SSAB — Annual Report 2010

Mar 14, 2011

Årsredovisning 2008 Annual report 2010

With SSAB's steels our customers are able to produce products that are lighter and stronger than if they had used ordinary steels.

With the support of SSAB's experts, the customers are able to develop handling, processing, design and construction and in so doing improve profitability.

The steel and the expertise that SSAB offers have made the company the market leader within high strength steels.

The cover shows a dumper truck with a bed made of high strength abrasion steel from SSAB. The truck is produced by Belaz, the manufacturer of some of the world's largest dumper trucks with load capacity of up to 320 tonnes.

Table of contents

	Page
Business overiew
The year 2010	1
Comments by the Chief Executive Officer	2
Vision and values	4
Strategies and targets	5
Strategic action plan	7
Products	9
Product development and research	10
Financial targets	12
Report of the Directors
Table of contents	13
Market development	14
Sales	15
Cost development	16
Result	18
Investments and liquidity	20
Financial position	21
Compensation to senior executives	24
Risk and sensitivity analysis	26
Near term prospects	27
SSAB EMEA	28
SSAB Americas	30
SSAB APAC	32
Tibnor	34
Sustainability
- Environment	36
- Employees	41
- Suppliers	44
5-year summary	46
Corporate governance report 2010	47
Financial reports
Table of contents	57
Consolidated income statement	58
Consolidated statement of
comprehensive income	58
Consolidated balance sheet	59
Consolidated statement of changes in equity	60
Consolidated cash flow statement	61
Parent company's income statement	62
Parent company's other comprehensive income 62
Parent company's balance sheet	63
Parent company's changes in equity	64
Parent company's cash flow statement	65
Accounting and valuation principles	66
Notes	74
Proposed allocation of profit	110
Auditor's report	111
Organization and share data
Board of Directors	112
Group Executive Committee	114
SSAB on the Stock Exchange	116
Annual General Meeting,
Nomination Committee, Calendar	118
Steel Talk ABC – a glossary	119
Addresses	120

The Annual Report is published in Swedish and English. In the event of differences between the English translation and the Swedish original, the Swedish Annual Report shall prevail.

SSAB in 90 seconds

SSAB is a world-leading producer of high strength steels.

SSAB offers products developed in close cooperation with customers, in order to create a stronger, lighter, and more sustainable world.

Profit 2010

• • Sales increased by 34 percent to SEK 39,883 (29,838) million
• • Profit after financial items amounted to SEK 682 (-2,061) million
• • Profit after tax was SEK 764 (-879) million and earnings per share were SEK 1.70 (-2.69)
• • Cash flow from the current operations was SEK -731 (3,387) million
• • Net debt/equity ratio at year-end was 58 (49) percent
• • Proposed dividend of SEK 2.00 (1.00) per share

SSAB EMEA

SEK m SEK -2,000 0 2,000 4,000 6,000 8,000 10,000 06 07 08 09 10 % Profit Margin -5 0 5 10 15 20 25 30

SSAB AMERICAS SSAB APAC

Share of the Group sales 36% Share of the Group capital employed 60% Share of the Group sales 6% Share of the Group capital employed 2%

³⁰⁰ OMX Stockholm Products

With SSAB's high strength steels, lift cranes become lighter, truck beds stronger, and containers more durable. In other words, SSAB's steels give the customers efficiency gains and environmental gains. In 2010, niche products accounted for 32 percent of total volumes.

The year 2010

Operations in 2010

• • The recovery continued during the year
• • Asia and Latin America demonstrated the strongest growth
• • Steep increases in raw materials costs could not be fully offset by higher steel prices
• • Strategic investment programs are ongoing to further strengthen SSAB's position within high strength steels

In 2010, SSAB increased its R&D spending by 20 percent compared with 2009. SSAB's development work focuses primarily on high strength steels, and is driven by the market's needs for environmentally friendly, high quality and costefficient products.

The Group's research centers form the hub of the development work. In addition to the R&D centers in Borlänge and Oxelösund, during the year a new state-of-the-art R&D facility was opened in Montpelier. SSAB has decided to establish a R&D center in Kunshan.

The work with several strategically important investments continued during the year. The finishing line in Kunshan, the new plate quenching line in Mobile and the direct quenching line in Borlänge are aimed at optimizing capacity within the Group and reaching closer to the customer.

" Strong expertise generates global leadership"

SSAB was an active participant in Expo 2010 in Shanghai. The outer casing of the Swedish pavilion, which was constructed of steel from SSAB, attracted the most attention. The innovation competition, aimed at stimulating ideas for a more sustainable world within the areas of construction and infrastructure, gave rise to such interesting innovations that several patents have been sought.

A year of recovery

2010 began in a much more optimistic light than the preceding year. The recovery has been perceptible, albeit that the intensity of the recovery weakened somewhat during the year.

For SSAB, 2010 has meant a return to profit. Although the recovery proved to be somewhat weaker than expected, we see a clearly positive growth trend. Thanks to the investments which we are now carrying out, we will be able to realize our strategy of growing within our niche products, high strength steels. By 2015, they will account for 50 percent of our shipments.

During the year we have continued our work on the construction of a direct quenching line in Borlänge, which will initially provide a capacity of 300,000 tonnes of quenched steel. We are also continuing to expand our plant in Mobile, Alabama, in order to increase quenched steel capacity by 200,000 tonnes. Both of these investment projects were approved in the autumn of 2008 and will be completed during the first half of 2012. During the coming year, a new finishing line in Kunshan, outside Shanghai, will also be commissioned. This will enhance our opportunities to provide better service to the growing Chinese market.

At the same time as we are expanding production technology to achieve growth in our niche products, we are also increasing our efforts within research and development. This involves developing existing areas of use for high strength steels together with our customers, while at the same time identifying new applications. During the year we opened a state-of-the-art research facility at our plant in Montpelier, Iowa. A research centre is also under construction adjacent to the finishing line in Kunshan, China. At the same time, we have coordinated our applications know-how and our research and development at the Swedish plants. We have also co-operated with the SwereaKimab research institute in order to develop the next generation of high strength steels. A common denominator for all of our research and development facilities is that they are to provide increased possibilities for the customer co-operation projects which represent an important aspect of SSAB's strategy for the future.

In order to further enhance SSAB's customer focus, a new organization was introduced at the beginning of 2010. Instead of the former divisions; Strip Products, Plate and North America, three new business areas have been estabished. SSAB EMEA, which covers Europe, the Middle East, and Africa. The previous North American division has been expanded into a business area, SSAB Americas, covering both North and Latin America. And, we have now an entirely new business area in Asia, Australia and New Zealand, SSAB APAC, where we are in the process of creating a strong foothold, wholly in line with our strategy to grow in this part of the world. The new organization is also aimed at providing a clearer offering to our customers. With the new organization, our sales personnel can offer customers SSAB's entire product range. During the year, demand was strongest from Asia, especially China, as well as parts of Latin America. Demand has been weaker in Europe and the US. The strongest customer segments were mainly the mining sector and heavy transports. Within Americas, demand within the energy sector has also been strong. Demand from the automotive industry, where we deliver primarily safety components and beams, was relatively good during the year. Demand from crane manufacturers has been weak throughout the year.

For SSAB's customers, the use of high strength steels renders possible the manufacture of products which are lighter, stronger, and more durable than products made of ordinary steels. Light and high strength steel constructions save material both in production and at the end use. For vehicles, excavating machinery and cranes, high strength steels provide increased lifespan and lower fuel consumption. These are properties which are increasingly in demand as energy prices increase and environmental awareness grows. In this way, SSAB's focus on high strength steels constitutes a focus on the environment.

At the same time, steel production places strains on the environment. Iron ore-based steel production results in carbon dioxide emissions. With current technology, it is not possible to go much further in reducing these emissions. SSAB is already among the steel companies which have gone furthest in the world in reducing carbon dioxide emissions from production. Nevertheless, we have set ourselves a target of reducing emissions by two percent per produced tonne under normal production conditions by 2012. We also actively participate in international research projects which are aimed, in the long term, at halving carbon dioxide emissions from steel production.

Prices for our raw materials — iron ore pellets and coal — rose sharply during the year. Initially, prospects were favorable that it would be possible to compensate for the raw materials costs, but prices of ordinary products came under pressure as several steel companies increased their production from 2009. However, prices of high strength steels remained more stable. All in all, the result has been that we have not been able to compensate in full for the increased raw materials costs. Thus, during the year we have

Olof Faxander Martin Lindqvist

continued our work on stringent cost controls. The savings program initiated at the end of 2008 is now generating annual savings of approximately SEK one billion.

Profit after financial items improved during 2010 compared with 2009 and reached SEK 682 million, representing earnings per share of SEK 1.70. The return on capital employed was 2 percent. The Board has proposed a dividend of SEK 2 per share.

The steel industry is characterized by great fluctuations. During the past year our employees have demonstrated great understanding for the Company's need to be able to adapt rapidly to changes. Despite the strains of the past few years, our employee satisfaction survey shows that SSAB's employees feel better with their work environment now than they did at the time of the last survey two years ago. The survey also demonstrates strong confidence among our employees as regards the future. It is, of course, extremely gratifying that our employees enjoy a sense of wellbeing and belief in SSAB's future. Thus, when I am now leaving the company to take up a new appointment, I feel great confidence as regards SSAB's continued development.

Olof Faxander

President and CEO

Although 2010 did not develop as strongly as we had initially hoped, I feel very confident as regards the coming year.

We have a clear and distinct strategy for the future. We have committed and skilled employees. We are carrying out investments which will ensure that we are well equipped for further growth within high strength steels. And demand for steel is expected to increase.

During the year, we will continue to develop our operations. We will continue to develop our employees' skills and use our production plants to the best effect, and we will manufacture where it is most cost-efficient to do so. We will continue our close cooperation with our customers and, together, develop new steel products and applications. We will improve products that are already available, while at the same time identifying new areas of use for high strength steels through our expanded research and development work. We will drive development forwards. With our new organization we are able to offer our customers a composite offering of the most advanced steels on the market.

Martin Lindqvist

President and CEO, from January 1, 2011

The vision points the way

SSAB's vision and values point the direction for the Group's long-term development. In recent years, SSAB has worked on unifying the Group, with shared values and a shared vision.

SSAB's vision

"A stronger, lighter and more sustainable world"

Together with our customers, we will go further than anyone to realize the full potential of lighter, stronger, and more durable steel products.

Values

customer's business in focus

We always take an active interest in the customer's business and seek long-term relationships. By sharing knowledge, together we create value.

True

We are dedicated and proud of what we do. We build strong relationships by being open-minded, straightforward and honest, and by sharing information and knowledge.

Always ahead

We are result-oriented. To achieve the highest performance we always proactively seek to be innovative and enhance our expertise further.

Global leadership within high strength steels

In order to achieve the vision and further strengthen our position as an innovative, profitable, and growth-oriented steel company, SSAB applies a long-term strategy involving clear targets.

SSAB's overall strategy is to be a leading global supplier of high strength and quenched steels, while at the same time maintaining and strengthening the positions in the domestic markets, the Nordic region and North America.

The strategic investment program which is currently being implemented will contribute to the Company's continued growth within niche products in the coming years.

Global leadership within high strength steels

SSAB has developed specialist expertise within high strength and quenched steels, which provides productivity and environmental benefits for end customers. These steels have demonstrated a higher rate of growth and better profitability than ordinary steels. Increased societal demand for savings in energy and resources, as well as cost-efficiency, are strong motivating forces behind demand for SSAB's niche products.

In order to continue to grow and strengthen the posi-

SSAB's overall strategy is to be a leading global supplier of high strength steels while at the same time maintaining and strengthening the positions in the domestic markets in the Nordic region and North America

tions, SSAB is continuously endeavoring to develop and broaden the market for high strength steels by working close to the customers and by offering cutting-edge expertise within applications development. Strong brands are a further way for SSAB to strengthen its position. The Group's strategic targets is that niche products shall account for 50 percent of the Group's total volumes by 2015.

CUTTING-EDGE EXPERTISE WITHIN APPLICATIONS DEVELOPMENT

SSAB possesses strong expertise in high strength steels. Our know-how covers design and construction, as well as processing, in order to exploit the qualities of the steel to the best advantage.

SSAB devotes significant resources to research and development for new applications, and consequently the Company is an attractive partner for customers for product and applications development. This close cooperation creates conditions for long term relationships and increased sales of SSAB's niche products. Accordingly, SSAB is focusing strategically on continued skills development.

PROXIMITY TO THE CUSTOMER

By operating and acting in proximity to the customer, conditions are created for rapidly identifying the customers' future needs and developing new applications for high strength steels. Through the reorganization of the operations into

geographic business areas, which was carried out in 2010, SSAB has strengthened and further clarified its offering to customers. The Group's various units co-operate so that customers are offered a complete range of solutions and products in the various markets. The Company's sales are dictated by the customers' needs, irrespective of where the products are manufactured. Proximity to the customer is important in all markets. There continues to be a great need for infrastructure development, first and foremost in China, while at the same time demands for environmental performance and sustainability considerations are increasing. One of SSAB's strategic targets is to strengthen its presence in Asia, particularly in China, by increasing sales of high strength steels in Asia to 20 percent of total niche product volumes by 2015.

Understanding the end customer's needs plays an important part in the work of accelerating growth within high strength steels. For this reason, SSAB has created meeting places for customers and end users at which SSAB's products and expertise are on display.

The international network, Hardox Wearparts, is an example of this. The end customers can identify companies which are members of the network and which manufacture high quality wear parts made of Hardox steel products.

SSAB's annual events, Experience High Strength Steel Day and the Swedish Steel Prize, which attract visitors from throughout the world, represent other examples. During the course of two days, existing and potential customers are able to visit the Company's plants and research centers and take part in seminars. Through the Swedish Steel Prize, SSAB has increased interest in, and drawn attention to, the new possibilities afforded by high strength steels.

STRONG BRANDS

SSAB's products possess excellent qualities for high strength, abrasion resistance, and formability. These factors have contributed to a strong position in the market. By creating its own product brands, SSAB has achieved a high degree of recognition. The profiled product brands include Hardox, Domex, Weldox, Docol, Armox, Prelaq and Toolox.

"Hardox in my body" is an example of the brand programs. By the customers' marking their products with the "Hardox in my body" emblem, the customer obtains a stamp of quality, while at the same time SSAB's brand is further strengthened.

Strong position in domestic markets

Within ordinary steels, having production close to the customers provides significant cost benefits. Thus, SSAB is constantly working on securing and developing its strong positions in its domestic markets, the Nordic region and North America. This provides SSAB with a stable platform for long term customer relations within both niche products and ordinary steels, and in the long term creates a basis for a transition from ordinary steels to niche products.

SSAB is the leading supplier of strip products in the Nordic region. SSAB's subsidiary, Tibnor, is a leading full-range distributor with a significant market share in the Nordic countries.

SSAB is the leading supplier of plate in North America, with sales directly to end customers and via distributors.

SSAB's strategic targets

• • High strength steels shall account for 50 percent of the total volumes by 2015
• • Sales of high strength steels in Asia shall increase to 20 percent of the total volume of niche products by 2015

Action plans for increased growth and profitability

SSAB's action plan is aimed at strengthening the strategic position by increasing growth in high strength steels, increasing profitability at current plants, and strengthening the organization.

The reorganization into geographic business areas contributes to increased market presence and improved co-ordination within purchasing, inventory management, research and distribution, and also optimizes conditions for production. The reorganization has also strengthened SSAB's position as a global knowledge company, attractive to skilled, highperformance employees.

Strategic investments within high strength steels

SSAB is currently carrying out several strategic investments in order to increase capacity and develop the market for high strength and quenched steels.

In Borlänge, a quenching line for quenched steel will be commissioned in the first half of 2012. It is initially estimated that quenched steel from Borlänge will be 300,000 tonnes annually. The quenching line will contribute to optimizing the entire production flow within SSAB EMEA.

The Mobile mill in Alabama, is continuing to construct a quenching line with a planned annual capacity of 200,000 tonnes, and is expected to be brought into commission in the first half of 2012. The investment will render possible further processing of steels produced by SSAB Americas into more abrasion-resistant and high strength steels, in order to meet a growing need on the local market.

The investment in a new finishing line in Kunshan, China, will enhance distribution efficiency and reduce delivery times within SSAB APAC. Steel which is shipped from the various production plants in Europe and the United States can be finished closer to the customers. The line will have capacity for cutting to length, shot blasting, and organic coating to customer order, and is expected to be commissioned in 2011.

Strategic investments

Borlänge, Sweden

• Quenching line for quenched steels, initial volume of 300,000 tonnes, expected to be commissioned in 2012

Mobile, USA

• Quenching line for quenched steels, capacity increase of 200,000 tonnes, expected to be commissioned in 2012

Kunshan, China

• Finishing line for cutting to length, shot blasting, and organic coating, expected to be completed in 2011

» BluPoint has developed a cost-effective solution for renovating worn teeth of excavators used in large loaders in the mining industry. In this solution, a new tooth tip made of high wear-resistant steel with good weldability is welded to the remaining part of the cast tooth. Since bucket teeth for mining shovels may need to be replaced several times per day, the solution significantly reduces operating expenses.«

High quality, leading product properties and strong brands

Thanks to SSAB's focus on expertise and a clear market organization, the Company has a portfolio of well known, high quality steel products. SSAB has a leading position within its niche products, while at the same time its ordinary steels are of a high and even quality with stable characteristics.

High strength steels - niche products for the future

SSAB's niche products in the form of high strength steels can be divided into the sub-groups of quenched steels and advanced high strength steels. A feature they share in common is their ability to reduce the weight, increase the strength, while at the same time extending the lifespan, of different applications and designs, thereby contributing to an improved total economy.

Quenched steels, produced in Oxelösund and in Mobile, comprise plate with particularly high strength and high abrasion resistance, but which also demonstrate good weldability and formability. The main products are abrasion-resistant steels and construction steels. Lighter end products require smaller quantities of steel, thereby resulting in a more efficient use of resources and reduced energy consumption. This is a quality that is attractive for manufacturers of construction machinery and mining equipment, with demands for both hardness and toughness combined with formability. The products are tailor-made to the needs of the customer or end customer.

• Hardox is an abrasion-resistant steel for maximum payload, lifespan, and operational certainty.
• Weldox is a steel for
• stronger, lighter structures and is suitable for e.g. cranes.

Armox is a protection steel for personal safety. Toolox is a tempered pre-hardened tool

and machine steel.

Ordinary steels - high and even quality for an established customer base

SSAB also produces ordinary steel products with stable qualities and of a high quality for an established customer base. Ordinary strip is used primarily within the engineering, building, and automotive industries, whereas plate is more in demand from the energy and transportation industries, but also the engineering industry. In addition, plate is used in larger infrastructure projects and, to an increasing degree, in the wind power industry.

Continued focus on product development and research

SSAB's research and development work is based on the market's needs. Through a structured process we identify relevant customer segments in which lighter, stronger and more durable steel applications fulfill critical functions and generate added value.

SSAB's development work is focused primarily on high strength steels. Focus is placed on process and product development, as well as customer applications. The work is governed by the Company's overriding vision, which constitutes the basis for a research and development vision:

"Our main products shall be the first choice for customers throughout the world, and will set the standard for performance in our selected market segments. Thus, for each main product SSAB shall identify two to three qualities which are important for the end user. In respect of these products, we will ensure long-term leadership by developing cutting-edge, guaranteed technical qualities."

In order to maintain a leading market position, the development work must be more efficient than that of the competitors. SSAB has identified a number of key factors for successful research and development. One important factor is that research and development must be market driven.

SSAB's key factors for successful R&D

• • Market-driven R&D
• • Skilled employees
• • Efficient portfolio and project control
• • Focus on efficient problem solving
• • Work climate which stimulates co-operation and innovation
• • Strong external networks

In addition, SSAB places great importance on efficient portfolio and project control.

Market-driven R&D

SSAB has developed a clear process to ensure that product development is market driven. In an initial phase, a number of customer segments are identified in which rigorous demands are placed on steel. Sustainability aspects, combining environmental and economic aspects, weigh heavily in this analysis, in terms of fuel consumption and durability. Thereafter, those steel applications are identified within the segments in which needs for high strength steels are greatest, as well as those qualities, e.g. abrasion resistance, construction durability or weight, which are critical for the application.

When needs have been clearly identified, an analysis is undertaken regarding customers in the segment and also the market's structure, demand and supply. If the results of this analysis are positive, an in-depth analysis is conducted regarding profitability potential.

The identified segments include, e.g., passenger cars, construction machinery, as well as agricultural and forestry machinery where abrasion-resistance and high strength constructions are important. Cranes, with rigorous demands for load tolerance (tensile strength), represent another segment.

At the same time, research is taking place on a microstructure level with the aim of enhancing the steel's core qualities. This research work is matched regularly against the market-driven projects, so that an identified need which has profitability potential can rapidly be converted into a new product.

Customer segments

Application/product: Optimization of technological properties

Product: Optimization of chemical composition

Process: Optimization of chemistry and process

Input from research conducted within strategic R&D areas

Efficient portfolio and project control

The value of the project portfolio is optimized through a strong focus on portfolio control. This control takes place based on two perspectives:

• • Correct choice of project. There must be a sound balance between projects which are driven by specific customer needs, extraneous changes – e.g. new legislation – and a market analysis as described above.
• • Correct implementation. The project must be implemented in the best possible manner by choosing the correct project model for the purpose, ensuring the right resources and by a regular focus on avoiding and dealing with bottlenecks in the process.

In order to maintain its leading position, SSAB's research must have a long-term perspective. The ambition is that 10 percent of research and development resources shall be allocated to projects with a longer term perspective, approximately 5–10 years.

Development in proximity to the customers

The Group's research facilities constitute the hub in the development work. In Oxelösund there is a center focusing on development in the production of quenched products as well as quenched plate product development. In Borlänge, there is a Center of Excellence with specialists within applications technology and a product development laboratory.

SSAB endeavors to conduct research as close to the customer as possible. During the year, a new research and development facility was opened in Montpelier, Iowa, which includes a laboratory with advanced equipment for testing, modeling and metallography.

In Kunshan, China, work also began during the year on the construction of a new research and development center, which will focus on processing and applications development of high strength steels. Asian customers will thus obtain better opportunities to develop production efficiency and product design in co-operation with SSAB. The new facility will be commissioned during the third quarter of 2011.

Local process development within the various production units is also carried out at all large production plants.

In addition, SSAB co-operates closely with selected research and development institutions. During the year, a five-year co-operation agreement was signed with the SwereaKimab research institute, which is owned jointly by the Swedish state and the business community.

In total efforts within research and development will increase significantly in the years to come.

USA

• New R&D Facility in Montpelier
• Process Development
• Product Development
• Application Technology

SWEDEN

Centers of Excellence

• Product Development
• Application Technology

New Group Strategic R&D Center (SWEREA)

• Basic research for
• the future

CHINA

New R&D Center in Kunshan

• Application Technology

Financial targets

SSAB's strategy is aimed at securing the Company's long term development, thereby creating value for shareholders and other stakeholders. To support the strategy, SSAB has established a number of financial targets.

Profitability

Taking into consideration the equity ratio requirement and the dividend policy, the target for the return on capital employed is that it shall exceed 15 percent over a business cycle.

In 2010, the return on capital employed was 2 percent. In 2009, the return on capital employed was negative.

Capital structure

The Group's operations are sensitive to the state of the economy. The objective is a long term equity ratio of approximately 50 percent and a long term net debt/equity ratio of 30 percent.

As of December 31, 2010, the equity ratio was 49 (51) percent and the net debt/equity ratio was 58 (49) percent.

Dividends

Dividends shall be adapted to the average level of earnings over a business cycle and, in the long term, constitute approximately 50 percent of profit after tax. However, the net debt/equity ratio must be taken into account. It shall also be possible to use dividends to adapt the capital structure.

The Board proposes a dividend for 2010 of SEK 2.00 (1.00) per share.

ROCE – return on capital employed

Equity ratio

Net debt/equity ratio

Earnings per share

Report of the Directors

Table of contents

	Page
Market development	14
Sales	15
Cost development	16
Result	18
Investments and liquidity	20
Financial position	21
Compensation to senior executives	24
Risk and sensitivity analysis	26
Near term prospects	27
SSAB EMEA	28
SSAB Americas	30
SSAB APAC	32
Tibnor	34
Sustainability
- Environment	36
- Employees	41
- Suppliers	44
5-year summary	46
Corporate governance report 2010	47
Financial reports	57
Proposed allocation of profits	110

Market development

Demand for steel increased in 2010 as the majority of the industries that use steel showed signs of recovery following the financial crisis. However, there was a degree of excess capacity in the steel industry, which diminished the possibilities to increase prices in pace with the increased demand. At the same time, increased global demand for iron ore and coal, primarily driven by high Chinese steel production, resulted in steep increases in raw materials prices in 2010. The combination of excess capacity, pressure on steel prices and increased raw materials costs led to squeezed margins for the steel industry as a whole.

Unexpected rapid recovery led by developing countries

Following a sharp downturn in the global economy, the second half of 2009 saw an upturn of the economy and, in the first half of 2010, the recovery – led by developing countries – was more rapid than expected. At the beginning of 2010, the recovery was reinforced by the customers' need to restock their very low inventory levels, and also by the fact that the emerging economies were not affected as much during the period of recession. China, Latin America and other emerging regions continued to grow at almost the same rate as previously, while growth in the more mature industrialized countries was significantly lower during the year. Assisted by powerful stimulant measures, the US showed a somewhat stronger recovery than Europe.

According to the World Steel Association, steel production in 2010 was 15 percent higher than the 2009 level. Expressed in absolute terms, the levels in the industrialized countries were still significantly below the pre-crisis levels. Notwithstanding a degree of slowdown, China recorded a new record level corresponding to 44 percent of global steel production.

Global steel consumption

New pricing model for iron ore and coal

2010 saw a move away from the previous annual iron ore agreements which were based on a global benchmark price system. Historically, annual agreements have been established between the major raw materials suppliers and some of the largest Asian steel producers. Other parties have then adapted themselves to these agreements. Starting in 2010, there are instead largely quarterly price agreements based on prevailing spot prices. In Sweden, LKAB was one of the few international mining companies to retain its annual benchmark prices in 2010.

As regards coking coal, the American suppliers retained the annual pricing model in 2010, while others – with BHP Billiton in the lead – changed to quarterly prices. Both iron ore and coal prices increased sharply in 2010 and approached the previous peak levels from the end of 2008.

Increased business activities

Business activities in SSAB's most important customer segments continued to improve in 2010 and demand for niche products gradually increased. Demand was strongest from the mining industry, and also from the energy sector. Construction machinery and heavy transport vehicles also recovered, albeit from low levels.

Thanks to the increased demand in the consumption stage together with the need to restock inventories to more normal levels, steel prices increased in the first half of 2010. Price levels stabilized during the second half of the year and declined somewhat towards the end of the year, due to the end of the inventory buildup period and the fact that previously idled production capacity in the steel industry was once again brought into use. Another contributing factor was a degree of slowdown within the automotive industry resulting from the end of scrappage premium programs.

Recovery continues, however some uncertainty remains

Despite a unanimous sense that the economy is in a recovery phase, customers continue to display a degree of caution, particularly in Europe, and are exercising restraint as regards inventory buildup. A more positive trend is discernable in the US. The trend in the emerging economies continues to be more positive.

Crude steel production per market

Million tonnes	2010	2009	%
EU 27	173	139	25
USA	112	82	36
China	627	574	9
Other Asia	254	231	10
Other	248	203	22
Global	1,414	1,229	15

Sales

Steel demand increased strongly in 2010, following a weak market in 2009. SSAB's crude steel production increased by 62 percent and amounted to 5,752 (3,553) thousand tonnes. The shipments increased by 43 percent and amounted to 4,606 (3,298) thousand tonnes. Shipments of niche products increased by 40 percent and amounted to 1,484 (1,041) thousand tonnes.

The Group's sales amounted to SEK 39,883 (29,838) million, an increase of SEK 10,045 million or 34 percent compared with 2009. Higher volumes accounted for a positive effect of 40 percentage points, higher prices for a positive effect of 1 percentage point, exchange rate movements had a negative effect of slightly more than 6 percentage points and produc mix effects a negative effect of 1 percentage point.

For the Group as a whole, 78 (76) percent of sales were outside Sweden.

Sales in the largest markets

SEK millions	2010	2009	Change, %
USA	11,648	8,621	35
Sweden	8,918	7,099	26
Germany	2,322	1,813	28
Canada	1,891	1,447	31
Finland	1,574	1,287	22

External sales per business area

SEK millions	2010	2009	Change, %
SSAB EMEA	16,536	12,453	33
SSAB America	14,498	10,684	36
SSAB APAC	2,326	1,574	48
Tibnor	6,523	5,127	27
Total	39,883	29,838	34

Sales per business area Shipments

Cost development

Cost trends

Costs in the business increased by 21 percent compared with the preceding year and were SEK 39,305 (32,412) million. Of these costs, SEK 3,920 (3,481) million related to products purchased in the trading operations.

Remaining costs consisted primarily of processing costs, selling and administrative costs, depreciation/amortization, and costs for input materials and energy.

Processing costs, selling and administrative costs are comprised primarily of costs for the Group's own personnel and purchased material and services. Due to the increased production and sales, the processing costs have increased significantly during the year. Part of the reduction in fixed costs in 2009 was due to the sharp cut-back in production. In 2010, fixed costs increased as production returned to a more normal level. However, the long-term reduction in costs is in line with the target set out in the cost savings program 2008.

Raw materials are priced in the world market and the prices, which are primarily quoted in USD, are very sensitive to the steel business cycle. Iron ore and coal are the dominant raw materials within the blast furnace based manufacturing in Sweden and price and delivery agreements were normally entered into annually at the beginning of the year, but a shift to quarterly based price agreements could be seen during 2010. Scrap metal is an important raw material for the North American operations with two scrap-based steel works.

The combined iron ore price for 2010 was 78 percent higher than 2009 in USD while the increase was 96 percent in SEK.

The combined coal price for 2010 was 43 percent higher than 2009 in USD while the increase was 57 percent in SEK.

The price of scrap metal in the US fluctuated during the first three quarters of the year but gradually increased during the fourth quarter and, at the end of the year, were 59 percent higher than at the end of 2009.

The Group's cost structure is shown in the diagram below.

Energy

Coal is an essential reduction agent to remove oxygen from iron ore and constitutes one of the most important raw materials in iron ore-based steel production. Coal also provides approximately 85 percent of the energy for the Swedish steel operations.

Energy is otherwise provided through electricity, oil and LPG. In total, the Swedish steel operations consumed 1,582 (1,243) GWh of electric power and 1,494 (1,102) GWh of oil and LPG during the year. By utilizing the energy-rich gases that are formed during steel production, among other things, electricity is produced at the OK3 heat and power plant in Oxelösund and in the half-owned energy company, Lulekraft. During the year, these plants produced 702 (516) GWh of electricity.

Electricity and natural gas represent significant energy costs for SSAB North America and accounted for approximately 10 percent of total steel plant production costs. SSAB North America has long-term, inflation-indexed agreements.

In total, the Group's energy costs (excluding coal) amounted to SEK 2,553 (2,087) million.

The Group's cost structure

Research and development

SSAB's research and development work focuses on process development, product development and customer applications. During the year, research and development expenditures amounted to almost SEK 190 million. The strategy and the new organization have strengthened the market-driven aproach to research and development, with the customer's business in focus.

Abrasion-resistant steels and wear applications constitute a key area for SSAB. During 2010, the development work within this segment intensified in respect of both product development and applications development. SSAB has expanded the product range by several dimensions (thicknesses and widths) from production plants in Oxelösund, Borlänge and Mobile. Today, SSAB is able to offer its customers abrasionresistant steel in thicknesses ranging from 0.5 mm to 130 mm, which is the most complete product range in the market.

The development of construction steels has followed the same pattern with, among other things, the development of thicker plate dimensions and improved qualities in the form of enhanced formability and toughness. The product portfolio has been expanded with steels for the production of pipe for oil and gas shipments.

Steel for safety components for the automotive industry also constitutes a prioritized area. During 2010, several new so called Dual-Phase and martensitic grades of steel have been developed. In order to meet the automotive industry's needs for corrosion-resistant high strength steels, considerable resources have been invested in the development of electrogalvanized steels, and DOCOL 1400 EZ was introduced in 2010.

The inauguration of a new research center in Montpelier, Iowa, and the start of construction on a research center in

Kunshan, China, during 2010 constitute milestones in the increased focus on research and development. These facilities will supplement the existing research centers and will lead to an accelerated development of steel products and technical solutions, as well as improved support to local customers.

Within the scope of applications development and technical customer service, SSAB carried out some one hundred customer projects during 2010 and developed new conceptual solutions. SSAB is able to provide support throughout the customer's entire development chain, from skills development to full-scale production and sales. The development, together with the Swedish company Wranne Fåhraeus Design, of a new type of bed which exploits the high strength of DOCOL 1200M combined with the desired elasticity, is an example of a new area of use for SSAB's high strength steels.

SSAB cooperates closely with selected research and development institutions in both Europe and North America. During the year, SSAB signed a long-term cooperation agreement with SwereaKimab, a leading research institution within the area of materials research, in order to further strengthen long-term product development.

SSAB is also actively engaged in research and development within the environmental area, focusing on reducing carbon dioxide emissions and identifying new applications for various residual products.

All in all, the capitalized new investments within R&D during 2010 entailed an increase of approximately 20 percent for the production of new products, applications, and improved manufacturing processes.

Crude steel production

1) SSAB Americas pro forma full year of 2007. 1) SSAB Americas pro forma full year of 2007.

Strip and plate production

SSAB enjoys close cooperation with a select network of leading institutions and industry organizations including the Swerea institutions (Swedish research), MEFOS and KIMAB, the Swedish Steel Producers' Association, Eurofer (European Confederation of Iron and Steel Institutes), and the World Steel Association. In North America, SSAB supports research activities at a number of universities including the Colorado School of Mines and the University of Iowa.

Result

Operating profit and profit after financial items

Operating profit for the full year improved by SEK 2,676 million to SEK 1,084 (-1,592) million. The profit analysis is shown in the table below.

Exchange rate movements compared with 2009 had a negative impact of approximately SEK 1.5 billion on operating profit during the year.

Financial items amounted to SEK -402 (-469) million and profit after financial items amounted to SEK 682 (-2,061) million, an improvement of SEK 2,743 million compared with 2009.

Tax

Tax for the year amounted to SEK +82 (+1,182) million. The effective tax rate was +12(+57) percent. Tax for the year was positively impacted by 55 percentage points due to lower tax rates on positive earnings and higher tax rates on negative earnings in foreign subsidiaries.

Profit after tax and earnings per share

Profit after tax (attributable to the shareholders) excluding discontinued operations amounted to SEK 716 (-871) million, equal to SEK 2.21 (-2.69) per share.

Return on capital employed/equity

The return on capital employed before tax and return on equity after tax were 2 percent for the full year, whereas the figures for the full year of 2009 were negative.

Test of impairment for goodwill

On November 30, the annual impairment test was carried out regarding goodwill. At the end of the year there remained SEK 18,643 million in goodwill, of which in principle the entire amount relates to SSAB North America (former IPSCO and now part of SSAB Americas). The result of the impairment test indicated no impairment. For further information, see Note 6.

Divestment of the North American tubular business

The tubular business in SSAB North America was sold in 2008. In the income statement for 2010 an additional cost of SEK -164 (-131) million has been reported as "Result after tax for discontinued operations". The cost relates to provisions for warranty undertakings to the buyer regarding tax for the period prior to the divestment.

Change in operating profit between 2010 and 2009 (SEK millions)
Exchange rate impact on operating profit	-1,500
Steel operations
- Higher prices	100
- Higher volumes	2,500
- Higher variable production costs	-1,100
- Unabsorbed fixed costs 2009	2,500
- Higher sales of by-products and slabs	520
Tibnor
- Higher volumes, changed mix and margins	430
Higher fixed costs	-964
Lower provisions for anticipated bad debt losses	170
Other	20
Change in operating profit	+2,676

Profit after financial items

Result
SEK millions	2010	2009
Sales	39,883	29,838
Operating profit per business area
- SSAB EMEA	374	-1,693
- SSAB Americas	1,119	595
- SSAB APAC	232	70
- Tibnor	421	-38
Depreciation/amortization surplus
values1)	-870	-942
Other 2)	-192	416
Operating profit	1,084	-1,592
Financial items	-402	-469
Earnings after financial items	682	-2,061
Tax	82	1,182
Earnings after tax for continuing
operations	764	-879
Earnings after tax for discontinued
operations 3)	-164	-131
Earnings after tax	600	-1,010

Key ratios
SEK millions	2010	2009
Operating margin (%)	3	-5
Return on capital employed before tax (%)	2	neg
Return on equity after tax (%)	2	neg
Earnings per share (SEK)	1.70	-3.09
of which for continuing operations (SEK)	2.21	-2.69
Equity	30,076	31,002
Net debt	17,587	15,314
Net debt/equity ratio (%)	58	49

1) Depreciation/amortization of surplus values on intangible and tangible fixed assets from the acquisition of IPSCO.

2) Profit includes a profit of SEK 0 (313) million on the sale of emission rights of which SEK 0 (13) million in SSAB EMEA. Earnings for 2009 also included a positive item regarding dissolution of a structural reserve in the amount of SEK +76 million.

3) The discontinued operations relate to the tubular business in North America which was divested in 2008. The cost for the year relates to a provision in respect of warranty obligations regarding tax to the buyer.

The business areas/subsidiaries' sales, profits and return on capital employed

								Return on capital
		Sales	Change	Change3)		Operating profit		employed 4)
SEK millions	2010	2009	%	%	2010	2009	2010	2009
SSAB EMEA	21,428	15,252	40	47	374	-1,693	3	neg
SSAB Americas	14,581	10,713	36	43	1,119	595	1	neg
SSAB APAC	2,326	1,583	47	50	232	70	33	13
Tibnor	6,696	5,286	27	30	421	-38	22	neg
Depreciation/amortization on surplus values 1)					-870	-942
Other 2)	-5,148	-2,996			-192	416	-	-
Total	39,883	29,838	34	40	1,084	-1,592	2	neg

1)Depreciation/amortization of surplus values on intangible and tangible assets related to the acquistion of IPSCO.

2) The result includes a profit of SEK 0 (300) million on the sale of emission rights in Other and of SEK 0 (13) million in SSAB EMEA.

3) Adjusted for changes in exchange rates.

4) SSAB America's return is calculated based on operating profit including depreciation and amortization on surplus values.

EBITDA

Investments and liquidity

Capital expenditures

During the year, decisions were made regarding new capital expenditures totaling SEK 1,772 (572) million, of which SEK 753 (0) million involved strategic investments. Capital expenditure payments during the year amounted to SEK 2,012 (1,912) million, of which SEK 1,170 (944) million involved strategic capital expenditures. For further description of the investments, see the sections for the different business areas.

Liquidity

The operating cash flow for the full year was negatively affected by an increase in working capital, primarily due to an increased inventory value, and amounted to SEK -212 (4,868) million.

Cash flow before financing and dividend amounted to SEK -2,460 (2,474) million. The year's negative cash flow was also affected by a non-recurring item in the form of a payment of SEK 591 million under warranty undertakings regarding tax to the purchaser of the tubular business. Following dividend and translation effects on debts in foreign currency, net debt during the year increased by SEK 2,273 million. As of December 31, the net debt amounted to SEK 17,587 (15,314) million. The net debt/equity ratio was 58 (49) percent.

Operating cash flow/change in net debt
SEK millions	2010	2009
SSAB EMEA	-1,736	2,113
SSAB Americas	1,421	1,464
SSAB APAC	162	141
Tibnor	42	725
Other 1)	-101	425
Operating cash flow	-212	4,868
Financial items 2)	-392	-538
Taxes 3)	-127	-943
Cash flow from current
operations	-731	3,387
Strategic investments	-1,170	-944
Divestment of businesses and operations 2)	-559	31
Cash flow before dividend and
financing	-2,460	2,474
Dividend	-324	-1,296
Translation differences on debt
against equity (hedge) 3)	599	475
Currency translation, etc.	-88	25
Change, net debt (increase-/
decrease+)	-2,273	1,678

1) Previous year included payment received for sold emission rights.

2) For 2010, the item comprises a payment of SEK 591 million under warranty undertakings

regarding tax to the purchaser of the tubular business. 3) Revaluation for hedging of currency risk in foreign operations.

The Group's liquidity preparedness
SEK millions	31 Dec 2010	31 Dec 2009
Cash and cash equivalents	1,314	3,652
Commited credit facilities	12,205	15,198
Liquidity preparedness	13,519	18,850
-as a percentage of annual sales (%)	34	63
Less commercial paper	-1,334	-2,601
Liquidity preparedness excluding commercial paper	12,185	16,249
-as a percentage of annual sales (%)	31	54

Investments and depreciation/ amortization

Financial position

Financing

During the year, a financing agreement was signed regarding part of the investment in the new quenching line in Mobile, Alabama. The financing is for USD 161 million and extends for 30 years, but due to the contract terms is classified as a short-term debt. If the financing was treated as a 30-year term, the average term to maturity on the loan portfolio would be 4.8 years. As of December 31, the loan is booked at SEK 1,087 million. Of this sum, SEK 116 million has been utilized, while the remaining SEK 971 million is held in escrow.

As of December 31, the term to maturity on the total loan portfolio averaged 3.3 (3.5) years with an average fixed interest period of 0.7 (0.9) years. Of the loan portfolio of SEK 19,763 (18,876) million, short-term commercial paper accounted for SEK 1,334 (2,601) million. In December 2010, Standard & Poor's lowered SSAB's long-term credit rating from BBB- to BB+, based on their view of the overall steel industry. The down-grade has had only a minor negative impact on interest expenses for existing financing.

Equity

Following the addition of profit for the year of SEK 552 million attributable to the Company's shareholders and other comprehensive income of SEK -1,184 million (primarily comprising translation differences), and after deduction of a dividend of SEK 324 million, the shareholders' equity in the Company amounted to SEK 29,885 (30,841) million, equal to SEK 92.26 (95.21) per share.

Profitability and the net debt/equity ratio in relation to targets are presented in diagrams under the heading Financial targets on page 12.

Dividend

The Board proposes that the Annual General Meeting issue a dividend of SEK 2.00 (1.00) per share, equal to SEK 648 (324) million. For considerations relating to proposed allocation of profit, see Note 30.

Operational cash flow

Accounts receivable

Consolidated balance sheet
	31 Dec	31 Dec
SEK millions	2010	2009
Assets
Goodwill	18,643	19,701
Other intangible assets	4,309	5,374
Tangible fixed assets	17,063	17,137
Participations in affiliated companies	395	348
Financial assets	77	55
Deferred tax receivables	159	164
Total fixed assets	40,646	42,779
Inventories	11,389	8,221
Accounts receivable	5,057	4,435
Current tax receivables	742	667
Other current receivables	1,905	665
Cash and cash equivalents	1,314	3,652
Total current assets	20,407	17,640
Total assets	61,053	60,419

Currency flows

Equity and liabilities

Equity for shareholders in the company	29,885	30,841
Minority shares	191	161
Total equity	30,076	31,002
Deferred tax liabilities	4,952	5,283
Other long-term provisions	254	550
Long-term interest-bearing liabilities	16,786	14,878
Total long-term liabilities	21,992	20,711
Current interest-bearing liabilities	2,977	3,998
Current tax liabilities	200	96
Accounts payable	4,048	3,063
Other current liabilities	1,760	1,549
Total current liabilities	8,985	8,706
Total equity and liabilities	61,053	60,419

» Van Reenen Steel has developed a truck body with more torsional stiffness and impact resistance in a new structure made of steel with high wear resistance and strength. A new bottom profile and rounded corners provide more even wear and faster tipping. The result is longer durability, lower weight, improved environmental performance, and greater productivity. «

Compensation to senior executives

Proposal by the Board for 2011

For 2011, the Board proposes that compensation to the President and other members of the Company's management shall comprise a fixed salary, possible variable salary components, other benefits, such as company car, as well as pension. "Other members of the Company's management" means members of the Group Executive Committee, currently eight persons in addition to the President. The total compensation package shall be on market terms and competitive in the employment market in which the executive works. Fixed salary and variable salary components shall be related to the executive's responsibilities and authority. The variable salary components shall be based on results as compared with defined and measurable targets and shall be subject to a ceiling in relation to the fixed salary. Variable salary shall not be included in the basis for computation of pension, except in those cases where so provided in the rules of a general pension plan (e.g. the Swedish ITP plan). For senior executives outside Sweden, all or parts of the variable salary may be included in the basis for pension computation due to legislation or local market practice.

Programs for variable salary should be structured such that, in the event of exceptional circumstances, the Board has the possibility to limit or withhold payment of variable salary where such a measure is deemed reasonable and compatible with the Company's responsibilities to shareholders, employees and other stakeholders.

Consulting fees on market terms may be payable to the extent a director performs work on behalf of the Company, in addition to the duties serving on the Board.

Senior executives in Sweden must give six months' notice of termination of employment. In the event of termination by the Company, the total termination period and the period during which severance compensation is payable shall not exceed 24 months. Pension benefits are determined either as benefit-based or contribution-based, or a combination thereof, with individual retirement ages, however under no circumstances below the age of 60. Benefit-based pension benefits are conditional on the benefit being earned during a predetermined period of employment. In the event the employment terminates prior to retirement age, the executive shall receive a paid-up policy regarding earned pension. Termination periods and severance compensation for senior executives outside Sweden may vary due to legislation or local market practice.

The Board of Directors shall be entitled to deviate from the guidelines where special reasons exist in an individual case.

Variable salary 2010

For the President and the other members of the Group Executive Committee, the variable salary component 2010 is linked to the Group's EBITDA margin relative to a number of comparable steel companies and to a target for cash flow established by the Board, combined with one or more individual targets.

Temporary incentive program

In connection with the acquisition of IPSCO, the Board made the assessment that, in light of the size of the acquisition and the major financial strain resulting from the acquisition, it was of the utmost importance to achieve a rapid integration of the business, that identified synergies quickly could be realized, that earnings continued to develop positively during the integration of the merged SSAB/IPSCO, and that senior executives remained with the Company during this critical period. Therefore, the Board of Directors decided on a temporary incentive program for a number of key persons stationed in Sweden who were engaged in the integration of the American operations, which includes the Swedish members of the Group Executive Committee, including the President. This temporary incentive program consisted of variable compensation and applied as a supplement to the already existing variable salary component. For the Swedish members of the Group Executive Committee, the incentive program applied during a maximum of two years commencing July 2007 and was capped at 100 percent of each member's fixed annual salary. The amount payable depended entirely on the degree to which a number of established targets were achieved as regards the integration of the American operations into SSAB's operations. The targets comprised the Group's EBITDA margin compared with a number of comparable steel companies, a cash flow target established by the Board, and realized synergies. The first year's outcome was paid in cash in 2008. Payment of the second year's outcome was, for the time being, stopped in accordance with the resolution adopted at the 2009 Annual General Meeting which authorized the Board to limit or withhold payment of variable compensation in the event of exceptional economic circumstances. However, the cost affected 2009. During 2010 the Board decided to pay two thirds of the maximum outcome.

For more detailed information regarding compensation, see Note 2.

Risk and sensitivity analysis

Significant risks and uncertainty factors

The Group's results and financial positions are affected by a large number of factors, several of which are beyond the Company's control. These include, for example, the political and economic conditions that affect the markets for steel.

The dramatic events of recent years on the global financial markets have been accompanied by increased general uncertainty, which also results in risks and uncertainty in the business operations. The consequent main risks and uncertainty factors encountered by the Group relate to the impact of the macro-economy on demand, existing financing and possibilities for future financing, as well as changes in value of fixed assets and operating assets.

Weak demand leads to a low rate of inventory turnover, which increases the risk of physical obsolescence in inventories.

The work of identifying and analyzing the risks and deciding how, and to what extent, the risks shall be addressed is a prioritized area in the Group.

Risks and uncertainty in the Group's operations

Steel production takes place in a chain of processes. Disruptions in any part of the chain can rapidly have serious repercussions on the entire process. Thus, a disruption in the operations due, for example, to transportation obstacles and damage to assets resulting from, for example fire, explosions and other types of accidents can be costly. The risk that disruptions in one part of the process will have repercussions on other parts of the process can be minimized by keeping stocks of raw materials, work in progress, inventories of finished goods, as well as other types of inventory on as optimal a level as possible. Both property insurance and business disruption insurance are held in order to minimize the costs resulting from this type of risk.

The possibility to attract and retain skilled personnel represents a key factor in being able to conduct the operations with good profitability in the long term. Thus, skills development and management development are prioritized areas. The niche strategy is contingent also on a continued strong process and product development, and skills development in these areas is of particular importance.

The Group's reputation can be eroded quickly if safety, environmental responsibility and ethics are called into question, and priority is given to these issues in the day-to-day work as well as in long-term training and work on influencing attitudes.

In an international business such as SSAB's, there are also a number of financial risks in the form of currency risks, financing risks, liquidity risks, interest rate risks and credit risks. The management of these risks is governed by the Group's finance policy which is described in greater detail in Note 27.

Risks and uncertainty in the steel industry

The steel industry is strongly affected by the business cycle for steel and the most important raw materials. The high percentage of fixed costs due to the large capital expenditures that characterize the steel industry also increases sensitivity to business cycle fluctuations. It is difficult to protect against this, but a focus on niche products is an example of how SSAB has chosen to minimize the cyclical nature of its earning capacity.

The transition to shorter term contracts for purchases of raw materials entails increased volatility as regards costs. To minimize this increased risk, there is a transition to shorter term price agreements also in conjunction with sales.

It is through a continued focus on developing its niche products that SSAB can maintain and, preferably, strengthen its position against competitors.

The system of carbon dioxide emission rights has resulted in new rules for companies in the steel industry. As the system functions today, there is a risk of distortion of competition due to the fact that a large proportion of steel producing countries in the world are not covered by the system.

External risks and uncertainty

There are a large number of extraneous factors that impact the entire steel industry and, therefore, SSAB. Examples include the introduction of various obstacles to trade, energy price trends and increased environmental requirements. The work of managing environmental risks and increased environmental requirements is addressed in greater detail under the section about SSAB's environmental activities.

Sensitivity analysis

The approximate effect in 2010 on profit after financial items and earnings per share of changes in significant factors is shown in the sensitivity analysis below.

	Change, %	Effect on profit, SEK millions	Effect on earnings per share, SEK2)
Steel prices - steel operations	10	3,150	7.15
Volumes - steel operations	10	320	0.75
Iron ore prices	10	520	1.20
Coal prices	10	290	0.65
Scrap metal prices	10	610	1.40
Interest rates	1 percent age point	160	0.35
Krona index 1)	5	240	0.55

1) Calculated based on SSAB's exposure without hedging. If the krona is weakened, this has a posi-

tive effect. 2) Calculated based on a tax rate of 26.3%.

Near term prospects

Demand for SSAB's niche products is expected to continue to develop well in Asia and in North and Latin America, while the recovery in Europe is expected to be slower both for niche and ordinary products. The market for ordinary plate in North America is expected to develop positively and, as a consequence, SSAB's North American unit will be fully booked during the first quarter 2011.

Production disruptions at one of the blast furnaces in Oxelösund as well as transportation problems in the rail system due to the exceptional winter weather will initially result in certain delays in shipments during the first quarter 2011.

The final week of the first quarter sees the start of a scheduled maintenance outage in Mobile, Alabama, which will extend until the beginning of April. This outage will negatively affect operating profit by approximately SEK 200 million, of which almost half occurs during the first quarter.

In SSAB EMEA, the fall in prices which occurred during the autumn of 2010 will have a somewhat negative impact on SSAB's contracted price agreements during the first quarter. In North America, it is believed that prices will increase as a consequence of higher scrap metal prices, and also due to improved underlying demand. The announced price increases will not, however, cover in full the increased scrap metal prices during the first quarter. As underlying demand improves, our ambition is to obtain full compensation for the increased scrap metal prices.

SSAB's coal agreements for deliveries during the first quarter entail a price increase in USD of approximately 8 percent compared with the coal agreements for the fourth quarter 2010, but due to current stocks will have no impact during the first quarter 2011. Prices in the iron ore agreement remain unchanged for the first quarter.

Scrap metal prices in the US have risen sharply in recent months. In early February 2011 prices were 27 percent higher than at the end of September 2010. The assessment is that seasonal factors will cause scrap metal prices to continue to increase during the first months of 2011.

A continued strengthening of the Swedish krona would put pressure on margins.

SSAB EMEA

SEK millions	2010	2009
Sales	21,428	15,252
Profit before depreciation and
amortization	1,495	-620
Operating profit	374	-1,693
Operating margin (%)	2	-11
Operating cash flow	-1,736	2,113
Capital expenditures	1,326	1,543
Capital employed at year-end	18,051	15,104
Return on capital employed (%)1)	3	neg
Average number of employees	6,296	6,161
1) Refers to return on average capital employed.

EMEA – Europe,

Share of the Group

Operating profit 36%

SSAB EMEA is a world leading manufacturer of quenched steels, the largest manufacturer of strip products in the Nordic region and one of Europe's leading companies within advanced high strength steels. The niche products are mainly sold directly to end customers, whereas ordinary grades also are sold via distributors and Steel Service Centers.

Market

Initiated by the economic recovery, steel consuming companies started to re-build stocks in the beginning of 2010. During the first half of the year, demand at steel companies grew faster than the underlying demand. Within the EU, the second quarter was the strongest since late 2006, however this performance conceals widely different growth patterns between regions and countries. Steel consumption in Europe is still significantly below pre-crisis levels and, according to Eurofer, companies attained approximately 70–75 percent of the 2007 level in 2010. SSAB EMEA's major competitors include Rautaruukki, Arcelor Mittal, ThyssenKrupp and Dillinger.

Europe

Recovery of demand gradually continued in the first half of the year, leading to increased capacity utilization rates among steel companies. The main driver for demand growth was the export driven manufacturing industry, which to some extent also was supported by a weakened Euro.

Industrial activity was very strong in Germany but also included robust improvements in the North West region, including Sweden. Central and Eastern Europe showed signs of improvements while the Southern European economic situation remained difficult.

The mechanical engineering and machinery industries, which showed the steepest drop during the crisis, performed at the highests growth rates since the 1970s. This was mainly fuelled by surging exports to the emerging markets, in particular to China.

The automotive industry opened strongly in 2010, but the growth rate slowed when the automotive scrap incentives schemes gradually came to an end.

The construction sector continued to develop weakly. Infrastructure related segments performed relatively well, but non-residential buildings for industrial or commercial buildings remained at a low level, thus negatively affecting the demand for painted material. Residential housing seems to have bottomed out, but there are large regional differences.

The situation for Original Equipment Manufacturers (OEM) has gradually improved. Thanks to demand for their products, performance in the mining industry has been strong.

Following strong recovery in the first half of 2010, overall growth slowed down during the summer months and into the fourth quarter. This was as a result of an uncertain macroeconomic situation in many parts of Europe, which was linked to more governmental budget restrictions.

Re-started idled production capacity combined with a more conservative approach among customers with regards to material procurement, led to steel supply overcapacity towards the end of the year. This situation was even more pronounced with ordinary grades as opposed to niche material.

Middle East/Africa

The Middle East and Africa showed continued growth. Turkey, in particular, showed solid growth. The country is developing more into a manufacturing country, driven by both exports and domestic demand. Other parts of the Middle East are also recovering. The main driver in Africa is the mining sector, which led to increased demand for abrasive resistant niche steels.

Plannja

Plannja is wholly owned by SSAB AB and is operationally included in SSAB EMEA. Sales are focused on building trade, boiler trade and building projects. The product offering consists of a comprehensive range of flat and profiled building sheet, sheet roofing tiles, rainwater run-off goods and sandwich-type wall panels.

Demand was negatively affected by a cold and extremely snowy winter, both at the beginning and end of the year. The result also was affected by substantial price increases on input materials, as well as increased competition in the market. During the year, the new plant in Järnforsen was commissioned and a decision was made to reorganize the panel production in Luleå. In connection with this, investments for improved productivity and quality will be taken.

Sales amounted to SEK 1,261 (1,342) million and profit after financial items was SEK -66 (-68) million. Plannja had 475 (553) employees.

Investments

During the year, decisions were taken regarding new capital expenditures in total of SEK 1,345 (611) million.

The major ongoing program is the approximately SEK 1,500 million investment in the equipment for quenched steel in Borlänge. This investment is planned to be commissioned in the beginning of 2012, and is an important part of SSAB's niche strategy.

Other important investments during the year were the installation of new hot stoves in one of the blast furnaces in Oxelösund, the new pushing emission control system in Oxelösund and upgrades of the reheating furnaces in Borlänge.

Total capital expenditures in SSAB EMEA during the year amounted to SEK 1,326 (1,543) million of which SEK 694 (744) million related to strategic investments.

Production

During 2010, strip and plate production was to a large extent characterized by improved market conditions, when compared to 2009. Production increased to 2,720 (1,750) thousand tonnes. However, harsh weather conditions in early as well as towards the end of 2010 caused disruptions in the transportation system and affected production. During the second and third quarter a ramp up in the plate system was made to secure production in line with the increased demand.

Due to ongoing investment programs, the summer outages in Borlänge and Oxelösund were longer than normal.

During the last quarter of the year production in primarily the strip system were adapted to the lower market demand in order to keep inventories on acceptable levels.

Profit

Sales increased by SEK 5,876 million to SEK 21,428 (15,552) million. Earnings before depreciation amounted to SEK 1,495 (-620) million. Operating profit increased by SEK 2,067 million to SEK 374 (-1,693) million.

	Shipments and production,
thousand tonnes		2010	2009
Shipments	- Quenched steels	269	167
	- AHSS1)	464	282
	- Ordinary steels	1,301	1,026
Production	- Crude steel	3,418	1,887
	- Steel	2,720	1,750

1) Advanced High Strength Steels

SSAB Americas

Americas – North and Latin America

Share of the Group

Sales 36%

EBITDA 43%

Operating profit 60%

Registered number of employees 14%

SSAB Americas is a leading supplier of steel plate and strip products in North and Latin America. The product offering includes quenched plate and advanced high strength steels as well as ordinary steel in plate and strip forms. SSAB Americas produces and sells directly to end customers, to intermediate fabricators and Steel Service Centers.

Market

The impact of the global recession lingered throughout 2010, affecting steel demand in most markets. In North America, recovery of demand continued strongly in the first half of the year, due in part to restocking efforts, as well as purchases which were brought forward on expectations of price increases. Conditions slowed over the third quarter as a result of the restocking efforts by service centers in combination with typical summer demand slowdowns. The fourth quarter showed relatively neutral demand. As a result, demand for 2010, while positive, remained well below historic levels. Latin American markets, not as severely impacted in 2009 by the recession, continued strong throughout 2010 despite a slight slowdown in demand in the last quarter as a result of re-stocking among customers.

North America

A significant pick up in order entry at U.S. steel mills and increased capacity utilization rates among North American steel makers continued over the year leading to improved commercial product volumes. However, the drivers for improvement were varied and not all customer segments improved from 2009.

Sales to service centers, a major North American customer channel, nearly doubled in 2010 after heavy inventory liquidation throughout the supply chain in 2009. However, demand remained at historically low levels to due uncertainty regarding future economic development among customers.

In the energy sector, ordinary steel sales to wind tower and pipeline producers declined as such project based work was impacted by the sluggish improvement of credit markets. At the same time, the oil and gas land based drilling sector, which drives sales of steel for oil country tubular goods and small diameter line pipe, was healthy in 2010. Demand for steels used in energy based applications increases as industrial production improves with a strengthened economy and also with the increased demand for renewable energy sources, some of which are steel intensive.

SEK millions 2010 2009 Sales 14,581 10,712

amortization 1,522 1,018 Operating profit 1) 1,119 595 Operating margin (%) 8 6 Operating cash flow 1,421 1,464 Capital expenditures 576 298 Capital employed at year-end 30,101 31,198 Return on capital employed (%) 2) 1 neg Average number of employees 1,222 1,056 1) Excluding depreciation and amortization on surplus values on intangible and tangible assets.

Profit before depreciation and

The heavy transport sector continued to be weak in 2010. However, sales to barge manufacturers in the United States were aided by improving economic conditions and securing projects to replace aging end user stocks. Heavy equipment demand was positive year over year, driven principally by the mining and agricultural sectors.

Demand in the automotive sector increased from low 2009 levels with increased demand for advanced high strength steels.

Latin America

Increased raw material prices for iron ore, copper, gold and silver led to strong performance in the mining industry and its related segments during the year. Demand remained high for quenched plate used in mining equipment such as buckets, liners, dump bodies and excavators in Brazil, Chile, Mexico, Peru and Columbia. This sector continues to expand based on recent significant announcements, such as the Brazilian government's multi-billion dollar investment plan known as the "program to accelerate growth," and the long-term nature of such investments. In addition, high food prices have led to increased demand for tippers and blade components used in the food processing and transportation industries in Latin America.

As in North America, demand in the automotive sector increased from 2009 levels with increased demand for advanced high strength steels.

Investments

During 2010, work continued on a number of strategic investment projects within SSAB Americas. In November, construction work began on the new quenching line in Mobile, Alabama. The investment constitutes part of the strategic investment program aimed at increasing quenched steel capacity within Americas. The plant, expected to be completed in 2012, will have capacity for approximately 200 thousand tonnes of quenched plate. The new quenching line comprises part of SSAB's strategy to become a leading global supplier of high strength steels, and is expected to meet the needs of a growing market for quenched plate in North and Latin America and also will supply plate to SSAB's new finishing line in Kunshan, China.

In October, a new research and development facility was opened in Montpelier, Iowa, and the recruitement of an expert team of personnel was largely completed. The facility, built with modern energy efficiency principles, is located adjacent to the SSAB steel mill in Montpelier. With the new research facility, opportunities to cooperate with customers to develop new applications increases. Capital expenditures in the year for this project were SEK 67 million.

Total capital expenditures in Americas in 2010 amounted to SEK 576 (298) million, of which SEK 418 (199) million related to the strategic investment programs.

Production

Capacity utilization improved from the average of 2009, which was impacted heavily by the economic downturn. For 2010, average capacity utilization was 90 percent, a reflection of improved conditions year over year. Steel production was affected by a planned outage in the Montpelier mill during the spring and in Mobile in December. Total plate production for the year was 2,209 (1,563) thousand tonnes. The share of niche products of total shipments was 24 (28) percent.

Profit

Sales increased by SEK 3,869 million to SEK 14,581 (10,712) million. Earnings before depreciation and amortization amounted to SEK 1,522 (1,018) million. Operating profit increased by SEK 524 million to SEK 1,119 (595) million.

Depreciation/amortization of surplus values was SEK 870 (942) million.

Shipments and production,
thousand tonnes		2010	2009
Shipments	- Quenched steels	178	108
	- AHSS1)	384	376
	- Ordinary steels	1,794	1,230
Production	- Crude steel	2,334	1,666
	- Steel	2,209	1,563

1) Advanced High Strength Steels

SSAB APAC

APAC - Asia, Australia, New Zealand

Share of the Group

SSAB APAC focuses exclusively on niche products. In 2010, almost 90 percent of deliveries were niche products, and in the coming year it is anticipated that virtually all volume sold will be niche products. The niche products are sold directly to end customers, and in an effort to provide good service, SSAB APAC has stock locations with finished goods spread out across the region, as well as two processing centers located in Kunshan and Singapore.

Market

EBITDA 7%

Operating profit 2%

of employees 1%

The APAC market is characterized by strong growth in steel consumption, and unlike other geographical regions, did not see any significant drop in steel consumption in 2009. Instead the market showed continued growth. However, growth rates vary significantly between different countries covered by the Group. In order to capture growth opportunities, strong focus during the year has been on developing the organization within APAC, alongside internal competence and capabilities.

The main growth driver is China. Growth segments where SSAB has a strong position include yellow goods, mining and lifting industries. The automotive industry also has seen great increases during the year and China has become the world's largest car producer.

The steel demand in China dropped somewhat in the third quarter from the high levels of the first and second quarters, but increased again in the fourth quarter. The positive trend is expected to continue in 2011.

Another important market for SSAB is Australia. The high raw material prices, for coal and iron ore, have led to a booming mining industry, which result in strong demand for SSAB's high strength steel products. The main applications for the mining industry are buckets and tippers. The demand from the tipper market decreased somewhat in the third quarter, but has returned in the fourth quarter. During 2010, SSAB increased its activities within value added services, and these efforts will continue into 2011 and beyond.

Indonesia is another market where the mining industry continues to grow strongly, and demand for SSAB's products increased in this market during 2010.

Korea and Japan are mature and stable markets. In Korea, the automotive industry showed an increase in production of approximately 22 percent in 2010, although the trend weakened during the latter part of the year. For SSAB, the lifting segment has continued to weaken, partly due to the slow development in the construction sector. In Japan, SSAB's main segment is the tipper industry. This market has been

SEK millions 2010 2009 Sales 2,326 1,583

amortization 238 76 Operating profit 232 70 Operating margin (%) 10 4 Operating cash flow 162 141 Capital expenditures 60 6 Capital employed at year-end 777 533 Return on capital employed (%) 1) 33 13 Average number of employees 107 79

Profit before depreciation and

stable, but growth opportunities are expected in other areas such as recycling and scrap shredding.

One market which is expected to grow significantly moving forward is India. As a result, SSAB increased its presence in this market. Automotive and yellow goods are examples of growing segments where SSAB's products are attractive. Additionally, Thailand and Vietnam are other emerging markets where growth opportunities exist for SSAB's high strength steels.

Main competitors for SSAB within APAC are both local and European steel producers. For example, local competitors include Japanese JFE and NSC, Posco from South Korea and Chinese Baosteel, Hebei and Wuhan, as well as Bisalloy in Australia. European producers competing with SSAB in APAC include ThyssenKrupp, Rautaruukki and Dillinger.

Investments

In February 2010, SSAB approved investment in a new finishing line in the plate center at Kunshan. Production is expected to begin in the fall of 2011, and investment amounts are estimated at SEK 300 million.

The finishing line will receive semi-finished plate material from Mobile, USA, and Oxelösund, Sweden, as well as perform finishing activities such as shot blasting, painting and cutting to customer sizes. The investment will improve services to customers through shorter lead times, better delivery performance and increased flexibility. Part of the investment approved in February 2010 was the establishment of an R&D facility in Kunshan. The facility will focus on application development of high strength steels, and customers will together with SSAB provide an opportunity to improve production efficiency and product structural design.

The existing plate center will be equipped as a Hardox Wearparts Company, offering value added service to the Chinese market.

During 2010, a decision also was made to implement a common IT platform for the APAC business area. This will enable better information sharing and service to our customers. Total capital expenditures in 2010 amounted to SEK 60 (6) million,

of which SEK 58 (0) million related to the strategic investment programs.

Profit

Sales increased by SEK 743 million to SEK 2,326 (1,583) million. Earnings before depreciation/amortization amounted to SEK 238 (76) million. Operating profit increased by SEK 162 million to SEK 232 (70) million.

Shipments, thousand tonnes		2010	2009
Shipments	- Quenched steels	100	62
	- AHSS1)	89	46
	- Ordinary steels	27	1

1) Advanced High Strength Steels

Tibnor

SEK millions	2010	2009
Sales	6,696	5,286
Profit before depreciation and amortization	470	22
Operating profit	421	-38
Operating margin (%)	6	-1
Operating cash flow	42	725
Capital expenditures	47	65
Capital employed at year-end	1,913	1,736
Return on capital employed (%) 1)	22	neg
Average number of employees	801	931

Share of the Group

EBITDA 7%

Operating profit 4%

of employees 10%

Tibnor is Sweden's leading steel distributor and constitutes an important sales channel for SSAB's steel operations, particularly in the Swedish market. The company is owned by SSAB (85 percent) and Outokumpu (15 percent). Tibnor has a leading position in the Nordic countries and also has subsidiaries in Poland and Latvia.

Tibnor enjoys a leading position within steel and non-ferrous metal trading in the Nordic region. The most important customer segments comprise companies within the automotive, engineering, construction, and processing industries. A significant portion of Tibnor's customers within the automotive and engineering industries are suppliers to the Swedish export industry.

Steel is supplied to the Swedish market by steel distributors or directly from Swedish and foreign steel producers. Other players include various Steel Service Centers and companies operating within a limited product area. The largest competitors among distribution companies in the Nordic region are BE Group and Rautaruukki, as well as a number of companies independently owned or owned by foreign producers, with a narrow product focus.

Tibnor's traditional core business lies within the areas of ordinary steels and stainless steels, providing a complete range of strip products, plate, engineering steels and tubes. In addition, business operations include the sale of nonferrous metals and construction-related steel products. Tibnor's foreign subsidiaries supply their customers with selections from the product range, depending on market conditions.

Tibnor offers a wide range of services, supplementing steel and non-ferrous products. As a consequence of customer demand for tailor-made logistics solutions, steel and non-ferrous metal products are nowadays being delivered pre-treated for immediate use in the customer's production. Tibnor possesses resources for processing of materials, such as slitting and cutting to length of strip steel. Also, Tibnor has its own production centers for processing of other materials in the form of cutting in lengths, shot blasting, primer coating, figure cutting, etc. In addition, Tibnor offers production resources through a network of partners within various areas of expertise.

In combination with sales, warehouse and distribution functions that are cost-efficient and strong in terms of resources, Tibnor has the ability to serve as an important partner for customers in all supplies of steel and non-ferrous products. For Tibnor, the objective is to be used as the first stage in a customer's own production.

Within the non-ferrous metals area, specialization has taken place toward trading in non-ferrous metals for industrial use. As a distributor of aluminum, copper and brass, Tibnor is one of the largest players within the non-ferrous metals area in Sweden, Finland and Denmark.

Tibnor also is one of Sweden's leading suppliers of reinforcement products, with major construction companies in the country constituting its most important customer group. With two plants for the manufacture of insertion-ready rebar products, the company also is able to provide tailor-made reinforcement solutions, in addition to standard materials. Tibnor also is one of Sweden's leading suppliers of sheet piling, which is used in the laying of foundations.

Tibnor has ongoing investments to develop its operations as well as ensure quality and productivity. In 2010, the Steel Service Center operations in Gothenburg and Copenhagen were closed and relocated to a new facility in Gothenburg. As a consequence of the closure of the warehouse in Malmö, the central storage facilities in Köping and Eskilstuna have been adapted to handle larger volumes. These measures were taken in order to enhance efficiency in operations and increase the availability of materials to customers. In 2010, new sawing equipment for processing of engineering

steels were installed at the automatic sawing centre in Eskilstuna. A new drilling and cutting line for long products, primarily beams and tubular sections, also was brought into commission, further expanding Tibnor's range of production services.

Market

During the spring of 2010, demand increased from the lower levels of 2009, primarily from customers within the automotive industry and their subcontractors. This increase was driven by increased activity in the industry and a restocking of inventory levels. Prices increased during the spring and summer, particularly for flat products. Shipments declined somewhat during the fall and price levels also declined during that period. All in all, shipments increased by 30 percent in 2010.

In the spring of 2010, lead times from the steel mills were longer than normal and, in some cases, suppliers experienced a shortage of materials. After the summer, lead times reverted back to normal.

Norsk Stål and Norsk Stål Tynnplater

Tibnor owns 50 percent of the shares in Norsk Stål and Norsk Stål Tynnplater. The remaining 50 percent stakes are owned by Tata Steel Europe.

Norsk Stål is Norway's largest steel distributor. Sales for the year decreased to SEK 2,053 (2,170) million, and Tibnor's share of earnings increased to SEK 28 (-4) million. There were 263 (290) employees.

Norsk Stål Tynnplater is Norway's largest Steel Service Center. Sales for the year increased to SEK 571 (487) million and Tibnor's share of earnings increased to SEK 9 (-8) million. There were 46 (45) employees.

Profit

The Tibnor Group's sales in 2010 were SEK 6,696 (5,286) million, up 27 percent on last year. Profit before depreciation was SEK 470 (22) million. Operating profit was SEK 421 (-38) million. The significant improvement compared with 2009 was due primarily to increased volumes and higher gross margins. The result for 2010 includes a capital gain of SEK 28 million on a property sale.

Sales by product, SEK millions	2010	2009	Change, %
Strip and plate	2,787	2,013	38
Long products	1,218	1,107	10
Engineering steels	986	713	38
Non-ferrous metals	723	647	12
Stainless steel	649	527	23
Reinforcement
products	319	266	20
Other	14	13	8
Total	6,696	5,286	27

Improvement work continues within the environmental area

SSAB works continuously to mitigate the environmental impact of steel production.

Environmental impact during the process

RAW MATERIALS, BYPRODUCTS AND TYPES OF ENERGY IN THE PROCESSES

Two different process methods are used in the production of SSAB's steel. In Sweden, hot metal is produced in three furnaces, of which one is located in Luleå and two in Oxelösund. In these operarations, iron ore pellets are reduced to hot liquid metal through the use of coal and coke. Oxygen is used to lower the hot metal's carbon content before it becomes steel and contaminants are removed through the use of lime stone. The process takes place in an oxygen converter and generates excess heat, which is cooled through the addition of scrap metal, primarily derived from the plants themselves.

In North America, hot metal is produced by recycled steel, scrap, being smelted in electric arc furnaces. The scrap metal is purchased on the open market. The electric arc furnaces are operated using electrical power.

In 2010, 53 (47) percent of SSAB's total steel production was based on iron ore and 47 (53) percent on recycled scrap metal. This can be compared with the international average in which recycled steel accounts for 35 percent of produced steel.

Both of the processes produce liquid steel which is subsequently refined and processed into alloys in various finishing stages, before being cast in the continuous casting line. The slabs that are manufactured in the continuous casting line are further processed in the rolling mills into different grades of steel. Today, SSAB produces both strip steel and plate in Sweden and plate in North America.

Steel production generates large quantities of heat, gas, slag and dust, which are reused to a large extent.

The blast furnaces' coke requirements under normal production are largely supplied by SSAB's coking plants.

The coking process generates several byproducts in the form of coke oven gas, tar, ammonium sulfate, benzene, sulfur and sulfuric acid. The coke oven gas constitutes a source of energy in various heating ovens and in heat and power plants, and thereupon replaces oil. Other byproducts are sold on the market to various industries.

Different types of energy are used in the heating furnaces for steel and slabs. Natural gas is used in the United States, while coke oven gas, LPG, oil and electric power are used in Sweden.

The energy-rich coke oven and blast furnace gases that are not used in the steel production are utilized in heat and power plants, among other things to supply SSAB with approximately 50 percent of the electrical power needed in the Swedish operations. In addition, district heating is delivered to over 70 percent of the population in the urban areas of Oxelösund and Luleå, and to approximately 15 percent of the population in the urban area of Borlänge.

CARBON DIOXIDE

The use of coal, coke, oil, natural gas and LPG in the various processes gives rise to carbon dioxide emissions. Iron is produced through iron ore being reduced with the help of coal and coke in blast furnaces, which generates carbon dioxide. International comparisons demonstrate that SSAB's blast furnaces are at the forefront in terms of low carbon dioxide emissions per tonne of hot metal. There are several reasons for this: high-quality raw materials in the form of iron ore pellets, high-quality coke and efficient processes.

It is important that the blast furnaces are able to produce without interruption. In Oxelösund, there is a granulation plant for hot metal, and consequently the blast furnaces can continue to produce even if subsequent stages in the production chain are standing idle.

SSAB's plants in the United States manufacture steel based on recycled scrap metal. Small quantities of coal and natural gas are used in the manufacturing process, but electricity is primarily used for smelting the scrap metal, which generates smaller emissions of carbon dioxide than in the case of steel produced from iron ore.

NITROGEN AND SULFUR DIOXIDES

Various types of combustion generate emissions of nitrogen and sulfur dioxides. Significant sources include slab heating furnaces and in Sweden, under-firing of the coke batteries and firing of Cowper stoves for the blast furnaces. In Sweden, the fuel for heating slabs consists of blast furnace gas, coke oven gas, LPG and oil, and in the United States of natural gas. SSAB chooses low sulfur content oil and gas to reduce sulfur dioxide emissions and it has been possible to reduce nitrogen oxide emissions by continuously adjusting the burners.

DUST

Dust levels from the operations are measured regularly at many places and all new plants which are constructed meet stringent standards with regard to dust emissions. At older plants, improvement work is constantly taking place to reduce dust emissions.

Emissions to water from steel manufacturing

Large quantities of water are used for cooling furnaces, coke

and steel. The use takes place primarily in closed systems and water is purified through sedimentation and filters before leaving the industrial area. SSAB conducts extensive controls of water quality to ensure compliance with all governmental authority requirements.

RECYCLING AND USE OF RESOURCES

SSAB's objective is to achieve as high a degree of recycling as possible in order to minimize the use of natural resources such as iron ore and coal, as well as energy.

Through the use of scrap metal and recycling of slag, SSAB reduces the total needs for iron ore and lime. Approximately one-half of all converter slag is returned to the blast furnaces. Slag contains 15–20 percent iron and 40 percent burned lime.

Coal and coke requirements are minimized in several ways. One example is that coal-rich dust from the blast furnaces' gas purification plants is returned to the blast furnaces. The electric arc furnaces in Mobile represent another example. Since 2008, SSAB in Mobile also uses recycled coal residue from spills, which were previously treated as waste and cleaned up. In this way, up to 60 percent of the coal which is used for the electric furnaces is replaced.

By recycling process gases, SSAB's oil and electricity needs are partially replaced, which also benefits the local communities through the production of district heating.

Byproducts

The very precise control of the steel production process results in valuable byproducts which are well defined and quality adapted. SSAB sells the byproducts for various purposes, primarily through its subsidiary, Merox.

Merox's high-quality products include Hyttsten, which is used for road construction purposes and gives the road a significantly longer life, and allowing roads to be built using smaller quantities of materials, and the cement and concrete materials, Merit 5000 and Merolit, which replace burnt lime stone. The use of one tonne of slag as a raw material in cement reduces carbon dioxide emissions by one tonne, compared with the use of lime stone. Other products include Paddex for riding tracks as well as an organic plant fertilizer, M-kalk. Another example is Black Iron, which is sold for the manufacture of ferrite magnetes, which today are included in almost all modern electrical goods. In the United States, the largest byproducts are steel slag and oxide scale. These are used, among other things, in asphalt and cement production.

WASTE

Steel production also generates waste, i.e. materials for which at present there is no environmentally or economically justified area of use or materials which, for environmental reasons, are removed from the use cycle. At SSAB, waste largely consists of flue gas purification dust which at present cannot be reused due to physical or chemical characteristics. The waste is handled either through destruction or depositing. The company's disposal tips are strictly regulated by governmental authorities as regards management and security. The waste is handled that in the future it will be possible to utilize these resources, too.

Transportation

Transportation takes place primarily by railway and ship, but also by truck. All business areas within SSAB have their own logistics departments, with the objective of making transportation efficient and economic.

In Sweden, raw materials are transported to Luleå and Oxelösund by rail or ship. Steel slabs are transported by rail between the production sites. This year, too, SSAB in Sweden was awarded Green Cargo's "Climate Certificate for Transportation", entailing that it meets the criteria established by the Swedish Society for Nature Preservation with respect to Good Environmental Choice for Transportation.

Prior to the construction of SSAB's two electric steel plants in Montpelier and Mobile, the locations were chosen based on the potential market and access to the scrap metal raw material. This strategy minimizes the environmental impact of the transportation since all plants have access to railways. In North America, the inland waterway system is also used.

Environmental work during the year

Environmental improvements in SSAB Americas The constant improvement work also continued during the year at the North American plants.

One particularly interesting initiative is a project in Mobile to reduce the volumes of material that are sent for depositing, by reusing the material in the processes. By focusing on four specific waste substances, first and foremost dust and spillage, it has been possible to reduce by more than 2,000 tonnes annually the volumes sent for depositing. This, in turn, is estimated to result in cost savings in excess of USD 500,000. In 2010, a project involving two of the waste categories was initiated and has already generated cost savings. The project will continue in 2011.

Another project has been aimed at reducing by at least 50 percent energy consumption in one of SSAB's storage facilities in Mobile. Different lighting solutions were assessed, such as LED lighting to replace halogen lamps. The best result was achieved with high efficiency flourescent fixtures together with a smarter lighting activation system. The energy saving exceeded the target, totaling 63 percent. It is estimated that the annual energy costs related to the premises can be reduced by approximately USD 12,000.

Energy efficiency improvements in Sweden An energy strategy has been formulated in Borlänge as part of the ongoing work for ensuring the long-term strategic supply of energy. One issue being evaluated is to, eventually, replace oil with alternative sources of energy in the form of

Read more about the production process in Steel Book, which is available on www.ssab.com

gas. In the course of the ongoing work of reducing nitrogen oxide emissions from the slab furnaces, tests are currently being carried out involving oxygen enrichment of the combustion air, and conversion of the oil-powered furnace to natural gas is being planned.

The installation of new Cowper stoves at one of the blast furnaces in Oxelösund has resulted in a significant reduction in fuel consumption. In addition, a heat recycling system has been connected, which contributes to further efficiency enhancement. The new solution involves the preheating of air which is injected into the blast furnaces, and the resulting extra energy reduces coke consumption in the blast furnace. The new Cowper stoves utilize furnace gas as a source of energy; consequently, the surplus of coke gas which was previously used as a source of energy in the earlier Cowper stoves which can, instead, be used in other parts of the process. In the rolling mill, for example, it has been possible to reduce oil consumption thanks to increased access to coke gas. Initial calculations for the new installations show savings of SEK 75 million annually, with a potential of up to SEK 120 million per year when the Cowper stoves have been fully adjusted.

Reduced dust emissions in Oxelösund

The new exhaust hood, which is aimed at reducing emissions of dust from the coking plant in Oxelösund, was installed during the year. The investment constitutes an important element in making the coking plant more environmentally friendly, and calculations show that it should be possible to reduce dust emission by hundreds of tonnes annually. Alignment of the exhaust hood took place during the late autumn.

Efficient clean up

In Luleå, SSAB has used freeze technology during the year to clean up old spills in the ground. By using freeze blocks and salt water as a freezing agent, it has been possible to remove old tar from the ground and from cooling water outlets that are no longer in use. The cleanup of old tar residue in the ground using by excavating equipment entails a risk of a detrimental impact on the environment when the particles

are roiled and diffused in the watercourse. Instead, SSAB has been able to remove entire blocks containing contaminants. As a result of the work it has been possible to recycle 2,300 tonnes of tar as a raw material in the coking plant. For many years, an oil trap has been in place which effectively prevents tar being spilled through the cooling water outlet.

Unique solution reduces nitrogen

By using existing technology in an entirely new context, SSAB in Oxelösund has created a unique solution which leads to a significantly lower impact on the environment from the coking plant. Water from the coke production process contains contaminants which, among other things, are purified through the use of bacteria. In order to reduce the nitrogen content of the water before it is returned to the Baltic Sea. Bacteria are also used through a so-called denitrification process, something which has never previously been done in a coking plant. With the help of this process, the quantity of nitrogen in the water emitted to the Baltic Sea will be reduced by 90 per cent. Following successful trials, the technology has been brought into full scale use.

Permit matters during the year

SSAB in Luleå has applied for, and been granted, a new and expanded environmental permit. The earlier permit covering 2.5 million tonnes of slabs has been increased in the application to 3 million tonnes of slabs. At the end of November, SSAB received a positive reply from the Environmental Court. Parts of the permit has been appealed by the County Administrative Board of Norrbotten.

During the year, work began on producing an application regarding a new disposal tip in Oxelösund since it is estimated that the current tip will reach its limit within a couple of years.

Work involving chemicals under the EU REACH Directive is continuing. Extensive work is underway on evaluating, approving and registering chemicals. During the year, SSAB completed the registration of all chemical substances affected by REACH, and the work now involves monitoring updates and changes to the rules.

During the year, the US Environmental Protection Agency (EPA) studied a number of proposals for changes in its rules. Among other things, nitrogen oxide and sulfur dioxide levels are being reviewed, which may affect the American part of the business. There is also a proposal regarding mercury discharges from the electric arc furnaces, and consequently the agency has requested that nine businesses, of which SSAB Mobile is one, provide information regarding emissions.

The County Administrative Board in Uppsala has commenced an investigation of the Dannemora mining district to study any possible contamination. SSAB previously owned Dannemora and is contributing to the production of information and samples for testing. The County Administrative Board in Östergötland has commenced a corresponding study of sediment in the marine system downstream from the industrial area in Finspång where SSAB currently operates an organic coating line.

Cooperation within research and development

SSAB participates in a number of different cooperation activities and projects affecting the steel industry. Some of the most important cooperation partners are the US Department of Energy, the Swerea Mefos and Swerea KIMAB institutes and IVL Svenska Miljöinstitutet, the PRISMA Skills Centre, Mistra as well as the industry organizations the Swedish Steel Producers' Association, Eurofer, American Iron and Steel Institute (AISI) and the World Steel Association (WSA). All of these organizations are important players within environmental research, as are universities, colleges and agencies. SSAB is engaged in all of these forums in various ways such as the Mistra-Financed Steel-Eco Cycle by way of example.

Commencing 2010, SSAB has a representative on two working committees within the international industry organization WSA, both of which are addressing environmental work in the steel industry. The Environmental Policy Committee (EPCO) is focused establishing the organization's position on various environmental issues and serving as a platform for discussions with decisionmakers and agencies. The newly

Carbon dioxide1) 2) Nitrogen oxide1) Dust 1)

Kg/tonne produced steel

established Technical and Environment Committee (TECO) focuses on technical development which can reduce the

In Sweden, the Environmental Court establishes conditions for SSAB's operations, a process which is affected by decisions taken within the EU regarding environmental legislation. In the United States, the Federal Government and specifically the United States Environmental Protection Agency (EPA) play a corresponding role. SSAB's operations are covered by hundreds of environmental conditions governing production levels, emissions into the air and water,

environmental impact of steel manufacturing.

Environmental conditions for the operations

noise levels and regulations regarding disposal tips.

Oxelösund

Oxelösund

Oxelösund

Oxelösund

Borlänge Köping Finspång

Pickled steel Borlänge 2,500 1,467 Cold-rolled steel Borlänge 1,400 981 Annealed steel Borlänge 650 502 Metal-coated steel Borlänge 680 451

damage to third parties.

Thousand tonnes Location

Coke Luleå

Hot metal Luleå

Slabs Luleå

Organic-coated products

1) Unit million m2

Hot-rolled steel Borlänge

All production units satisfy their local environmental requirements and the Group holds mandatory environmental damage insurance as well as liability insurance covering

The maximum permitted production levels in the Swedish operations are stated in the table below, while in North America production levels are determined in the form of restrictions regarding the maximum volume production per hour.

Permitted production

800 530

2,300 2,000

2,500 1,900

3,200 820

140 30 401)

Production 2010

705 413

2,223 1,224

2,001 1,134

2,184 527

104 20 301)

Kg/tonne produced steel

1) Relates to the Swedish steel operations. Due to the low production level during 2009, the efficiency went down and the emissions per tonne produced steel increased. 2) In 2010, values for carbon dioxide emissions per produced tonne were higher than in previous years. Among other things, this was due to the fact that during part of the year, when major repairs were carried out on the gas tank in Luleå, the LD gas was burnt off instead of being used in the power plant. In addition, operational disruptions in Oxelösund had a negative impact on emissions. In 2011, improved results are expected thanks to the measures and investments carried out in 2010, including new Cowpers in Oxelösund, together with additional scheduled investments to ensure operational stability.

For more information about sustainability work, see SSAB's Sustainability Report 2010, which is available on www.ssab.com

» Ruthmann has used advanced high strength steel in the telescopic boom of a sky lift. The design has increased lift height and load capacity within the total weight limits for light trucks. The rigidity of the structure is designed to withstand loads, despite a fifty percent reduction of the thickness of the material.«

Focus on safety and development during the year

The new organization has meant exciting challenges for many employees and new roles have been developed. However, the year also was marked with serious accidents.

Higher targets for safety

SSAB has long been engaged in systematic work to increase safety and health. In 2010, the bar was raised still further: SSAB shall be one of the leading steel companies in the world within health and safety. The two steel mills in Mobile and Montpelier demonstrate very good results as regards safety and, according to independent observers, are among the leading steel mills in the US within the area of health and safety. High priority is accorded to the work on achieving equally good results in the Swedish operations.

As part of its strategic action plan extended through 2015, SSAB has established a long-term target to reduce occupational injuries by five percent per year. To support attainment of the goal, SSAB has introduced a 'zero tolerance' program designed to develop a safety culture, emphasizing a safe working environment and adherence to established safety rules and practices. Risks will be regularly identified and eliminated with the ultimate goal being to perform all work elements safely. Employees also receive regular training on safe work procedures. SSAB has also made it clear that a personal commitment from all employees is necessary in order to achieve a lower rate of accidents and to sustain this for the long term. The requirement – that all employees perform their work safely at all times Z– has been clarified over the course of the year.

Employee development

All employees shall have an annual performance and planning interview with their immediate manager. One of the main objectives for 2015 is more than 90 percent of employees should have completed annual performance and planning interviews. In 2010, slightly more than 80 percent of the employees took part in such interviews with their immediate manager. The percentage of performance and planning interviews carried out constitutes an important key ratio for SSAB's work in becoming a high performance organization.

Safety certification in SSAB Americas

2010 proved to be a busy, but productive year in safety for the Americas. The Mobile and Montpelier facilities were challenged late in 2009 to register and certify their Safety Management System to the OHSAS 18001 standard. As a result of team effort and working on an accelerated schedule,

both facilities received certification to the standard in December of 2010. The newly adopted Safety Management System is laying the foundation essential for continuous improvement in the safety effort. For 2011, the safety group has set their target on certifying the Houston, St. Paul and Toronto cut-to-length facilities to the 18001 standard.

SSAB Americas' steel mills finished in the top rankings of the safest steel mills in North America by the Steel Manufacturers Association. The association represents 85 percent of the total steel production in North America. The Mobile facility took top honors with the lowest Recordable Injury Frequency Rate among other members represented by the organization.

New organization

Active management planning and internal mobility were important factors in the implementation of the organiza-

High response frequency and positive results in Voice '10

During the year, SSAB's joint group employee survey, Voice '10, was carried out. The results from the survey show improvements within all areas and the employee satisfaction index was 84, compared with 79 in 2008. The response frequency was 83 percent, which was also up from 2008, when 78 percent of employees participated.

The survey is aimed at identifying strengths and improvement areas within the organization. Based on the results from Voice '10, each manager is preparing improvement plans which address development areas.

tional change that occurred in 2010. Because of this new organization, work conditions improved for synergy and cooperation.

By stimulating internal mobility, greater areas of contact were created within the organization, contributing to improved cooperation and exchange of knowledge.

Specialist careers within SSAB

SSAB is a knowledge-based company in which technical specialist expertise within areas connected to SSAB's strategic business is critical in order to continueing to being a competitive organization.

As part of its skills supply work, SSAB identified key skills and clarified the opportunities for specialist careers within the Group last year. There are three specialist role levels intended to help secure and develop key expertise within areas related to SSAB's strategic business development. The role as a specialist includes contributing knowledge to the organization and developing one's own expertise.

In 2010, 27 employees were appointed as specialists within EMEA.

Regular work on strengthening the organization

Employees are crucial for the company's continued success and SSAB's has targets for strengthening its brand as an employer. As part of these targets, SSAB's employees will be motivated, capable of developing in their work, and perform work in a safe environment. Several of the most important aspects of the strategic personnel work are presented in detail below.

INTERNAL MOBILITY CONTRIBUTES TO DEVELOPMENT The overarching aim of SSAB's human resources strategy is to continue to develop the organization and strengthen its high-performance culture. The employees' willingness to develop and mutual learning are key elements for SSAB as a knowledge-based company.

SSAB encourages internal mobility and skills development. The objective is to have an individual development plan for each employee, to carry out annual performance and planning interviews between managers and employees, as well as use a common CV database when filling internal vacancies.

GOOD MANAGEMENT IS CRUCIAL

First and foremost, SSAB strives to recruit internal candidates for managerial positions within the Group, intending to have three internal candidates per each managerial position. As part of the new structure, staffing of the organization by business area involves a high degree of internal staffing.

Thanks to deliberate work to address generational changes and exchanges of skills, most management groups are characterized by a sound balance between ages, skills and cultural backgrounds.

As a basis for the work, SSAB's global manager supply process, consisting of six common manager criteria, is applied. A good manager within SSAB will create results, serve as an example, carry through improvements, give others the opportunity to develop, generate energy and be aware of his/her own strengths and weaknesses. These criteria are to be applied when identifying, appointing, developing and evaluating SSAB's managers.

DIVERSITY AND EQUALITY

Diversity strengthens the company's ability to develop and achieve success. For that reason, SSAB has advanced its position on diversity with an updated policy. Equality of

Average number of employees, gender breakdown					Age structure
		Number of employees		Women, %	Ages
	2010	2009	2010	2009
Parent Company					60–
Sweden	48	44	46	40
Subsidiaries					50–59
Sweden	6,413	6,453	19	18
USA	1,107	959	12	13	40–49
Other	909	878	25	24	30–39
Total	8,477	8,334	19	18

opportunity is clearly a major part of the diversity concept. SSAB's diversity and equality work begins with the Group Executive Committee, where there is a large diversity of ages and backgrounds. Of the Group Executive Committee's nine members, two are women and several of the members were born outside Sweden. This demonstrates to the rest of the organization SSAB's level of commitment and, together with increased internal mobility, the long term contributions of increased diversity at all levels of the organization.

SSAB operates in a traditionally male-dominated industry, particularly in regard to production workers. In 2010, the percentage of women in the Group increased marginally, totaling 19 (18) percent. The percentage of female managers in the Group also has increased to 18 (16 percent), meaning that the gap between the percentage of female managers and the percentage of female employees is closing. Additionally, closing the gender gap aligns with the goal to achieve correlation between the percentages.

A SAFE WORKPLACE IS THE HIGHEST PRIORITY

Providing a workplace that is free from recognized hazards and health risks is fundamental to being an attractive employer. In addition, every employee must work in a safe manner. This is assisted through the development of sound, comprehensive safety management systems. According to independent U.S. surveys, the North American operations of SSAB are among the leaders in industry based on their safety performance. Swedish operations have focused on safety throughout the year and a number of measures have been carried out.

SSAB units exchange experiences among one another, emphasizing process, precision as well as other efficiency

standards and best practices. This system is executed through the SSAB One production system, which is based on the Six Sigma program.

In order to achieve a common, more systematically structured approach to continuous improvements within the working environmental area, all Swedish production plants require certification in accordance with the OHSAS 18001 standard. Operations in Luleå are already certified in accordance with the standard, which involves a third party reviewing and certifying safety practices, as well as the systematic working environment. Borlänge and Oxelösund also are pursuing implementation of this systematic approach, intending to achieve certification in 2012. The operations in Mobile and Montpelier were certified in 2010.

ACTIVE PREVENTIVE HEALTHCARE

SSAB has made a major commitment to help its employees improve their health and a number of preventive healthcare projects are currently underway. During 2010, sick leave within the Swedish portion of the Group declined to 2.8 (3.4) percent. Sick leave in Sweden declined to 3.3 (4.3) percent for blue collar workers and to 1.6 (1.8) percent for white collar staff.

Number of employees
at year-end	2010	2009	Change, %
SSAB EMEA	6,569	6,351	3
SSAB Americas	1,221	1,105	10
SSAB APAC	104	91	14
Tibnor	838	857	-2
Other	58	50	16
Total	8,790	8,454	4

Personnel expenses Sick leave Number of accidents

Per million work hours 20

Increased coordination within purchasing

Raw materials used in steel production are SSAB's strategically most important purchases. They take place from several suppliers from various parts of the world. During the year, important work to coordinate the purchasing process more efficiently was carried out and on introducing principles regarding employee rights and human rights in contracts with suppliers.

Joint purchasing within SSAB EMEA

Through the reorganization of SSAB's operations implemented in 2010, purchasing within SSAB EMEA is now formally coordinated. Purchasing is divided into several subcategories including raw materials, services, investments and energy. The coordination is a platform for operations analysis and the development of joint processes, training, contract templates and routines. New offers or enquiries templates within SSAB EMEA contain a special section regarding sustainability issues based on the ten principles enshrined in the UN Global Compact. Experience gained from the working group which started in 2009 has been included as a basis, as well as experience from work together with members of the Swedish Coal Institute in 2009.

The purchasing organization has participated in training sessions during the year in order to get education what regards the new provisions included in templates for offers and agreements.

Follow up and monitoring of suppliers

SSAB endeavors to be an involved and knowledgeable purchaser and to have long-term relations with suppliers. During the year, the raw materials purchasing category in particular has focused on expanding contract terms regarding sustainability issues. These also include the right for third party audits to be conducted without advance warning. The purchasing group regularly evaluates the work.

The subsidiaries which have relations with suppliers are responsible for monitoring the suppliers' compliance with SSAB's principles.

Traditionally, monitoring has been prioritized in supplier industries or countries which are associated with risks as regards fundamental human rights. This takes place through obtaining and verifying the codes of conduct of certain suppliers, or obtaining certification that they comply with the United Nations' Declaration on Human Rights. Another method is to verify conditions at factories and plants through site visits.

Guidelines and governance

At the beginning of 2010, SSAB signed up to the UN Global Compact and its principles are applied in work with suppliers. SSAB's Code of Business Ethics is the most important control document for work with suppliers, and is based on Global Compact's principles and UN's Declaration on Human Rights. In contacts with suppliers, SSAB communicates its Code of Business Ethics and encourages the suppliers to comply with it. Respect for fundamental human rights is a criterion when choosing suppliers.

SSAB's Code of Business Ethics is supplemented by SSAB's Instructions regarding the Giving and Acceptance of Bribes. The Instructions provide employees with clear information on how SSAB defines bribery and improper benefits, and how employees are expected to act in relation to suppliers, customers and other business partners in order to comply with the prohibition on the giving and acceptance of bribes.

» Wranne/Fåhraeus Design has developed a new type of bed spring with the help of advanced high strength steel. This solution meets the requirements for comfort, hygiene, cost, and attractive design. The designer uses the elastic properties of the steel in an innovative manner. «

5-year summary

	2010	2009	20085)	2007 5)	2006
Sales (SEK millions)	39,883	29,838	54,329	40,441	31,054
Operating profit (SEK millions)	1,084	-1,592	9,516	7,923	5,951
Profit after financial items (SEK millions)	682	-2,061	8,953	6,964	5,949
Profit after tax for shareholders in the Company (SEK millions) 1)	552	-1,002	6,935	4,560	4,253
Investments in plant and operations (SEK millions)	2,011	1,912	2,606	57,592	1,407
Cash flow from current operations (SEK millions)	-731	3,387	5,387	3,574	3,958
Net debt (SEK millions)	17,587	15,314	16,992	43,643	-176
Capital employed at year-end (SEK millions)	50,023	50,015	55,511	74,390	17,285
Total assets (SEK millions)	61,053	60,419	69,255	91,706	22,795
Return on capital employed before tax (%)	2	neg	17	18	36
Return on equity after tax (%)	2	neg	22	22	29
Equity ratio (%)	49	51	51	32	68
Net debt/equity ratio (%)	58	49	48	150	-1
Dividend per share (SEK), 2010 - proposal 2)	2.00	1.00	4.00	5.00	4.50
Earnings per share (SEK) 2)	1.70	-3.09	21.41	15.36	14.66
Average number of employees 3)	8,477	8,334	9,172	8,663	8,031
Sales per average employee (SEK millions)	4.7	3.6	5.9	4.7	3.9
Production of crude steel (thousand tonnes) 4)	5,752	3,553	6,074	6,540	3,737

1) Earnings from the discontinued tubular business in IPSCO impacted on earnings for 2010 in the amount of SEK -164 million, 2009 in the amount

of SEK -131 millon and for 2008 in the amount of SEK 490 million. 3) New definition commencing 2007. The 2006 figure has been adjusted.

2) Data per share has been recalculated in light of the 3:1 split carried out in 2006 and the 1:4 new issue carried out in 2007.

4) 2007 includes "old SSAB" with 3,957 thousand tonnes and SSAB North America for the full year of 2007 with 2,583 thousand tonnes.

5) Excluding the divested tubular business.

Corporate governance report 2010

Application

SSAB's organization is characterized by a decentralized work method in which responsibilities and powers are, to a large degree, delegated to the respective business areas and subsidiaries.

The Group's steel operations in 2010 comprised the three geographic business areas: SSAB EMEA (Europe, the Middle East and Africa), SSAB Americas (North and Latin America) and SSAB APAC (Asia, Australia and New Zealand), while trading operations consisted of the subsidiary Tibnor.

SSAB is listed on Nasdaq OMX Stockholm and complies with its rules and regulations and applies the Swedish Code on Corporate Governance (the "Corporate Code").

The diagram below illustrates SSAB's corporate governance model as per December 31, 2010 and how the central bodies operate.

Deviations from the Corporate Code

During 2010, the Compensation Committee consisted of Sverker Martin-Löf (Chairman), John Tulloch and Lars Westerberg. According to the main rule in section 9.2 of the Swedish Code on Corporate Governance, the members of the Compensation Committee who are elected by the general meeting shall be independent in relation to the Company and company management. Since John Tulloch has been considered to be dependent in relation to the Company,

his participation in the Compensation Committee thereby constitutes a deviation from the Code's rules. The Company currently conducts extensive international operations involving a large number of employees outside Sweden, not least in North America. John Tulloch possesses long experience from senior managerial positions in the North American steel industry. His knowledge of compensation principles and compensation structures in the North American steel industry in particular constitutes an extremely valuable contribution to the Committee's overall ability to address compensation issues in a purposeful and rational manner. Thus, the Company has made the assessment that the value of John Tulloch's participation in the Compensation Committee outweighs any possible disadvantages resulting from him not being deemed independent in relation to the Company. For these reasons, the Company thus considers the deviation from section 9.2 of the Swedish Code on Corporate Governance to be justified.

Shareholders

SSAB's share capital consists of class A and class B shares, with class A shares carrying one vote and class B shares one-tenth of one vote. Both classes of shares carry the same rights to participate in the Company's assets and profits. On December 31, 2010 there were 68,407 shareholders. In terms of votes, Industrivärden was the largest shareholder, followed by Swedbank Robur Funds, LKAB, AMF and Alecta.

Important external and internal regulations and policies that affect corporate governance.

Internal

• • By-laws • The Rules of Procedure for the Board of Directors with instructions for the President and instructions for Board committees
• • Accounting manual (Financial Guidelines), including finance policy
• • Code of Business Ethics

External

• • Swedish Companies Act
• • Swedish Accounting Act
• • Swedish Annual Reports Act • Nasdaq OMX Stockholm's
• Rules and Regulations, www.nasdaqomx.com • Swedish Code on Corporate Governance, www.bolagsstyrning.se

71 percent of the shareholders held 1,000 shares or fewer, while the ten largest institutional owners together owned just over 43 percent of the total share capital. Foreign owners accounted for 23 (22) percent of shareholdings. For further information regarding the ownership structure, see page 116.

Owners as per December 31, 2010

	% of votes	% of shares	Number of shares
Owner
Industrivärden	22.5	17.3	56,179,470
Swedbank Robur Funds	7.9	8.8	28,354,683
LKAB	5.0	3.8	12,344,064
AMF – Försäkring och Fonder	3.0	2.6	8,398,220
Alecta pensions försäkring	3.0	2.6	8,250,000
Nordea Investment Funds	2.4	2.5	8,051,036
Folksam-KPA-Förenade Liv	1.9	1.7	5,563,173
1st National Pension Fund	1.7	1.6	5,258,063
Other shareholders	52.6	59.1	191,536,066
Total	100.0	100.0	323,934,775

Source: Euroclear

General Meeting

The General Meeting is the Company's highest decisionmaking body; it is where that shareholder influence in the Company is exercised. At the Annual General Meeting (Ordinary General Meeting), the shareholders decide, among other things, on the following:

• • Adoption of the Annual Report and consolidated financial statements
• • Allocation of the Company's profit
• • Discharge from liability for the Board of Directors and the President
• • Election of the Board and its Chairman and, where appropriate, election of auditors
• • Method of appointment of the Nomination Committee
• • Compensation to the Board and the auditors
• • Guidelines for compensation to the President and other senior executives

2010 Annual General Meeting

The 2010 Annual General Meeting adopted the Annual Report and consolidated financial statements for 2009 presented by the Board and the President, decided on the allocation of the Company's profit, and granted the directors and the President discharge from liability.

In addition, the Chairman of the Nomination Committee described the work during the year and the reasons for the presented proposals. The General Meeting decided on compensation to the Board and auditors in accordance with the Nomination Committee's proposals. Carl Bennet,

Anders G Carlberg, Olof Faxander (President and CEO), Sverker Martin-Löf (Chairman), Marianne Nivert, Anders Nyrén, Matti Sundberg, John Tulloch and Lars Westerberg were re-elected as directors.

The General Meeting decided that the dividend would be SEK 1.00 per share. All directors and the auditor-in-charge were present at the Annual General Meeting.

See the minutes of the General Meeting on www.ssab.com.

Nomination Committee

The Nomination Committee's duties

The Nomination Committee's duties include presenting proposals to the Annual General Meeting regarding:

• • Chairman of the Board
• • Directors
• • Auditors, where appropriate
• • Chairman of the Annual General Meeting
• • Fees to the Board
• • Fees to the auditors

Composition of the Nomination Committee

The 2010 Annual General Meeting adopted guidelines for the Nomination Committee. According to these guidelines, the Chairman of the Board is charged with the task of requesting no fewer than three and no more than five of the largest shareholders in terms of votes to each appoint a member to constitute a Nomination Committee together with the Chairman of the Board. The total number of members shall not exceed six. The Chairman of the Nomination Committee shall be the representative of the largest shareholder.

The composition of the Nomination Committee was announced on the Company's website on, www.ssab.com, September 27, 2010.

Nomination Committee for the 2011 Annual General Meeting
Appointed by, name	Share in % of voting capital
Industrivärden, represented by Carl-Olof By, Chairman	22.5
Swedbank Robur Fonder, represented by Thomas Eriksson	7.9
LKAB, represented by Lars-Erik Aaro	5.0
1st National Pension Fund, represented by Ossian Ekdahl	1.7
Sverker Martin-Löf, Chairman of the Board	-

Until December 31, 2010 shareholders have been able to submit proposals to the Nomination Committee, among other things by e-mail. The Nomination Committee's proposals are published not later than in connection with the notice to attend the Annual General Meeting. In connection with issuance of the notice to attend the Annual General Meeting, the Nomination Committee will provide, on www.ssab.com, a detailed statement regarding its proposal for a Board.

The Nomination Committee's work pending the 2011 Annual General Meeting Since being appointed in the autumn of 2010, the Nomination Committee has held four meetings.

The Chairman of the Board has described to the Nomination Committee the process applied in the Company in conjunction with the annual evaluation of the Board of Directors and the President, as well as the result of the evaluation. In addition, the Chairman of the Nomination Committee has informed the Nomination Committee of the result of the evaluation of the Chairman of the Board. At one of its meetings, the Nomination Committee also met the Company's President, who informed the members about the Company's operations and strategy.

The Nomination Committee has discussed the Board's composition and agreed upon the main demands which should be made on the directors, including the demand for independent directors. In this context, particular consideration has been given to the issue of a more equal gender division. The Nomination Committee has also had access to an external consultant in the work of identifying and evaluating potential new directors.

When producing its proposal regarding fees to the Board and its committees, the Nomination Committee has among other things conducted a comparative study of the levels of board fees in similar companies. In producing its proposals regarding the election of auditors and fees for audit work, the Nomination Committee has been assisted by the Audit Committee.

The Board of Directors

The Board's responsibilities

The overall task of the Board of Directors is to manage the Company's affairs on behalf of the shareholders in the best possible manner. The Board of Directors shall regularly assess the Group's financial position and evaluate the operational management. The Board of Directors decides, among other things, on questions concerning the Group's strategic focus and organization, and decides on important capital expenditures (exceeding SEK 50 million) and undertakings.

Each year, the Board shall prepare proposals for guidelines regarding determination of salary and other compensation for the President and other members of the Company's management, to be decided upon at the Annual General Meeting.

The Board's rules of procedure

Each year, the Board adopts rules of procedure including instructions to the President which, among other things, govern the allocation of work between the Board and the President.

The rules of procedure also regulate the manner in which Board work is allocated among the directors, the frequency of Board meetings and the allocation of work among Board committees. The rules of procedure state that there shall be a compensation committee and an audit committee. Prior to each Board meeting, the directors receive a written agenda and full documentation to serve as a basis for decisions. At each Board meeting, a review is conducted regarding the current state of the business, the Group's results and financial position, and prospects for the remainder of the year. Other issues addressed include competition and the market situation.

Chairman of the Board

The Chairman of the Board of Directors presides over the Board's work, represents the Company on ownership issues and is responsible for the evaluation of the work of the Board. In addition, the Chairman is responsible for regular contacts with the President and for ensuring that the Board of Directors performs its duties.

Composition of the Board

According to the by-laws, the Board shall consist of no fewer than five and no more than ten directors elected by the General Meeting. The Board is quorate when more than half of the directors elected by the General Meeting are present. Taking into consideration the Company's operations, phase of development and circumstances in general, the Board must have an appropriate composition which is characterized by diversity and breadth as regards the expertise, experience and background of its members. New directors undergo an introduction course to rapidly acquire the knowledge which is expected in order to best promote the interests of the Company and its shareholders.

The Board's work in 2010

In 2010, eight meetings were held at which minutes were taken and the Board was at all times quorate. SSAB's General Counsel, who is not a director, served as secretary to the Board.

During the year, SSAB's Board continued its work of endeavoring to counteract the negative effects on the Company's operations and financial position resulting from the financial crisis and attendant recession in 2009 and the first part of 2010. The Board focused in particular on various measures by the Company to strengthen profitability in the business through scrupulous cost control and increased sales volumes, including pricing which has had to compensate for steep increases in the prices of the Company's most important raw materials, iron ore and coal. A great deal of effort has also been devoted to ensuring a sound cash flow despite the inventory build-up which occurred as a consequence of increased sales volumes compared with 2009. The Board has also attached importance to monitoring and securing the intended effects of the major organizational change which took place at the beginning of the year, with the aim of clarifying and enhancing the Company's total offering to its customers. The Company's overall strategy was also discussed in depth at a special board meeting held in September.

Auditors

According to the by-laws, SSAB shall have one or two external auditors. At the 2007 Annual General Meeting, PricewaterhouseCoopers was re-elected as auditor for an additional four-year term. Authorized public accountant Claes Dahlén has been the auditor-in-charge since 2005; he is also the auditor-in-charge of the listed company, Medivir. In total, PricewaterhouseCoopers is the elected auditor of a total of 22 of the 61 companies in the "Large cap" segment, and 95 out of a total of 260 companies on Nasdaq OMX, Stockholm.

The external audit of the financial statements of the parent company and the Group, as well as management by the Board of Directors and President, is conducted in accordance with Generally Accepted Auditing Standards in Sweden. The Company's auditor-in-charge participates at all meetings of the Audit Committee. The auditor attends at least one Board meeting per year and goes through the audit for the year and discusses the audit with the directors, without the President and other members of the Group

Executive Committee being present. For information regarding fees to the auditors, see Note 2.

Compensation Committee Duties

In addition to the Chairman of the Board, the Compensation Committee shall consist of at least one director elected at the General Meeting, who shall be independent in relation to the Company and company management. The members of the Compensation Committee shall possess the requisite knowledge and experience on issues relating to compensation to senior executives. The President shall be present at meetings of the Committee in order to report on matters. The Compensation Committee's duties are stated in the Board's rules of procedure. The Compensation Committee presents proposals to the Board of Directors regarding the President's salary and other employment terms, establishes salaries and employment terms for other members of the Group Executive Committee and establishes limits regarding salary and employment terms for other senior executives.

	Attendance statistics 2010				Independent
Name of Director	Elected to the Board	Board meetings	Compensation Committee	Audit Committee	In relation to the Company and Company man agement	In relation to the Company's major shareholders
Elected by the General Meeting
Sverker Martin-Löf, Chairman of the Board (1943)	2003, Chairman since 2003	8	5	4	Yes	No, Deputy Chairman of Industrivärden
Carl Bennet (1951)	2004	8	-	-	Yes	Yes
Anders G Carlberg (1943)	1986	8	-	4	Yes	Yes
Olof Faxander, President and CEO (1970)	2006	8	-	-	No, President and CEO of the Company	No, Director of Industrivärden
Marianne Nivert (1940)	2002	8	-	-	Yes	Yes
Anders Nyrén (1954)	2003	8	-	-	No, President and CEO of Industrivärden where Olof Faxander is a Director	No, President and CEO of Industrivärden
Matti Sundberg (1942)	2004	8	-	4	Yes	Yes
John Tulloch (1947)	2009	8	3	-	No, former President of IPSCO Division	Yes
Lars Westerberg (1948)	2006	8	5	-	Yes	Yes
Employee representatives
Sture Bergvall (1956)	2005	8	-	-	-	-
Uno Granbom (1952)	2008	8	-	-	-
Per Scheikl (1968)	2009	7	-	-	-	-
Alternates:
Bo Jerräng (1947)	2004	8	-	-	-	-
Bert Johansson (1952)	1998	8	-	-	-	-
Ola Parten (1953)	2005	8	-	-	-	-

For information regarding fees, see Note 2.

Honorary Chairman: Björn Wahlström since 1991.

Appointed by the Annual General Meeting

Member	Elected to the Board	Share holding1)	Experience and current appointments
Sverker Martin-Löf, Chairman (1943)	2003, Chairman since 2003	21,563 shares	Licentiate of Technology, dr h.c. Board Chairman: Industrivärden, SCA and Skanska. Deputy Chairman: Ericsson.
			Director: Handelsbanken.
			Formerly President and CEO of SCA.
Carl Bennet (1951)	2004	53,375 shares	M.Sc. in Economics, Tech. dr h.c.
			Board Chairman: Elanders, Getinge, Lifco and University of Gothenburg.
			Director: Holmen and L E Lundbergföretagen.
			Formerly President and CEO of Getinge.
Anders G Carlberg (1943)	1986	6,000 shares	M.Sc. in Economics. Board Chairman: Höganäs.
			Director: Axel Johnson Inc., Mekonomen, Beijer Alma, Sapa, Sweco and Säkl.
			Formerly President and CEO of Nobel Industrier, J.S. Saba and Axel Johnson International, and Executive Vice President of SSAB.
Olof Faxander, President and	2006	10,000 shares	M.Sc. (Materials Science) and B.Sc. (Business Administration).
CEO (1970)			Chairman of the Council of the Swedish Steel Producers' Association.
			Director: Industrivärden.
			Formerly Executive Vice President of Outokumpu. Employed at SSAB since 2006.
Marianne Nivert (1940)	2002	10,000 shares	BA.
			Director: Beijer Alma and Wallenstam.
			Formerly President and CEO of Telia.
Anders Nyrén (1954)	2003	2,812 shares	M.Sc. in Economics, MBA.
			President and CEO of Industrivärden.
			Board Chairman: Sandvik.
			Deputy Chairman: Handelsbanken.
			Director: Ericsson, Industrivärden, SCA, Volvo, Ernströmgruppen and Stockholm School of Economics.
			Formerly Executive Vice President of Skanska.
Matti Sundberg (1942)	2004	10,000 shares	Mining Counselor, MSc. in Business and Economics, econ dr h.c.
			Board Chairman: Chempolis and Finnish Ski Association.
			Director: Boliden, Skanska and FIS.
			Formerly President and CEO of Valmet/Metso and Ovako Steel.
John Tulloch (1947)	2009	15,000 shares	Bachelor of Agricultural Science, Master of Science.
			Formerly Executive Vice President, Steel & Chief Commercial Officer of IPSCO and Executive Vice President of SSAB & President, Division IPSCO.
Lars Westerberg (1948)	2006	10,000 shares	Civil Engineer and MBA.
			Board Chairman: Autoliv, Husqvarna and Vattenfall.
			Director: Volvo and Sandvik.
			Formerly President and CEO of Autoliv and Gränges.

1) Shareholdings include shares owned by closely-related persons.

Appointed by the employees

Sture Bergvall (1956)	2005	Electrician, SSAB EMEA
Uno Granbom (1952)	2008	Technician, SSAB EMEA
Per Scheikl (1968)	2009	Mechanic, SSAB EMEA
Alternates:
Bo Jerräng (1947)	2004	Personnel, SSAB EMEA
Bert Johansson (1952)	1998	Electrician, SSAB EMEA
Ola Parten (1953)	2005	Engineer, SSAB EMEA

The Compensation Committee assists the Board in its task of drawing up proposals for guidelines for determination of salary and other compensation for the President and other members of the Company's management, to be decided upon at the Annual General Meeting.

Work in 2010

In 2010, the Compensation Committee held five meetings at which minutes were taken. The Compensation Committee comprised Sverker Martin-Löf (Chairman), John Tulloch and Lars Westerberg. The President is co-opted to the Committee but does not participate in discussions concerning his own salary and employment terms.

Audit Committee

Duties

According to the Board's rules of procedure, the Audit Committee shall comprise at least three directors elected by the General Meeting. The members of the Audit Committee may not be employees of the Company. Most of the members shall be independent in relation to the Company and company management. At least one of the members, who is independent in relation to the Company and company management, shall also be independent in relation to the Company's major shareholders and possess accounting or auditing skills. The Committee elects a chairman among its members, who may not be the Chairman of the Board. The duties of the Committee are stated in the Board's rules of procedure. The Chairman of the Audit Committee is responsible for ensuring that the entire Board is kept regularly informed regarding the work of the Committee and, where necessary, shall submit matters to the Board for a decision. The main duties of the Audit Committee are to support the Board in the work of ensuring the quality of the financial reporting. The Committee regularly meets the Company's auditors, evaluates the audit work and established guidelines as to which additional services the Company may procure from the external auditors. Such additional services up to a maximum of SEK 100,000 per engagement must be approved in advance by the Company's CF0. Engagements in excess of SEK 100,000 must be approved in advance by the Chairman of the Audit Committee. All additional services must be reported regularly to the Audit Committee each quarter.

There is an established risk management process in the Company which is based on processes and flows in production. In this process, the Audit Committee reviews and takes into account the risk areas that have been identified (both commercial risks and risks of errors in the financial reporting). Based on the result of the internal and external risk assessment, the Committee regularly analyses the focus and scope of the audit with the Company's external and internal auditors.

Each year, the Audit Committee adopts an internal audit plan which, among other things, is based on the risks that have arisen in the risk management process described above. The audit plan is discussed with the external auditors in order to enhance the efficiency and quality of the regular audit work. The Committee also analyses and elucidates significant accounting issues which affect the Group and assists the Nomination Committee in producing proposals as regards auditors and their fees.

Work in 2010

In 2010, the Audit Committee further developed and improved the presentation of the external financial reporting. The Audit Committee, together with the external auditors, reviewed and analyzed the risk analysis and audit plan prepared by the auditors as a basis for the statutory audit.

The Committee's members were Anders G Carlberg (Chairman), Sverker Martin-Löf and Matti Sundberg. In 2010, the Audit Committee held four meetings at which minutes were taken.

Group Executive Committee

The Group Executive Committee's work and responsibilities

The Group Executive Committee is responsible for the formulation and implementation of the Group's overall strategies and addresses issues such as acquisitions and divestments. These issues, as well as major capital expenditures (in excess of SEK 50 million), are prepared by the Group Executive Committee for decision by the Board of Directors of the parent company.

The President is responsible for the day-to-day management of the Company in accordance with the Board of Directors' instructions and guidelines. As per December 31, 2010, the Group Executive Committee consisted, in addition to the President, of the Heads of SSAB EMEA, SSAB Americas and SSAB APAC, the Chief Financial Officer, the Head of Marketing, the General Counsel, the Head of Human Resources and the Head of Communications.

The Group Executive Committee holds monthly meetings in order to monitor the results and financial position of the Group and the business areas/subsidiaries. Other issues addressed at Group Executive Committee meetings include strategy issues and follow-up on budget and forecasts.

The head of each business area and subsidiary is responsible for the relevant income statement and balance sheet. Overall operational control of the business areas takes place through quarterly performance reviews and, in Tibnor, through the board of directors. In most cases, the President of the parent company is the Chairman of the Board of each of the directly-owned major subsidiaries and these boards also include other members from the Group Executive Committee, as well as employee representatives. The boards of the subsidiaries monitor the ongoing operations and adopt strategies and budgets.

Compensation Guidelines

The 2010 Annual General Meeting decided that compensation to the President and other members of the Company's senior management shall comprise fixed salary, possible variable salary components, other benefits such as company car, and pension. The total compensation package shall be on market terms and competitive on the employment market on which the executive works. Fixed salary and variable salary components shall be related to the executive's responsibilities and powers. The variable salary components shall be based on results as compared with defined and measurable targets and shall be subject to a cap in relation to the fixed salary. Variable salary components shall not be included in the basis for computation of pension, except in those cases where so provided in the rules of a general pension plan (e.g. the Swedish ITP plan). As regards senior executives outside Sweden, all or parts of the variable salary

components may be included in the basis for pension computation due to legislation or practice on the local market. The Board shall be entitled to derogate from the guidelines where special reasons exist in an individual case. For more detailed information regarding current compensation, reference is made to Note 2.

The Company currently has no share or share-price related incentive programs.

Internal control and risk management

The overall objective of the internal control is to ensure, to a reasonable degree, that the Company's operational strategies and targets are monitored and that the owners' investments are protected. In addition, the internal control shall ensure with reasonable certainty that the external financial reporting is reliable and prepared in accordance with generally accepted accounting principles, and shall ensure

	Member of Group Executive
Name	Committee	Shareholding1)	Education and experience
Olof Faxander, President and CEO (1970) 2)	2006	10,000 shares	M.Sc. (Materials Science) and B.Sc. (Business Administration). Employed at SSAB since 2006. Formerly Executive Vice President of Outokumpu.
Jonas Bergstrand, General Counsel and Executive Vice President, Legal (1965)	2006	5,242 shares	Master of Law. Employed at SSAB since 2006. Formerly corporate counsel at ABB; OM Gruppen; Ericsson Radio Systems.
David Britten, Executive Vice President, Head of Business Area SSAB Americas (1960)	2008	5,000 shares	M.Sc. (Engineering). Employed at SSAB since 2007. Formerly Executive Vice President, IPSCO.
Martin Lindqvist, Executive Vice President, Head of Busines Area SSAB EMEA (1962) 2) 3)	2001	17,109 shares	B.Sc (Economics). Employed at SSAB since 1998. Formerly CFO at SSAB, CFO at SSAB Strip Products and Chief Controller at NCC.
Martin Pei, Executive Vice President, Head of Business Area SSAB APAC (1963)	2007	1,000 shares	Ph. D. (Technology). Employed at SSAB since 2001. Formerly Head of Research and Development; General Manager, Slab Production, SSAB Plate.
Karl-Gustav Ramström, Executive Vice President, Head of Group Marketing and Market Development (1954)	2007	1,000 shares	Master of Engineering, MBA. Employed at SSAB since 2007. Formerly Head of Division, Svenska ABB.
Helena Stålnert, Executive Vice President, Communications (1951)	2007	500 shares	Master program in Journalism. Employed at SSAB since 2007. Formerly Senior Vice President, Communications at Saab, Editor-in-Chief Aktuellt Swedish Television.
Anna Vikström Persson, Executive Vice President, Human Resources (1970)	2006	3,500 shares	Master of Law. Employed at SSAB since 2006. Formerly Head of Human Resources at Ericsson's Swedish operations.
Marco Wirén, Chief Financial Officer and Executive Vice President, Finance (1966)	2008	8,700 shares	Master in Economics. Employed at SSAB since 2007. Formerly Chief Controller at SSAB and CFO at Eltel Networks AB and Vice President, Strategic Planning and Group Controller at NCC.

1) Shareholdings include shares owned by closely-related persons.

2) As of January 1, 2011 Martin Lindqvist is President and CEO in SSAB.

3) Thom Mathisen is acting Head of Business Area SSAB EMEA.

compliance with applicable laws and regulations and the requirements imposed on listed companies.

During the autumn of 2008, SSAB decided to employ a risk manager to replace the Company's Risk Committee. The risk manager is charged with developing and implementing a uniform risk management model regarding the Group's risks, primarily relating to injury to individuals and damage to machinery and the environment. The risk manager has the task of identifying, evaluating and reporting these risks as well as compiling and updating SSAB's risk structure and risk model. The work also involves assessing which preventive measures are to be taken in the internal control in order to reduce and prevent such risks. In addition, the risk manager shall ensure that the Group is sufficiently insured and shall prepare information as a basis for decisions by the Group Executive Committee, the business areas and subsidiaries. The risk manager reports directly to the Company's General Council. The financial risks will continue to be managed by the Group's treasury function and are thus outside the mandate of the risk manager.

In order to further strengthen the internal control and risk management, in 2010 SSAB decided to establish a whistleblower function through which serious improprieties and violations of the Company's Code of Business Ethics can be reported. This function is aimed, among other things, at guaranteeing safety in the workplace, maintaining sound business ethics and curbing economic irregularities within SSAB, to the benefit of employees, customers, suppliers and shareholders.

Internal audit

SSAB has an established internal audit function reporting

directly to the Audit Committee but functionally subordinate to the Chief Financial Officer.

During 2010, the internal audit function carried out and reported on audits in accordance with an audit plan adopted by the Audit Committee. These audits were carried out in accordance with a produced and adopted audit process which is regularly developed in order to optimize the work method and delivery of reports which generate added value.

For a further description of the internal audit work in 2010, see the section entitled "The Board's description of the internal control and risk management regarding financial reporting".

The Board's description of the internal control and risk management regarding financial reporting

In accordance with the Swedish Companies Act and the Swedish Code on Corporate Governance, the Board of Directors of SSAB is responsible for the internal control. This description has been prepared in accordance with the Annual Reports Act.

Framework for internal control

SSAB complies with the internationally established framework, Internal Control - Integrated Framework, which is issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). In accordance with COSO, SSAB's internal control process is based on five components: control environment, risk assessment, control activities, information and communication, and monitoring. SSAB's internal control process is structured in order to ensure, to a reasonable degree, the quality and accuracy of the financial reporting. The process shall ensure that the reporting is prepared in accordance with applicable laws and regulations,

1) Member of the Group Executive Committee

reporting standards, as well as requirements imposed on listed companies in Sweden. Prerequisites for this being achieved are that a sound control environment is in place, that reliable risk assessments are carried out, that established control activities are in place and that information and communication as well as monitoring function satisfactorily.

Control environment

The control environment is characterized by the organization structure, management's work methods and philosophy as well as other roles and responsibilities within the organization. The Audit Committee assists the Board with respect to important accounting issues which the Group applies and monitors the internal control with respect to financial reporting. In order to maintain an efficient control environment and sound internal control, the Board of Directors has delegated the practical responsibility to the President who, in turn, has delegated responsibility to other members of the Group Executive Committee as well as to heads of business areas/subsidiaries.

A number of projects aimed at achieving improvements in work methods, routines and documentation are regularly conducted with the aim of ensuring that the Group's internal controls meet the requirements imposed by various stakeholders. In order to ensure the quality of the financial reporting, work takes place regularly on further developing policies and manuals for the entire Group; among other things, there is an accounting manual (Financial Guidelines) for the Group which is regularly updated and communicated within the Group. The Financial Guidelines also include the finance policy. Apart from the Financial Guidelines, the most important overall control documents for the Group are the information policy and business ethics policy. In addition, there are control documents and policies, e.g. credit policy and policy for dissemination of financial information.

All business areas and subsidiaries have adopted guidelines with respect to business ethics issues. The work on clarifying the Group's Code of Business Ethics continued during

Internal control process

1. The Group also decided to sign up to the UN Global Compact commencing January 1, 2010. This represents a stage in further strengthening communication of the Group's values and philosophy.

Risk assessment

SSAB is an organization which is exposed to both internal and external risks. In order to appropriately ensure a sound internal control, the risks which may affect the financial reporting are identified, gauged and measures are taken. The Group's system for identifying, reporting and taking measures as regards risks is integrated in the regular reporting to Group Executive Committee and the Board of Directors and also constitutes the basis for the assessment of risks of error in the financial reporting. SSAB's operations are characterized by processes involving well-established routines and systems. The risk assessment thus takes place largely within these processes. Only general risk assessments take place on a Group level. Responsible persons in the Group identify, monitor and follow-up risks. This creates conditions for well-founded and correct commercial decisions at all levels. Financial risks such as currency, financing and counterparty risks, as well as interest rate and credit risks, are handled primarily by the parent company's treasury function in accordance with the Group's finance policy (see Note 27). See also the section entitled "Internal control and risk management" as well as the Report of the Directors, page 26, for an outline of the Group's commercial risk exposure.

Control activities

The primary purpose of control activities is to prevent and discover at an early stage errors in the financial reporting so that they can be addressed and rectified. Control activities take place on both overall and more detailed levels within the Group. Routines and activities have been designed in order to handle and rectify significant risks associated with the financial reporting as identified in the risk analysis. Corrective measures, implementation, documentation and quality assurance take place on a Group level, subsidiary level or process level, depending on the nature and affiliation of the control activity. As with other processes, the relevant head is responsible for the completeness and accuracy of the control activities.

During the year and in connection with the Group's reorganization, an in-depth analysis has begun concerning the processes and control structures in group companies in order to further ensure the reliability of the financial reporting. This work is expected to continue during 2011.

In 2007, work began on implementing a joint Group consolidation system. All companies in the Group report in this system commencing 2009. The joint Group system entails an improved internal control over the financial reporting. Work has also continued in the Group concerning automation of

Further information regarding corporate governance in SSAB is available on www.ssab.com, including the following information:

• • Routines regarding the Annual General Meeting (when the Annual General Meeting is to be held, notice to attend and registration procedure, as well as which important decisions are to be taken at the Annual General Meeting)
• • Information from SSAB's previous Annual General Meetings (commencing 2005), including notices, minutes, addresses by the President and communiqués
• • The by-laws
• • Corporate governance reports from previous years
• • Information regarding the Nomination Committee

more controls and processes, and limitations on authority in IT systems in accordance with express and ostensible powers.

Control activities are carried out at all levels in the Group. For example, there are established Controller functions which analyze and follow-up deviations and forward reports in the Company. Monitoring by Group Executive Committee takes place, among other things, through regular meetings with heads of business areas and subsidiaries with regard to the operations, their financial position and results, as well as financial and operational key ratios. The Board of Directors analyses, among other things, monthly business reports in which the Group Executive Committee describes the period that has elapsed and comments on the Group's financial position and results. In these ways, important fluctuations and deviations are followed up, a factor which minimizes the risks of errors in the financial reporting.

The work on the closing accounts and the annual report involves processes in which there are additional risks of error in the financial reporting. This work is less repetitive in nature and contains several elements in the nature of an assessment. Important control activities include ensuring the existence of a well-functioning reporting structure in which the business areas/subsidiaries report in accordance with standardized reporting templates, and that important income statement and balance sheet items are specified and commented on.

Information and communication Externally

SSAB's communications must be correct, open, and prompt and provided simultaneously to all stakeholders. All communications must take place in accordance with Nasdaq OMX Stockholm's Rules and Regulations and in accordance with other regulations. The financial information must provide the capital market and stock market, as well as current and future shareholders, with a comprehensive and clear view of the Company, its operations, strategy and financial development.

The Board of Directors approves the Group's annual reports and half-year reports, and instructs the CEO to submit quarterly reports and results for the year in accordance with the Board's rules of procedure. All financial reports and press releases are published on the website (www.ssab.com) simultaneously with publication via Nasdaq OMX Stockholm, and are notified to the Swedish Financial Supervisory Authority.

Financial information regarding the Group may be provided only by the CEO and CFO, as well as by the Executive Vice President, Communications, and the Head of Investor Relations. The business areas/subsidiaries disseminate financial information regarding their operations only after the Group has published corresponding information.

The Company applies silent periods during which the Company does not communicate information regarding the Company's development. Silent periods are three weeks

prior to publication of results for the year, half-year reports and quarterly reports.

In the event of a leakage of price-sensitive information or upon the occurrence of special events which may affect the valuation of the Company, Nasdaq OMX Stockholm will be notified, after which a press release containing the same information will be distributed. Informational activities are governed by an information policy.

Internally

Each business area and subsidiary has a chief financial officer who is responsible for maintaining high quality and precision of delivery with respect to the financial reporting. The local intranets constitute important communication channels in the Company on which information is published regularly. In 2008, SSAB introduced a new joint Group intranet. Regular joint Group accounting meetings are held with the chief financial officers of the business areas/ subsidiaries. In this way, the business areas/subsidiaries are updated regarding news and changes within, among other things, the accounting area as well as routines and internal controls with respect to the financial reporting. In addition, the parent company regularly communicates changes in the joint Group accounting principles and policies as well as other relevant issues relating to the financial reporting.

Monitoring

The Board's monitoring of the internal control with respect to financial reporting takes place primarily through the Audit Committee, among other things by monitoring the work and reports of the internal and external auditors.

The internal audit regularly carries out independent and objective audits in accordance with an adopted audit plan. The audits are carried out in accordance with an adopted audit process which commences with an annual risk analysis in order to create an audit plan. Following a completed audit, the audit is formally concluded with regular reporting back to the Audit Committee regarding observations and of measures taken by the Company. The audits are carried out as process audits focusing on SSAB's compliance with its internal and external rules and regulations and the existence of efficient and suitable processes for risk management, business management and internal controls.

The external auditors review each year selected parts of the internal control within the scope of the statutory audit. The external auditors report the results of their review to the Audit Committee and Group Executive Committee. Important observations are also reported directly to the Board of Directors. In 2010, the external auditors monitored the internal control in selected key processes and reported thereon to the Audit Committee and Group Executive Committee.

Financial reports Table of contents

	Page
Consolidated income statement	58
Consolidated statement of
comprehensive income	58
Consolidated balance sheet	59
Consolidated statement of changes in equity	60
Consolidated cash flow statement	61
Parent company's income statement	62
Parent company's other comprehensive income 62
Parent company's balance sheet	63
Parent company's changes in equity	64
Parent company's cash flow statement	65
Accounting and valuation principles	66
Notes	74
Proposed allocation of profit	110
Auditor's report	111

Consolidated income statement

SEK millions	Note	2010	2009
Sales	1	39,883	29,838
Cost of goods sold	2	-35,938	-29,020
Gross profit		3,945	818
Selling expenses	2	-1,444	-1,668
Administrative expenses	2	-1,388	-1,384
Other operating revenue	1, 25	449	975
Other operating expenses	2	-535	-340
Shares in earnings of affiliated companies and joint ventures after tax	3	57	7
Operating profit		1,084	-1,592
Financial income	4	30	50
Financial expenses	4	-432	-519
Profit after financial items		682	-2,061
Taxes	5	82	1,182
Profit for the year, continuing operations		764	-879
Profit for the year, discontinued operations	25	-164	-131
Profit for the year		600	-1,010
Of which attributable to:
- parent company's shareholders		552	-1,002
- non-controlling interests		48	-8
Earnings per share1)	12, 29	1.70	-3.09
- of which for continuing operations 1)		2.21	-2.69
- of which for discontinued operations 1)		-0.51	-0.40
Dividend per share – 2010 proposal		2.00	1.00

1) There are no outstanding share instruments and thus no dilution is relevant.

Consolidated statement of comprehensive income

SEK millions	2010	2009
Profit for the year	600	-1,010
Other comprehensive income
Translation differences for the period	-1,762	-2,219
Cash flow hedges	181	-2
Hedging of currency risks in foreign operations	599	475
Tax attributable to comprehensive income	-205	-125
Share in other comprehensive income of affiliated companies
and joint ventures	0	16
Other comprehensive income for the year, net after tax	-1,187	-1,855
Total comprehensive income for the year	-587	-2,865
Of which attributable to:
- parent company's shareholders	-632	-2,857
- non-controlling interests	45	-8

Consolidated balance sheet

SEK millions	Note	2010	2009
ASSETS
Fixed assets
Goodwill	6	18,643	19,701
Other intangible assets	6	4,309	5,374
Tangible fixed assets	7	17,063	17,137
Participations in affiliated companies and joint venture	3, 8	395	348
Financial assets	8	77	55
Deferred tax receivables Total fixed assets	14	159 40,646	164 42,779
Current assets
Inventories	9	11,389	8,221
Accounts receivable	27	5,057	4,435
Prepaid expenses and accrued revenue	10	495	331
Current tax receivables		742	667
Other current interest-bearing receivables	11	971	-
Other current receivables	27	439	334
Cash and cash equivalents	11	1,314	3,652
Total current assets		20,407	17,640
Total assets		61,053	60,419
EQUITY AND LIABILITIES
Equity	12
Share capital		2,851	2,851
Other contributed funds		9,944	9,944
Reserves		-2,047	-916
Retained earnings		19,137	18,962
Total equity for shareholders in the Company		29,885	30,841
Non-controlling interests		191	161
Total equity		30,076	31,002
Long-term liabilities
Long-term interest-bearing liabilities	16	16,786	14,878
Pension provisions	13	135	135
Deferred tax liabilities	14	4,952	5,283
Other long-term provisions	15	119	415
Total long-term liabilities		21,992	20,711
Current liabilities
Current interest-bearing liabilities	16	2,977	3,998
Accounts payable	27	4,048	3,063
Accrued expenses and deferred revenue	17	1,521	1,327
Current tax liabilities		200	96
Other current liabilities	27	186	179
Current provisions	15	53	43
Total current liabilities		8,985	8,706
Total equity and liabilities		61,053	60,419
Pledged assets	21	41	40
Contingent liabilities	22	124	88

Consolidated statement of changes in equity

SEK millions	Note	Share capital	Other contribu ted funds	Reserves	Retained earnings	Total	Non con trolling interest	Total equity
Equity, January 1, 2009		2,851	9,944	939	21,260	34,994	199	35,193
Translation difference	12	-	-	-2,217	-	-2,217	-2	-2,219
Effects of cash flow hedge	12	-	-	-2	-	-2	-	-2
Tax attributable to cash flow
hedges	12	-	-	0	-	0	-	0
Effects of hedging of currency
risks in foreign operations	12	-	-	475	-	475	-	475
Tax on hedging of currency risks
in foreign opertions	12	-	-	-125	-	-125	-	-125
Share in other comprehensive
income in affiliated companeis
and joint ventures		-	-	14	-	14	2	16
Profit for the year		-	-	-	-1,002	-1,002	-8	-1,010
Total comprehensive income		-	-	-1,855	-1,002	-2,857	-8	-2,865
Dividend		-	-	-	-1,296	-1,296	-30	-1,326
Equity, December 31, 2009	12	2,851	9,944	-916	18,962	30,841	161	31,002
Equity, January 1, 2010		2,851	9,944	-916	18,962	30,841	161	31,002
Adjustment translation diffe
rences previous periods 1)	12	-	-	53	-53	-	-	-
Adjusted equity,
January 1, 2010		2,851	9,944	-863	18,909	30,841	161	31,002
Translation differences	12	-	-	-1,759	-	-1,759	-3	-1,762
Effect of cash flow hedge	12	-	-	181		181	-	181
Tax attributale to cash flow
hedges	12	-	-	-48	-	-48	-	-48
Effects of hedging of currency
risks in foreign operations	12	-	-	599	-	599	-	599
Tax on hedging of currency risks
in foreign opertions	12	-	-	-157	-	-157	-	-157
Share in other comprehensive
income in affiliated companies
and joint ventures		-	-	0	-	0	-	0
Profit for the year		-	-	-	552	552	48	600
Total comprehensive income		0	0	-1,184	552	-632	45	-587
Dividend		-	-	-	-324	-324	-15	-339
Equity, December 31, 2010	12	2,851	9,944	-2,047	19,137	29,885	191	30,076

1) Relates to adjustment of error between currency translation and retained earnings.

Consolidated cash flow statement

SEK millions	Note	2010	2009
BUSINESS OPERATIONS
Profit from operating activitIes
Operating profit		1,084	-1,592
Reversal of non-cash items
- Non distributed shares in affiliated companies' earnings		-54	31
- Depreciation of tangible fixed assets	7	1,629	1,599
- Amortization of intangible assets	6	822	907
- Profit upon sale of fixed assets		-18	118
- Profit upon sale of subsidiaries and affiliated companies		-28	-8
- Change in provisions		-279	-423
- Other reversals		267	-168
Interest received		8	54
Interest paid Tax paid		-400 -127	-565 -943
		2,904	-990
Working capital
Inventories (+ decrease)		-3,363	4,532
Accounts receivable (+ decrease)		-1,095	984
Accounts payable (+ increase)		1,515	-268
Other current receivables (+ decrease)		-264	627
Other current liabilities (+ increase)		355	-740
		-2,852	5,135
Cash flow from operating activities		52	4,145
INVESTING ACTIVITIES
Investments in plants and machinery	6, 7	-2,011	-1,912
Sale of plants and machinery		50	145
Acquisition of companies and shares	24	-	-
Sold companies and operations	25	-559	31
Other long-term receivables (+ decrease)		7	65
Cash flow from investing activities		-2,513	-1,671
FINANCING ACTIVITIES
Dividend to shareholders		-324	-1,296
New loans		5,429	8,273
Repayment/amortization of loans Financial investments		-4,001 -1,029	-9,032 142
Other financing (+ increase)		48	456
Cash flow from financing activities		123	-1,457
CASH AND CASH EQUIVALENTS
Balance, January 1		3,652	2,713
Cash flow from operating activities		52	4,145
Cash flow from investing activities		-2,513	-1,671
Cash flow from financing activities		123	-1,457
Translation differences, cash and cash equivalents		0	-78
Balance, December 31	11	1,314	3,652
Contracted, non-utilized overdraft facilities		12,205	15,198
Disposable cash and cash equivalents		13,519	18,850

Parent company's income statement

SEK millions	Note	2010	2009
Gross profit		-	-
Administrative expenses	2	-202	-165
Other operating revenue	1	2,089	378
Other operating expenses	2	-164	-256
Operating profit		1,723	-43
Dividend from subsidiaries	4	98	431
Financial items	4	-233	-256
Profit after financial items		1,588	132
Appropriations	23	-42	5
Tax before profit		1,546	137
Tax	5	99	11
Profit for the year		1,645	148

Parent company's other comprehensive income

SEK millions	2010	2009
Profit for the year	1,645	148
Other comprehensive income
Hedging of currency risks in foreign operations	599	475
Tax attributable to comperehensive income	-157	-125
Other comprehensive income for the year, net after tax	442	350
Total comprehensive income for the year	2,087	498

Parent company's balance sheet

ASSETS Fixed assets Tangible fixed assets 7 4 4 Financial assets 8 38,799 36,758 Long-term receivables from subsidiaries 14 23 Deferred tax receivables 14 1 1 Total fixed assets 38,818 36,786 Current assets Accounts receivable 27 - - Current receivables from subsidiaries 12,602 10,027 Prepaid expenses and accrued revenue 10 41 79 Current tax receivables 0 1 Other current interest-bearing receivables 11 - - Other current receivables 27 4 2 Cash and cash equivalents 11 843 2,184 Total current assets 13,490 12,293 Total assets 52,308 49,079 EQUITY AND LIABILITIES Equity Restricted equity 3,753 3,753 Unrestricted equity 27,234 25,528 Total equity 30,987 29,281 Untaxed reserves 23 694 652 Provisions Pension provisions 13 4 5 Other long-term provisions 15 67 355 Total provisions 71 360 Long-term liabilities Liabilities to subsidiaries 1 1 Other long-term interest-bearing liabilities 16 16,383 14,596 Total long-term liabilities 16,384 14,597 Current liabilities Accounts payable 27 10 9 Liabilities to subsidiaries 2,258 1,237 Current interest-bearing liabilities 16 1,743 2,863 Accrued expenses and deferred revenue 17 88 61 Current tax liabilities 37 - Other current liabilities 27 6 4 Current provisions 15 30 15 Total current liabilities 4,172 4,189 Total equity and liabilities 52,308 49,079 Pledged assets 21 - - Contingent liabilities 22 631 422	SEK millions	Note	2010	2009

Parent company's changes in equity

		Restricted equity		Unrestricted equity
			Statutory	Retained	Profit for
SEK millions	Note	Share capital	reserve	earnings	the year	Total
Equity, January 1, 2009		2,851	902	19,706	6,944	30,403
Effect of hedging of currency
risks in foreign operations	12	-	-	475	-	475
Tax on hedging of currency
risks in foreign operations	12	-	-	-125	-	-125
Profit for the year		-	-	-	148	148
Total comprehensive income		-	-	350	148	498
Retained earnings from
previous year		-	-	6,944	-6,944	-
Group contributions given		-	-	-441	-	-441
Tax on Group contributions		-	-	117	-	117
Dividend	12	-	-	-1,296	-	-1,296
Equity, December 31, 2009	12	2,851	902	25,380	148	29,281
Equity, January 1, 2010		2,851	902	25,380	148	29,281
Effect of hedging of currency
risks in foreign operations	12	-	-	599	-	599
Tax on hedging of currency
risks in foreign operations	12	-	-	-157	-	-157
Profit for the year		-	-	-	1,645	1,645
Total comprehensive income		-	-	442	1,645	1,645
Retained earnings from
previous year		-	-	148	-148	-
Group contributions given		-	-	-75	-	-75
Tax on Group contributions		-	-	19	-	19
Dividend	12	-	-	-324	-	-324
Equity, December 31, 2010	12	2,851	902	25,590	1,645	30,988

Retained earnings include a premium reserve of SEK 9,391 (9,391) million and a fair value reserve of SEK 2,015 (1,573) million.

Parent company's cash flow statement

SEK millions	Note	2010	2009
BUSINESS OPERATIONS
Profit from operating activities
Operating profit		1,723	-43
Reversal of non-cash items
- Depreciation of tangible fixed assets	7	2	2
- Profit upon sale of subsidiaries and affiliated companies		-2,010	-
- Change in provisions		-273	128
- Other reversals		431	-14
Interest received		171	241
Interest paid		-386	-537
Tax paid		0	-547
		-342	-770
Working capital
Accounts receivable (+ decrease) Accounts payable (+ increase)		0 1	11 -22
Other current receivables (+ decrease)		61	524
Other current liabilities (+ increase)		8	-45
Commercial intra-group transactions		-40	-11
		30	457
Cash flow from operating activities		-312	-313
INVESTING ACTIVITIES
Investments in plants and machinery	6, 7	-2	0
Sold companies and operations	25	2,919	-
Cash flow from investing activities		2,917	0
FINANCING ACTIVITIES
Dividends to shareholders		-324	-1,296
Group contributions		-	-441
Dividends from subsidiaries		98	431
Shareholder contributions to subsidiaries		-3,511	-
New loans		4,025	6,932
Repayments/amortization of loans		-2,863	-8,977
Financial intra-group transactions		-1,499	3,054
Financial investments		-	142
Other financing (+ increase)		128	433
Cash flow from financing activities		-3,946	278
CASH AND CASH EQUIVALENTS
Balance, January 1		2,184	2,219
Cash flow from operating activities		-312	-313
Cash flow from investing activities		2,917	0
Cash flow from financing activities		-3,946	278
Balance, December 31	11	843	2,184
Contracted, non-utilized overdraft facilities		12,205	15,164
Disposable cash and cash equivalents		13,048	17,348

Accounting and valuation principles

The most important accounting principles applied in the preparation of these consolidated financial statements are set forth below. Unless otherwise stated, these principles have been applied consistently with respect to all presented years.

General information

SSAB AB is a limited liability company with its registered office in Stockholm, Sweden. The parent company is listed on NASDAQ OMX Stockholm.

Principles for preparation of the report

The consolidated financial statements have been prepared in accordance with the Swedish Annual Reports Act as well as International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) with interpretation statements issued by the International Financial Reporting Interpretations Committee (IFRIC), as such have been adopted by the EU. In addition, the Swedish Financial Reporting Board's recommendation RFR 1.3, Supplementary Accounting Rules for Groups, has been applied.

Accounting standards and applications introduced during the year have had a marginal impact on the Group's earnings and financial position.

The consolidated financial statements have been prepared in accordance with the acquisition value method, other than with respect to certain financial assets and liabilities (including derivative instruments) which are valued at fair value via the income statement.

The preparation of reports in accordance with IFRS requires the use of a number of important estimations for accounting purposes. In addition, management must make certain assessments in conjunction with the application of the Group's accounting principles. Those areas that include a high degree of assessment, which are complex, or in which assumptions and estimations are of material significance for the consolidated financial statements are stated in Note 28.

The parent company applies the same accounting principles as the Group, except where stated below in a particular section. The differences that exist between the principles applied by the parent company and the Group are due to limitations on the possibilities to apply IFRS to the parent company as a consequence of the provisions of the Swedish Annual Reports Act and the Swedish Pension Obligations (Security) Act and also, in certain cases, for tax reasons. In addition, the Swedish Financial Reporting Board's recommendation RFR 2, Accounting for Legal Entities, has been applied.

i. Standards, changes and interpretations that entered into force in 2010 and are relevant to the Group.

• IAS 27 (Revised), "Consolidated financial statements and separate financial statements": This change entered into force on July 1, 2009. The revised change applies to future transactions with minority interests with, among other things, the designation 'minority interests' being changed to 'non-controlling interests.' In addition, the amendment entails, among other things, profit/loss relating to minority interests must always be reported even if this entails that the portion attributable to the minority interests is negative. The change also means that transactions with minority interests must always be reported in equity; and that in those cases where a parent company relinquishes its controlling influence, any remaining stake must be revalued at fair value. The Group has applied IAS 27 (Revised) commencing the financial year beginning January 1, 2010. The revised standard has had no effect on previously conducted transactions with non-controlling interests.

• • IFRS 3 (Revised), "Business combinations": This change entered into force on July 1, 2009. The application entails a change in the manner in which future acquisitions are reported, among other things regarding reporting of transaction costs, any conditional purchase price and step acquisitions. The Group has applied IFRS 3 (Revised) commencing the financial year beginning January 1, 2010. No acquisitions have taken place in 2010 and the change has had no effect on previously implemented acquisitions. Thus, the revised standard has had no effect on the consolidated financial statements.
• • IFRS 5 (Revised), "Non-current assets held for sale and discontinued operations": This change applies going forward as from July 1, 2009. The change clarifies that all of a subsidiary's assets and liabilities are classified as holdings for sale if a plan for partial divestment leads to the loss of the controlling influence. Necessary disclosure must be provided regarding such subsidiary, if the definition of discontinued operations is fulfilled. The Group applies IFRS 5 (Revised) commencing the financial year beginning January 1, 2010. In 2010, the Group has had no non-current assets held for sale and discontinued operations. Thus, this change has had no effect on the consolidated financial statements.

ii. Standards, changes and interpretations relevant to the Group which have been adopted by the EU but have not yet entered into force and have not been applied by the Group prematurely

The following standards, amendments and interpretations of existing standards are obligatory as regards the consolidated financial statements for financial years commencing January 1, 2010 or later.

• IAS 24 (Revised), Related Party Disclosures: This amendment applies commencing January 1, 2011. The most important changes consist of simplification of the disclosure requirements regarding companies connected to the State, as well as a clarification of the meaning of 'related party'. The Group will apply IAS 24 (Revised) commencing the financial year beginning January 1, 2011. This change will only have a limited effect.

Consolidated financial statements

The consolidated financial statements cover SSAB AB (publ) and the companies in which the Group is entitled to formulate financial and operational strategies in a manner which is normally associated with a shareholding in excess of 50% of

the voting capital. Companies in which the Group exercises a significant but not controlling influence are reported as affiliated companies; this is normally the case where shares are held equal to between 20% and 50% of the voting capital. Those companies in which the Group, together with one or more co-owners, is bound by a cooperation agreement which provides that the co-owners shall jointly exercise a controlling influence, are reported as joint ventures.

Subsidiaries

The Group's annual accounts are prepared in accordance with the acquisition method, entailing that the equity of a subsidiary at the time of acquisition - defined as the difference between the fair value of identifiable assets, liabilities and potential obligations - is eliminated in its entirety against the acquisition price. Those surpluses that comprise the difference between the acquisition value and the fair value of the Group's share of identifiable acquired assets, liabilities and potential obligations are reported as goodwill. If the acquisition price is below the fair value of the net assets of the acquired subsidiary, the difference is reported directly in the income statement.

Acquired companies are included in the consolidated financial statements commencing the date on which a controlling influence is obtained, while sold companies are reported up to the date on which the controlling influence ceases.

Intra-group transactions, dealings and unrealized profits are eliminated in the consolidated financial statements. Unrealized losses are also eliminated unless the transaction constitutes evidence of impairment of the transferred asset. Where appropriate, the accounting principles for subsidiaries have been changed in order to ensure a consistent application of the Group's principles.

In the consolidated cash flow statement, the purchase price with respect to acquired or sold operations is reported under the headings "Acquisition of companies and shares" and "Sold companies and operations". Thus, the assets and liabilities of the acquired/sold companies at the time of the acquisition/sale are not included in the cash flow statement.

Affiliated companies and joint ventures

Affiliated companies and joint ventures are reported in accordance with the equity method and valued initially at acquisition value. The equity method entails that the Group's book value of the shares in affiliated companies and joint ventures corresponds to the Group's share in the equity of the affiliated companies and joint ventures and, where appropriate, the residual value of surplus values or under-values from a Group perspective, including goodwill. The Group's share in the earnings of affiliated companies and joint ventures which arises after the acquisition is reported in the income statement. In the consolidated income statement, "Shares in earnings of affiliated companies and joint ventures after tax" comprise the Group's share in the post-tax earnings of the affiliated company or joint venture. Shares in the earnings of affiliated companies and joint ventures are reported in the operating profit when operations in affiliated companies and joint ventures are related to SSAB's operations and considered to be of a business nature. Any intra-group profits are eliminated in relation to the share of equity held.

In the parent company, affiliated companies and joint ventures are reported in accordance with the acquisition value method.

Transactions in foreign currencies

Items included in the financial statements for the various units in the Group are valued in the currency used in the economic environment in which the company in question primarily operates (functional currency). Swedish kronor are used in the consolidated financial statements; this is the functional currency and reporting currency of the parent company.

Transactions in foreign currency are reported at the exchange rate prevailing on the transaction date. In certain cases, the actual rate is approximated to the average rate during a month. At the end of the month, receivables and liabilities in foreign currency are translated in accordance with the closing day rate at that time. Exchange rate differences relating to the business are reported in the operating profit, while differences attributable to financial assets and liabilities are reported as a net sum among financial items.

The income statements of foreign subsidiaries are translated into Swedish kronor at the average exchange rates for the year, while their balance sheets are translated into Swedish kronor at the closing day rates. Any translation differences that arise are transferred directly to the consolidated statement of comprehensive income and reported in the item "Translation reserve".

Loans or other financial instruments taken up in order to hedge net assets in foreign subsidiaries are reported in the consolidated financial statements at the closing day rate. Any exchange rate differences less deferred taxes are transferred directly to other comprehensive income and thereby set off against the translation differences which arise in conjunction with the translation of these subsidiaries' balance sheets into Swedish kronor.

Upon sales of foreign subsidiaries, the total translation differences that relate to the foreign subsidiary are reported as a part of capital gains/losses in the consolidated income statement.

Goodwill and adjustments of assets and liabilities to fair value in connection with the acquisition of foreign subsidiaries are treated as assets and liabilities in the foreign operations and thus translated in accordance with the same principles as the foreign subsidiaries.

Revenue recognition

Sales are reported after the crucial risks and benefit associated with title are transferred to the buyer and no right of disposition or possibility of actual control over the goods remains. In most cases, this means that sales are reported upon delivery of the goods to the customer in accordance with agreed delivery terms and conditions. The sale is reported less value added tax, discounts, returns and freight, including exchange rate differences from forward contracts which are entered into in order to hedge sales in foreign currency. Intra-group sales are eliminated in the consolidated financial statements.

With respect to revenue other than from sales of goods, interest income is recognized in accordance with the effective return and dividends are reported when the entitlement to the dividend is established. Regarding dividends from subsidiaries, see the section entitled "Dividends".

Pricing between Group companies

Arm's length pricing is applied to deliveries of goods and services between companies in the Group. However, deliveries of slabs from SSAB Oxelösund AB to SSAB Tunnplåt AB take place at cost price.

Government assistance

Government assistance and grants are reported at fair value when there is reasonable certainty that the grant will be received and that the Group will fulfill the conditions attached to the grant.

Government assistance and grants are allocated over the same period as the expenses which the grants are intended to reimburse. Grants provided as compensation for expenses are recognized in the income statement as an expense reduction. Grants related to assets are recognized in the balance sheet through a reduction in the reported value of the assets.

Research and development expenses

Research and development expenses are booked as they are incurred. Development expenses may be capitalized under certain strict conditions. However, this requires, among other things, that future economic benefits can be demonstrated at the time the expenses are incurred. The projects that take place are short-term in nature and do not involve significant amounts, and thus development expenditures are also booked as costs.

Software development expenses

Expenses for development and acquisition of new software are capitalized and reported as an intangible asset provided they have a significant value for the Company in the future and they can be deemed to have a useful life in excess of three years. These capitalized expenses are depreciated on a straight-line basis over the assessed useful life. Expenses for training and software maintenance are, however, booked directly as costs.

Tangible non-current assets

Tangible non-current assets are reported at acquisition value less deduction for accumulated depreciation and any accumulated impairment. Depreciation is based on the acquisition value of the assets and estimated useful life. If major investments include components, an assessment must always be made as to whether the useful life of the component differs from that of the entire facility. The acquisition value includes expenditures directly attributable to the acquisition of the asset. Any borrowing costs in conjunction with the construction and design of non-current assets, a significant portion of which is required for completion for use or sale, are added as a part of the acquisition cost of the asset. Restoration expenses in connection with disposals of non-current assets are included in the acquisition value only where the criteria for making a provision for such restoration expenses may be deemed fulfilled. Additional expenditures for acquiring replacement components are added to the reported value of the non-current asset or recognized as a separate asset only where it is likely that the Group will enjoy the future economic benefits associated with the asset and the acquisition value of the asset can be measured in a reliable manner. The reported value for the replaced part is removed from the balance sheet. All other forms of repairs and maintenance are recognized as expenses in the income statement during the period in which they occur.

Land is assumed to have a perpetual period of use and thus is not depreciated. Other tangible non-current assets are classified into groups for calculation of depreciation based on their estimated useful life, in accordance with the following table.

Examples of items	Estimated use, years
Vehicles, office equipment and computers	3–5
Light machinery	5–12
Heavy machinery
- Re-tooling of blast furnaces	12–15
- Steel furnaces, rolling mills and cranes	15–20
- Blast furnaces and coke ovens	15–20
Land improvement	20
Buildings	25–50

The useful life of the assets is reviewed annually and adjusted where required. The assets are normally depreciated to zero without any remaining residual value.

The straight line depreciation method is used for all types of tangible non-current assets with a limited useful life. Where the book value of an asset exceeds the expected recovery value, the asset is written down to such value.

Capital gains and capital losses upon the sale of tangible non-current assets are determined by comparing the revenue from the sale with the reported value; this is reported in the income statement as "Other operating revenues" or "Other operating expenses".

Intangible assets

Similarly, intangible assets are classified in two groups, with assets with a determinable useful life being amortized over a determined useful life, while assets with an undeterminable useful life are not amortized at all.

Goodwill

Goodwill comprises the amount by which the acquisition value exceeds the fair value of the Group's share of the identifiable net assets of the acquired subsidiary at the time of the acquisition. Goodwill upon the acquisition of a subsidiary is reported as an intangible asset.

Goodwill is reviewed annually to identify any impairment and reported at acquisition value less accumulated impairment. Impairment of goodwill is not reversed. Profits or losses upon the sale of a unit include the remaining reported value of the goodwill which relates to the sold unit.

When testing for any impairment, goodwill is allocated over cash-generating units. The allocation is made on the cashgenerating units or groups of cash-generating units which are expected to benefit from the business combination which gave rise to the goodwill item.

Customer relations

Acquired customer relations are reported at acquisition value. Customer relations have a determinable useful life and are reported at acquisition value less accumulated amortization. Straight line amortization is applied to allocate the costs for customer relations over their assessed useful life (six to twelve years).

Trademarks

Acquired trademarks and licenses are reported at acquisition value. Trademarks and licenses have a determinable useful life and are reported at acquisition value less accumulated amortization. Straight line amortization is applied to allocate the costs for trademarks over their assessed useful life and licenses are amortized over the term of the agreement (five to ten years).

Software

Acquired software licenses are capitalized on the basis of the costs incurred upon acquisition and placement into operation of the relevant software. These capitalized costs are amortized on a straight line basis over the assessed useful life (three to five years).

Other intangible assets

Other intangible assets are reported at acquisition value less accumulated amortization. Straight line amortization is applied to allocate the costs over their assessed useful life (five to fifteen years).

Impairment of non-financial assets

Intangible assets with an undeterminable useful life (including goodwill) are not amortized but, rather, tested annually for any impairment or otherwise where signs indicate impairment. Other non-financial assets with an undeterminable useful life are tested when signs indicate impairment. Amortized assets are tested for impairment when signs indicate impairment. Where the estimated recovery value is less than the reported value, the asset is written down to the recovery value. Testing of the value of an asset with an undeterminable useful life may also result in the asset being reclassified as an asset with a determinable useful life. The asset's period of use is then calculated and amortization commences. The recovery value is the asset's fair value reduced by selling expenses, or its useful value, whichever is higher. When testing for impairment, assets are grouped on the lowest levels for which there are separately identifiable cash flows (cash-generating units). With respect to assets other than financial assets and goodwill which have previously been impaired, an annual test is conducted as to whether a reversal should be made.

Leased assets

Expenses for non-current assets that are leased instead of owned are reported primarily as lease expenses on a straight line basis over the leasing period (operational leasing). Where lease agreements contain terms and conditions pursuant to which the Group enjoys the economic advantages and incurs the economic risks that are associated with ownership of the property (financial leasing), they are reported in the consolidated balance sheet under 'Non-current Assets' and depreciated over the useful life (the economic life or the outstanding leasing period, whichever is the shorter). At the beginning of the leasing period, financial leasing is reported in the balance sheet at the leased object's fair value or the present value of the minimum leasing charges, whichever is lower. Each lease payment is divided into interest payment and repayment of the debt; interest is allocated over the leasing period. Corresponding payment obligations, less deductions for financial expenses, are included in the balance sheet items, "Current interest-bearing liabilities" and "Long-term interest-bearing liabilities".

In the parent company, all leasing agreements are reported as operational.

Financial assets

Financial assets include cash and cash equivalents, accounts receivable, shares and participations, loan claims and derivative instruments. They are reported initially at an acquisition value corresponding to the fair value of the asset plus a supplement for transaction costs, with the exception of assets that are valued at fair value. Reporting thereafter takes place depending on the classification of the asset. Financial assets are removed from the balance sheet when the debt/instrument is finally paid or ceases to apply or is transferred through all risks and benefits being assigned to an external party.

Spot purchases and sales of financial assets are reported on the settlement day, i.e. the day on which the asset is delivered. Accounts receivable are reported in the balance sheet when an invoice has been issued.

The fair value of listed financial assets corresponds to the asset's listed transaction price on the balance sheet date. The fair value of unlisted financial assets is determined through use of valuation techniques, for example, recently conducted transactions, prices of similar instruments and discounted cash flows.

Financial assets are classified in four valuation categories: "holdings valued at fair value via the income statement", "holdings to maturity", "loan claims and accounts receivable" and "assets for sale".

• • Holdings valued at fair value via the income statement: Assets that are acquired primarily in order to enjoy profits upon short-term price fluctuations, holdings for trading, are classified as "Holdings valued at fair value via the income statement" and reported as short-term investments if the term to maturity on the acquisition date is less than three months and as "Other interest-bearing current receivables" if the term to maturity is between three and twelve months. Derivative instruments are classified as holdings for trading except where used for hedge accounting. Assets in this category are valued regularly at fair value and changes in value are reported in the income statement. Derivative instruments taken up in respect of business-related items are reported in the operating profit, while derivative instruments of a financial nature are reported in financial items. Assets in this category are included in current assets, with the exception of items with maturity dates more than twelve months after the balance sheet date, which are classified as non-current assets.
• • Holdings to maturity: Assets with a fixed maturity date and which are intended to be held until maturity are classified as "holdings to maturity" and reported as financial noncurrent assets, except those parts that mature within twelve months; these are reported as "Other interest-bearing current receivables". Assets in this category are valued at the accrued acquisition value. The accrued acquisition value is determined based on the effective interest rate, which is calculated on the acquisition date. The Group held no instruments in this category during 2009 or 2010.
• • Loan claims and accounts receivable: Loan claims and accounts receivable are financial assets that are not derivative instruments, which have fixed or determinable payments and which are not listed on an active market. The claims arise when cash, goods or services are provided directly to the debtor without an intention of trading in the receivables. Just as with the preceding category, assets in this category are valued at the accrued acquisition value. They are included in current assets, with the exception of items with maturity dates more than twelve months after the balance sheet date, which are classified as non-current assets.
• • Assets available for sale: Assets without a fixed term to maturity but which can be sold should liquidity needs arise or upon changes in interest rates are classified as "available for sale" and reported as financial non-current assets.

Assets in this category are valued regularly at fair value with changes in value in other comprehensive income. Upon removal of the investments from the balance sheet, any accumulated profit or loss previously reported in comprehensive income is reversed to the income statement. They are included in current assets, with the exception of items with maturity dates more than twelve months after the balance sheet date, which are classified as non-current assets. The Group held no instruments in this category during 2009 or 2010.

Other shares and participations

Consist primarily of investments in equity instruments which do not have a listed market price and the fair value of which cannot be calculated in a reliable manner. They are valued at acquisition value.

Long-term receivables

Long-term receivables are receivables held without any intention of trading in the claim. Parts where the outstanding holding period is less than one year are reported among "Other current interest-bearing receivables". The receivables are classified in the category, "Loan claims and accounts receivable".

Accounts receivables

Accounts receivable are classified in the category, "Loan claims and accounts receivable". Accounts receivable are reported initially at fair value and accounts receivable in excess of twelve months are reported at the accrued acquisition value applying the effective interest rate method, less any provisions for reduction in value. The Company has had no accounts receivable with a due date in excess of twelve months. Any impairment of accounts receivable takes place in selling expenses in the income statement.

Cash and cash equivalents

'Cash and cash equivalents' include cash, immediately accessible bank balances as well as other short-term deposits with an original term to maturity of less than three months (short-term investments). Investments with an original term to maturity of between three and twelve months are reported under "Other current interest-bearing receivables" and classified as assets valued at the fair value via the income statement. Overdraft facilities are reported in the balance sheet as borrowing among "Current interest-bearing liabilities".

Impairment of financial assets

The Group regularly assesses whether there is any objective evidence for impairment of a financial asset or a group of financial assets. With respect to investments in equity instruments which are valued at acquisition value, a significant or prolonged decline in the fair value of a share to a level below its acquisition value is considered to be evidence of impairment. If such evidence exists, the difference between the reported value and the current fair value is reported in the income statement. Impairment of equity instruments is not reversed. Tests for impairment of accounts receivable are based on an individual assessment of bad debts. The size of the provision comprises the difference between the reported value of the asset and the present value of estimated future cash flows, discounted applying an effective interest rate. The remaining amount is reported in the income statement.

Inventories

Inventories are valued at the lower of acquisition cost and net realizable value, with the acquisition value being calculated in accordance with the FIFO method (first in, first out). When calculating the acquisition value, a weighted average value is normally used to approximate FIFO.

The net realizable value is normally calculated as the sales price less production and selling expenses. With respect to raw materials and products in the trading operations, the replacement cost is used as the best gauge of the net realizable value. However, raw materials are not written down below the acquisition value where the end product in which they are included is expected to be sold at a price which exceeds the manufacturing cost. Work in progress and finished inventories are valued at the manufacturing cost or the net realizable value, whichever is lower. Necessary provision is made for obsolescence.

The acquisition value of inventories includes all costs for purchasing, production and other expenses incurred in bringing the goods to their current location and condition.

Employee benefits

Pensions

Within the Group there are both contribution-based and benefit-based pension plans. Generally, the plans are financed through payments to insurance companies or manager-administered funds.

In the contribution-based plans, fixed fees are paid to a separate legal entity and there is no obligation, legal or informal, to pay any additional fees. In the contribution-based plans, payments are recognized as an expense during the period when the employees have performed the services to which the fees relate. Blue collar employees in Sweden are covered by such a contribution-based plan.

In the benefit-based plans, compensation is payable to employees and former employees based on salary at the time of retirement and number of years in service. The Group bears the risk that the costs for the promised payments will be higher than estimated.

In the consolidated balance sheet, the net of the estimated present value of the obligations and fair value of the managed assets is reported either as a long-term provision or as a longterm financial claim. In those cases where a surplus in a plan cannot be utilized in full, only that part of the surplus which can be recovered through reduced future fees or refunds is reported. Set-off of a surplus in one plan against a deficit in another plan takes place only where a right of set-off exists.

Pension expenses and pension obligations for benefitbased plans are calculated in accordance with the Projected Unit Credit Method. The method allocates pension expenses as the employees perform the services that increase their entitlement to future compensation. The obligation is calculated by independent actuaries and constitutes the present value of the anticipated future disbursements. The discount rate that is applied corresponds to the rate of interest on top-rated corporate bonds or government bonds with a term to maturity which corresponds to the average term for the obligations. The most important actuarial assumptions are stated in Note 13. Actuarial profits or losses may arise upon determination of the present value of the obligations and the fair value of the managed assets. These arise either as a consequence of the actual result differing from previously-made assumptions, or due to changes in the assumptions. Such actuarial profits and losses

are recognized in their entirety in the Group's results when they arise.

White collar personnel in Sweden are covered by a collective benefit-based plan, the ITP (supplementary pensions for salaried employees) plan. The ITP plan has been financed through the purchase of pension insurance with the mutual insurance company, Alecta. However, at present no information is available which makes it possible to report this plan as a benefit-based plan. Accordingly, the plan is reported as a contributions-based plan, and thus premiums paid to Alecta during the year are reported as pension expenses.

The parent company and other legal entities within the Group report benefit-based pension plans in accordance with the local rules in each country

Profit shares and variable salary

SSAB employees are covered by a profit sharing system which entitles them to a share in the profit above a minimum level. The Group Executive Committee and a number of other senior executives also have salaries which contain a variable element related to the profit level and individually set targets. The costs for these systems are booked as accrued expenses regularly during the year as soon as it is likely that the targets will be met.

Compensation upon termination of employment Compensation upon termination of employment is paid when employment is terminated prior to the normal retirement age or where an employee accepts voluntary retirement in exchange for such compensation. The Group reports severance compensation when the Group is demonstrably obliged either to terminate an employee in accordance with a detailed formal plan without the possibility of recall, or to provide compensation upon termination as a result of an offer made in order to encourage voluntary retirement. Benefits which fall due more than twelve months from the balance sheet date are discounted to present value.

Provisions

Provisions are reported when the Group has an obligation as a result of an event that has occurred and it is likely that payments will be demanded for fulfillment of the obligation. A further requirement is that it is possible to make a reliable estimation of the amount to be paid out.

Provisions for restructuring measures are made when a detailed, formal plan for the measures is in place and wellfounded expectations have been created among the parties that will be affected by the measure, and this takes place prior to the balance sheet date.

Emission rights

SSAB participates in the EU's emission rights trading system. Provision is made if a shortfall in emission rights is identified between owned rights and those rights which will have to be delivered due to emissions having taken place. The value of any surplus emission rights is reported only when it is realized as an external sale. Emission rights are reported as intangible assets and are booked at the acquisition value of SEK 0.

Environmental restoration expenses

Expenses for environmental measures associated with previous operations and which do not contribute to current or future revenue are booked as a cost when incurred. The environmental

undertaking is calculated based on interpretations of applicable environmental legislation and regulations and reported when it is likely that payment liability will be incurred and a reasonable estimation can be made of such amount. Provisions have not been made for land clean-up to prepare the industrial areas for other use in the future, since it is not possible to make a reasonable estimation of when such clean-up will take place.

Financial liabilities

Financial liabilities include loan debts, accounts payable and derivative instruments. Reporting thereafter takes place depending on how the liabilities are classified. Financial liabilities are removed from the balance sheet when the debt/instrument is paid in full or ceases to apply or is transferred through all risks and benefits being assigned to an external party.

Accounts payable

Accounts payable are valued initially at fair value and thereafter at accrued acquisition value.

Loan debts

Loan debts are valued initially at net fair value after transaction costs, and thereafter at accrued acquisition value. The accrued acquisition value is determined based on the effective interest rate which was calculated when the loan was taken up. Accordingly, surplus values and under-values as well as direct issuance costs are allocated over the loan period. Loans which constitute the hedged object in fair value hedging are valued and booked at fair value. Long-term loan debts have an anticipated term to maturity in excess of one year, while current loan debts have a term to maturity of less than one year.

Derivative instruments and hedging

Currency derivatives in the form of forward contracts and swaps are used to hedge exchange rates on purchase orders for coal and iron ore, to hedge the exchange rate in conjunction with major sales in foreign currency, in conjunction with major investments in non-current assets made in foreign currency, to hedge net investments in foreign subsidiaries, and to hedge Swedish kronor payment flows on foreign loans. Derivative instruments in the form of interest swaps are used to hedge exposure to interest rate risks.

All derivative instruments are reported in the balance sheet at fair value. The method for reporting accrued profit/loss differs, however, depending on the purpose of the derivative instrument. When a derivative contract is entered into, it is characterized as hedging of the fair value of a reported asset/ liability or of a signed delivery order ("fair value hedging"), hedging of a planned transaction ("cash flow hedging"), hedging of a net investment in a foreign company, or as a derivative instrument which does not meet the requirements for hedging transactions.

When the transaction is entered into, the Group documents the relationship between the hedge instrument and the hedged item, as well as the Group's risk management objectives and risk management strategy as regards the hedging. The Group also documents its assessment, both when hedging is entered into and on a regular basis, of whether the derivative instruments used in hedge transactions are effective in counteracting changes in fair value or cash flows that relate to the hedged items.

Information regarding fair value of various derivative instruments used for hedging purposes is set forth in Note 27. Changes in the hedging reserve in equity are set forth in Note 12. The entire fair value of a derivative instrument which constitutes a hedge instrument is classified as a non-current asset or long-term liability when the outstanding term of the hedged item exceeds twelve months, and as a current asset or current liability when the outstanding term of the hedged item is less than twelve months.

• • Fair value hedging: Changes in the fair value of derivative instruments which are categorized as, and meet the requirements for, "fair value hedging" are reported in the income statement together with changes in the fair value of the asset/liability or the delivery order to which the hedging relates. Transaction costs related to "fair value hedging" are recognized immediately in the income statement.
• • Cash flow hedging: The effective part of changes in fair value of derivative instruments which are characterized as, and meet the requirements for, cash flow hedging, is reported in other comprehensive income. The profit or loss attributable to the ineffective part is reported immediately in financial items in the income statement. However, the ineffective part of the profit or loss relating to cash flow hedging of sales in foreign currency is reported among other operating expenses or revenue. Accumulated amounts in equity are reversed to the income statement in those periods in which the hedged item affects earnings (e.g. when the forecast sale which is hedged takes place). The profit or loss attributable to the effective part of a forward contract which hedges sales in foreign currency is reported in the income statement item, Sales. When a hedge instrument lapses or is sold, or when the hedging no longer fulfills the criteria for hedge accounting and there are accumulated profits or losses in equity regarding the hedging, such profits or losses remain in equity and are reported as income at the same time as the forecast transaction is finally reported in the income statement. When a forecast transaction is no longer expected to occur, the accumulated profit or loss which is reported in equity is transferred immediately to the income statement. Where the transfer relates to cash flow hedging of sales in foreign currency, it is reported among other operating expenses or revenue. Where the transfer relates to cash flow hedging of financial items, it is reported in the income statement among financial items.
• • Net investment hedging: Hedging of net investments in foreign companies is reported in the same manner as cash flow hedging. The effective part of changes in value of derivative instruments and liabilities, which are used as hedge instruments, is reported in other comprehensive income. The ineffective part of changes in value is reported immediately in financial items in the income statement. Accumulated profits and losses in equity are reported in the income statement when the foreign operations are divested, in whole or in part.
• • Certain derivative transactions do not meet the formal criteria for hedge accounting; they are reported in the income statement among financial revenues and expenses.

Derivative instruments which are reported in hedge accounting and executed in respect of business-related items are reported in operating profit, while derivative instruments of a financial nature are reported in financial items.

The fair value of currency forward contracts and currency swaps is calculated based on forward contract prices on the balance sheet date, while interest rate swaps are valued calculated on the basis of future discounted cash flows.

Taxes

The Group's reported tax expenses consist of tax on the taxable earnings of Group companies for the period as well as any adjustments with respect to tax for previous periods and changes in deferred tax.

Deferred tax

Deferred tax is calculated in order to correspond to the tax effect which arises when final tax is triggered. It corresponds to the net effect of tax on all differences between the tax value of assets and liabilities and their value for accounting purposes (temporary differences), applying the future tax rates already decided upon or announced which will apply when the tax is expected to be realized.

Temporary differences arise primarily through accelerated depreciation of non-current assets, profits from intra-group inventory transactions, untaxed reserves in the form of tax allocation reserves, non-utilized losses carried forward, as well as fair value adjustments in conjunction with business combinations. A deferred tax receivable due to losses carried forward is, however, recognized as an asset only to the extent that it is likely that the deduction can be set off against future surpluses.

In the parent company's balance sheet, the accumulated values of accelerated depreciation and other untaxed reserves are reported in the item "Untaxed reserves" without deduction of the deferred tax. In the parent company's income statement, changes in the untaxed reserves are reported on a separate line.

Dividends

Dividends proposed by the Board of Directors do not reduce equity until the annual general meeting has adopted a resolution regarding payment of the dividend.

Dividends, the parent company

An anticipated dividend is reported in those cases where the parent company is exclusively entitled to decide on the amount of the dividend and the parent company, prior to the date on which its financial statements are published, has decided on the amount of the dividend and ascertained that the dividend will not exceed the dividend capacity of the subsidiary.

Group contributions in the parent company

Group contributions and the tax consequences thereof are reported directly against equity and thus do not affect earnings.

Cash flow statement

The cash flow statement is prepared in accordance with the indirect method. Cash and cash equivalents in the cash flow statement consist of cash and bank balances as well as shortterm investments with a term to maturity of less than three months from the acquisition date which are exposed to only an insignificant risk of change in value.

Segment reporting

Operating segments

Since January 1, 2010, the Group is organized in four reportable operating segments which are designated as the following business areas: SSAB EMEA, SSAB Americas, SSAB APAC, and the subsidiary Tibnor. In addition, there are other operating segments which are not reportable since they do not reach the threshold values in IFRS 8 and they are not monitored separately by the Group Executive Committee. The segment reporting takes place in such a manner that it corresponds to the internal reporting which is submitted to the Group Executive Committee. The Group Executive Committee is the highest executive decision-making body which is responsible for allocation of resources and assessment of the results of operating segments, and takes strategic decisions. A more detailed description of the reportable segments and their operations is provided on pages 28-35 and in Note 26.

Non-current assets held for sale

Significant non-current assets (or divestments groups) are classified as Non-current assets held for sale when their reported value will primarily be recovered through a sales transaction and a sale is deemed to be very likely. They are reported at reported value or fair value less selling expenses, whichever is lower, if their book value is primarily recovered through a sales transaction and not through permanent use.

Discontinued operations

On the line "Profit for the year, discontinued operations" in the income statement, net earnings after tax are reported which relate to significant independent lines of business, or operations which are conducted within a geographic area, which are either divested or are to be sold through a coordinated plan. Significant additional costs in a subsequent period regarding discontinued operations are reported also on the line "Profit for the year, discontinued operations".

Notes

		Page
1	Sales and other operating revenue	75
2	Operating expenses, compensation to employees	75
3	Affiliated companies, joint venture and related party transactions	79
4	Financial items	80
5	Taxes	81
6	Intangible assets	82
7	Tangible fixed assets	84
8	Financial non-current assets, shares and participations in affiliated companies and joint venture	86
9	Inventories	88
10	Prepaid expenses and accrued revenue	88
11	Other current interest-bearing receivables/Cash and cash equivalents	88
12	Equity	89
13	Pensions	90
14	Deferred tax liabilities and tax receivables	91
15	Other provisions	92
16	Interest-bearing liabilities	94
17	Accrued expenses and deferred revenue	95
18	Net debt	96
19	Average number of employees, gender breakdown and sick leave	96
20	Leasing	97
21	Pledged assets	98
22	Contingent liabilities	98
23	Untaxed reserves and appropriations	99
24	Business combinations	99
25	Divestment of operations and companies	99
26	Segments	100
27	Financial risk management	102
28	Critical estimations and assessments	107
29	Definitions	108
30	Considerations relating to proposed allocation of profit	109

1 Sales and other operating revenue

Sales per product area	Group
SEK millions	2010	2009
Hot-rolled strip	6,276	4,754
Cold-rolled and metal-coated strip	3,549	2,709
Organic-coated and profiled strip	2,767	2,756
Plate	18,039	12,896
Trading operations	6,198	4,871
Slabs	847	74
By products/scrap	1,726	1,224
Other	481	554
Total sales per product area	39,883	29,838

Sales broken down by business area and geographic area are shown in the Group Review on page 11 and in Note 26.

Other operating revenue Group		Parent Company
SEK millions	2010	2009	2010	2009
Sales of purchased energy and media	251	264	-	-
Net exchange rate gains	0	276	-	1
Profit upon sale of emission rights	0	313	-	300
Profit upon sale of companies and operations 1)	28	8	2,010	-
Profit upon sale of fixed assets	41	20	-	-
Other	129	94	79	77
Total other operating revenue	449	975	2,089	378

1) For 2010, the group´s capital gains comprise capital gains from sales of a building in Tibnor. The capital gain for 2009 comprise capital gains from sales of Laminated Steel AB. The profit in the Parent company of SEK 2,010 million, relates to the sale of the subsidiary SSAB Tunnplåt to SSAB Oxelösund. The transaction was done at equity and was a first step to merger the two subsidiaries.

Type of cost	Group		Parent Company
SEK millions	2010	2009	2010	2009
Raw materials in the steel operations	18,262	10,171	-	-
Purchased products in the steel operations	1,871	1,287	-	-
Purchased products in the trading operations	3,920	3,481	-	-
Materials and services	3,962	3,699	80	47
Energy	2,553	2,087	-	-
Compensation to employees	4,970	4,963	103	84
Depreciation/amortization	2,452	2,506	2	2
Change in inventory	-277	2,988	-	-
Other	1,592	1,230	181	288
Total operating expenses per type of cost	39,305	32,412	366	421

Fees for audits and related services	Group		Parent Company
SEK millions	2010	2009	2010	2009
PricewaterhouseCoopers
Audit fees	10	11	2	3
Audit related services	1	3	-	1
Tax consulting	4	3	-	1
Other services	3	4	1	1
Total fees for audit and related services to PricewaterhouseCoopers	18	21	3	6
Other accounting firms
Audits and related services	6	2	-	-
Other services	4	14	-	3
Total expenses for audit and related services	28	37	3	9

For 2008 other compensation to PricewaterhouseCooper,s including tax consulting, amounted to SEK 43 million and related primarily to services in connection with the sale of SSAB North America's tubular business.

Operating expenses have been reduced by the following government grants:

		Group		Parent Company
SEK millions	2010	2009	2010	2009
Freight support	3	11	-	-
Other	2	2	-	-
Total government grants	5	13	-	-

		Directors, President and	Other
Compensation to employees Executive Vice President				employees
SEK millions	2010	2009	2010	2009
Parent company 1)	19	15	47	39
Subsidiaries in Sweden	8	11	2,490	2,350
Subsidiaries outside Sweden
USA	6	3	663	603
Canada	1	1	34	32
Denmark	4	3	40	68
Finland	3	3	45	51
France	0	0	12	11
Italy	0	1	21	21
China	3	2	19	5
Netherlands	0	1	11	9
Norway	2	3	18	18
Poland	4	5	22	22
South Africa	1	1	21	18
Great Britain	1	1	17	19
Germany	0	0	24	25
Other countries	1	1	72	66
Total wages and salaries 2)	54	51	3,556	3,357
Social security expenses	23	20	1,213	1,430
(of which pension expenses)	(12)	(11)	(331)	(534)
Profit-sharing scheme	0	0	0	2
Other expenses for employee benefits	3	1	121	102
Total compensation to employees	80	72	4,890	4,891

1) Relates only to personnel employed and working within the parent company. Personnel in some of the larger subsidiaries are formally employed in the parent company but are reported in terms of number and expense in the relevant subsidiary. In the parent company expenses for the Presidents of SSAB EMEA are also reported .

2) Total wages and salaries include variable salary components to Presidents in the amount of SEK 6 (0) million, of which SEK 3 (0) million in the parent company. The parent company also includes variable salary components to the President of SSAB EMEA.

The summary for 2009 is inclusive expenses reported against the cost reduction provision.

Board fees and terms of employment for the Group's senior executives

Board of Directors

The general meeting decides upon fees payable to the Chairman of the Board and the directors elected by the general meeting. The Chairman's fee was SEK 1,200 (1,200) thousand and directors (excluding the President) each received a fee of SEK 400 (400) thousand. In addition, members of Board committees received SEK 75,000 for each committee on which the member served, with the exception of the Chairman of the Audit Committee, who instead received SEK 100,000. In total, SEK 4,475 (4,400) thousand was paid in fees to the Board of Directors.

			Fees 2010, SEK			Fees 2009, SEK
Directors	Elected	Position	Board fees	Committee fees		Board fees Committee fees
Elected by the AGM
Sverker Martin-Löf	2003	Chairman	1,200,000	150,000	1,200,000	150,000
Carl Bennet	2004	Board member	400,000	-	400,000	-
Anders G Carlberg	1986	Board member	400,000	100,000	400,000	100,000
Olof Faxander	2006	Board member, President	-	-	-	-
Marianne Nivert	2002	Board member	400,000	-	400,000	-
Anders Nyrén	2003	Board member	400,000	-	400,000	-
Matti Sundberg	2004	Board member	400,000	75,000	400,000	75,000
John Tulloch	2009	Board member	400,000	75,000	400,000	-
Lars Westerberg	2006	Board member	400,000	75,000	400,000	75,000

Salaries and compensation for the President and other senior executives

Resolution of the Annual General Meeting

According to a resolution adopted by the AGM in March 2010, the President and other persons in the Company's senior management shall receive compensation comprising fixed salary, possible variable salary components, other benefits such as company car, and pension. "Other persons in the Company's senior management" means members of the Group Executive Committee in addition to the President. The total compensation package shall be on market terms and competitive in the employment market in which the executive works. The fixed salary and variable salary components shall be related to the executive's responsibilities and powers. The variable salary components shall be based on the results relative to defined and measurable targets and shall be capped relative to the fixed compensation. Variable compensations shall not be included in the computation of pension rights, except in those cases where so prescribed in the rules of a general pension plan (e.g. the Swedish ITP plan). For senior executives outside Sweden, all or parts of the variable salary components may be included in the computation of pension rights due to legislation or local market practice.

Programs for variable salary components should be structured such that, in the event of exceptional circumstances, the Board has the possibility to limit or withhold payment of variable compensation where such a measure is deemed reasonable and compatible with the Company's responsibilities to shareholders, employees and other stakeholders.

Consultants fees, on market conditions, may be payable to the extent a director performs work on behalf of the Company, in addition to the duties serving on the Board.

Senior executives in Sweden must give six months' notice of termination of employment. In the event of termination by the Company, the total termination period and the period during which severance compensation is payable shall not exceed 24 months. Pension benefits are determined either as benefit-based or contribution-based, or a combination thereof, with individual retirement ages, however under no circumstances below the age of 60. Benefit-based pension benefits are conditional on the benefit

being earned during a predetermined period of employment. In the event the employment terminates prior to retirement age, the executive shall receive a paid-up policy regarding earned pension. Termination periods and severance compensation for senior executives outside Sweden may vary due to legislation or competitive practice on the local market.

The Board of Directors shall be entitled to deviate from the guidelines where special reasons exist in an individual case.

Compensation Committee

Within the Board of Directors there is a Compensation Committee which issues proposals to the Board regarding the President's salary and other employment terms and conditions, and determines the salary and other employment terms and conditions for the Group Executive Committee in accordance with guidelines decided upon by the AGM. The Committee consists of Sverker Martin-Löf (chairman), John Tulloch and Lars Westerberg. The President is a co-opted member of the Committee but does not participate in discussions concerning his own salary and employment terms and conditions.

Compensations 2010

Compensation to the President and other members of the Group Executive Committee consisted of fixed and variable salary components. For the members of the Group Executive Committee stationed in Sweden, the variable salary component is linked to the Group's EBITDA margin relative to a number of comparable steel companies and to a, by the Board, established target for cash flow, combined with one or more individual targets. The variable salary component may not exceed 50 percent of fixed salary. However, pending the introduction of a long term incentive program, the President was granted a temporary increase in the maximum to 75 percent of fixed salary during 2010. There is no share-related compensation.

In connection with the acquisition of IPSCO, the Board made the assessment that, in light of the size of the acquisition, it was the utmost importance to achieve a rapid integration of the business, that identified synergies quickly could be realized, that earnings continued to develop positively during the integration of the merged SSAB/IPSCO, and that senior executives remained with the Company during this critical period. Therefore, the Board

of Directors decided on a temporary incentive program for a number of key persons stationed in Sweden who were engaged in the integration of the American operations, including the Swedish members of the Group Executive Committee, including the President. This temporary incentive program consisted of variable compensation and applied as a supplement to the already existing variable salary component. For the Swedish members of the Group Executive Committee, the incentive program applied during a maximum of two years commencing July 2007 and was capped at 100 percent of each member's fixed annual salary. The fixed annual salary was to be unchanged during the two years in which the incentive program was in force. The amount payable depended entirely on the degree to which a number of established targets were achieved as regards the integration of the American operations into SSAB's operations. The targets comprised the Group's EBITDA margin compared with a number of comparable steel companies, a cash flow target established by the Board, and realized synergies.The first year's outcome (for the period 1 July 2007 up to 30 June 2008) was paid in cash in 2008. Payment of the second year's outcome was, for the time being, stopped. The cost however, was booked in 2009. During 2010, the Board decided to pay two thirds of the maximum outcome, based on achievements against the targets.

The member of the Group Executive Committee who is stationed in the United States receives compensation which is considered to be competitive from a North American perspective, and which also applied in IPSCO prior to the acquisition. He receives a fixed basic salary and, in addition, annual variable compensation related to the same targets as for the rest of the Group Executive Committee. His annual variable compensation is capped relative to the fixed salary. The target result is 60 percent of fixed salary but, in the event of extremely high profitability, may amount to a maximum of 400 percent. In addition, during his employment he is entitled to participate in the North American operations longterm incentive program. The outcome depends on the North American operation's return on capital employed, it's earnings and a component which is related to the Group's earnings. The outcome is capped relative to fixed salary. Fully developed, the plan has a target outcome of 100 percent of fixed annual salary, but in an extreme case may amount to a maximum of 200 percent. Payments under the long-term incentive program take place in cash, solely on condition that he remains in his employment. Finally, he has received a retention bonus of USD 225,000 annually for three years, calculated from the acquisition of IPSCO in July 2007, provided that he remained in his employment. This retention bonus terminated in July 2010.

President and Chief Executive Officer

Olof Faxander's total compensation excluding pension amounted to SEK 10.7 (7.2) million. The compensation of SEK 10.7 million includes a payment of SEK 3.0 million in respect of the temporary incentive program for the period July 2008 up to and including June 2009, which was paid out in 2010. No ordinary variable salary element was payable in respect of 2009 and thus no payment took place in 2010. The compensation of SEK 7.2 million for 2009 includes a payment of SEK 2.3 million in respect of the ordinary variable salary element relating to 2008, which was paid out in 2009.

The minimum retirement age is 60. The pension is based on contributions and covered by insurance. The cost amounted to 30 (29) percent of fixed salary. Earned pension is inviolable, but premium payments cease upon termination of the employment.

There is a 24-month notice period in the event of dismissal by the Company, while the President must give 6 months' notice of termination. However, in connection with Mr. Faxander's resignation in 2011, the parties chose not to exercise the entitlement to a 6 month notice period.

Other Group Executive Committee members

Apart from the President, the Group Executive Committee during the year comprised 8 (8) persons. The Group Executive Committee is presented on page 114. (During a brief period in 2010, an additional person was included in the Group Executive Committee.)

The minimum retirement age is 62 for other members of the Group Executive Committee stationed in Sweden. Pensions are based on contributions. Members of the Group Executive Committee stationed in Sweden are entitled to 6-12-months' notice in the event of dismissal by the Company. In addition, in such a situation severance compensation is payable equivalent to 12 months' salary. Members of Group Executive Committee must give 6 months' notice of termination, whereupon there is no entitlement to severance compensation.

For the member of the Group Executive Committee stationed in the United States, other rules apply with respect to pension, termination periods and severance compensation in accordance with US legislation and practice.

Total compensation and benefits are shown in the table on next page.

Compensation 2011

After the end of the year, the Board decided, commencing 2011, to introduce a long-term incentive program which, for the Company's senior executives including the CEO, is capped at 25% of fixed salary. The program extends for rolling three-year periods, is cash-based and linked to the total return on the SSAB share relative to a comparison group comprising the Company's competitors. The program has been introduced in order to enhance the Company's ability to recruit and maintain particularly important employees and also to stimulate such employees' own holdings of shares in the Company.

However, the long-term incentive program of the member of the Group Executive Committee stationed in the US will remain in force on unchanged terms until further notice.

President and Chief Executive Officer

Martin Lindqvist took up the position of President and CEO on January 1, 2011. His fixed annual salary is SEK 6.0 million. The short-term variable salary element can amount to a maximum of 50% of the fixed annual salary. He is also covered by the Group's long-term incentive program, which will yield results in 2014 at the earliest.

The minimum retirement age is 62. The pension is contribution-based and covered by insurance. The President is covered by the ITP plan and, in respect of salary up to approximately 62 price base amounts, the Company's pension premiums are in accordance with the premium scale for senior executives; in respect of salary above that amount, the Company pays a pension premium amounting to 40 percent of the fixed salary. Earned pension is inviolable but premium payments cease upon termination of employment.

In the case of termination by the Company, the termination period is 12 months. In addition, in such a situation severance compensation is payable equal to 12 monthly salaries. In the case of termination by the President, the termination period is six months and there is no entitlement to severance compensation. Variable salary is earned during the notice period only if the President remains in active employment.

Compensation and benefits paid for the President and other members of the Group Executive Commitee	President		Other Group Executive Committee
SEK millions	2010	2009	2010	2009
Basic salary	7.6	4.7	19.8	16.6
Other benefits 1)	0.1	0.2	2.2	0.8
Variable compensation 2)	-	2.3	3.2	11.3
Integration bonus 3)	3.0	-	8.1	-
Total compensation before pension expenses	10.7	7.2	33.3	28.7
Pension expenses	2.3	1.3	10.3	7.3
Total	13.0	8.5	43.6	36.0

1) Relates primarily to housing, car and gasoline benefits. 2) The accounting principle has been changed so that amounts refer to payments made during the relevant financial year, which were earned the year before. Previously, the booked cost was reported, but since the compensation is currently not known at the end of the accounting year due to the fact that comparisons are made with competitors who have not yet reported their figures and also the fact that the Board can decide to reduce the compensation if special reasons exist compensation is reported in this table only in the year in which payment has taken place.

3) Relates to compensation earned during the period July 2008–June 2009.

3 Affiliated companies, joint venture and related party transactions

Share of earnings and sales	Share of earnings after tax		Share of sales
SEK millions	2010	2009	2010	2009
Lulekraft AB	-1	5	223	154
Norsk Stål A/S	28	-4	1,027	1,085
Norsk Stål Tynnplater A/S	9	-8	285	246
Oxelösunds Hamn AB	12	11	152	119
Blastech Mobile LLC (joint venture)	9	3	30	19
Total	57	7	1 717	1 623

Share of assets and liabilites	Share of assets		Share of liabilities
SEK millions	2010	2009	2010	2009
Lulekraft AB	123	78	111	63
Norsk Stål A/S	340	333	129	141
Norsk Stål Tynnplater A/S	119	106	59	63
Oxelösunds Hamn AB	149	128	61	49
Blastech Mobile LLC (joint venture)	31	22	7	3
Total	762	667	367	319

Receivables from affiliated companies and joint venture Group				Parent Company
SEK millions	2010	2009	2010	2009
Included in balance sheet items:
Accounts receivable	141	106	-	-
Total	141	106	-	-
Liabilities to affiliated companies and joint venture	Group		Parent Company
SEK millions	2010	2009	2010	2009
Included in balance sheet items:
Accounts payable	36	61	-	-
Total	36	61	-	-

Share of owning and equity share can be found in Note 8.

Related party transactions

The following transactions with affiliated companies and joint venture occurred during the year: SSAB Americas purchased plate shot blasting and painting services from Balstech Moblie for SEK 51 (40) million. Lulekraft purchased gas from SSAB EMEA for SEK 456 (338) million and resold electricity for SEK 277 (176) million. Norsk Stål and Norsk Stål Tynnplater purchased steel from the steel operations for SEK 409 (341) million

and sold for SEK 19 (11) million. Oxelösunds Hamn sold port services to SSAB EMEA for SEK 171 (199) million and purchased other services from SSAB Plate for SEK 18 (18) million. The Board Member John Tulloch has a consultancy agreement with one of the US subsidiaries of SSAB from which he received SEK 0.4 (0.5) million in fees. The transactions took place at arm's length prices.

Group
SEK millions	2010	2009
Financial income
Interest income	15	45
Dividends	2	2
Net exchange rate differences	-	-
Other	13	3
Total financial income	30	50
Financial expenses
Interest expenses	360	437
Net exchange rate differences	20	49
Other	52	33
Total financial expenses	432	519
Total financial revenue and expenses	-402	-469

Net result attributable to derivatives is included in the Net exchange rate differences with the amount of SEK -69 (-36) million.

Parent Company
SEK millions	2010	2009
Dividends from subsidiaries	98	431
Dividends from affiliated companies	1	1
Profit from other securities and
receivables which constitute fixed assets
Other interest income	0	20
Other interest income and similar revenues
Interest income from subsidiaries	191	204
Other interest income	3	6
Net exchange rate differences	-	-
Total financial revenue	293	662
Interest expenses and similar expenses
Interest expenses to subsidiaries	7	9
Other interest expenses	355	421
Net exchange rate differences	31	42
Other	35	15
Total financial expenses	428	487
Total financial revenue and expenses	-135	175

Tax expenses		Group		Parent Company
SEK millions	2010	2009	2010	2009
Swedish corporate income tax	12	136	99	11
Foreign corporate income tax	-136	384	-	-
Total current tax expenses	-124	520	99	11
Deferred taxes	206	662	-	-
Total tax expenses	82	1,182	99	11

Reconciliation of tax rates	Group		Parent Company
%	2010	2009	2010	2009
Applicable tax rate in Sweden	26	26	26	26
Tax effect of:
non-deductible expenses	4	-3	3	52
non-taxable divestments	-	0	-34	0
non-taxable revenue	-2	2	-1	-85
changes in tax rates	2	9	-	-
other tax rates in foreign subsidiaries	-55	22	-	-
taxes relating to earlier periods	13	1	-	-1
losses carried forward which it is believed cannot be utilized	-	0	-	-
Effective tax rate	-12	57	-6	-8

The parent company's other non-taxable revenue consists primarily of earnings from the sale of the subsidiary SSAB Tunnplåt to SSAB Oxelösund and of dividends from subsidiaries.

The tax for the year was positive SEK 82 (1,182) million and the effective tax rate was -12 (+57) percent. The tax rate was positively affected by lower tax rates on positive results and higher tax rates on negative results in foreign subsidiaries by -55 percentage points. Taxes relating to earlier periods relates primarily to adjustments of final tax and to tax reserves in the American operations.

			Patents,
			licenses,
	Customer	Trade	technology and other		Total intangible
Group	relations	marks	rights	Goodwill	assets
SEK millions
Acquisition value, January 1, 2009	7,434	5	688	21,105	29,232
Acquisitions	-	-	7	-	7
Translation differences	-496	-	-42	-1,404	-1,942
Acquisition value, December 31, 2009	6,938	5	653	19,701	27,297
Acquisition value, January 1, 2010	6,938	5	653	19,701	27,297
Translation differences	-372	-	-34	-1,058	-1,464
Acquisition value, December 31, 2010	6,566	5	619	18,643	25,833
Accumulated amortizaton, January 1, 2009	1,181	2	281	-	1,464
Amortization for the year	804	1	102	-	907
Translation differences	-128	0	-21	-	-149
Accumulated amortization,
December 31, 2009	1,857	3	362	-	2,222
Accumulated amortization, January 1, 2010	1,857	3	362	-	2,222
Amortization for the year	758	1	63	-	822
Translation differences	-142	0	-21	-	-163
Accumulated amortization, December 31, 2010	2,473	4	404	-	2,881
Residual value, December 31, 2009	5,081	2	291	19,701	25,075
Residual value, December 31, 2010	4,093	1	215	18,643	22,952

Amortization for the year is included in the income statement in the amount of SEK 818 (903) million in costs of goods sold; SEK 2 (1) million in administrative expenses; and SEK 3 (3) million in other operating expenses There are no internally generated intangible assets.

6 cont. Intangible assets

Test of impairment of goodwill

A test of impairment of goodwill takes place annually on November 30. Significant goodwill balances are allocated to two of the Group's cash-generating units identified below:

	SSAB North America			Steinwalls Plåt
SEK millions	2010	2009	2010	2009
	18,570	19,630	60	60

A recoverable amount for a cash-generating unit is based on calculations of value in use. These calculations are based on financial budgets and forecasts produced on a regular basis by management. Cash flows beyond a five year period have been extrapolated using assessed growth in accordance with the information below. The rate of growth does not exceed the long-term rate of growth for the market on which these cashgenerating units operate.

Significant assumptions used in calculations of use value are shown in the table below:

	SSAB North America			Steinwall Plåt
%	2010	2009	2010	2009
Assessed rate
of growth	2	2	2	2
Weighted
average
discount rate,
before tax	11.0	11.7	11.0	11.7

The assumptions have been used to analyze each cashgenerating unit.

The management has established the budgeted and forecast margin based on historical results and expectations regarding market trends and the cash generating unit. The rate of growth used corresponds to the forecasts available in industry and analyst reports. The discount rate used is stated before tax and reflects specific risks applicable to the different cashgenerating units.

Calculations conducted using the above assumptions have demonstrated that no impairment of goodwill existed as per December 31. For a sensitivity analysis, see Note 28.

Emission rights

As a method for curtailing carbon dioxide emissions, in 2005 the EU introduced a system of emission rights. For the trading period 2008–2012, the Group received 36.7 million tonnes, of which 9.8 million tonnes were consumed in 2008–2009. Estimated consumption for 2010 is 5.8 million tonnes. No emissions were sold in 2010, but 3.9 million tonnes were sold in 2008–2009. Thus, slightly more than 17 million tonnes remains for the reminder of the trading period, 2011–2012, Emission rights are reported as intangible assets booked at an acquisition value of SEK 0.

7 Tangible fixed assets

Group	Land and land improve ments	Buildings	Plant	Equipment, tools, fix tures and fittings	Construc tion in pro gress and advances to suppliers	Total tangible fixed assets
SEK millions
Acquisition value, January 1, 2009	531	3,826	26,311	1,015	1,896	33,579
Acquisitions	83	86	1,635	64	37	1,905
Sales and disposals	0	-5	-570	-71	-11	-657
Decrease through discontinued operations	-	-	-21	-2	-	-23
Reclassifications	1	27	503	-476	-22	33
Translation differences	-13	-79	-486	-7	-29	-614
Acquisition value, December 31, 2009	602	3,855	27,372	523	1,871	34,223
Acquisition value, January 1, 2010	602	3,855	27,372	523	1,871	34,223
Acquisitions	9	38	647	40	1,277	2,011
Sales and disposals	-12	-14	-401	-29	-	-456
Decrease through discontinued operations	-1	-17	-	-1	-	-19
Reclassifications	29	90	134	0	-259	-6
Translation differences	-14	-70	-392	-14	-54	-544
Acquisition value, December 31, 2010	613	3,882	27,360	519	2,835	35,209
Accumulated depreciation, January 1, 2009	57	1,794	13,459	684	-	15,994
Sales and disposals	-	-2	-331	-64	-	-397
Depreciation for the year	29	101	1,438	31	-	1,599
Decrease through discontinued operations	-	-	-16	-1	-	-17
Reclassifications	-	0	392	-392	-	0
Translation differences	0	-10	-86	2	-	-94
Accumulated depreciation, December 31, 2009	86	1,883	14,856	260	-	17,085
Accumulated depreciation, January 1, 2010	86	1,883	14,856	260	-	17,085
Sales and disposals	-10	-6	-383	-25	-	-424
Depreciation for the year	19	108	1,474	28	-	1,629
Decrease through discontinued operations	0	-14	-	-1	-	-15
Reclassifications	0	0	-3	0	-	-3
Translation differences	-1	-17	-106	-3	-	-127
Accumulated depreciation, December 31, 2010	94	1,954	15,838	259	-	18,145
Accumulated write-down, January 1, 2009	1	-	-	-	-	1
Write-down for the year	-	-	-	-	-	-
Accumulated write-down, December 31, 2009	1	-	-	-	-	1
Accumulated write-down, January 1, 2010	1	-	-	-	-	1
Write-down for the year	-	-	-	-	-	-
Accumulated write-down, December 31, 2010	1	-	-	-	-	1
Residual value, December 31, 2009	515	1,972	12,516	263	1,871	17,137
Residual value, December 31, 2010	518	1,928	11,522	260	2,835	17,063

.

Depreciation for the year is included in the income statement in the amount of SEK 1,541 (1,493) million in costs of goods sold; SEK 41 (44) million in selling expenses; SEK 38 (51) million in administrative expenses; and SEK 8 (11) million in other expenses. Commencing October 1, 2008, the Company applies IAS 23 regarding capitalization of interest during the construction period. During the period, SEK 15 (8) million was capitalized and the rate of interest applied was 2.0 percent. The item "Machinery" includes leasing agreements in the amount of SEK 88 (88) million in acquisition value and SEK 31 (38) million in residual value. The tax assessment value of properties in Sweden is SEK 2,201 (2,206) million, while the corresponding properties residual value is SEK 1,387 (1,519) million. As per the balance sheet date, there were contracted investments in fixed assets valued at SEK 1,870 (1,018) million which were not reported in the financial statements.

Parent Company	Equipment, tools, fixtures and fittings	Total tangible fixed assets
SEK millions
Acquisition value, January 1, 2009	9	9
Acquisitions	0	0
Sales and disposals	0	0
Acquisition value, December 31, 2009	9	9
Acquisition value, January 1, 2010	9	9
Acquisitions	2	2
Sales and disposals	-	-
Acquisition value, December 31, 2010	11	11
Accumulated depreciation, January 1, 2009	3	3
Sales and disposals	0	0
Depreciation for the year	2	2
Accumulated depreciation, December 31, 2009	5	5
Accumulated depreciation, January 1, 2010	5	5
Sales and disposals	-	-
Depreciation for the year	2	2
Acquisition value, December 31, 2010	7	7
Residual value, December 31, 2009	4	4
Residual value, December 31, 2010	4	4

8 Financial non-current assets, shares and participations in affiliated companies and joint venture

Group	Other shares and participations	Other long-term receivables	Total financial assets	Participations in affiliated companies
SEK millions
Book value at January 1, 2009	6	113	119	373
Investments	1	3	4	-
Sales and amortization	-	-66	-66	-
Shares in profit after tax	-	-	-	7
Reclassification	3	-1	2	-
Dividend	-	-	-	-45
Translation differences	-	-4	-4	13
Book value at December 31, 2009	10	45	55	348
Book value at January 1, 2010	10	45	55	348
Investments	0	30	30	-
Sales and amortization	-	-4	-4	-
Shares in profit after tax	-	-	-	57
Reclassification	-	-3	-3	-
Dividend	-	-	-	-6
Translation differences	0	-1	-1	-4
Book value at December 31, 2010	10	67	77	395

Other shares and participations consist primarily of unlisted holdings in equity instruments which do not have a listed market price and the fair value of which cannot be calculated in a reliable manner. They are valued at acquisition value.

Other long-term receivables are receivables that are classified in the category "Loans and receivables". They are valued at amortized cost.

Parent Company	Shares in subsidiaries	Shares in affiliated companies	Other shares and participations	Other long-term receivables	Total financial assets
SEK millions
Acquisition value, January 1, 2009	36,745	10	3	-	36,758
Investments	-	-	-	-	-
Sales and amortization	-	-	-	-	-
Residual value according to plan, December 31, 2009	36,745	10	3	-	36,758
Acquisition value, January 1, 2010	36,745	10	3	-	36,758
Investments	3,511	-	-	30	3,541
Sales and amortization	-1,500	-	-	-	-1,500
Residual value according to plan, December 31, 2010	38,756	10	3	30	38,799

During 2010 the parent company sold SSAB Tunnplåt to SSAB Oxelösund, and at the same time contributed equity to SSAB Oxelösund and SSAB Oxelösund changed name to SSAB EMEA. In January 2011 the two companies were merged.

8 cont.

Financial non-current assets, shares and participations in affiliated companies and joint venture

Parent company's shares and					Book value,
participations in subsidiaries	Reg. no	Office	Number	% 2)	SEK millions
Swedish operating subsidiares:
Plannja AB	556121-1417	Luleå	80,000	100	16
SSAB EMEA AB	556313-7933	Oxelösund	1,000	100	3,961
Tibnor AB	556004-4447	Stockholm	850,000	85	283
SSAB Technology AB	556207-4905	Stockholm	1,000	100	0
Foreign operating subsidiaries:
SSAB Central Inc.		Canada	1,000	100	272
SSAB Swedish Steel Inc.		USA	100	100	4,149
Western Steel Limited		Canada	682	100	182
SSAB Finance Belgium		Belgium	49,999,999	100	29,787
Other 1)					105
Dormant companies					1
Total					38,756

Parent company's other shares and participations
Tenant-owner rights	3
Total	3
Subsidiaries' other shares and participations1)	7
Total, Group's other shares and participations	10

1) A complete specification of other shares and participations is available from SSAB's Group headquarters in Stockholm. 2) The percentages indicate the equity share which, in all cases, also corresponds to the share of the voting capital.

Parent company's shares in affiliated companies
Lulekraft AB	556195-0576	Luleå	100,000	50	10
Total, parent company's shares in affiliated companies					10
Subsidiaries' shares and participations in affiliated companies and joint venture					Participation, SEK millions
Oxelösunds Hamn AB	556207-4913	Oxelösund	5,000	50	88
Blastech Mobile LLC		USA		50	24
Norsk Stål A/S		Norway	31,750	50	211
Norsk Stål Tynnplater A/S		Norway	13,250	50	60
					383
Equity shares in Lulekraft in excess of the book value					12
Total, Group participations in affiliated companies and joint venture					395

9 Inventories

	Group		Parent Company
SEK millions	2010	2009	2010	2009
Raw materials, consumables and semi
finished goods	5,254	3,152	-	-
Slabs	848	733	-	-
Work in progress	620	464	-	-
Stocks of finished goods	4,667	3,872	-	-
Total inventories	11,389	8,221	-	-

SEK 992 (1,165) million of the inventory value is valued at net realizable value. The share of inventories which is booked as an expense amounts to SEK 35,938 (29,020) million during the period, whereof SEK 72 (761) million was reported as an expense relating to impairment of inventories.

10 Prepaid expenses and accrued revenue

	Group		Parent Company
SEK millions	2010	2009	2010	2009
Delivered, non-invoiced goods
and services	37	42	-	-
Bonuses, discounts, licenses and similar	20	12	-	-
Prepaid rents	29	31	3	2
Prepaid insurance premiums	17	21	0	-
Accrued interest income	8	12	8	12
Currency derivatives reported in hedge
accounting	229	84	5	44
Currency derivatives not reported in
hedge accounting	2	9	0	4
Reappraisal, hedged orders	64	3	-	-
Freight support	2	6	-	0
Unsettled insurance indemnification	2	8	-	0
Other prepaid expenses	85	103	25	17
Total prepaid expenses and
accrued income	495	331	41	79

11 Other current interest-bearing receivables/Cash and cash equivalents

	Group Parent Company
SEK millions	2010	2009	2010	2009
Other current interest-bearing
receivables
Restricted cash	971	-	-	-
Total current interest-bearing receivables	971	-	-	-
Cash and cash equivalents
Cash and bank balances	914	1,835	443	1,104
Short-term investments (term to maturity of less than three months)	400	1,817	400	1,080
Total cash and cash equivalents	1,314	3,652	843	2,184

All short-term investments and current interest-bearing receivables are valued at amortized cost. Short-term investments with terms to maturity of less than three months consist of overnight deposits at banks.

The share capital is SEK 2,851 (2,851) million, divided into 323.9 (323.9) million shares, with a par value of SEK 8.80 (8.80) per share. 240.7 (240.7) million of the shares are Class A shares while 83.2 (83.2) million are Class B shares. Each Class A share

entitles the holder to one vote, while each Class B share entitles the holder to one-tenth of one vote. No shares are held in treasury by the Company or its subsidiaries.

Shares/share capital	2010	2009
Numbers of shares in million	323.9	323.9
Share capital in SEK million	2,851	2,851

The average number of shares was 323.9 (323.9) million. Other contributed funds amount to SEK 9,944 (9,944) million and

consist of funds paid in by the shareholders in connection with new issues, in excess of the par value of the shares.

Reserve for
hedge of foreign	Reserve for	Translation	Total
			reserves
-2,527	-	3,466	939
-	-	-2,203	-2,203
475	18	-	493
-125	-5	-	-130
-	-20	-	-20
			5
-	5	-
-2,177	-2	1,263	-916
-2, 177	-2	1,263	-916
-	-	53	53
			-1,759
			969
-158	-97	-	-255
-	-189	-	-189
-	50	-	50
-1,736	132	-443	-2,047
	operations - 599	cashflow hedge - 370	reserve -1,759 -

Exchange rate differences which arise upon the translation into Swedish kronor of the net investment in foreign subsidiaries are transferred to the translation reserve. The accumulated translation differences amounted to SEK -443 (1,263) million. The exchange rate differences in conjunction with the translation of loans or other financial instruments taken up in order to hedge the exchange rate of net assets in foreign subsidiaries are transferred to the reserve for hedge of foreign operations. The accumulated translation differences amounted to SEK -1,736

(-2,177) million. Exchange rate differences in conjunction with cash flow hedge of significant sales in foreign currency are transferred to the reserve for cashflow hedge.The accumulated translation differences amounted to SEK 132 (-2) million.

The proposed but as yet not resolved upon dividend for 2010 amounts to SEK 648 (324) million, equal to SEK 2.00 (1.00) per share. The amount has not been reported as a liability.

Within the Group there are both contribution-based and benefit-based pensions. In respect of contribution-based pensions and the pension plan for white collar staff in Sweden which is taken out with Alecta, the premiums relating to the period that has elapsed are reported as expenses for the year. The scope

of benefit-based pension plans in the Group has increased through the acquisition of IPSCO, but has been substantially reduced through the divestment of the tubular business. Actuarial profits and losses are reported in their entirety in the result.

The following provisions for pension obligations have been made in the balance sheet:

		Group		Parent Company
SEK millions	2010	2009	2010	2009
Funded pension obligations	31	30	-	-
Fair value of managed assets	-31	-30	-	-
Pension obligations less managed assets	0	0	-	-
Unfunded pension obligations	135	135	4	5
Pension provisions	135	135	4	5

The total pension expenses are broken down as follows:

		Group		Parent Company
SEK millions	2010	2009	2010	2009
Fees for contribution-based plans	188	376	6	8
Fees for pension insurance policies with Alecta 1)	53	58	5	3
Pension expenses, benefit-based plans	28	13	-1	-1
Special employer's contributions	69	97	4	3
Other	5	1	-	-
Total pension expenses	343	545	14	13

1)Alecta's surplus can be allocated to the policyholders and/or the insureds. At the end of September 2009, Alecta's surplus in the form of the collective funding level amounted to 134 percent compared to 141 percent as per the end of 2008. The collective funding level consists of the market value of Alecta's assets as a percentage of insurance commitments calculated in accordance with Alecta's actuarial calculation assumptions, which do not concur with IAS 19. The summary for 2009 is inclusive expenses reported against the cost reduction provision.

Changes in benefit-based obligations during the year:

		Group	Parent Company
SEK millions	2010	2009	2010	2009
Pension obligations, opening balance	166	285	5	5
Benefits earned during the year	18	10	0	0
Interest expenses	7	6	0	0
Paid benefits	-31	-129	-1	0
Exchange rate differences	-4	0	-	-
Actuarial losses (+)/profits (-)	10	-6	-	-
Pension obligations, closing balance	166	166	4	5

Changes in the value of the managed assets during the year:

		Group		Parent Company
SEK millions	2010	2009	2010	2009
Managed assets, opening balance	31	34	-	-
Return during the year	2	4	-	-
Fees from employer	1	92	-	-
Disbursed benefits	-3	-94	-	-
Exchange rate differences	0	2	-	-
Actuarial losses (-)/profits (+)	0	-7	-	-
Managed assets, closing balance	31	31	-	-

SEK millions	2010	2009
Experience based adjustments
- benefit-based obligations	-10	8
- managed assets	0	-7

Actuarial calculation assumptions

The actuarial calculation of pension obligations and pension expenses is based on the following assumptions.

%	2010	2009
Discount rate (rate of government bonds)	3.5	3
Inflation	2	2
Anticipated increase in salaries	3	3
Personnel turnover	1	1
Increase in income-base amount	3	3
Return on managed assets	5.5	6

In SSAB North America, however, the discount rate has been 5.8 (6.6) percent, the salary increase 3.5 (3.5) percent and the return 6.0 (6.5) percent.

14 Deferred tax liabilities and tax receivables

	Group		Parent Company
SEK millions	2010	2009	2010	2009
Deferred tax liabilities have arisen
- through accelerated depreciation/
amortization of fixed assets	4,669	5,058	0	0
- through transfers to tax allocation reserves	294	261	-	-
- through pension provisions	-5	-2	-	-
- through other temporary differences	-6	-34	-	-
Total deferred tax liabilities	4,952	5,283	0	-
Deferred tax receivables have arisen
- through non-utilized losses carried forward	98	69	-	-
- through pension provisions	28	37	1	1
- through fixed assets	8	1	-	-
- through other temporary differences	25	57	-	-
Total deferred tax receivables	159	164	1	1

Deferred tax on retained earnings in subsidiaries and affiliated companies is not taken into consideration. To the extent profits are transferred to the parent company, such a transfer is normally exempt from taxation. To the extent such a transfer is not exempt from taxation, the parent company determines the date of such a transfer and such a transfer will not take place within the foreseeable future.

Changes in deferred tax liabilities		Group		Parent Company
SEK millions	2010	2009	2010	2009
Opening balance	5,283	6,279	-	-
Changes against earnings	-188	-744	-	-
Tax related to cash flow hedges	31	-	-	-
Translation difference	-174	-252	-	-
Closing balance	4,952	5,283	-	-
Changes in deferred tax receivables
Opening balance	165	245	1	1
Changes against earnings	18	-82	0	-
Tax related to cash flow hedges	-17	-	-	-
Translation difference	-7	1	-	-
Closing balance	159	164	1	1

		Warranties,
Group	Cost reduction program	divestment of operations 1)	Other provisions 2)	Total
SEK millions
Opening balance, January 1, 2009	498	224	49	771
Additional provisions		131	50	181
Reversed, non-utilized provisions	-76	-	-	-76
Utilized during the year	-400	-	-20	-420
Translation difference	-	-	2	2
Closing balance, December 31, 2009	22	355	81	458
Opening balance, January 1, 2010	22	355	81	458
Additional provisions	-	164	37	201
Utilized during the year	-22	-504	-25	-551
Reclassification 3)	-	67	-	67
Translation difference	-	-	-3	-3
Closing balance, December 31, 2010	-	82	90	172
			2010	2009
of which reported as:
- Other long-term provisions			119	415

• Current provisions 53 43

1) The tubular business in North America was sold on June 12, 2008 and there are warranty undertakings to the purchaser regarding taxes for the period prior to the sale. In conjunction with the sale, provision was made in respect of this warranty. In 2010, an agreement was reached regarding a tax dispute, which in all essential respects constitutes the currently known warranty undertakings, which resulted in an adjustment of the provision entailing an additional cost of SEK 164 million. Most of the amount was paid during the year.

2)Other provisions" consist primarily of personnel-related provisions.

3) The reclassification relates to a previously booked tax liability which, however, relates to the warranty undertaking to the purchaser of the tubular business and thus has been moved to provisions.

Parent Company	Warranties, divestment of operations 1)	Other provisions 2)	Total
SEK millions
Opening balance, January 1, 2009	224	18	242
Additional provisions	131	15	146
Utilized during the year	-	-18	-18
Closing balance, December 31, 2009	355	15	370
Opening balance, January 1, 2010	355	15	370
Additional provisions	164	15	179
Utilized during the year	-504	-15	-519
Reclassification 3)	67	-	67
Closing balance, December 31, 2010	82	15	97
		2010	2009
of which reported as:
- Other long-term provisions		67	355
- Current provisions		30	15

1) The tubular business in North America was sold on June 12, 2008 and there are warranty undertakings to the purchaser regarding taxes for the period prior to the sale. In conjunction with the sale, provision was made in respect of this warranty. In 2010, an agreement was reached regarding a tax dispute, which in all essential respects constitutes the currently known warranty undertakings, which resulted in an adjustment of the provision entailing an additional cost of SEK 164 million. Most of the amount was paid during the year.

2)Other provisions" consist primarily of personnel-related provisions.

3) The reclassification relates to a previously booked tax liability which, however, relates to the warranty undertaking to the purchaser of the tubular business and thus has been moved to provisions.

Long-term interest-bearing liabilities	Group		Parent Company
SEK millions	2010	2009	2010	2009
Capital market debt 1)	6,968	5,526	6,968	5,526
Financial leasing agreements	31	37	-	-
Bank loans 2)	9,363	9,018	9,363	9,018
Export financing 3)	377	246	-	-
Alabama tax revenue bond 4)	1,087	-	-	-
Other	53	57	52	52
Total	17,879	14,884	16,383	14,596
Less amortization 2011 and 2010	-1,093	-6	-	-
Total	16,786	14,878	16,383	14,596

1)-4) For description see table below.

		Outstanding, SEK millions
	Interest rate
Issued/matures	(nominal), %	Group		Parent Company
SEK millions		2010	2009	2010	2009
1)Specification of capital market debt
Fixed interest
2007–2017	5,25 – 5,875	1,945	2,026	1,945	2,026
Variable interest
2009–2017	stibor +1,70 – +2,45	4,445	3,500	4,445	3,500
2010–2018	libor +1,75	578	-	578	-
Total capital market debt		6,968	5,526	6,968	5,526
2)Specification of bank loans
Variable interest
2007–2014	libor +0,60 – +1,00	7,069	7,474	7,069	7,474
2007–2015	stibor +0,60 – +1,50	2,294	1,544	2,294	1,544
Total bank loans		9,363	9,018	9,363	9,018
3)Specification of export financing
Variable interest
2009–2016	euribor + 1,50	377	246	-	-
Total export financing		377	246	-	-
	4)Specification of Alabama tax revenue bond
Variable interest 2010–2027	libor + 0,75	1,087	-	-	-
Total Alabama tax revenue bond		1,087	-	-	-

Alabama tax revenue bond is a debt financing with term of maturity of 30 years, but due to the contact terms it has been classified as a short-term interest-bearing liability.

Repayment of long-term interest-bearing liabilities

SEK millions	2011	2012	2013	2014	2015	Later
As per December 31, 2010
Group	1,093	3,635	4,328	2,884	805	5,134
Parent Company	0	3,578	4,271	2,828	750	4,956
Repayment of long-term interest-bearing liabilities
SEK millions	2010	2011	2012	2013	2014	Later
As per December 31, 2009
Group	6	50	3,774	4,531	2,933	3,590
Parent Company	0	16	3,718	4,475	2,877	3,510

Current interest-bearing liabilities	Group		Parent Company
SEK millions	2010	2009	2010	2009
Current part of long-term liabilities	1,093	6	-	-
Commercial paper	1,334	2,601	1,334	2,601
Overdraft facilities	550	1,391	409	262
Total current interest-bearing liabilities	2,977	3,998	1,743	2,863

Loan debts are valued at the amortized cost except for a fixed interest loan of SEK 1,000 million which is a fair value hedge valued at the amortized cost, adjusted for changes in fair value on the hedged risk. The outstanding portion of loans in foreign currency is used as hedging for the net investment in SSAB North America and thus has not been hedged.

On the balance sheet date, the Group's exposure to changes in interest rates and the contractually agreed dates for interest renegotiation with respect to borrowing was as follows:

Amount falling due for interest rate renegotiation

SEK millions	2011	2012	2013	2014	2015	Later
As per December 31, 2010
Group	15,873	25	25	522	5	1,429
Parent company	14,403	18	18	516	0	1,429
Amount falling due for interest rate renegotiation
SEK millions	2010	2011	2012	2013	2014	Later
As per December 31, 2009
Group	12,776	24	24	24	520	1,516
Parent company	12,518	18	18	18	514	1,510

Reported amounts, per currency, for the Group's borrowing are set forth in Note 27.

17 Accrued expenses and deferred revenue

	Group		Parent Company
SEK millions	2010	2009	2010	2009
Accrued personnel expenses	850	808	16	17
Non-invoiced goods and services received	356	279	-	-
Accrued interest expenses	53	42	52	42
Accrued discounts, bonuses and complaints	16	20	-	-
Reappraisal, hedged orders	-	38	-	-
Derivatives reported in hedge accounting	102	29	15	-
Derivatives not reported in hedge accounting	40	2	0	-
Accrued expenses vis-à-vis affiliated companies	-	0	-	-
Energy taxes	19	9	-	-
Other items	85	100	5	2
Total accrued expenses and
deferred revenue	1,521	1,327	88	61

Notes

18 Net debt

	Group		Parent Company
SEK millions	2010	2009	2010	2009
Cash and bank balances	914	1,835	443	1,104
Short-term investments	400	1,817	400	1,080
Receivables from subsidiaries	-	-	12,515	10,034
Other receivables	1,046	47	36	-
Interest-bearing assets	2,360	3,699	13,394	12,218
Current interest-bearing liabilities	2,977	3,998	1,743	2,863
Long-term interest-bearing liabilities	16,786	14,878	16,384	14,596
Pension provisions	135	135	4	5
Liabilities to subsidiaries	-	-	2,257	1,201
Other liabilities	49	2	9	-
Interest-bearing liabilities	19,947	19,013	20,397	18,665
Net debt	17,587	15,314	7,003	6,447

For defintion see Note 29.

19 Average number of employees, gender breakdown and sick leave

	Number of employees		Women, %
	2010	2009	2010	2009
Parent Company
Sweden	48	44	46	40
Total, Parent Company	48	44	46	40
Subsidiaries
Sweden	6,413	6,453	19	18
Denmark	72	112	40	35
Finland	121	136	28	26
Italy	54	54	26	26
Canada	77	74	6	7
China	64	33	25	15
Norway	32	33	22	18
Poland	98	107	34	28
Great Britain	44	45	32	34
South Africa	89	64	11	22
Germany	32	31	34	37
USA	1,107	959	12	13
Other < 20 employees	226	189	25	19
Total, subsidiaries	8,429	8,290	19	18
Total, Group	8,477	8,334	19	18

19 cont. Average number of employees, gender breakdown and sick leave

The calculation is based on a normal number of working hours per year in different production areas. Consideration has been given, among other things, to different forms of shift work. The percentage of women relates to the numbers employed on December 31. Women accounted for 6 (4) percent of the members of all boards of directors in the Group, while the figure for the Board of Directors of the Parent Company was 8 (9) percent. The percentage of women in the management groups (including Presidents) in the Group was 13 (11) percent. The Group Executive Committee comprises seven men and two women.

Personnel sick leave	Group1)		Parent Company 2)
(% of ordinary work time)	2010	2009	2010	2009
Total sick leave absence	2.8	3.4	0.6	0.6
- of which 60 days or more	31.5	34.7	28.2	0
Sick leave absence per group
- women	4.0	4.7	1.4	1.3
- men	2.5	3.2	0.2	0.2
- age 29 and younger	2.1	3.1
- aged 30–49	2.6	3.1
- aged 50 and older	3.3	3.9

1) Relates to the Group's employees in Sweden.

2)Sickness in the parent company is reported only as a total and by gender since there are only 54 (48) employees.

Operational leasing	Group		Parent Company
SEK millions	2010	2009	2010	2009
Minimum leasing charges during the year	115	93	7	8

The agreed minimum leasing charges relating to operational leasing agreements that cannot be terminated amount to SEK 102 million for 2011; a total of SEK 306 million for 2012–2015; and to SEK 251 million for the years after 2015. Operational leasing includes office equipment, leases for property, premises and rolling stock for transportation in the steel operations.

Financial leasing	Group		Parent Company
SEK millions	2010	2009	2010	2009
Minimum leasing charges during the year	11	11	-	-

Agreed minimum leasing charges for 2011 amount to SEK 11 million and to a total of SEK 39 million for 2012–2015. The present value of financial leasing liabilities is SEK 29 (37) million. Financial leasing includes a switchgear, rolling stock for transportation in the steel operations, as well as a number of fork lift trucks.

21 Pledged assets

	Group		Parent Company
SEK millions	2010	2009	2010	2009
Real property mortgages	39	39	-	-
Floating charges	2	1	-	-
Total pledged assets	41	40	-	-

	Group		Parent Company
SEK millions	2010	2009	2010	2009
Guarantees	0	0	0	0
Contingent liabilities regarding
subsidiaries' obligations 1)	68	41	594	396
Other contingent liabilities	56	47	37	26
Total contingent liabilities	124	88	631	422

1) Of the contingent liabilities of the Parent company, SEK 400 million relates to a guarantee for a subsidiary loan.

Conditions not reported as contingent liabilities

In 2005, IPSCO was involved in two legal proceedings which are still pending in the state of Alabama, USA. The opposing party (initially, approximately 300 plaintiffs) alleges, among other things, that emissions from the steel mill in Mobile, Alabama affect the environment and, as a consequence, is claiming an unspecified amount in damages. IPSCO – and, following the acquisition, SSAB – have denied the allegations and 17 claims were tried on the merits in 2008 and each was adjudicated in SSAB's favor. SSAB continued its denial of all allegations. Subsequently, all counsel for plantiffs withdrew from representation on all pending claims. In the beginning of 2011 the court dismissed all remaining claims in favor of SSAB. However, the plaintiffs have 40 days to appeal.

During the autumn of 2008, a number of class actions were brought in Illinois, USA against a number of steel producers including SSAB alleging that they had violated US anti-trust legislation by colluding to restrict steel production in the United States during 2005–2008 with the aim of influencing steel prices. The opposing party consists of direct and indirect purchasers of relevant steel products who are claiming an unspecified amount in damages from the sued steel producers. SSAB denies the allegations.

The Group is otherwise involved in a very limited number of legal disputes concerning insurance and warranty matters, as well as complaints. The anticipated outcome of these cases has been taken into consideration in the accounting.

Untaxed reserves	Parent Company
SEK millions	2010	2009
Depreciation in excess of plan	0	0
Tax allocation reserve 2008	652	652
Tax allocation reserve 2010	42	-
Total untaxed reserves in the balance sheet	694	652

Appropriations	Parent Company
SEK millions	2010	2009
Difference between booked depreciation and depreciation according to plan	1	3
Change in tax allocation reserve	-43	2
Total appropriations in the income statement	-42	5

No business acquisitions have occured in 2010 or 2009.

25 Divestment of operations and companies

During 2010, Tibnor sold two smaller companies, AB Elof Johansson Metallindustri and Fastighetsaktiebolaget Rödingen, which generated a capital gain of SEK 28 million and had a positive impact on cash flow in the amount of SEK 32 million. The capital gain is included in the item "Other operating revenue".

SSAB North America's Tubular operations were divested in 2008. In the income statement for 2010, SEK -164 million (SEK -131 million) has been reported as Profit after tax for discontinued operations. The cost relates to a provision for warranty obligations to the buyer regarding tax in respect of the period prior to the sale. Cash-flow was negatively affected by SEK 591 (-) million due to payments under the warranty obligation.

The key features of SSAB's strategic plan of action are based on increasing growth within niche products, increasing profitability at current plants, and strengthening the organization. The extensive reorganization of the business operations, which has been implemented and entered into force in January 2010, represents

an important element in creating conditions for achieving the strategic goals. In the new organization, the earlier divisions have been replaced by three geographic business areas. The Tibnor trading operations remain as a separate business segment. The segment information is presented in the tables below:

Sales and results per business area

	Total sales		Of which internal sales		Operating profit		Return on capital employed, %
SEK millions	2010	2009	2010	2009	2010	2009	2010	2009
Business area:
SSAB EMEA	21,428	15,252	4,892	2,799	374	-1,693	3	neg
SSAB Americas	14,581	10,713	83	29	1,119	595	1	neg
SSAB APAC	2,326	1,583	-	10	232	70	33	13
Tibnor	6,696	5,286	52	50	421	-38	22	neg
Amortization on surplus values 1)					-870	-942
Other incl. Group adjustments2)	-5,148	-2,996	-5,027	-2,888	-192	416	-	-
Total	39,883	29,838	-	-	1,084	-1,592	2	neg

1) Depreciation and amortization on surplus values on intangible and tangible fixed assets related to the acquisition of IPSCO. 2) Earnings for year include a profit of SEK 0 (313) million on sales of emission rights, of which SEK 0 (13) million in SSAB EMEA.

Balance and cash flow information per business area

		Working capital		Depreciation and amorti zation 1)		Continous investments		Strategic investments		Operational cash flow
SEK millions	2010	2009	2010	2009	2010	2009	2010	2009	2010	2009
Business area:
SSAB EMEA	18,051	15,104	1,121	1,074	632	799	694	744	-1,736	2,113
SSAB Americas	30,101	31,198	1,273	1,365	158	99	418	199	1,421	1,158
SSAB APAC	777	533	6	6	2	6	58	-	162	141
Tibnor	1,913	1,736	50	59	47	65	-	-	42	725
Other incl. Group adjust
ments	-794	1,444	2	2	3	-	-	-	-101	731
Total	50,048	50,015	2,452	2,506	842	969	1,170	943	-212	4,868

1) SSAB Americas includes depreciation and amortization on surplus values on intangible and tangible fixed assets related to the acquisition of IPSCO in the amount of SEK 870 (942) million.

Geographical areas

The Group's export sales from Sweden are focused primarily on Europe. However, as a consequence of growth in the Group's niche products, sales on more distant markets are increasing. The manufacture of the Group's steel products has taken place almost exclusively in Sweden and the United States. Thus, investments other than in those countries have been small. The table below shows the breakdown of the Group's sales per country/region, irrespective of where the products are manufactured.

Sales per country/region

SEK millions	2010	%	2009	%
Sweden	8,917	22	7,099	24
EU-27 (excl. Sweden)	11,223	28	8,491	29
Rest of Europe	2,218	6	1,291	4
North America	13,710	34	10,366	35
Asia	2,491	6	1,915	6
Rest of the world	1,324	4	676	2
Total	39,883	100	29,838	100

The table below shows the reported value of tangbile and intangible assets and capital expenditures broken down by geographic areas according to the location of the assets.

Tangible/Intangible assets				Capital expenditures
SEK millions	2010	%	2009	%	2010	%	2009	%
Sweden	9,992	25	9,796	23	1,359	68	1,583	83
EU-27 (excl. Sweden)	191	1	227	1	12	1	14	1
Rest of Europe	31	0	40	0	3	0	7	0
North America	29,525	74	32,065	76	566	28	296	16
Asia	118	0	70	0	60	3	6	0
Rest of the world	158	0	14	0	11	0	6	0
Total	40,015	100	42,212	100	2,011	100	1,912	100

Financial risk management is governed by the Group's finance policy adopted by the Board. Most financial transactions take place through the parent company's finance function in Stockholm and through SSAB Finance Belgium.

SSAB's operational business gives rise to a number of financial risks, among other things refinancing risks (liquiditiy risks), market risks (interest rate risks and currency risks) and credit risks.

Refinancing risks (liquidity risks)

With its current financial targets, SSAB is a net borrower. Thus, a refinancing risk arises in connection with extensions of existing loans and the raising of new loans.

The borrowing strategy is focused on securing the Group's needs for loan financing, with regard to both long-term loans and SSAB's day-to-day payment obligations to its lenders and suppliers. Borrowing takes place primarily through the parent company, taking into consideration the Group's financial targets.

At year-end, long-term borrowing amounted to SEK 16,786 (14,878) million. Borrowing takes place primarily through the bank market and through existing note and commercial paper programs. For borrowing for terms of up to ten years, a European Medium Term Note Program (EMTN) or a Swedish MTN program is used, while a Swedish commercial paper program is used for borrowing for shorter terms. The program limit of the EMTN program is EUR 2,000 million, the MTN program has a limit of SEK 7,000 million, while the commercial paper programs has a limit of SEK 5,000 million. The Swedish commercial paper program is rated by Standard & Poor's at K-4 and the note programs at BB+. At year-end, long-term borrowing within the

EMTN program amounted to SEK 1,428 (1,510) million, borrowing within the MTN program amounted to SEK 3,500 (3,500) million, and borrowing within the commercial paper program amounted to SEK 1,334 (2,601) million.

In order to minimize the refinancing risk, the objective is that the total of loans maturing during a single year shall not exceed 50 percent of the total debt portfolio. In addition, not more than 50 percent of the loans shall mature within the coming year. With respect to long-term financing, the target is an average term to maturity in excess of 3 years.

The liquidity buffer, i.e. non-utilized and binding credit facilities as well as cash and cash equivalents, should exceed 10 percent of the Group's sales. The liquidity buffer consists primarily of a back-up facility of USD 1,500 million. The Group's liquidity preparedness, consisting of cash and cash equivalents, short-term investments and non-utilized binding credit facilities, amounted at year-end to SEK 13,519 (18,850) million, equal to 34 (63) percent of sales.

To the extent surplus liquidity arises, it is used first and foremost to repay loans. If that is not possible, the funds are invested in government securities or deposited with approved banks.

The total loan debt at year-end was SEK 19,763 (18,876) million, with an average term to maturity of 3,3 (3,5) years. If the Alabama tax revenue bond is included as with a 30-year term, the average term to maturity on the loan portfolio is 4.8 years. The maturity structure during the coming years is presented in Note 16.

The contractual payments as per December 31 on the outstanding loan debt, including interest payments and derivatives, are shown in the following table:

	Book	Contractual
SEK millions	value	cash flow	2011	2012	2013	2014	2015	Later
Bond loans	6,968	8,721	294	299	299	2,315	206	5,308
Bank loans	9,363	9,826	140	3,739	3,491	1,680	776	-
Export financing Alabama tax	377	449	9	59	59	59	59	204
revenue bond	1,087	1,098	1,098	-	-	-	-	-
Commercial paper	1,334	1,336	1,336	-	-	-	-	-
Credit facilities	550	552	552	-	-	-	-	-
Other	84	84	24	24	23	6	6	1
Total loan debt	19,763	22,066	3,453	4,121	3,872	4,060	1,047	5,513
Derivatives,
outflow, net	-4,370	-4,370	-2,975	-204	-133	-108	-	-950
Derivatives, inflow,
net	4,513	4,513	3,079	218	145	118	-	953
Total including derivatives	19,906	22,209	3,557	4,135	3,884	4,070	1,047	5,516

In addition to the above loan debts and derivatives, there are accounts payable and other current liabilities which are due and payable within one year. Interest flows are calculated based on interest rates and exchange rates at year-end.

Market risks

Market risks are the risk of changes in market prices, such as interest rates and exchange rates, that can affect the Group's earnings or financial position.

Interest rate risks

The Group's interest rate risks relate to changes in market interest rates and their impact on the debt portfolio.

The average fixed rate term in the total debt portfolio should be approx. 1 year, but is permitted to vary between 0.5 and 2.5 years. The fixed rate term on the borrowing may be adjusted through the use of interest rate swaps.

At the end of the year, the total loan debt amounted to SEK 19,763 (18,876) million, of which SEK 2,940 (3,026) million carried fixed interest. SEK 1 000 million in fixed interest loans have been converted to variable 3-month interest rates through interest rate swaps. Including the interest rate swaps, the average fixed rate term was 0.7 (0.9) years. The fair value of the loan is SEK 994 milion. Given the same loan debt, short-term investments, cash and cash equivalents and the same fixed rate terms as at the end of the year, a change in market interest rates of 100 points (1 percentage point), including interest hedging, would change earnings after tax by approximately SEK 120 (100) million. Loans which are subject to rate renegotiation in the coming years are shown in Note 16.

At the end of the year, the value of interest rate swaps reported under hedge accounting was SEK -5 (0) million and loan reappraisal amounted to SEK 5 (0) million. No inefficiency was identified during the year.

The Group's interest-bearing assets amounted to SEK 2,360 (3,699) million and consisted of cash equivalents and restricted cash which both are at variable rates of interest.

Currency risks

The Group's currency risks are managed by SSAB's treasury function. SSAB's currency exposure largely relates to the translation risk regarding net assets of foreign subsidiaries. This exposure is

hedged through borrowing in foreign currency, so-called Equity Hedge. Exceptions are made in the case of small amounts, e.g. for equity in foreign sales companies. The objective with the Equity Hedge is to minimize the translation effect on the net debt/equity ratio. The Swedish krona is the base currency.

To handle the transaction risk, most of the commercial currency flows which qualify for hedge accounting (at present purchases of coal and iron ore in USD and sales in EUR) are hedged. Major investments decided upon in foreign currency are hedged in their entirety. Other commercial currency flows that arise in connection with purchases and sales in foreign currency are short term in nature and thus no hedging takes place; instead, they are exchanged on the spot market.

The Group had a net inflow in the most important currencies. The net foreign currency inflow in 2010 was SEK 4.9 (7.9) billion. The Group's most important currency flows are shown in the diagram on page 22.

Based on revenues and expenses in foreign currency in 2010, a five percentage point devaluation of the Swedish krona against other currencies, including hedging, would have an annual effect on earnings after tax of just over SEK +180 (+290) million.

A five percentage point devaluation of the Swedish krona against the Group's two most important currencies, USD and EUR, would have a negative impact on earnings after tax of SEK 330 (0) million with respect to USD and a positive impact of just over SEK 300 (170) million with respect to EUR. The negative effect vis-à-vis USD consists of an increased cost for the Group's purchases of the raw materials, coal, iron ore and scrap metal, in the amount of SEK 560 (270) million, a positive effect on the business' net flows of USD in other respects of approximately SEK 240 (280) million, and a negative impact as regards increased interest payments of just over SEK 10 (10) million. The positive effect vis-à-vis EUR derives from the business' net flows.

In 2010, net exchange rate differences were booked in the amount of SEK 56 (51) million in operating profit and SEK -20 (-49) million in financial items.

As per December 31, the breakdown per currency of the accounts receivable, other current receivables and derivative instruments was as follows:

		Group	Parent Company
SEK millions	2010	2009	2010	2009
SEK	1,741	1,280	4	2
USD	1,324	1,429	5	16
EUR	1,850	1,346	-	32
Other currencies	812	807	-	-
Total	5,727	4,862	9	50
of which:
Accounts receivable	5,057	4,435	-	-
Other current receivables	439	334	4	2
Derivative instruments 1)	231	93	5	48
Total	5,727	4,862	9	50

1) Derivative instruments are included in the balance sheet item, Prepaid expenses and accrued revenue, in the amount of SEK 231 (93) million and for the parent company with SEK 5 (48) million.

As per December 31, the breakdown per currency of the accounts payable, other current liabilities and derivative instruments was as follows:

	Group		Parent Company
SEK millions	2010	2009	2010	2009
SEK	1,565	1,166	22	13
USD	2,015	1,262	6	-
EUR	701	617	3	-
Other currencies	94	228	-	-
Total	4,375	3,273	31	13
of which:
Accounts payable	4,048	3,063	10	9
Other current liabilities	185	179	6	4
Derivative instruments 1)	142	31	15	-
Total	4,375	3,273	31	13

1) Derivative instruments are included in the balance sheet item, Accrued expenses and deferred revenue, in the amount of SEK 142 (31) million, and for the Parent Company with SEK 15 (-) million..

The Group's borrowing broken down per currency is shown below:

	Group		Parent Company
SEK millions	2010	2009	2010	2009
SEK	9,081	8,251	9,044	8,210
USD	10,170	10,125	9,082	9,146
EUR	378	350	0	104
Other currencies	134	150	-	-
Total	19,763	18,876	18,126	17,460

As shown above, the Group's borrowing in foreign currency is largely in USD.

Borrowing in USD has not been hedged since exchange rate differences on loans are offset by exchange rate differences on the net investment in the North American operations and the net investment in SSAB Finance Belgium (which provides the internal financing for SSAB North America).

The objective is to obtain an even balance in which the currency effect on the net investment in the North American operations and SSAB Finance Belgium has as little impact as possible on the Group's net debt/equity ratio.

At year-end, this net investment amounted to USD 4,314 (4,314) million. In total, hedged accounted loans and currency derivatives amounted to USD 1,585 (1,370) million. At year end, the accumulated fair value change in the hedge reserve on the part that was defined as loans and derivatives amounted to SEK -2,437 (-3,036) million. During the year, an inefficiency of SEK -11 (10) million was identified and has been reported in its entirety in the result.

Credit risk

Financial counterparties are selected based on Standard & Poor's (S&P) and Moody's current ratings for long-term borrowing and taking into account the Group's reciprocal commercial relations with the relevant counterparty. The lowest acceptable ratings are A- from Standard & Poor's or A3 from Moody's.

The limits for individual counterparties are evaluated continuously and during 2010, these have remained unchanged at SEK 1,500 (1,500) million. The total counterparty risk in derivative instruments at year-end was SEK 1,402 (3,714) million, of which derivative instruments accounted for SEK 88 (62) million and investments in cash equivalents accounted for SEK 1,314 (3,652) million.

In addition to the above, there are credit risks associated with accounts receivable and other receivables, which are managed in each subsidiary. Prior to write down in respect of bad debts, these receivables had a gross value of SEK 5,727 (4,943) million. The risk is allocated over a large number of customers. In addition, individual credit rating tests are conducted and limits imposed for each customer. The financial crisis increased the credit risk in accounts receivable and other receivables. However, during the year, it has been possible to decrease the provision made for bad debts, as shown in the table on the next page. No security has been received for these receivables.

Age analysis regarding

Accounts receivable

and Other receivables	Group		Parent Company
SEK millions	2010	2009	2010	2009
Not due	4,591	3,770	4	2
0–30 days	637	659	-	-
31–120 days	169	196	-	-
121–365 days	27	110	-	-
> 365 days	72	34	-	-
Total	5,496	4,769	4	2

Bad debts, change	Group		Parent Company
SEK millions	2010	2009	2010	2009
Opening balance	-174	-86	-	-
Anticipated
bad debt losses	-66	-135	-	-
Established
bad debt losses	43	28	-	-
Reversed non-utilized
amount	100	17	-	-
Translation differences	2	2	-	-
Closing balance	-95	-174	-	-

No other financial assets have been written-down.

Emission rights

The parent company's treasury function is responsible for managing any deficits or surpluses in emission rights. This takes place through external trading with approved counterparties.

Valuation of financial instruments

Currency derivatives and interest rate swaps According to the financing policy, currency hedging takes place mainly to minimize the translation risk associated with the impact of changes in exchange rates on the net debt/equity ratio. The translation exposure is hedged primarily through loans in the same currency, in the absence of which currency derivatives may be used instead. At year-end, investment in the North American operations was hedged with loans amounting to USD 1,335 (1,250) million and derivative instruments amounting to USD 250 (120) million.

Currency hedging takes place also with respect to purchases of coal and iron ore, as well as for major investments in foreign currency. Only currency derivatives are used to hedge such currency risks and all currency derivatives are valued at fair value on the balance sheet. For the currency hedging which meets the requirements for hedge accounting pursuant to IAS 39 and comprises fair value hedging, changes in value of the currency derivative do not impact earnings but, rather, are set off in the income statement against corresponding changes in value of the hedged order. In connection with the delivery of such hedged purchases, the hedged part of the acquired asset is booked at the hedged rate, and thus no separately booked exchange rate difference arises on the purchase. At year end, purchase orders for which currency futures had been contracted had a total value of SEK 2.2 (1.1) billion. At year-end, derivative instruments for "fair value hedging" had a booked fair value of SEK -90 (+41) million, while

purchases reported in hedge accounting were booked at SEK 90 (-41) million, entailing that there was no inefficiency at the end of the accounting year.

Currency hedging also takes place on sales in EUR. For currency hedging which meets the requirements for hedge accounting, changes in value of a currency derivative do not impact on earnings but, rather, are reported in the statement of comprehensive income as a hedge reserve. In connection with sales, accumulated amounts are reversed from the hedge reserve in equity to the income statement in the periods in which the hedged item affects earnings. At year-end, the total value of forecast sales in respect of which currency futures had been contracted was SEK 5.4 (2.5) billion. Derivative instruments which relate to forecast sales and which meet the requirements for hedge accounting amounted to net SEK 221 (-2) million, where of SEK 181 (-2) million of the value has been booked against the hedge reserve in the statement of comprehensive income. There was no inefficiency at the end of the accounting year.

Fair value hedging also takes place with respect to certain bond loans carrying fixed interest where a fixed to variable interest rate swap is used. For interest rate derivatives which meet the requirements for hedge accounting pursuant to IAS 39 and comprise fair value hedging, changes in value of the interest rate derivative do not impact earnings but, rather, are set off in the income statement against corresponding changes in value of the hedged debt. At year-end, interest rate derivatives for "fair value hedging" had a booked fair value of SEK -6 (0) million, while reappraisal of the hedged bond debt was booked at SEK 6 (0) million. There was no inefficiency at the end of the accounting year.

Derivative instruments which are not reported in hedge accounting are valued at fair value over the income statement. At yearend, net non-realized derivative instruments amounted to SEK 38 (7) million, of which SEK 0 (0) million was reported in "Other operating revenue" and SEK 38 (7) million in "Financial items".

The net result from realized derivatives amounted during the year to SEK 3 (-43) million, which was reported in its entirety in "Financial items". The Group's total outstanding derivatives at year end had an average remaining term of 16 (4.0) months.

Valuation of financial assets and liabilities

The table below shows the reported value compared with the assessed fair value per type of financial asset and liability:

	Reported	Fair value	Reported	Fair
Group	value	value	value	value
SEK millions	2010	2010	2009	2009
Financial,assets
3. Financial,fixed assets	77	77	55	55
1. Currency derivatives not subject to hedge accounting1)	2	2	9	9
6. Currency derivatives for "fair value hedging" of flows 1)	3	3	45	45
6. Currency derivatives for hedging of net investment1)	5	5	16	16
6. Currency derivatives for cash-flow hedging of sales 1)	221	221	23	23
6. Interest rate swaps for "fair value hedging"	-	-	0	0
3. Accounts receivable	5,057	5,057	4,435	4,435
3. Other current interest-bearing receivables	971	971	-	-
3. Cash and cash equivalents	1,314	1,314	3,652	3,652
Financial liabilities
5. Long-term interest-bearing liabilities	15,831	16,034	13,878	14,051
7. Long-term interest-bearing liabilities	994	994	1,000	1,000
5. Current interest-bearing liabilities	2,977	2,977	3,998	3,998
1. Currency derivatives not subject to hedge accounting1)	40	40	2	2
6. Currency derivatives for "fair value hedging" of flows 1)	93	93	4	4
6. Currency derivatives for hedging of net investment1)	3	3	-	-
6. Currency derivatives for cash-flow hedging of sales 1)	-	-	25	25
6. Intrest rate derivates for "fair value hedging" 1)	6	6	-	-
5. Accounts payable	4,048	4,048	3,063	3,063

1) Derivative instruments are included in the balance sheet item prepaid expenses and accrued revenue and accrued expenses and deferred revenue.

Balance sheet item classification:

1. Holding valued at fair value in the income statement.

2. 2.Holding to maturity.

3. 1. Loan claims and accounts receivable.
4. 1. Assets available for sale.
5. 1. Financial liabilities valued at amortized cost.
6. 6.Derivatives for hedging.
7. 1. Long-term liabilities valued at amortized cost adjusted for fair value changes of the hedged risk.

Financial fixed assets consist largely of other long-term receivables and are valued at the amount which is expected to be received following an assessment of bad debts.

Derivative instruments are valued at fair value and calculated based on a model taking into account observable market data derived from prices on a listed market.

Accounts receivable are reported in the amount which is expected to be received following an individual assessment of bad debt. There is no concentration of credit risks since the Group has a large number of customers spread throughout the world.

Other current interest-bearing receivables consist of restricted cash with terms to maturity of less than 12 months. Fair value is estimated at the acquisition value.

Cash and cash equivalents consist of bank balances and depo-

sits at banks with short terms until maturity and the fair value is estimated at the acquisition value.

Long-term interest-bearing liabilities consist primarily of loans and are valued at amortized cost. Loans which are reported in hedge accounting are valued and booked at fair value. Fair value has been calculated based on the rate of interest for outstanding terms to maturity as applicable at the end of the year.

Current interest-bearing liabilities are valued at amortized cost. Fair value has been calculated based on the rate of interest for outstanding terms to maturity as applicable at the end of the year. Accounts payable are reported in the amount which is expected to be paid and valued at acquisition value.

Management of capital

The Company's capital management objective is to ensure that the operations can continue to be conducted to generate good returns for the shareholders. Since the Group's operations are dependent on the business cycle, the target is to maintain a long-term net debt/equity ratio of around 30 percent.

In order to maintain or adapt the capital structure, dividends may be adjusted, share buy-backs or redemption may take place, or new issues or divestments of assets may take place in order to reduce liabilities.

During the year, the net debt/equity ratio increased somewhat. The net debt/equity ratio at year end was 58 (49) percent.

Important assessments upon application of the accounting principles

In the steel operations' industrial areas, there is a need for future land clean up. In accordance with applicable rules, such clean up will become relevant only when SSAB ceases to conduct operations in the area. At present, it is not possible to assess if and when operations will cease and, accordingly, no provision has been made for such land clean up.

Important sources of uncertainty in estimations

Test of impairment of goodwill

On November 30, the annual impairment test was carried out of the goodwill which arose in conjunction with the acquisition of IPSCO. The test showed no impairment (see Note 6). The valuation was carried out at a time when the global economy is still characterized by great uncertainty and, under such circumstances, it is of course extraordinary difficult to make an assessment as regards future earning capacity and thereby an assessment of the fair value of goodwill.

Had the estimated discount rate before tax which was applied to the discounted cash flows been 1.9 percentage points higher than the assessment made in the calculation or if the long term forecasted gross margin will be 3.9 percentage points lower than the assessment made in the calculation, the useful value of the goodwill would correspond to the book value.

Pension benefits

A large part of the Group's pension obligations with respect to white collar staff are benefit based and insured on a collective basis with Alecta. Since it is not possible at present to obtain information from Alecta regarding the Group's share of the obligations and managed assets, the pension plan taken out with Alecta is reported as a contributions based plan. The funding level reported by Alecta at the end of the year does not indicate the existence of a deficit; however, it is not possible to obtain any detailed information from Alecta regarding the amount of the pension liabilities.

Accounts receivable

Provision for bad debts is based on assessments of the customers' payment ability and, in the financial turbulence of last year's it is extremely difficult to estimate. The item has been the subject of special assessment and, compared with the preceding year, the provision for bad debts was decreased by SEK 79 million to SEK 95 (174) million, thereby representing 1.8 (3.8) percent of outstanding accounts receivable.

Other provisions

Following an agreement during the year, it is believed that further claims from the purchaser of the tubular business regarding warranty undertakings relating to the period prior to the sale will be much lower. The assessment is based on facts known at the end of the accounting year and provision therefor has been made. See other provisions, Note 15.

Sales

Sales less deduction for value added tax, discounts, returns, and freight.

EBITDA margin

Result before depreciation and amortization as a percentage of total sales.

Operating margin

Operating result as a percentage of total sales.

Equity

Total equity according to the consolidated balance sheet.

Capital employed

Total assets less non-interest-bearing current and long-term liabilities.

Cash and cash equivalents

Cash and bank balances, as well as short-term investments with a term to maturity of less than three months on the date of acquisition.

Net debt

Interest-bearing liabilities less interest-bearing assets.

Return on equity after tax

Profit for the year after tax as a percentage of average equity per month during the year.

Return on capital employed before tax

Operating profit before participations in affiliated companies increased by financial revenue as a percentage of average capital employed per month during the year.

Equity ratio Equity as a percentage of total assets.

Net debt/equity ratio Net debt as a percentage of equity.

Operating cash flow

Funds generated from operations including change in working capital as well as cash flow for regular maintenance investments, but before financial items and paid tax.

Cash flow from current operations

Operational cash flow less financial items and paid tax.

Earnings per share

Profit for the year attributable to the parent company's shareholders divided by the average number of shares.

P/E ratio

Share price at year end divided by earnings per share.

Equity per share

Equity, excluding minority interests, divided by number of shares at year end.

Yield

Dividend as a percentage of the share price at year end.

30 Considerations relating to proposed allocation of profit

At the 2011 Annual General Meeting, the shareholders shall, among other things, vote on the dividend proposed by the Board of Directors.

At the end of the year, the net debt was SEK 17,587 (15,314) million, entailing a net debt/equity ratio of 58 (49) percent. The Group's long-term target over a business cycle is 30 percent. The average term to maturity on the loan portfolio at the end of the year was 3.3 years, and no major loans will mature during the coming year. The Group's retained earnings amounted to SEK 19,137 (18,962) million and the parent company's unrestricted funds to SEK 27,235 (25,528) million. Equity included unrealized profits resulting from financial instruments being reported at market value in the amount of SEK 1 (-) million. Since the end of the year, nothing material has occurred which has had a negative impact on the Group's financial position.

According to SSAB's financial targets, dividends over a business cycle shall comprise approximately 50 percent of profit after tax. In recent years, SSAB has been slightly below this

target also when the redemption program carried out by the Company is taken into account. In proposing the dividend, the Board of Directors has weighed the positive result generated in 2010, amounting to SEK 600 million, against the financial target for dividend. Against this background, the Board has decided to propose to the Annual General Meeting that the dividend to be increased by SEK 1 per share and thus that a dividend be paid of SEK 2.00 (1.00) per share, equal to SEK 648 (324) million. The dividend will thereupon, measured at the turn of the year, increase the net debt/equity ratio of the Group to 62 percent.

The Board believes that the proposed distribution of profit to the shareholder is defensible with respect to both the Company and the Group, taking into consideration the demands placed by the nature, scope and risks associated with the operations regarding the size of equity and also taking into account the need to consolidate the balance sheet, financing, liquidity and financial position in general.

Proposed allocation of profit

The amount at the disposal of the Annual General Meeting of SSAB AB, reg.no. 556016-3429 is as follows

Retained earnings	25,590
Profit for the year	1,645
SEK millions	27,235

Of this, a share premium reserve comprises SEK 9,391 million and a fair value reserve comprises SEK 2,015 million.

The Board of Directors and President recommend that the profit be allocated as follows:

Dividend to the shareholders
SEK 2.00 per share	648
Carried forward to next year	26,587
SEK millions	27,235

Sverker Martin-Löf Carl Bennet Sture Bergvall

Chairman Director Director

Matti Sundberg John Tulloch Lars Westerberg

According to the consolidated balance sheet, the Group's retained earnings amounted to SEK 19,137 (18,962) million.

The Board of Directors and the President hereby affirm that the consolidated financial statements have been prepared in accordance with international accounting standards, IFRS, as adopted by the EU and provide a true and fair view of the Group's financial position and earnings. The Annual Report has been prepared in accordance with generally accepted accounting principles and provides a fair and true view of the parent company's financial position and earnings. The report of the directors for the Group and the parent company provides a true and fair overview of the development of the operations, financial position and earnings of the Group and parent company and describes material risks and uncertainty factors facing the parent company and the companies included in the Group.

Stockholm, February 10, 2011

Anders G Carlberg Olof Faxander Uno Granbom Director Director Director

Marianne Nivert Anders Nyrén Per Scheikl Director Director Director

Director Director Director

Martin Lindqvist

President and CEO

Our auditor's report was submitted on February 10, 2011 PricewaterhouseCoopers AB

Claes Dahlén Authorized public accountant

Auditor's report

To the annual meeting of the shareholders of SSAB AB Corporate identity number 556016-3429

We have audited the annual accounts, the consolidated accounts, the accounting records and the administration of the board of directors and the managing director of SSAB AB for the year 2010. The annual accounts and the consolidated accounts of the company are included in the printed version of this document on pages 13-110. The board of directors and the managing director are responsible for these accounts and the administration of the company as well as for the application of the Annual Accounts Act when preparing the annual accounts and the application of international financial reporting standards IFRSs as adopted by the EU and the Annual Accounts Act when preparing the consolidated accounts. Our responsibility is to express an opinion on the annual accounts, the consolidated accounts and the administration based on our audit.

We conducted our audit in accordance with generally accepted auditing standards in Sweden. Those standards require that we plan and perform the audit to obtain reasonable assurance that the annual accounts and the consolidated accounts are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the accounts. An audit also includes assessing the accounting principles used and their application by the board of directors and the managing director and significant estimates made by the board of directors and the managing director when preparing the annual accounts and consolidated accounts as well as evaluating the overall presentation of information in the annual accounts and the consolidated accounts. As a basis for our opinion concerning discharge from liability, we examined significant decisions, actions taken and circumstances of the company in order to be able to determine the liability, if any,

to the company of any board member or the managing director. We also examined whether any board member or the managing director has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. We believe that our audit provides a reasonable basis for our opinion set out below.

The annual accounts have been prepared in accordance with the Annual Accounts Act and give a true and fair view of the company's financial position and results of operations in accordance with generally accepted accounting principles in Sweden. The consolidated accounts have been prepared in accordance with international financial reporting standards IFRSs as adopted by the EU and the Annual Accounts Act and give a true and fair view of the group's financial position and results of operations. A corporate governance statement has been prepared. The statutory administration report and the corporate governance statement are consistent with the other parts of the annual accounts and the consolidated accounts.

We recommend to the annual meeting of shareholders that the income statement and balance sheet of the parent company and the group be adopted, that the profit of the parent company be dealt with in accordance with the proposal in the statutory administration report and that the members of the board of directors and the managing director be discharged from liability for the financial year.

Stockholm, February 10, 2011 PricewaterhouseCoopers AB

Claes Dahlén Authorized public accountant

Directors appointed by the Annual General Meeting

Sverker Martin-Löf (1943) Chairman of the Board. Elected 2003, chairman since 2003. Shareholding 21,563 shares. Licentiate of Technology, dr h.c. Board Chairman: Industrivärden, SCA and Skanska. Board Deputy Chairman: Ericsson and Industrivärden. Director: Handelsbanken. Formerly President and CEO of SCA.

Carl Bennet (1951) Elected 2004. Shareholding 53,375 shares. MSc. in Economics, Tech dr h.c. Board Chairman: Elanders, Getinge, Lifco and University of Gothenburg. Director: Holmen and L E Lundbergföretagen. Formerly President and CEO of Getinge.

Anders Nyrén (1954) Elected 2003. Shareholding 2,812 shares. MSc. in Economics, MBA. President and CEO of Industrivärden. Chairman: Sandvik. Deputy Board Chairman: Handelsbanken. Director: Ericsson, Industrivärden, SCA, Volvo, Ernströmgruppen and Stockholm School of Economics. Formerly Executive Vice President of Skanska.

Lars Westerberg (1948) Elected 2006. Shareholding 10,000 shares. Msc., MBA. Board Chairman: Autoliv, Husqvarna and Vattenfall. Director: Volvo and Sandvik. Formerly President and CEO of Autoliv and Gränges.

Anders G Carlberg (1943) Elected 1986.

Shareholding 6,000 shares. MSc. in Economics. Board Chairman: Höganäs. Director: Axel Johnson, Mekonomen, Beijer Alma, Sapa, Sweco and SäkI. Formerly President and CEO of Nobel Industrier, J.S. Saba and Axel Johnson International, as well as Executive Vice President of SSAB.

Matti Sundberg (1942) Elected 2004. Shareholding 10,000 shares. Mining Counsellor, MSc. in Business and Economics; Econ. dr h.c. Board Chairman: Chempolis and Finnish Ski Association. Director: Boliden, Skanska and FIS. Formerly President and CEO of Valmet/ Metso and Ovako Steel.

Marianne Nivert (1940) Elected 2002. Shareholding 10,000 shares. BA. Director: Beijer Alma and Wallenstam. Formerly President and CEO of Telia.

John Tulloch (1947) Elected 2009.

Shareholding 15,000 shares. Bachelor of Agricultural Science, Master of Science. Formerly Executive Vice President, Steel & Chief Commercial Officer of IPSCO and Executive Vice President of SSAB & President Division IPSCO.

Olof Faxander (1970) Elected 2006. Shareholding 10,000 shares. President and CEO until December 31, 2010. MSc. and BSc. Employed at SSAB since 2006. Chairman of the Council of Jernkontoret (Swedish Steel Producers' Association). Director: Industrivärden. Formerly Executive Vice President of Outokumpu.

Directors appointed by the employees

Sture Bergvall (1956) Electrician, SSAB EMEA. Employee representative since 2005.

Uno Granbom (1952) Technician, SSAB EMEA. Employee representative since 2008.

Per Scheikl (1968) Mechanic, SSAB EMEA. Employee representative since 2009.

Bo Jerräng (1947) Alternate member Personnel, SSAB EMEA. Employee representative since 2004.

Bert Johansson (1952) Alternate member Electrician, SSAB EMEA. Employee representative since 1998.

Ola Parten (1953) Alternate member Engineer, SSAB EMEA. Employee representative since 2005.

Group Executive Committee

Olof Faxander (1970), President and CEO1)

Member of the Group Executive Committee since 2006. Shareholding 10,000 shares. Education: Master of Science in Material Science from the Royal Institute of Technology, Stockholm; Bachelor of Social Science (Business Administration), Stockholm University. Background: Employed at SSAB since 2006. Previously, Executive Vice President, Outokumpu.

Martin Lindqvist (1962), Executive Vice President, Head of Business Area SSAB EMEA1)

Member of the Group Executive Committee since 2001. Shareholding 17,109 shares.

Education: Bachelor of Science in Economics, Uppsala University. Background: Employed at SSAB since 1998. Previously, Head of SSAB Strip Products; CFO SSAB; CFO SSAB Tunnplåt; Chief Controller, NCC.

Karl-Gustav Ramström (1954), Executive Vice President, Head of Group Marketing & Market Development

Member of the Group Executive Committee since 2007.

Shareholding 1,000 shares.

Education: Master of Engineering, Uppsala University; Master of Business Administration in International Marketing, Uppsala University. Background: Employed at SSAB since 2007. Previously, Head of SSAB Plate; Head of division within Process Automation, ABB Sweden.

David Britten (1960), Executive Vice President, Head of Business Area SSAB Americas

Member of the Group Executive Committee since 2008. Shareholding 5,000 shares. Education: Master of Science Degree from Queen's University, Kingston in Mechanical Engineering. Background: Employed at IPSCO Inc since 1985. Employed at SSAB since 2007. Previously, Senior Vice President of Steel within the IPSCO Division.

Jonas Bergstrand (1965), Executive Vice President, General Counsel

Member of the Group Executive Committee since 2006. Shareholding 5,242 shares. Education: Master of Law, Uppsala University. Background: Employed at SSAB since 2006. Previously, Corporate Counsel; ABB; OM Gruppen; Ericsson Radio Systems.

Martin Pei (1963), Executive Vice President, Head of Business Area SSAB APAC

Member of the Group Executive Committee since 2007. Shareholding 1,000 shares. Education: Ph. D. from the Royal Institute of Technology,

Stockholm.

Background: Employed at SSAB since 2001. Previously, Executive Vice President, Technical Development; Manager R&D Department; General Manager, Slab Production within SSAB Plate.

1) As of January 1, 2011, Martin Lindqvist is President and CEO in SSAB.

Helena Stålnert (1951), Executive Vice President, Head of Group Communications

Member of the Group Executive Committee since 2007. Shareholding 500 shares. Education: Master program in Journalism, Stockholm Background: Employed at SSAB since 2007. Previously, Senior Vice President, Communications, Saab; Editor-in-Chief Aktuellt Swedish Television.

Anna Vikström Persson (1970), Executive Vice President, Head of Group Human Resources

Member of the Group Executive Committee since 2006. Shareholding 3,500 shares. Education: Master of Law, Lund University. Background: Employed at SSAB since 2006. Previously, Head of Human Resources at Ericsson's Swedish operations.

Marco Wirén (1966), Executive Vice President, Chief Financial Officer

Member of the Group Executive Committee since 2008. Shareholding 8,700 shares. Education: Master in Economics, Uppsala University. Background: Employed at SSAB since 2007. Previously, Chief Controller, SSAB; CFO, Eltel Networks; Vice President Strategic Planning and Group Controller, NCC.

Shareholdings include shareholdings of closely-related persons.

1. Martin Lindqvist 2. Anna Vikström Persson 3. Martin Pei 4. David Britten 5. Helena Stålnert 6. Marco Wirén 7. Olof Faxander 8. Jonas Bergstrand 9. Karl-Gustav Ramström

SSAB on the Stock Exchange

SSAB's shares are listed on the Nasdaq OMX Stockholm, Large cap list. OMX Nordic Exchange issues call and put options on the shares.

The final transaction prices in 2010 were SEK 113 for SSAB's class A share and SEK 99.15 for SSAB's class B share, corresponding to a total market capitalization of SEK 35.4 billion. During the year, the price of SSAB's class A share fell by 7 percent and the class B share by 11 percent. During the same period, Nasdaq OMX Stockholm increased by 23 percent. The highest transaction price for the class A share during the year was listed on April 7 and was SEK 136.10 and on January 14 for the class B share at SEK 122.50. The lowest transaction price, SEK 90.90 and SEK 79.10 respectively, were listed on November 23. During the year, SSAB's shares were traded for almost SEK 87 billion. Trading in shares took place on all exchange days and averaged approximately SEK 343 million per day. The volume of traded A shares corresponded to 269 percent of the average number of outstanding shares. The volume of traded B hares corresponded to 154 percent of the average number of outstanding shares. SSAB's shares accounted for 2.4 percent of trading on the Nasdaq OMX Stockholm Exchange. The SSAB-share is also traded on market places such as BOAT, Burgundy, Chi-X and Turqouise. Of the total volume of traded shares, 68 percent of the class A shares were traded on Nasdaq OMX Stockholm and 81 percent of the class B shares.

Dividends

Dividends shall be adjusted to the average profit level over a business cycle and, in the long term, constitute approximately 50 percent of profit after tax. It should also be possible to use dividends to adjust the capital structure. For the 2010 financial year, a dividend to the shareholders is proposed of SEK 2.00 per share. For the 2009 financial year, the dividend amounted to SEK 1.00 per share.

Share breakdown

Shareholding	Number	% of all shareholders
1–500	36,475	53.3
501–1,000	12,012	17.6
1,001–5,000	17,608	25.7
5,001–10,000	1,168	1.7
10,001–15,000	328	0.5
15,001–20,000	195	0.3
20,001–	621	0.9
Total	68,407	100.0

Share capital

At the end of the year there were 323,934,775 shares, divided into 240,765,832 class A shares and 83,168,943 class B shares, which was unchanged since December 31, 2009. Each class A share carries one vote and each class B share carries one-tenth of one vote. The quotient value per share is SEK 8.80. At the end of 2010, SSAB's three largest owner groups in terms of capital were Industrivärden, Swebank Robur Funds and LKAB. It should be noted that the holdings of foreign owners in SSAB are nomineeregistered. At the end of 2010, SSAB had 68,407 shareholders, a decrease of approximately 1,000 during the year. The ten largest identified owners together owned 43.4 percent of the share capital and 49.3 percent of the voting capital. Foreign-registered ownership in SSAB increased slightly during the year and, at the end of December, represented approximately 23 percent of the share capital.

Investor relations

During 2010, a large number of meetings were held with representatives of financial institutions. Meetings were held in, among other places, Stockholm, London, New York, Boston, and Paris. A capital markets day was held in Stockholm in February and, in connection therewith, a tour was arranged of the plant in Oxelösund. Larger meetings for investors with a CSR focus have been arranged twice during the year. Presentations have been arranged regularly in connection with the publication of interim reports and results.

Ticker

NASDAQ OMX Stockholm AB: class A SSAB A (SSE300) NASDAQ OMX Stockholm AB: class B SSAB B (SSE301)

Owners as of December 31, 2010

	% of share capital	% of votes
Industrivärden	17.3	22.5
Swedbank Robur Funds	8.8	7.9
LKAB	3.8	5.0
AMF – Försäkring och Fonder	2.6	3.0
Alecta pensionsförsäkring	2.6	3.0
Nordea Investment Funds – Sweden	2.5	2.4
Folksam – KPA – Förenade Liv	1.7	1.9
First National Pension Fund	1.6	1.7
Skandia Liv	1.3	0.5
Handelsbanken incl. pension fund	1.2	1.4
Second National Pension Fund	1.2	1.4
Foreign-registered shareholders	22.8	24.1
Other shareholders	32.6	25.2
Total	100.0	100.0

The number of shares and the share capital have changed since 1989 as follows:

		Change in		Change in share
Year		number of of shares	Number of shares	capital SEK millions	Share capital SEK millions
1989	Conversion	1,500,000	26,500,000	150	2,650
1994	Conversion	5,500,000	32,000,000	550	3,200
1995	4:1 split	96,000,000	128,000,000	0	3,200
1998	Redemption	-15,891,199	112,108,801	-397	2,803
2001	Reduction	-11,210,880	100,897,921	-281	2,522
2005	Redemption	-9,968,861	90,929,060	-249	2,273
2006	Redemption	-4,546,453	86,382,607	-114	2,159
2006	Bonus issue	0	86,382,607	121	2,280
2006	3:1 split	172,765,214	259,147,821	0	2,280
2007	1:4 new issue	64,786,954	323,934,775	571	2,851

Data per share
	2010	2009	2008	2007	2006
Exchange price December 31, class A share, SEK	113.00	122.10	68.00	176.00	148.69
Profit, SEK1)	1.70	-3.09	21.41	15.36	14.66
Cash flow, SEK1)	-7.59	7.64	91.20	neg	14.29
Equity, SEK1)	92.26	95.21	108.64	89.19	59.18
Dividend, SEK	2.002)	1.00	4.00	5.00	4.50
Average number of shares, million	323.9	323.9	323.9	296.9	265.5
Number of shares at year-end, million	323.9	323.9	323.9	323.9	259.1
Number of shares at year-end adjusted for split, million	323.9	323.9	323.9	323.9	259.1
Market capitalization, SEK million, December 31	35,452	38,671	21,653	55,599	41,579
Valuation
Direct yield, %	1.8	0.8	5.9	2.8	3.0
P/E ratio	66.5	neg	3.2	11.5	10.1
Price/equity, %	122	128	63	197	251

1) Adjusted based on the final value of net assets in IPSCO Inc.

2) In accordance with the Board's proposal.

Annual General Meeting, Nomination Committee, Calendar

Annual General Meeting

The Annual General Meeting will be held in Borlänge at 1:00 pm on Tuesday, April 12, 2011. To be entitled to participate at the Annual General Meeting, shareholders must be included in the share register that is printed out by Euroclear Sweden AB on Wednesday, April 6, 2011 and must have registered their intention to participate at the meeting not later than 12 noon Wednesday, April 6, 2011.

Nominee-registered shares

Shareholders whose shares are registered in the name of a nominee must register their shares in their own names in order to be entitled to participate at the annual general meeting. Temporary owner-registration (voting registration) should be effected in due time prior to April 6, 2011.

Registration

Registration in respect of participation at the annual general meeting takes place via the Company's website, www.ssab.com or by telephone on +46 8 45 45 760. The name, personal identification number (company registration number), address and telephone number of the shareholder must be provided in the notice of registration. Notices must be received by SSAB not later than 12 noon on Monday, April 6, 2011, at which time the registration period will expire.

Proxies

Powers of attorney in original and, as regards legal entities, certificates of registration, should be submitted in due time prior to the Annual General Meeting to: SSAB AB, Årsstämman, Box 70, 101 21 Stockholm, Sweden.

Nomination committee

Carl-Olof By, Industrivärden, Chairman Thomas Eriksson, Swedbank Robur Funds Lars-Eric Aaro, LKAB Ossian Ekdahl, First National Pension Fund Sverker Martin-Löf, Chairman of the Board

The Nomination Committee presents, among other things, proposals to the Annual General Meeting concerning the election of the Board of Directors, fees for the Board of directors, and election of auditors.

Dividends

Friday, April 15, 2011, is proposed as the record date for the right to receive dividends. It is thereupon estimated that payment of dividends might be effected through Euroclear Sweden AB on Wednesday April 20, 2011. The Board of Directors and the President propose that the Annual General Meeting resolve upon the payment of a dividend for 2010 in the amount of SEK 2.00 per share.

Financial information

SSAB will provide the following information with respect to the 2011 financial year: Report for the first quarter, April 29, 2011. Report for the first six months, July 22, 2011. Report for the third quarter, October 28, 2011. Results for 2011, February 10, 2012. Annual report, March 2012.

Steel Talk ABC – a glossary

A After-treatment – Heat treatment, cooling, etc., in order to endow the steel with certain qualities; also galvanizing, organic coating, and cutting to size

Alloy – A substance composed of two or more metals Alloy Steel – An iron-based mixture is considered to be an alloy steel when manganese is greater than 1.65%, silicon over 0.5%, copper above 0.6%, or other minimum quantities of alloying elements such as chromium, nickel, molybdenum, or tungsten are present. An enormous variety of distinct properties can be created for the steel by substituting these elements in the recipe

Alloying material – Material that is added to the molten metal during the steelmaking process and which combines with iron or other metals and changes the metal's qualities Annealing – A thermal cycle involving heating to, and holding at a suitable temperature and then cooling at a suitable rate, for such purposes as reducing hardness, improving machinability, facilitating cold working, producing a desired microstructure, or obtaining desired mechanical

or other properties Application – Area of use; a product which uses a certain

grade of steel Applications engineer – Trained specialists in the qualities of the material and its areas of use; problem solvers

and developers B Base industry – Industry involving the extraction and processing of raw materials; fundamental for the Swedish

economy and other economies around the globe Billet – A semi-finished steel form that is used for "long" products: bars, channels or other structural shapes. A billet is different from a slab because of its outer dimensions; billets are normally 50 to 180 mm square (2 to 7"sq), while slabs are 760 to 3,200 mm (30 to 126") wide and 50 to 250 mm (2 to 10") thick. Both shapes are generally continually cast, but they may differ greatly in their chemistry Blast Furnace – A shaft furnace lined with heat-resistant (refractory) bricks, used by integrated steel mills to reduce and melt iron ore to iron. Its name comes from the "blast" of hot air and gases forced up through the iron ore, coke, and limestone that load the furnace

Blast air – Heated air which is blown into the blast furnace under high pressure

C Carbon dioxide – CO2, colorless gas, soluble in water to form carbonic acid; included in carbonated drinks and comprises 0.03% of the atmosphere and is identified as a greenhouse gas

Carbon monoxide – Colorless and odorless energy-rich gas which burns with a blue flame; noxious. Upon combustion, carbon dioxide is formed

Charging – The act of loading material into a vessel. For example, iron ore, coke, and limestone are charged into a blast furnace; a basic oxygen furnace is charged with scrap and hot metal, and an electric arc furnace is charged with steel scrap and fluxes

Coil box – Rolling machinery; box for coiled steel employed to promote temperature uniformity during the hot rolling process

Coiler – Mechanical part which captures plate, sheet or strip from the rolling mill and coils it Coke – Dry distilled coal, the basic fuel consumed in

blast furnaces in the smelting of iron ore. Approx. 450 kg (1,000 pounds)) of coke are needed to process a ton of pig iron, an amount which represents more than 50% of an integrated steel mill's total energy use

Cold rolling – Metalworking process in which the thickness of a sheet, strip or plate is reduced by rolling at ambient temperature

Continuous casting – A process by which molten metal is solidified into a semi-finished billet, bloom, or slab for subsequent rolling

Cowper stoves – Heating apparatus; ceramic towers used for pre-heating blast air

Crude steel – Steel in its solidified state directly after casting. This is then further processed by rolling or other treatments, which can change its properties Cutting station – Place for cutting the steel strand into slabs

D Decarburization – In oxygen-blown steelmaking processes, the reduction of the hot metal's carbon content during refining by the use of gaseous oxygen Desulphurization – Method for removing sulphur from

the hot metal; for example, through the addition of calcium carbide or magnesium oxide Dry distillation process – Combustion without entry of oxygen

Dual-phase steel (DP) – High-strength steel that has a one soft (ferrite) and one hard (martensite) microstructure which allows for desired combination of good formability with high strength

• E Electric arc furnace (EAF) Steel-making furnace where scrap is generally 100% of the charge. Heat is supplied from electricity that arcs from the graphite electrodes to the metal bath. Furnaces may be either an alternating current (AC) or direct current (DC). DC units consume less energy and fewer electrodes, but they are more expensive
• F Fatigue The progressive and localized structural damage that occurs when a material is subjected to cyclic loading at stresses considerably below the ultimate tensile strength

Four-high rolling mill – Mechanical equipment; comprises four cylindrical rollers with extremely high pressure which press slabs into plate by repeatedly rolling backwards and forwards

H Hardening – Process that increases the hardness of steel, i.e. the degree to which steel will resist cutting, abrasion, penetration, bending, and stretching

Hearth – Lower part of the blast furnace; area for collection of molten hot metal Hematite –Fe2O3, non-magnetic iron ore or blood ore

High-strength steel – Strong steel with high resistance to tensile stress before fatigue and breaking may occur. A very strong steel that is able to withstand high loads before failure

Hot dip galvanization – Method for adding a rust protection surface layer. For example, adding zinc and aluminum in hot molten form on the steel. The opposite to zinc-plating, an electrochemical method of applying a coat of molten zinc to the surface of steel for the purpose

of enhancing corrosion resistance Hot metal – The name for the molten iron produced in a blast furnace. It proceeds to the basic oxygen furnace in

molten form or is cast as pig iron Hot strip rolling mill –A mill for rolling heated slabs through a series of rolling stands to produce sheet steel in

coil form Hot rolling – A metalworking process in which slabs are heated to high temperatures and then deformed between

rollers to form thinner cross-sections I Injection coal – Coal powder which is injected into the

blast furnace under high pressure without being converted to coke Iron ore pellets – Iron ore particles rolled into small balls

and compacted by heating L Ladle – A "bucket" lined with refractory (heat resistant)

bricks, used to transport molten steel from process to process in a steel plant

Ladle change – Switch from an empty to a full container of steel

Ladle Metallurgy Furnace (LMF) – An intermediate steel processing unit that further refines the chemistry and temperature of molten steel while it is still in the ladle. The ladle metallurgy step comes after the steel is melted and refined in the electric arc or basic oxygen furnace, but before the steel is sent to the continuous caster

Ladle treatment method – Different methods for ladle metallurgy

LD converter – Oxygen steelmaking process employing a converter (vessel) and top blowing oxygen lance to refine the blast furnace hot metal into crude steel. Named for the Austrian towns of Linz and Donawitz, L-D. Often referred to as Basic Oxygen Furnace (BOF) in North America Low alloyed steel grades – A steel, other than a carbon steel, that requires the minimum content for each specified alloying element to be lower than the applicable limit for the definition for alloy steel

M Magnetite – Fe3O4, magnetic iron ore

Martensitic steel – Steel with a very hard form of steel crystalline structure called martensite that is formed by displacive transformation. The martensite is formed by rapid cooling (quenching) of austenite which traps carbon atoms that do not have time to diffuse out of the crystal structure

Material design – Control of the steel chemical composition and processing to achieve a microstructure that offers a combination of properties desirable for an intended product or application

Metallurgy – The science and technology of metals – a broad field that includes, but is not limited to, the study of internal structures and properties of metals, and the effects on them of various processing methods

Mold – Casting mold O Ore car – Railcar for transportation of lump ore, iron ore concentrate or pellets

Oxide scale – An oxide of iron which forms on the surface of hot rolled steel Oxygen lance – Pipe-shaped lance for treatment using

oxygen P Pair of rollers – A pair of cylindrical rollers for rolling steel

to thinner dimensions under high pressure Particulates filter – Purification plant for gas or air in which particulates are separated and condensed for

recycling Phases – Steel has different crystal structures at various

temperatures and the phase(s) present depend on heat treatment, alloy quantity, hardening, quenching, etc. Best known are the martensite (quick hardening) phase, ferrite phase (pure iron) austenite (non-magnetic) phase and bainite phase

Pickling line – A processing line which chemically removes oxide or scale from the steel surface to obtain a clean surface for subsequent processing

Plate – Flat rolled steel product which is typically classified as over 1,200 mm (48") in width and 4.5 mm (0.180")

in thickness Process gas – Gas from metallurgical processes; often

energy rich Process methods – Methods for extracting raw materials and manufacturing products in a continuous cycle without disruption

Process water – Water from cooling or treatment in the processes. Always undergoes purification and can often

be re-circulated Q Quenched steels – Hardened or toughened steel. SSAB's quenched steels are also high strength

R Recycling – Return of used products or byproducts to enter a new cycle of production and use

Reduction agents – Carbon or hydrogen used to remove oxygen from iron ore to produce iron

Rolling mill – Any of the mills in which metal undergoes a rolling process. For plate, sheet and strip, these include the slabbing mill, hot rolling mills, cold rolling mills, and temper mills.. Any operating unit that reduces gauge by application of loads through revolving cylindrical rolls; operation can be hot or cold. The elevated temperature rolling mill is the Hot Mill and is capable of reducing the gauge of a slab 92-99%

Roll pass – Number of times a billet or slab passes through a pair of rollers

Rougher – Two rough cylindrical rollers which press the steel to thinner dimensions prior to hot rolling Runner – Ceramic-lined spout for controlling molten,

hot metal S Scrap – Ferrous (iron-containing) material that generally is re-melted and re-cast into new steel. Integrated steel

mills use scrap for up to 25% of their basic oxygen furnace charge; electric-arc furnace based steel mills may use scrap for 100% of the furnace charge

SEN – Submerged entry nozzle, a ceramic pipe which protects the steel from exposure to air, in conjunction with casting

Sintering – A process that combines iron-bearing particles, once recovered from environmental control filters, into small pellets. Previously, these materials were too fine to withstand the air currents of the smelting process and were thrown away. The iron is now conserved because the chunks can be charged into the blast furnace

Skirt – Pipe around the blast furnace for the supply and allocation of hot blast air, also known as a bustle pipe Slab furnace – Furnace for heating steel slabs to rolling temperatures

Slabs – The most common type of semi-finished steel. Traditional slabs can measure 150 to 400 mm thick (6 to 15.7") and up to 3,200 mm (126") wide, while the output of the recently developed "thin-slab" casters is approximately 40 to 70 mm (1.6 to 2.7 ") thick. Subsequent to casting, slabs are sent to the hot-strip mill or plate mill to be rolled into coiled sheet and plate products

Slag – Solution of mainly liquid oxides. Flux such as limestone may be added to foster the congregation of

undesired elements into a slag. Because slag is lighter than iron, it will float on top of the pool, where it can be skimmed. Smelting reduction process – Process for smelting and removing unwanted substances from, for example, metal

raw materials

Steckel mill – A four-high reversing rolling mill, the Steckel mill allows the rolling of a large slab by providing heated coil furnaces or boxes on both sides of the mill to store the increased length produced during rolling. These coil furnaces allow for additional heat retention and thermal consistency in the rolled piece, which in turn produces improved uniformity throughout the rolled product Steel – Alloy of iron and carbon with a carbon content of

less than 1.7% Steel bath – The hot, molten steel in a container

Steel shuttle – Train system for transportation of steel slabs between Luleå, Borlänge and Oxelösund production facilities

Strand – The continuous cast slab within the continuous casting machine prior to cutting into individual slabs Strength – Properties related to the ability of steel to oppose applied forces. Forms of strength include withstanding imposed loads without a permanent change in

shape or structure and resistance to stretching Structure – The steel's molecular form following different treatment methods; crystalline structure. May also refer to the size, shape, and arrangement of phases within the steel Strip – Thin, flat steel that resembles hot-rolled sheet, but it is normally narrower (up to 300 mm, or 12" wide) and produced to more closely controlled thicknesses. Strip

also may be cut from steel sheet by a slitting machine Surface treatment – Cleaning, polishing or coating of surfaces; for example, through galvanization or organic coating

T Temper Mill – A type of cold-rolling mill, usually a fourhigh, single stand mill, used to provide a relatively light cold rolling reduction to hot rolled, cold rolled, or coated flat steel products to improve flatness, minimize surface disturbances such as coil breaks, and to alter mechanical properties

Tempering – Heating to 200-500°C degrees in order to make steel tougher and less brittle Tensile strength – Ability to withstand tensile stress. (See

Strength) Torpedo – Cylinder-shaped brick-lined railway car used

for transporting hot, molten metal Tundish – An intermediate container in the casting process to facilitate ladle change without disruption in the process

• V Vacuum Degassing An advanced steel refining facility that removes oxygen, hydrogen and nitrogen under low pressures (in a vacuum) to produce high quality steel for demanding applications. Normally performed in the ladle, the removal of dissolved gases results in cleaner, higher quality, more pure steel (see Ladle Metallurgy)
• W Wear resistance Ability to resist the erosion of material from the surface as a result of mechanical action, e.g. abrasion and friction

Addresses

Group offices:

SSAB AB

Box 70 101 21 Stockholm, Sweden Telephone: +46 8 45 45 700 Fax: +46 8 45 45 725 Visiting address: Klarabergsviadukten 70, D6 www. ssab.com

Business Areas/Subsidiaries:

SSAB EMEA

SSAB AB Box 70 101 21 Stockholm, Sweden Telephone: +46 8 45 45 700 Fax: +46 8 562 321 21

SSAB Americas

SSAB Enterprises, LLC 801 Warrenville Rd., Suite 800 Lisle, Illinois 60532, USA Telephone: +1 630 810 4800 Toll free: +1 877 594 7726 Fax: +1 630 810 4600

SSAB APAC

SSAB Swedish Steel (China) Co. Ltd. No. 123 Yuanfeng Rd. Kunshan P.R. of China 215300 Telephone: +86 512 5012 8100 Fax: +86 512 5012 8200

Tibnor AB

Box 600 169 29 Solna, Sweden Telephone: +46 10 484 00 00 Fax: +46 10 484 00 76 www.tibnor.se

Plannja AB

971 88 Luleå, Sweden Telephone: +46 10 516 10 00 Fax: +46 10 516 11 82 www.plannja.se

Mobile Montpelier Steel mills Rolling mills Steel Service Centers

Production: Hallvarsson & Halvarsson. Print: Elanders in Falköping. Paper: Arctic Matt.