.2012 | 126,721 | 300,481 |
| Additions | 3,436 | 8,840 |
| Disposals * | -388 | -1,706 |
| Reclass between items | 48 | 377 |
| Effect of movements in exchange rates | -2,147 | -18,155 |
| Acquisition cost 30.9.2012 | 127,670 | 289,838 |
| Acquisition cost 1.1.2011 | 132,715 | 354,221 |
| Additions | 4,231 | 420 |
|---|---|---|
| Disposals * | -524 | -21,574 |
| Transfer to assets held for sale | -353 | 1 |
| Reclass between items | 5,940 | -1,076 |
| Effect of movements in exchange rates | -15,288 | -31,511 |
| Acquisition cost 31.12.2011 | 126,721 | 300,481 |
* Including changes in earn-out liabilities
| EUR '000 | Q1-Q3/12 | Q1-Q3/11 | FY/11 |
|---|---|---|---|
| Profit for the period | -10,489 | 33,437 | 22,729 |
| Adjustments to profit for the period | 15,397 | -25,231 | -21,584 |
| Changes in working capital | 7,446 | -17,998 | -11,799 |
| Discontinued operations | -370 | 2,340 | 8,241 |
| Net cash from operating activities | 11,983 | -7,452 | -2,412 |
| Acquisition of subsidiaries and associates, net of cash acquired |
-25,081 | -500 | -500 |
| Acquisition of joint ventures, net of cash acquired |
0 | -1,592 | -1,598 |
| Disposal of subsidiaries and associates, net of cash sold |
0 | 83,276 | 83,276 |
| Capital expenditure and other investing activities |
-3,990 | -3,134 | -4,147 |
| Proceeds from repayments of loans and loans given |
-3,042 | -2,889 | -7,122 |
| Discontinued operations | 0 | -77 | -77 |
| Net cash from investing activities | -32,113 | 75,085 | 69,832 |
| Capital redemption | 0 | -9,617 | -9,617 |
| Dividends paid to non-controlling interests | 0 | -86 | -84 |
| Proceeds from borrowings | 54 | 11,139 | 10,004 |
| Repayment of borrowings, and other financing activities |
-5,329 | -13,215 | -20,148 |
| Discontinued operations | 0 | -339 | -339 |
| Net cash used in financing activities | -5,275 | -12,118 | -20,184 |
| Net increase in cash and cash equivalents | -25,405 | 55,515 | 47,236 |
| EUR '000 | A | B | C | D | E | F | G | H | I |
|---|---|---|---|---|---|---|---|---|---|
| Equity at 31.12.2010 | 23 642 | 25 740 | 2 193 | 250 849 | 13 921 | -104 772 | 211 574 | 24 781 | 236 355 |
| Dividend distribution | 0 | -627 | -627 | ||||||
| Total comprehensive | -6 254 | 33 741 | 27 487 | -2 991 | 24 496 | ||||
| income 1-9/2011 | |||||||||
| Share-based payments | 666 | 666 | 666 | ||||||
| Share subscriptions | 3 895 | 3 895 | 3 895 | ||||||
| based on option rights | |||||||||
| Capital redemption | -9 617 | -9 617 | -9 617 | ||||||
| Acquisitions and | -2 193 | 2 193 | 0 | -6 649 | -6 649 | ||||
| disposals of subsidiaries | |||||||||
| Equity at 30.9.2011 | 23 642 | 25 740 | 0 | 245 128 | 7 668 | -68 173 | 234 005 | 14 514 | 248 519 |
| Dividend distribution | 0 | -3 | -3 | ||||||
| Total comprehensive | 1 328 | -10 077 | -8 749 | -163 | -8 912 | ||||
| income 10-12/2011 | |||||||||
| Share-based payments | 555 | 555 | 555 | ||||||
| Equity at 31.12.2011 | 23 642 | 25 740 | 0 | 245 128 | 8 995 | -77 695 | 225 811 | 14 348 | 240 158 |
| Total comprehensive | -1 760 | -8 919 | -10 679 | -1 759 | -12 438 | ||||
| income 1-9/2012 | |||||||||
| Share-based payments | 689 | 689 | 3 | 692 | |||||
| Acquisitions and | 2 784 | 2 784 | -2 649 | 135 | |||||
| disposals of subsidiaries | |||||||||
| Equity at 30.9.2012 | 23 642 | 25 740 | 0 | 245 128 | 7 236 | -83 141 | 218 605 | 9 942 | 228 547 |
During the nine month period ended on 30 September 2012 the Group sold goods and rendered services to related parties and joint ventures worth EUR 0.3 (4.2) million. The Group also made raw material purchases from a joint venture amounting to EUR 1.8 (0.7) million and accrued interest on loans from a related party and other financing expenses amounting to EUR 0.3 (0.6) million. Interest income from a joint venture company totalled EUR 0.8 (0.4) million during the first three quarters of 2012.
On 30 September the Group had loans and other receivables from joint venture companies totalling EUR 20.2 (16.6) million and loan and interest receivables from a related party amounting to EUR 10.0 (10.1) million. The Group's loans from a related party amounted to EUR 0.0 (6.4) million and the Group's joint venture's loans from a related party to EUR 11.3 (11.0) million. The Group's trade and other payables to joint venture companies totalled EUR 0.2 (0.0) million.
| Q1-Q3/12 | Q1-Q3/11 | FY/11 | |
|---|---|---|---|
| Return on equity, % p.a. | -6.0% | 18.4% | 9.5% |
| Return on capital employed, % p.a. | -4.7% | 13.6% | 7.0% |
| Equity ratio, % | 60.3% | 54.3% | 57.0% |
| Gearing, % | 12.8% | 6.4% | 8.1% |
| Personnel at the end of the period | 752 | 799 | 797 |
The balance sheet date rate is based on exchange rate published by the European Central Bank for the closing date. The average exchange rate is calculated as an average of daily rates from the European Central Bank during the year.
The key exchange rates applied in the accounts:
| Q1-Q3/12 | Q1-Q3/11 | FY/11 | |
|---|---|---|---|
| TRY | 2.3090 | 2.2920 | 2.3378 |
| USD | 1.2808 | 1.4065 | 1.3920 |
| ZAR | 10.3092 | 9.8238 | 10.097 |
| 30.9.2012 | 30.9.2011 | 31.12.2011 | |
|---|---|---|---|
| TRY | 2.3203 | 2.5100 | 2.4432 |
| USD | 1.2930 | 1.3503 | 1.2939 |
| ZAR | 10.7125 | 10.9085 | 10.4830 |
Financial ratios and indicators have been calculated with the same principles as applied in the 2011 financial statements. These principles are presented below.
Return on equity, % = Profit for the period / Total equity (average for the period) * 100
Return on capital employed, % = (Profit before taxes + financing expenses) / (Total assets - interest-free liabilities) average * 100
Equity ratio, % = Total equity / (Total assets - prepayments received) * 100
Gearing, % = (Interest-bearing debt - liquid funds) / Total equity * 100
Net interest-bearing debt = Interest-bearing debt - liquid funds
Earnings per share, basic, EUR = Profit attributable to owners of the parent company / Average number of shares during the period
Earnings per share, diluted, EUR = Profit attributable to owners of the parent company / Average number of shares during the period, diluted
Operating profit (EBIT) = Operating profit is the net of revenue plus other operating income, plus gain/loss on finished goods inventory change, minus employee benefits expense, minus depreciation, amortisation and impairment and minus other operating expense. Foreign exchange gains or losses are included in operating profit when generated from ordinary activities. Exchange gains or losses related to financing activities are recognised as financial income or expense.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) = Operating profit + depreciation + amortisation + impairment losses
This Interim Report is prepared in accordance with the IAS 34 standard. Ruukki Group Plc applies the same accounting and IFRS principles as in the 2011 financial statements.
The preparation of the Interim Report in accordance with IFRS requires management to make estimates and assumptions that affect the valuation of the reported assets and liabilities and other information, such as contingent liabilities and the recognition of income and expenses in the income statement. Although the estimates are based on the management's best knowledge of current events and actions, actual results may differ from the estimates.
The figures in the tables have been rounded off, which must be considered when calculating totals. Average exchange rates for the period have been used for income statement conversions, and period-end exchange rates for balance sheet.
The Interim Report data are unaudited.
Share-related key figures
| Q3/12 | Q3/11 | Q1-Q3/12 | Q1-Q3/11 | FY/11 | |
|---|---|---|---|---|---|
| Share price | |||||
| development in London |
| Stock Exchange | ||||||
|---|---|---|---|---|---|---|
| Average share price* | EUR | 0.48 | 1.24 | 0.55 | 1.65 | 1.50 |
| GBP | 0.38 | 1.09 | 0.45 | 1.44 | 1.30 | |
| Lowest share price* | EUR | 0.40 | 0.96 | 0.39 | 0.96 | 0.96 |
| GBP | 0.32 | 0.84 | 0.32 | 0.84 | 0.83 | |
| Highest share price* | EUR | 0.67 | 1.52 | 1.06 | 1.84 | 1.84 |
| GBP | 0.53 | 1.33 | 0.86 | 1.60 | 1.60 | |
| Share price at the end of | ||||||
| the period** | EUR | 0.48 | 0.98 | 0.48 | 0.98 | 1.05 |
| GBP | 0.38 | 0.85 | 0.38 | 0.85 | 0.88 | |
| Market capitalisation at | EUR | |||||
| the end of the period** | million | 118.3 | 243.7 | 118.3 | 243.7 | 261.7 |
| GBP | ||||||
| million | 94.4 | 211.2 | 94.4 | 211.2 | 218.6 | |
| Share trading development |
||||||
| thousand | ||||||
| Share turnover | shares | 187 | 24 | 243 | 117 | 151 |
| EUR | ||||||
| Share turnover | thousand | 90 | 30 | 133 | 193 | 227 |
| GBP | ||||||
| Share turnover | thousand | 71 | 26 | 108 | 168 | 197 |
| Share turnover | % | 0.1% | 0.0% | 0.1% | 0.0% | 0.1% |
| Share price development in |
||||||
| NASDAQ OMX Helsinki | ||||||
| Average share price | EUR | 0.50 | 1.04 | 0.75 | 1.45 | 1.33 |
| Lowest share price | EUR | 0.38 | 0.81 | 0.38 | 0.81 | 0.81 |
| Highest share price | EUR | 0.71 | 1.61 | 1.02 | 2.03 | 2.03 |
| Share price at the end of | ||||||
| the period | EUR | 0.48 | 0.98 | 0.48 | 0.98 | 0.89 |
| Market capitalisation at | EUR | |||||
| the end of the period | million | 119.2 | 243.5 | 119.2 | 243.5 | 221.1 |
| Share trading | ||||||
| development | ||||||
| thousand | ||||||
| Share turnover | shares | 1,553 | 3,039 | 4,191 | 8,746 | 11,344 |
| EUR | ||||||
| Share turnover | thousand | 781 | 3,150 | 3,149 | 12,684 | 15,138 |
| Share turnover | % | 0.6% | 1.2% | 1.7% | 3.5% | 4.6% |
* Share prices have been calculated on the average EUR/GBP exchange rate published by Bank of Finland.
** Share price and market capitalisation at the end of the period have been calculated on the EUR/GBP exchange rate published by Bank of Finland at the end of the period.
Formulas for share-related key indicators
Average share price = Total value of shares traded in currency / Number of shares traded during the period
Market capitalisation, million = Number of shares * Share price at the end of the period
This report contains forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. By their nature, forward-looking statements involve uncertainty because they depend on future circumstances, and relate to events, not all of which are within the Company's control or can be predicted by the Company.
Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Actual results could differ materially from those set out in the forward-looking statements. Save as required by law (including the Finnish Securities Markets Acts (495/1989), as amended, or by the Listing Rules or the Disclosure and Transparency Rules of the UK Financial Services Authority), the Company undertakes no obligation to update any forward-looking statements in this report that may occur due to any changes in the Directors' expectations or to reflect events or circumstances after the date of this report.
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