SSAB — Earnings Release 2011

Oct 28, 2011

Report for the third quarter of 2011

The quarter

• Sales increased by 10% and reached SEK 10,917 (9,902) million
• Operating profit improved to SEK 502 (289) million.
• Profit after financial items improved to SEK 392 (151) million
• Earnings per share of SEK 1.19 (0.51)
• Operating cash flow SEK 301 (-686) million and cash flow from current operations SEK 16 (-900) million
• Shipments of niche products were up 19% compared with the third quarter 2010

Nine months

• Sales increased by 14% and reached SEK 33,742 (29,678) million
• Operating profit improved to SEK 2,441 (1,165) million.
• Profit after financial items improved to SEK 2,075 (858) million
• Earnings per share of SEK 5.12 (2.60)
• Operating cash flow SEK 1,128 (-89) million and cash flow from current operations SEK 372 (-355) million
• Niche products now account for 37 (31)% of steel shipments

(In the report, amounts in brackets refer to the corresponding period of last year.)

Comments by the CEO

Operating profit for the third quarter was SEK 502 million, which was more than SEK 200 million up on the corresponding period of last year. Due to the seasonal decline in demand and the extensive investment and maintenance projects carried out during the period, as anticipated, earnings for the third quarter were below those of the preceding quarter.

During the third quarter, the American operations once again delivered the strongest earnings and cash flow. Despite the volatile market trend, both earnings and cash flow generation in the North American units have been good since the end of 2008. Because of these generated cash flows, more than 60% of the purchase price has been repaid since the acquisition of IPSCO in 2007. The synergies identified in connection with the acquisition have been realized according to plan; among other things we are now producing several of our most important niche products - Hardox 450 and Hardox 500 - at our plants in the US.

APAC experienced stable growth during the quarter, while EMEA was affected by a normal seasonal decline, as well as the investment and maintenance projects. These capital expenditure projects have been carried out on schedule and are well within the anticipated cost limits. Consequently, in order to meet shipment commitments it has not been necessary to utilize the inventories we built up to address any technical problems which might arise in these extremely complicated projects. Thus, during the latter part of the quarter we have worked on reducing those inventories and have curtailed production.

All business areas have increased their niche product prices during the period, but we have witnessed a continued negative spot price trend, which will impact on prices for our standard products for the fourth quarter. Quenched steel prices are expected to be more stable, despite a weakening trend in demand.

Short-term prospects remain uncertain and the clear recovery we witnessed at the beginning of the year has leveled off, but the total inventory levels are low in the supply chain. With the flexibility we have in our production system, it is easier for us to adjust the rate of production to market demand. A planned maintenance outage in Montpelier, Iowa, will negatively impact on earnings in the fourth quarter in the amount of approximately SEK 275 – 300 million.

SSAB's strategic investment package will be fully completed during the first quarter of next year. We will then have capacity to produce 1.3 million tonnes of the highest quality quenched steels, with a world-unique product range. Consequently, we are well equipped to meet our customers' future needs.

Consolidated income statement

	2011	2010	2011	2010	Oct 10-	2010
SEK millions	Q 3	Q 3	Qs 1-3	Qs 1-3		Sept 11 Full year
Sales	10,917	9,902	33,742	29,678	43,947	39,883
Operating profit	502	289	2,441	1,165	2,360	1,084
Of which operating profit per business area
- SSAB EMEA	-3	-109	897	443	828	374
- SSAB Americas	652	444	1,674	912	1,881	1,119
- SSAB APAC	59	109	228	215	245	232
- Tibnor	12	136	239	403	257	421
- Amortization on surplus values 1)	-189	-212	-561	-668	-763	-870
- Other	-29	-79	-36	-140	-88	-192
	502	289	2,441	1,165	2,360	1,084
Financial items	-110	-138	-366	-307	-461	-402
Profit after financial items	392	151	2,075	858	1,899	682
Tax	-7	31	-415	30	-363	82
Profit after tax for continuing operations	385	182	1,660	888	1,536	764
Profit after tax for discontinued operations 2)	-	-	-	-164	-	-164
Profit for the period after tax	385	182	1,660	724	1,536	600

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

2) The discontinued operations relate to the tubular business in North America which was divested in 2008. The cost in 2010 relates to warranty undertakings to the buyer regarding tax.

Key numbers	2011	2010	2011	2010	Oct 10-	2010
	Q 3	Q 3	Qs 1-3	Qs 1-3		Sept 11 Full year
Return on capital employed before tax (%)	-	-	-	-	5	2
Return on equity after tax (%)	-	-	-	-	5	2
Earnings per share (SEK)	1.19	0.51	5.12	2.09	4.74	1.70
-of which for continuing operations (SEK)	1.19	0.51	5.12	2.60	4.74	2.21
Equity (SEK millions)	30,626	29,794	30,626	29,794	30,626	30,076
Net debt (SEK millions)	19,860	16,141	19,860	16,141	19,860	17,587
Net debt/equity ratio (%)	65	54	65	54	65	58

The market

According to the World Steel Association (WSA), global crude steel production during January-September amounted to 1,134 (1,048) million tonnes, an increase of 8% compared with the same period last year. China accounted for 46 (45)% of the global crude steel production.

Demand for steel products has been characterized by major volatility resulting from fluctuations in customer inventories. Demand for steel products in Europe weakened already at the end of the second quarter. In Europe, the third quarter is always weaker than the second quarter due to normal seasonal variations. Demand in North America remained good during the quarter, though a degree of weakening could be discerned towards the end of the period. In Asia, demand was good during the quarter.

During the quarter, a downward trend could be noted on spot prices for both iron ore and coal.

Market prices fell in most areas during the quarter. Spot prices for strip products have experienced a downward trend in Europe since March this year, and up to and including September had fallen by 16%. In North America, standard plate spot prices experienced downward pressure and fell by 7% during the quarter.

Demand for SSAB's niche products was good during large parts of the quarter, but weakened towards the end of the quarter due to increased uncertainty among customers. The Material Handling and Heavy Transport segments, as well as the Energy segment in North America, have continued to be the strongest segments.

Inventories at the European and North American steel distributors have remained at relatively low levels. However, there is a tendency among distributors to attempt to reduce inventory levels further. Our assessment is that inventory levels at customers are relatively low.

Short-term outlook

The planned 30-day maintenance outage in Montpelier, Iowa, was completed on schedule during the latter part of October. This will have a negative impact on operating profit in the amount of approximately SEK 350-400 million, of which approximately 75% will be incurred during the fourth quarter.

As a consequence of the downward price trend of recent times, prices of standard products in the fourth quarter will be lower than in the third quarter. Prices for SSAB's AHSS products are also expected to come under pressure, however to a lesser extent than in the case of standard products while prices for quenched steel are expected to be more stable. Production will be adjusted regularly to prevailing demand.

The Group

Nine months in brief

Raw materials

Spot prices for iron ore as well as coal came under pressure during the third quarter. SSAB's agreements regarding new prices for iron ore for the second and third quarters, entailed a price increase in USD of 19% compared with the prices in the first quarter. In Swedish kronor, this means a price increase of approximately 8% compared with the first quarter of the year. The price increase impacted on earnings in the third quarter. The price of iron ore is unchanged in the fourth quarter.

SSAB is purchasing approximately 60% of this year's coal needs from Australia, and the remainder from the US. Price agreements for Australian coal are currently entered into on a monthly basis and monthly agreements in the third quarter entailed a price reduction USD of 7% compared with the price during the second quarter of 2011. In Swedish kronor, this means a price reduction of approximately 4%. Coal purchases from the US are entered on a yearly basis. An agreement has been signed for SSAB's entire American coal purchases in 2011, entailing a price increase of just over 36% in USD and 10% in SEK, compared with the 2010 agreement.

The American operations regularly purchase scrap metal as a raw material for their production. Market prices for scrap metal fell somewhat at the beginning of the first quarter of the year and recovered slightly at the beginning of the second quarter. Prices have been unchanged during the third quarter.

Shipments and production

SSAB's shipments during the first three quarters increased by 3% compared with the first three quarters of last year and amounted to 3,575 (3,478) thousand tonnes. Shipments of niche products increased by 23% compared with the first three quarters of last year. In total, during the first three quarters niche products accounted for 37 (31)% of total shipments.

Crude steel production increased by 1%, while steel production increased by 3%, compared with the first three quarters of last year.

Sales

Sales during the first three quarters amounted to SEK 33,742 (29,678) million, an increase of SEK 4,064 million or 14% compared with the first three quarters of 2010. Higher volumes accounted for a positive effect of 5 percentage points, higher prices for 15 percentage points, and an improved product mix for 3 percentage points, while currency effects accounted for a negative effect of 9 percentage points.

Earnings

Operating profit during the first three quarters improved by SEK 1,276 million compared with the first three quarters of 2010, and amounted to SEK 2,441 (1,165) million. Exchange rate movements, compared with the first three quarters of 2010, positively affected operating profit by approximately SEK 200 million.

Financial items for the first three quarters amounted to SEK -366 (-307) million. Financial items have been negatively affected primarily by higher interest rates as well as a slightly higher net debt, compared with the first three quarters of last year.

Profit after financial items for the first three quarters was SEK 2,075 (858) million, an improvement of SEK 1,217 million.

Profit after tax and earnings per share

Profit after tax (attributable to the shareholders) for the first three quarters was SEK 1,660 (841) million or SEK 5.12 (2.60) per share. Tax for the first three quarters amounted to SEK -415 (+30) million.

Financing and liquidity

The operating cash flow during the first three quarters was SEK 1,128 (-89) million. Cash flow was positively affected by operating profit but negatively affected by an increase in working capital. Cash flow before dividends and financing amounted to SEK -1,116 (-1,105) million. Cash flow was affected by, among other things, strategic capital expenditures of SEK 1,386 (694) million, as well as business acquisitions of SEK 102 (-) million. The net debt increased by SEK 2,273 million during the first three quarters and, as per September 30, amounted to SEK 19,860 (16,141) million. At 65%, the net debt/equity ratio was unchanged compared with the last quarter. At the beginning of the year it was 58%.

Operating cash flow per business area

	2011	2010	2011	2010	Oct 10-	2010
SEK millions	Q 3	Q 3	Qs 1-3	Qs 1-3		Sept 11 Full year
SSAB EMEA	-375	-1,372	570	-1,044	-122	-1,736
SSAB Americas	677	567	719	1,025	1,115	1,421
SSAB APAC	26	197	-127	118	-83	162
Tibnor	-32	-94	35	-130	207	42
Other	5	16	-69	-58	-112	-101
Operating cash flow	301	-686	1,128	-89	1,005	-212
Financial items	-57	-96	-301	-288	-405	-392
Taxes	-228	-118	-455	22	-604	-127
Cash flow from current operations	16	-900	372	-355	-4	-731
Strategic capital expenditures	-571	-304	-1,386	-694	-1,862	-1,170
Acquisition of businesses and operations	-81	-	-102	-	-102	-
Divestment of businesses and operations 1)	-	29	-	-56	-503	-559
Cash flow before dividends and financing	-636	-1,175	-1,116	-1,105	-2,471	-2,460
Dividend to the parent company's shareholders	-	-	-648	-324	-648	-324
Dividend to holdings without controlling influence	-	-	-45	-15	-45	-15
Acquisitions, holdings without controlling influence 2)	-	-	-393	-	-393	-
Net cash flow	-636	-1,175	-2,202	-1,444	-3,557	-2,799
Net debt at beginning of period	-18,524	-16,321	-17,587	-15,314	-16,141	-15,314
Net cash flow	-636	-1,175	-2,202	-1,444	-3,557	-2,799
Revaluation of liabilities against equity 3)	-833	1,577	-81	743	-225	599
Currency effects 4)	133	-222	10	-126	63	-73
Net debt at end of period	-19,860	-16,141	-19,860	-16,141	-19,860	-17,587

1) For 2010 includes payment of SEK 591 million to the purchaser of the tubular business under warranty undertakings regarding tax.

2) The minority stake in Tibnor was acquired in May 2011.

3) Revaluation for hedging of currency risk in foreign operations.

4) Primarily cash flow effects on derivative instruments and revaluations of other financial liabilities in foreign currency.

At September 30, the term to maturity on the loan portfolio averaged 2.7 (3.5) years, with an average fixed interest period of 0.9 (0.9) years. Of the loan portfolio of SEK 21,283 (18,034) million, short-term commercial paper accounted for SEK 3,071 (1,872) million and long-term financing with an average term to maturity of 3.2 (3.8) years accounted for SEK 17,013 (14,934) million..

The Group's liquidity preparedness

	2011	2010
SEK millions	Sept 30	Sept 30
Cash and cash equivalents	1,039	790
Unutilized credit facilities	11,354	12,058
Liquidity preparedness	12,393	12,848
-as a percentage of annual sales (rolling 12 months)	28%	34%
Less commercial paper	-3,071	-1,872
Liquidity preparedness excluding commercial paper	9,322	10,976
- as percentage of annual sales (rolling 12 months)	21%	29%

Return on capital employed/equity

The return on capital employed before tax and return on equity after tax for the most recent 12-month period were 5% and 5% respectively, while for the full year of 2010 they were 2% and 2% respectively.

Equity

Following the addition of profit for the first three quarters attributable to the Company's shareholders of SEK 1,660 million and other comprehensive income of SEK -24 million (primarily comprising translation differences), and after deductions for dividends amounting to SEK 648 million and following acquisition of the minority stake in Tibnor, the shareholders' equity in the Company amounted to SEK 30,626 (29,605) million, corresponding to SEK 94.54 (91.39) per share.

Capital expenditures

During the first three quarters, decisions were taken regarding new capital expenditures totaling SEK 814 (1,448) million, of which SEK 117 (638) million involved strategic capital expenditure projects. Capital expenditure payments, including business acquisitions, during the first three quarters amounted to SEK 2,422 (1,359) million, of which SEK 1,386 (694) million involved strategic capital expenditure projects and SEK 102 (-) million involved business acquisitions.

Acquisition of minority stake in Tibnor

Since May, SSAB is the sole owner of Tibnor AB. This took place through SSAB's acquisition of Outokumpus' minority stake of 15% of the shares. The purchase price was SEK 393 million.

Development during the third quarter

Shipments and production

SSAB's shipments in the third quarter experienced a seasonal decline of 14% compared with the second quarter of 2011, but were up 5% compared with the third quarter of 2010. Shipments of niche products declined seasonally by 12% compared with the second quarter of 2011, but increased by 19% compared with the third quarter of last year. All in all, during the quarter niche products accounted for 37 (33)% of total shipments.

Due to the summer outage and curtailed production, crude steel production during the third quarter fell by 23% compared with the second quarter of 2011, and by 8% compared with the third quarter of last year. Due to the uncertain market conditions, one of the two blast furnaces in Oxelösund has not resumed production following the summer outage. Steel production declined by 20% compared with the second quarter of 2011 but increased by 2% compared with the third quarter of 2010.

Sales

Sales during the quarter reached SEK 10,917 (9,902) million, an increase of SEK 1,015 million or 10% compared with the third quarter of 2010. Higher prices accounted for a positive effect of 13 percentage points and an improved product mix, including higher volumes, for 5 percentage points, while currency effects accounted for a negative effect of 8 percentage points.

Earnings

Operating profit during the third quarter improved by SEK 213 million compared with the third quarter of 2010 and amounted to SEK 502 (289) million. Exchange rate movements, compared with the third quarter of 2010, had a negative impact on sales of approximately SEK 700 million, while exchange rate movements on costs and revaluation effects had a positive impact of approximately SEK 1,100 million. The positive currency effect on costs is attributable primarily to this year's lower exchange rates when hedging purchases of raw materials, compared with last year. The profit analysis is shown in the table below.

Change in operating profit between the third quarter of 2011 and 2010 (SEK millions)

Steel operations
-Higher prices	1,300
-Higher volumes	300
-Higher variable production costs	-1,300
-Currency effect on operating profit	400
Tibnor
-Higher volumes, change mix and margins	-95
Higher fixed costs	-183
Lower sales of byproducts	-94
Other	-115
Change in operating profit	213

Financial items for the quarter amounted to SEK -110 (-138) million.

Profit after financial items for the quarter amounted to SEK 392 (151) million.

Profit after tax and earnings per share

Profit after tax (attributable to the shareholders) for the quarter amounted to SEK 385 (165) million or SEK 1.19 (0.51) per share. Tax for the quarter was SEK -7 (+31) million.

Financing and liquidity

The operating cash flow for the quarter was SEK 301 (-686) million. The cash flow was positively affected by operating profit but negatively affected by, primarily, increased inventories. The increased inventories were due to the curtailed production, which resulted in increased stocks of raw materials, as well as build-up of inventories to ensure that shipment commitments could be met while extensive installation and maintenance projects were carried out during the year. Net cash flow amounted to SEK -636 (-1,175) million and was affected, among other things, by payments of strategic capital expenditures of SEK 571 (304) million and business acquisitions of SEK 81 (-) million. Besides the net cash flow, net debt was also affected by currency revaluations of SEK -700 (+1,355) million and amounted to SEK 19,860 (16,141) million by the end of the quarter.

		2011	2010	2011	2010	Oct 10-	2010
SEK millions		Q 3	Q 3	Qs 1-3	Qs 1-3		Sept 11 Full year
Sales		5,491	5,194	17,948	15,708	23,668	21,428
Operating profit before depreciation		288	181	1,744	1,282	1,957	1,495
Operating profit		-3	-109	897	443	828	374
Operating margin (%)		0%	-2%	5%	3%	3%	2%
Return on capital employed (%)		-	-	-	-	5%	3%
Shipments ('000 tonnes)	-Quenched steels	78	58	257	192	334	269
	-AHSS	109	103	407	344	527	464
	-Standard steel	231	240	881	1,012	1,170	1,301
Production ('000 tonnes) -Crude steel		612	739	2,512	2,554	3,376	3,418
	-Steel	506	505	2,026	2,007	2,739	2,720
Operating cash flow		-375	-1,372	570	-1,044	-122	-1,736
Maintenance capital expenditures		-418	-181	-810	-494	-948	-632
Strategic capital expenditures 1)		-230	-200	-608	-459	-843	-694

SSAB EMEA

1) Including business acquisitions during the second quarter of a Polish steel distributor as well as a 30% stake in a Dutch Hardox Wearpart company for a total of SEK 52 million.

During the quarter, demand remained stable from the mining industry within the Material Handling segment, and parts of the Construction Machinery segment also demonstrated continued good demand. However, some other segments showed weaker demand. Steel shipments fell seasonally by 25% compared with the second quarter of 2011 but increased by 4% compared with the third quarter of last year and amounted to 418 (401) thousand tonnes. Shipments of niche products increased by 16% compared with the third quarter of 2010 and reached 187 (161) thousand tonnes. Shipments of niche products thereby accounted for 45 (40)% of total shipments.

Compared with the second quarter of 2011, prices for advanced high-strength steels (AHSS) increased by 2% in local currency and, following mix and currency effects, the price changes totaled 4%. Quenched steel prices in local currency increased by 2% and, following mix and currency effects, prices increased in total by 4%. Prices for standard steel fell by 4% compared with the second quarter and, following an improved product mix (1%) and currency effect (1%), price changes totaled -2%. See the table below.

Crude steel production declined by 17% compared with the third quarter of 2010, partly due to a longer than normal summer outage and partly due to curtailed production during the quarter. Steel production was at the same level as during the same period last year.

Sales increased by 6% compared with the third quarter of 2010 and reached SEK 5,491 (5,194) million. Higher prices accounted for a positive effect of 5 percentage points, an improved product mix including higher volumes accounted for 4 percentage points, while currency effects accounted for a negative effect of 3 percentage points.

Operating profit for the quarter amounted to SEK -3 (-109) million, an improvement of SEK 106 million compared with the third quarter of last year. Exchange rate movements compared with the third quarter of 2010 had a positive effect on profit of approximately of SEK 500 million. The profit analysis is shown in the table below.

Operating cash flow during the quarter amounted to SEK -375 (-1,372) million. Cash flow was positively affected by operating profit but negatively affected by increased inventories. The increased inventories were due to curtailed production, resulting in an increase in stocks of raw materials, and a build-up of inventories to ensure that shipment commitments could be met while extensive installation and maintenance projects were carried out during the summer.

During the quarter, decisions were taken regarding new capital expenditure projects totaling SEK 286 (618) million. Capital expenditure payments during the quarter amounted to SEK 648 (381) million, of which SEK 230 (200) million involved strategic capital expenditures. The largest ongoing project comprises an investment to produce quenched steel at the plant in Borlänge. The line is expected to be brought into full commission at the beginning of 2012.

Analysis of operating profit quarter 3/10 to 3/11	SEK millions	Price analysis quarter 2/11 to 3/11	Standard steel	Quenched Steels	AHSS
Currency effect in operating
profit	500	Price change, local currency	-4%	2%	2%
Price/mix	240	Changed product mix	1%	1%	1%
Volume	180	Currency changes	1%	1%	1%
Variable costs	-550	Net price change	-2%	4%	4%
Fixed costs	-114
Sales of by-products	-94
Other	-56
Change in operating profit	106

SSAB Americas

		2011	2010	2011	2010	Oct 10-	2010
SEK millions		Q 3	Q 3	Qs 1-3	Qs 1-3		Sept 11 Full year
Sales		4,505	3,794	12,892	10,973	16,500	14,581
Operating profit before depreciation		744	546	1,946	1,220	2,248	1,522
Operating profit 1)		652	444	1,674	912	1,881	1,119
Operating margin (%)		14%	12%	13%	8%	11%	8%
Return on capital employed (%) 2)		-	-	-	-	24%	16%
Shipments ('000 tonnes)	-Quenched steels	42	41	146	132	192	178
	-AHSS	129	93	349	258	475	384
	-Standard steel	441	449	1,368	1,368	1,794	1,794
Production ('000 tonnes)	-Crude steel	607	583	1,862	1,767	2,429	2,334
	-Steel	563	545	1,734	1,656	2,287	2,209
Operating cash flow		677	567	719	1,025	1,115	1,421
Maintenance capital expenditures		-38	-31	-104	-141	-121	-158
Strategic capital expenditures 3)		-365	-103	-791	-234	-975	-418

1) Excluding depreciation and amortization on surplus values on intangible and tangible fixed assets.

2) The return is calculated excluding surplus values. Including surplus values, the return is 4% and 1% respectively.

3) The quarter including business acquisition of the wear steel manufacturer Hard Wear Inc. for SEK 81 million.

During the third quarter, demand remained good from the mining industry within the Material Handling segment, from parts of the Construction Machinery segment as well as from the Energy segment, while Automotive demonstrated weaker demand. Steel shipments were 3% lower than in the second quarter of 2011 but 5% higher than in the third quarter of 2010, and amounted to 612 (583) thousand tonnes. Shipments of niche products were 28% higher than during the third quarter of 2010 and amounted to 171 (134) thousand tonnes and thereby accounted for 28 (23)% of total shipments during the third quarter.

AHSS prices were 5% higher than in the second quarter, but following mix effects the price changes were -2 %. For quenched steels, the price change was 3% and, following mix effects, 2%. The price increases for standard steel were 4% and, following mix effects, 3%. See the table below.

Both crude steel production and steel production were stable during the quarter and increased by 4% and 3% respectively, compared with the third quarter of 2010. The plant in Montpelier was closed for maintenance work from the end of the third quarter until the end of October.

Sales during the third quarter increased by 19% compared with the third quarter of 2010 and reached SEK 4,505 (3,794) million. Higher prices accounted for a positive effect of 27 percentage points, an improved product mix including volume increases for a positive effect of 5 percentage points, while currency effects accounted for a negative effect of 13 percentage points.

Operating profit for the quarter amounted to SEK 652 (444) million, an improvement of SEK 208 million. Exchange rate movements, compared with the third quarter of 2010, negatively affected profit by approximately SEK 60 million. The profit analysis is shown in the table below.

Operating cash flow during the third quarter was positively affected by operating profit, but negatively affected by a slight increase in working capital, and amounted to SEK 677 (567) million.

During the quarter, decisions were taken regarding new capital expenditure projects totaling SEK 22 (23) million. Capital expenditure payments during the quarter amounted to SEK 403 (134) million, of which SEK 365 (103) million involved strategic capital expenditures, including a business acquisition of SEK 81 million. The largest ongoing project comprises the construction of a second quenching line in Mobile, Alabama in order to increase quenched steel production by approx. 200 thousand tonnes. The quenching line is expected to be brought into commission during the first half of 2012.

Analysis of operating profit	SEK	Price analysis	Standard	Quenched
quarter 3/10 to 3/11	millions	quarter 2/11 to 3/11	steel	Steels	AHSS
Currency effect in operating profit	-60	Price change, local currency	4%	3%	5%
Price/mix	1,020	Changed product mix	-1%	-1%	-7%
Volume	80	Net price change in USD	3%	2%	-2%
Variable costs	-680
Fixed costs	-64
Other	-88
Change in operating profit	208

		2011	2010	2011	2010	Oct 10-	2010
SEK millions		Q 3	Q 3	Qs 1-3	Qs 1-3		Sept 11 Full year
Sales		625	531	2,103	1,808	2,621	2,326
	Operating profit before depreciation	60	110	232	219	251	238
Operating profit		59	109	228	215	245	232
Operating margin (%)		9%	21%	11%	12%	9%	10%
	Return on capital employed (%)	-	-	-	-	25%	33%
Shipments ('000
tonnes)	-Quenched steels	29	21	100	77	123	100
	-AHSS	16	23	62	68	83	89
	-Standard steel	1	0	5	27	5	27
Operating cash flow		26	197	-127	118	-83	162
	Maintenance capital expenditures	0	0	-2	-2	-2	-2
	Strategic capital expenditures	-56	-1	-120	-1	-177	-58

SSAB APAC

During the third quarter, demand (primarily for quenched steels) remained strong in China and Australia, not least within the Materials Handling segment and from manufacturers of larger equipment within Construction Machinery. However, a weakening in demand could be discerned as regards Lifting within the Construction Machinery segment, not least in China where a credit squeeze is hurting the building industry. Shipments of niche products fell by 26% compared with the second quarter of 2011, but increased by 2% compared with the third quarter of 2010. Shipments of niche products amounted to 45 (44) thousand tonnes and accounted for 98 (100)% of total shipments.

In local currencies, prices of shipments of quenched steels increased by 4% compared with prices in the second quarter and, following a mix effect of -3% and currency effect of 4%, price changes totaled 5%. AHSS prices in local currencies increased by 8% compared with the second quarter and, following a mix and currency effect of 4%, price changes totaled 12%. See the table below.

Sales increased by 18% compared with the third quarter of 2010 and amounted to SEK 625 (531) million. Higher prices accounted for a positive effect of 11 percentage points and an improved product mix, including volume increases, for 13 percentage points, while currency effects accounted for a negative effect of 6 percentage points.

Operating profit for the quarter was SEK 50 million lower at SEK 59 (109) million. Exchange rate movements, compared with the third quarter of 2010, negatively affected profit by approximately SEK 40 million. The profit analysis is shown in the table below.

Operating cash flow during the third quarter was positively affected by operating profit but negatively affected by increased inventories. The operating cash flow was SEK 26 (197) million.

No decisions on new capital expenditures were taken during the quarter. The largest ongoing project comprises the finishing line in Kunshan, China. The line will have capacity for cutting to size, blasting and organic coating and is expected to be brought into commission at the end of this year. The investment also includes a research and development center which will focus on processing and applications development of high strength steels. Capital expenditure payments during the quarter amounted to SEK 56 (1) million, of which SEK 56 (1) million involved strategic capital expenditures.

Analysis of operating profit quarter 3/10 to 3/11	SEK million	Price analysis quarter 2/11 to 3/11	Standard steel	Quenched steels	AHSS
Currency effect in operating profit	-40	Price change, local currency	5%	4%	8%
Price/mix	60	Changed product mix	-6%	-3%	0%
Volume	40	Exchange rate movements	3%	4%	4%
Variable costs	-80	Net price change	2%	5%	12%
Fixed costs	-16
Other	-14
Change in operating profit	-50

	2011	2010	2011	2010	Oct 10-	2010
SEK millions	Q 3	Q 3	Qs 1-3	Qs 1-3		Sept 11 Full year
Sales	1,637	1,587	5,545	4,895	7,346	6,696
Operating profit before depreciation	24	149	272	441	301	470
Operating profit	12	136	239	403	257	421
Operating margin (%)	1%	9%	4%	8%	3%	6%
Return on capital employed (%)	-	-	-	-	14%	22%
Shipments ('000 tonnes)	140	134	478	455	636	613
Operating cash flow	-32	-94	35	-130	207	42
Maintenance capital expenditures	-13	-21	-18	-26	-39	-47

Tibnor

Total shipments during the third quarter fell by 14% on a seasonal basis, compared with the second quarter of 2011, but increased by 4% compared with the third quarter of 2010. Tibnor's shipments of strip products declined compared with the second quarter of the year and the corresponding quarter of last year.

Sales increased by 3% compared with the third quarter of 2010 and amounted to SEK 1,637 (1,587) million. The increase is due to higher volumes with a positive effect of 4 percentage points, while currency effects negatively affected sales by 1 percentage point.

Operating profit for the third quarter was SEK 124 million lower at SEK 12 (136) million, primarily due to lower sales prices on stock items and inventory write down. Operating profit last year included a capital gain of SEK 28 million on the sale of a real estate company. The profit analysis is shown in the table below.

Operating cash flow during the third quarter was SEK -32 (-94) million. Operating cash flow was negatively affected by an increase in working capital.

During the quarter, decisions were taken regarding new capital expenditures totaling SEK 7 (1) million. Capital expenditure payments during the quarter amounted to SEK 13 (21) million.

Analysis of operating profit quarter 3/10 to 3/11	SEK millions
Currency effect in operating profit	-1
Margin/volume/mix	-51
Write down inventory	-39
Fixed costs	11
Capital gain, preceding year	-28
Bad debt losses	-14
Other	-2
Change in operating profit	-124

Risks and uncertainties

Risks and general uncertainty have increased due to the crises regarding state finances in Europe and the US. The main risks and uncertainty factors facing the Group, as a consequence thereof, relate to their impact on demand.

For further information regarding significant risks and uncertainty factors, see the detailed description in the annual report for 2010.

Accounting principles

This quarterly report has been prepared in accordance with IAS 34.

The accounting principles are based on International Financial Reporting Standards as adopted by the EU and consequential references to Chapter 9 of the Annual Accounts Act. The accounts of the parent company have been prepared in accordance with RFR 2 and the Annual Accounts Act. No material changes in accounting principles have taken place since the annual accounts for 2010.

Review report This quarterly report has not been reviewed by the auditors.

Stockholm, October 27, 2011

Martin Lindqvist President and CEO

Consolidated income statement

	2011	2010	2011	2010	Oct 10-	2010
SEK millions	Q 3	Q 3	Qs 1-3	Qs 1-3		Sept 11 Full year
Sales	10,917	9,902	33,742	29,678	43,947	39,883
Costs of goods sold	-9,769	-8,920	-29,371	-26,434	-38,875	-35,938
Gross profit	1,148	982	4,371	3,244	5,072	3,945
Selling and administrative costs	-714	-584	-2,226	-2,018	-3,040	-2,832
Other operating income and expenses 1)	64	-121	264	-109	287	-86
Affiliated companies, profit after tax	4	12	32	48	41	57
Operating profit/loss	502	289	2,441	1,165	2,360	1,084
Financial income	12	12	24	42	12	30
Financial expenses	-122	-150	-390	-349	-473	-432
Profit/loss for the period after financial items	392	151	2,075	858	1,899	682
Tax	-7	31	-415	30	-363	82
Profit/loss for the period after tax for continuing
operations	385	182	1,660	888	1,536	764
Profit for the period after tax for discontinued
operations 2)	-	-	-	-164	-	-164
Profit/loss for the period after tax	385	182	1,660	724	1,536	600
Of which attributable to:
- the parent company's shareholders	385	165	1,660	677	1,535	552
- non-controlling interests	-	17	-	47	1	48
Key numbers	2011	2010	2011	2010	Oct 10-	2010
	Q 3	Q 3	Qs 1-3	Qs 1-3		Sept 11 Full year
Operating margin (%)	5	3	7	4	5	3
Return on capital employed before tax (%)	-	-	-	-	5	2
Return on equity after tax (%)	-	-	-	-	5	2
Earnings per share (SEK) 3)	1.19	0.51	5.12	2.09	4.74	1.70
- of which continuing operations (SEK) 3)	1.19	0.51	5.12	2.60	4.74	2.21
Equity per share (SEK)	94.54	91.39	94.54	91.39	94.54	92.26
Equity ratio including non-controlling interests (%)	48	49	48	49	48	49
Net debt/equity ratio (%)	65	54	65	54	65	58
Average number of shares during the period (millions)	323.9	323.9	323.9	323.9	323.9	323.9
Number of shares at end of period (millions)	323.9	323.9	323.9	323.9	323.9	323.9

Number of employees at end of period 9,462 9,007 9,462 9,007 9,462 8,790 1) The results for the quarter include primarily exchange rate profits/losses on operating receivables/liabilities of SEK 21 (-146) million.

2) 'Discontinued operations' means the tubular business in North America divested in 2008. The cost in 2010 relates to the warranty undertakings

to the buyer regarding tax.

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

Consolidated statement of comprehensive income

	2011	2010	2011	2010	Oct 10-	2010
SEK millions	Q 3	Q 3	Qs 1-3	Qs 1-3		Sept 11 Full year
Profit/loss for the period after tax	385	182	1,660	724	1,536	600
Other comprehensive income
Translation differences for the period	2,363	-4,606	286	-2,203	727	-1,762
Cash flow hedging	-185	78	-327	85	-231	181
Hedging of currency risks in foreign operations	-833	1,577	-81	743	-225	599
Share in other comprehensive income of affiliated compa
nies and joint ventures	-1	-8	-9	0	-9	0
Tax attributable to other comprehensive income	268	-436	107	-218	120	-205
Other comprehensive income for the period, net after
tax	1,612	-3,395	-24	-1,593	382	-1,187
Total comprehensive income for the period	1,997	-3,213	1,636	-869	1,918	-587
Of which attributable to:
- parent company's shareholders	1,997	-3,226	1,636	-912	1,916	-632
- non-controlling interests	-	13	-	43	2	45

Consolidated statement of changes in equity

		Other con	Equity attributable to the parent company's shareholders
		tribut				Non
SEK millions	Share capital	ed funds	Reserves	Retained earnings	Total	controlling interest	Total equity
Equity, December 31, 2009	2,851	9,944	-916	18,962	30,841	161	31,002
Changes Jan 1-Sept 30, 2010
Adjustment, opening balance			53	-53	0		0
Comprehensive income for the period			-1,642	730	-912	43	-869
Dividend				-324	-324	-15	-339
Equity, September 30, 2010	2,851	9,944	-2,505	19,315	29,605	189	29,794
Changes Oct 1 - Dec 31, 2010
Comprehensive income for the period			458	-178	280	2	282
Equity, December 31, 2010	2,851	9,944	-2,047	19,137	29,885	191	30,076
Changes Jan 1 - Sept 30, 2011
Comprehensive income for the period			-24	1,660	1,636		1,636
Dividend to non-controlling interests						-45	-45
Acquisition of non-controlling interests 1)			-3	-244	-247	-146	-393
Dividend				-648	-648		-648
Equity September 30, 2011	2,851	9,944	-2,074	19,905	30,626	-	30,626

There were 323,934,775 shares with a quotient value of SEK 8.80.

1) The minority stake in Tibnor was acquired in May 2011.

Consolidated balance sheet

	Sept 30,	Sept 30,	Dec 31,
SEK millions	2011	2010	2010
Assets
Goodwill	18,825	18,373	18,643
Other intangible assets	3,779	4,431	4,309
Tangible fixed assets	18,306	16,748	17,063
Participations in affiliated companies	352	388	395
Financial assets	69	116	77
Deferred tax receivables	288	232	159
Total fixed assets	41,619	40,288	40,646
Inventories	13,028	11,230	11,389
Accounts receivable	6,169	5,603	5,057
Current tax receivables	574	499	742
Other current receivables	1,701	2,213	1,905
Cash and cash equivalents	1,039	790	1,314
Total current assets	22,511	20,335	20,407
Total assets	64,130	60,623	61,053
Equity and liabilities
Equity for shareholders in the company	30,626	29,605	29,885
Non-controlling interests	-	189	191
Total equity	30,626	29,794	30,076
Deferred tax liabilities	4,680	4,965	4,952
Other non-current provisions	265	249	254
Non-current interest-bearing liabilities	17,014	14,935	16,786
Total non-current liabilities	21,959	20,149	21,992
Current interest-bearing liabilities	4,369	3,099	2,977
Current tax liabilities	315	187	200
Accounts payable	4,078	4,613	4,048
Other current liabilities	2,783	2,781	1,760
Total current liabilities	11,545	10,680	8,985
Total equity and liabilities	64,130	60,623	61,053

Cash flow

	2011	2010	2011	2010	Oct 10-	2010
SEK millions	Q 3	Q 3	Qs 1-3	Qs 1-3		Sept 11 Full year
Operating profit/loss	502	289	2,441	1,165	2,360	1,084
Adjustments for depreciation and impairment	585	618	1,718	1,859	2,310	2,451
Adjustment for other non-cash items	5	-85	58	-134	80	-112
Received and paid interest	-58	-96	-302	-288	-406	-392
Tax paid	-228	-118	-455	22	-604	-127
Change in working capital	-324	-1,286	-2,156	-2,352	-2,656	-2,852
Cash flow from operations	482	-678	1,304	272	1,084	52
Capital expenditure payments	-1,039	-537	-2,320	-1,359	-2,972	-2,011
Acquisition of businesses and operations	-81	-	-102	-	-102	-
Divested businesses and operations 1)	-	29	-	-56	-503	-559
Other investing activities	2	11	2	38	21	57
Cash flow from investing activities	-1,118	-497	-2,420	-1,377	-3,556	-2,513
Dividend	-	-	-648	-324	-648	-324
Change in loans	655	-565	1,408	-1,845	4,681	1,428
Change in financial investments	148	-	459	-	-570	-1,029
Acquisition of non-controlling interests 2)	-	-	-393	-	-393	-
Other financing activities	178	1,226	36	404	-320	48
Cash flow from financing activities	981	661	862	-1,765	2,750	123
Cash flow for the period	345	-514	-254	-2,870	278	-2,338
Cash and cash equivalents at beginning of period	705	1,345	1,314	3,652	790	3,652
Exchange rate difference in cash and cash equivalents	-11	-41	-21	8	-29	-
Cash and cash equivalents at end of period	1,039	790	1,039	790	1,039	1,314

1) In 2010, warranty undertakings regarding tax were paid to the purchaser of the tubular business.

2) The minority stake in Tibnor was acquired in May 2011.

The business areas' sales, earnings and return on capital employed

		Sales			Sales, external			Operating profit/loss		Return on capital employed (%) 3)
	2011	2010	Change		2011	2010	2011	2010	Oct 10-	2010
SEK millions	Qs 1-3	Qs 1-3	in %	in % 2)	Qs 1-3	Qs 1-3	Qs 1-3	Qs 1-3	Sept 11	Full year
SSAB EMEA	17,948	15,708	14%	19%	13,520	12,186	897	443	5	3
SSAB Americas	12,892	10,973	17%	33%	12,728	10,921	1,674	912	24	16
SSAB APAC	2,103	1,808	16%	27%	2,103	1,808	228	215	25	33
Tibnor	5,545	4,895	13%	15%	5,391	4,763	239	403	14	22
Amortization on surplus values 1)							-561	-668
Other	-4,746	-3,706					-36	-140	-	-
Total	33,742	29,678	14%	23%	33,742	29,678	2,441	1,165	5	2

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

2) Adjusted for changes in exchange rates.

3) SSAB America's return is calculated excluding surplus values. Inclusive of surplus values, the return is 4% and 1% respectively.

The Group's results per quarter

SEK millions	1/09	2/09	3/09	4/09	1/10	2/10	3/10	4/10	1/11	2/11	3/11
Sales	8,035	6,583	6,936	8,284	8,865	10,911	9,902	10,205	11,056	11,769	10,917
Operating expenses	-7,499	-6,911	-7,269	-7,252	-8,093	-9,602	-9,007	-9,703	-9,873	-9,908	-9,834
Depreciation/amortization	-652	-633	-611	-610	-611	-630	-618	-592	-572	-561	-585
Affiliated companies	-18	9	8	8	7	29	12	9	5	23	4
Financial items	-81	-144	-162	-82	-85	-84	-138	-95	-112	-144	-110
Earnings after financial
items	-215	-1,096	-1,098	348	83	624	151	-176	504	1,179	392

Sales per quarter and business area

SEK millions	1/09	2/09	3/09	4/09	1/10	2/10	3/10	4/10	1/11	2/11	3/11
SSAB EMEA	4,414	3,551	3,168	4,119	4,836	5,678	5,194	5,720	6,071	6,386	5,491
SSAB Americas	2,566	1,943	2,909	3,295	3,142	4,037	3,794	3,608	3,984	4,403	4,505
SSAB APAC	427	492	341	323	589	688	531	518	690	788	625
Tibnor	1,578	1,319	1,122	1,267	1,474	1,834	1,587	1,801	1,951	1,957	1,637
Other	-950	-722	-604	-720	-1,176	-1,326	-1,204	-1,442	-1,640	-1,765	-1,341
Sales	8,035	6,583	6,936	8,284	8,865	10,911	9,902	10,205	11,056	11,769	10,917

Operating profit/loss per quarter and business area

Operating profit/loss	-134	-952	-936	430	168	708	289	-81	616	1,323	502
Other	240	110	-33	99	-46	-15	-79	-52	-39	32	-29
value 1)	-263	-248	-222	-209	-223	-233	-212	-202	-189	-183	-189
Amortization on surplus
Tibnor	-82	-12	62	-6	79	188	136	18	128	99	12
SSAB APAC	13	62	8	-13	10	96	109	17	102	67	59
SSAB Americas	1	-107	327	374	134	334	444	207	378	644	652
SSAB EMEA	-43	-757	-1,078	185	214	338	-109	-69	236	664	-3
SEK millions	1/09	2/09	3/09	4/09	1/10	2/10	3/10	4/10	1/11	2/11	3/11

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

The Parent Company's income statement

	2011	2010	2011	2010	Oct 10-	2010
SEK millions	Q 3	Q 3	Qs 1-3	Qs 1-3		Sept 11 Full year
Gross profit	0	0	0	0	0	0
Administrative expenses	-50	-44	-148	-151	-199	-202
Other operating income 1)	21	2,025	86	1,902	109	1,925
Operating profit/loss	-29	1,981	-62	1,751	-90	1,723
Dividend from subsidiaries	3	5	258	90	266	98
Financial items	-26	-98	-102	-209	-126	-233
Profit/loss after financial items	-52	1,888	94	1,632	50	1,588
Appropriations	0	0	0	0	-42	-42
Tax	13	35	47	80	66	99
Profit/loss after tax	-39	1,923	141	1,712	74	1,645

1) Earnings for 2010 include a capital gain of SEK 2,010 million on the sale of SSAB Tunnplåt to SSAB Oxelösund, which was a first stage in the merger of the two subsidiaries which took place in January 2011.

The Parent Company's statement of comprehensive income

	2011	2010	2011	2010	Oct 10-	2010
SEK millions	Q 3	Q 3	Qs 1-3	Qs 1-3	Sept 11	Full year
Profit after tax	-39	1,923	141	1,712	74	1,645
Other comprehensive income
Hedging of currency risks in foreign operations	-833	1,577	-81	743	-225	599
Cash flow hedging	-4	-	-4	-	-4	-
Tax attributable to other comprehensive income	220	-414	22	-195	60	-157
Other comprehensive income, net after tax	-617	1,163	-63	548	-169	442
Total comprehensive income for the year	-656	3,086	78	2,260	-95	2,087

The Parent Company's balance sheet

	Sept 30,	Sept 30,	Dec 31,
SEK millions	2011	2010	2010
Assets
Fixed assets 1)	39,278	38,942	38,818
Other current assets	14,010	11,570	12,647
Cash and cash equivalents	648	334	843
Total assets	53,936	50,846	52,308
Equity and liabilities
Restricted equity	3,753	3,753	3,753
Unrestricted equity	26,665	27,463	27,234
Total equity	30,418	31,216	30,987
Untaxed reserves	694	652	694
Non-current liabilities and provisions	16,656	14,846	16,456
Current liabilities and provisions	6,168	4,132	4,171
Total equity and liabilities	53,936	50,846	52,308

1) In May 2011, the minority stake in Tibnor was acquired for SEK 393 million.

Production and shipments

Thousand tonnes	1/09	2/09	3/09	4/09	1/10	2/10	3/10	4/10	1/11	2/11	3/11
Crude steel production
- SSAB EMEA	492	418	233	744	874	941	739	864	943	957	612
- SSAB Americas	280	278	514	594	585	599	583	567	631	624	607
-Total	772	696	747	1,338	1,459	1,540	1,322	1,431	1,574	1,581	1,219
Steel production1)
- SSAB EMEA	372	441	285	652	738	764	505	713	765	755	506
- SSAB Americas	260	262	477	564	558	553	545	553	592	579	563
-Total	632	703	762	1,216	1,296	1,317	1,050	1,266	1,357	1,334	1,069
Steel shipments
- SSAB EMEA	344	341	295	495	547	600	401	486	571	556	418
- SSAB Americas	308	319	510	577	565	610	583	598	623	628	612
- SSAB APAC	26	25	25	33	70	58	44	44	57	64	46
-Total	678	685	830	1,105	1,182	1,268	1,028	1,128	1,251	1,248	1,076
of which
- AHSS, SSAB EMEA 2)	64	71	59	88	111	130	103	120	140	158	109
-Quenched steels, SSAB EMEA	63	29	29	46	59	75	58	77	93	86	78
- AHSS, SSAB Americas 2)	45	40	99	192	86	79	93	126	117	103	129
- Quenched steels, SSAB Americas	25	23	29	31	40	51	41	46	53	51	42
- AHSS, SSAB APAC 2)	11	10	11	14	19	26	23	21	24	22	16
- Quenched steels, SSAB APAC	15	15	13	19	25	31	21	23	32	39	29
-Total niche products	223	188	240	390	340	392	339	413	459	459	403

1) Including subcontract rolling.

2) AHSS= Advanced High Strength Steels.

Sensitivity analysis

The approximate full year effect (based on results during the first three quarters of 2011) 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 mil lions	Effect on earnings per share, SEK 2)
Steel prices – steel operations	10	3,750	8.50
Volumes – steel operations	10	550	1.25
Iron ore prices	10	480	1.10
Coal prices	10	300	0.70
Scrap metal prices	10	700	1.60
Interest rates	1 percentage point	180	0.40
Krona index 1)	5	400	0.90

1) Calculated based on SSAB's exposure without currency hedging. If the krona weakens, this entails a positive effect. 2) Calculated based on a tax rate of 26.3%.

Note:

This report has been published in Swedish and English. In the event of differences between the English translation and the Swedish original, the Swedish Report shall prevail.

For further information:

Helena Stålnert, Executive VP Communications Tel.+46 8 - 45 45 734 Catarina Ihre, Director, Investor Relations, Tel. +46 8 - 45 45 729

Results for 2011:

The results for 2011 will be published on February 10, 2012.

SSAB AB (publ)

Box 70, SE-101 21 Stockholm, Sweden Telephone +46 8-45 45 700. Fax +46 8-45 45 725 Visiting address: Klarabergsviadukten 70 D6, Stockholm E-mail: info@ssab.com www.ssab.com