SSAB — Earnings Release 2012

Feb 8, 2013

Results for 2012

The quarter

• Sales of SEK 8,354 (10,898) million
• Operating profit/loss of SEK -665 (50) million
• Loss after financial items of SEK -842 (-98) million
• Earnings per share of SEK -0.70 (-0.23)
• Operating cash flow of SEK 1,251 (1,671) million and cash flow from current operations of SEK 1,049 (1,828) million

The full year

• Sales of SEK 38,923 (44,640) million
• Operating profit/loss of SEK -96 (2,512) million
• Profit/loss after financial items of SEK -693 (1,998) million
• Earnings per share of SEK 0.05 (4.82)
• Operating cash flow of SEK 4,929 (2,821) million and cash flow from current operations of SEK 3,925 (2,200) million
• Niche products accounted for 38 (37)% of steel shipments
• A dividend is proposed of SEK 1.00 (2.00) per share, equal to SEK 324 (648) million
• A reduced tax rate in Sweden impacted, as a one-time item, positively on taxes with SEK 253 million

Key numbers

	2012	2011	2012	2011
SEK millions	Q4	Q4	Full year	Full year
Sales	8,354	10,898	38,923	44,640
Operating profit/loss before depreciation/amortization	-19	677	2,491	4,857
Operating profit/loss	-665	50	-96	2,512
Profit/loss after financial items	-842	-98	-693	1,998
Profit/loss after tax 1)	-227	-76	15	1,560
Earnings per share (SEK)	-0.70	-0.23	0.05	4.82
Operating cash flow	1,251	1,671	4,929	2,821
Return on equity after tax (%)	-	-	0	5
Net debt/equity ratio (%)	54	60	54	60
Equity ratio (%)	49	49	49	49

1) The fourth quarter includes a positive effect of SEK 253 million due to a reduced corporate tax rate in Sweden. (In the report, amounts in brackets refer to the corresponding period of last year).

Comments by the CEO

The steel markets continued to perform negatively following the deterioration in order inflow we witnessed at the beginning of the autumn. The weak trend pertains particularly to the European market, but North American and Asian customers also adopted a wait-and-see approach. Prices of standard products fell during the quarter. Quenched steel prices continued to exhibit greater stability.

Many of our customers had longer than normal production outages during December and the beginning of January. At the same time at the customer level, the inventory reduction process which began during the third quarter continued. This also affected our order books for both standard steels and niche steels. Shipments during the fourth quarter were 1% lower than in the third quarter and 13% lower than in the fourth quarter 2011.

Thanks to our continued work on improving inventory management and working capital, we were able to deliver a strong cash flow of SEK 1.2 billion, despite a weak earnings trend. Thus, our net debt/equity ratio was reduced even further, to 54 per cent. At the beginning of 2012, the net debt/equity ratio was 60 per cent.

There are currently signs of a revival in economic activity in North America and Asia as compared with the fourth quarter of 2012. It is our assessment that volumes will continue to increase somewhat within SSAB Americas and SSAB APAC during the first quarter of 2013, as compared with the fourth quarter. The trend in Europe still remains weak and difficult to assess.

Generally speaking, steel prices appear to have stabilized. We will also see certain easing on the cost side as the lower raw material prices will have a positive impact on earnings by approximately SEK 200 million during the first quarter.

The efficiency program within SSAB EMEA is proceeding according to plan and we will achieve the previously announced cost savings of approximately SEK 800 million on an annual basis as from 2014. The entire efficiency program is aimed to improve our competitiveness and increasing flexibility, in order to better address fluctuations in the market. In addition to the efficiency program, a program involving a cut in work hours and pay has been introduced for both blue-collar employees and whitecollar staff in SSAB Sweden. The program runs from December 2012 until the end of May 2013.

Our major investments are now complete and we can now supply a range of products with unique breadth and quality when the market turns.

Sales per business area

	2012	2011	2012	2011
SEK millions	Q4	Q4	Full year	Full year
SSAB EMEA	4,529	5,820	20,258	23,768
SSAB Americas	3,238	4,207	16,173	17,099
SSAB APAC	559	708	2,318	2,811
Tibnor	1,288	1,699	5,961	7,244
Other	-1,260	-1,536	-5,787	-6,282
Total	8,354	10,898	38,923	44,640

Operating profit/loss per business area
	2012	2011	2012	2011
SEK millions	Q4	Q4	Full year	Full year
SSAB EMEA	-545	-248	-930	649
SSAB Americas	110	414	1,568	2,109
SSAB APAC	46	96	167	324
Tibnor	-42	15	104	254
Depreciation/amortization on surplus values 1)	-221	-197	-861	-758
Other	-13	-30	-144	-66
Total	-665	50	-96	2,512

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

Operating margin per business area
	2012	2011	2012	2011
%	Q4	Q4	Full year	Full year
SSAB EMEA	-12.0	-4.3	-4.6	2.7
SSAB Americas	3.4	9.8	9.7	12.3
SSAB APAC	8.2	13.6	7.2	11.5
Tibnor	-3.3	0.9	1.7	3.5
Total	-8.0	0.5	-0.2	5.6

Percentage of external sales 2012

Percentage of EBITDA 2012

The market

Global crude steel production fell by 2% during the fourth quarter compared to the third quarter. However, compared with the same quarter of 2011, production was up 2.7% due to China's 9% increase, while EU production fell by 4.8%. According to the World Steel Association (WSA), global crude steel production for the full year increased by 1.2% compared with 2011 and amounted to 1,518 (1,500) million tonnes. China's share of global crude steel production was 47 (46)%.

Inventory reduction continued during the quarter and many customers carried out expanded production outages during December due to the uncertain market climate. This impacted on demand for SSAB's products, resulting in lower shipments than in the fourth quarter of 2011.This was especially the case for strip products and standard plate, which continued to experience price pressure during the period. Inventory levels have declined in Europe and are now considered to be at a normal level. Inventory levels at Steel Service Centers in North America decreased somewhat during the quarter. Demand and prices for quenched steels were more stable than in the case of strip products.

The Chinese distributors gradually decreased inventory levels during the fourth quarter in response to weaker demand. The stimulus packages announced by the Chinese government have had no appreciable effect on demand for steel in 2012.

The Heavy Transport, Automotive and Material Handling where the segments which best withstood the decline in demand.

Raw materials

Due to a price clause in the iron ore purchase agreement, the price in USD has been reduced with 23% from between October 1 until the expiration of the contract term on March 31. The price reduction will improve earnings, in the first quarter of 2013.

SSAB purchases approximately 60 - 70% of its annual coal needs from Australia, and the remainder from the US. Coal agreements for deliveries from the US take place on an annual basis. SSAB's American coal purchases for 2012 were contracted at prices which, in USD, were more than 30% below the 2011 prices. In Swedish kronor, this entailed price reductions of approximately 25%. The lower coal prices impacted on earnings in the third quarter of 2012.

Price agreements for Australian coal are signed on a monthly basis. From the beginning of the second half of the year, Australian coal is purchased in pace with actual consumption. Consumption of Australian coal during the fourth quarter entailed price increases in USD of 10% compared with the third quarter of this year. The higher prices will begin to impact on earnings during the second quarter of 2013.

The US operations regularly purchase scrap metal as a raw material for their production. Spot prices for scrap weakened somewhat at the beginning of the fourth quarter but bounced back during the remainder of the fourth quarter. Spot prices at the end of December were just over 4% higher than at the end of the third quarter but 16% lower than at the end of 2011/beginning of 2012.

Prospects

The demand for steel in EU during the first quarter is expected to be somewhat higher than during the last quarter of 2012 due to restocking at the customers. This is a consequence of the financial crisis in Europe. The downward price trend has stopped, although announced price increases have not been realized.

In North America, the political decisions concerning fiscal matters have a negative impact on demand for steel. Spot prices for standard plate have fallen during the first weeks of the year, while scrap metal prices have been stable. However, it is believed that a degree of inventory restocking will take place during the first part of the year. Inventory restocking is expected to have some positive impact on volumes during the first quarter, compared with the fourth quarter of 2012. In 2013, two maintenance outages will be carried out at the American plants. The first maintenance outage, which will take place during three weeks in March/April, is expected to have a negative impact on earnings of approximately SEK 150-200 million, slightly more of which will be incurred during the second quarter than in the first quarter. Planning for the second maintenance outage is underway; it is expected to be carried out towards the end of the third quarter or the beginning of the fourth quarter.

Steel customers in China are positively affected by the stimulus packages announced by the government and thus demand in the first quarter is expected to be somewhat stronger than in the preceding quarter.

The Group

Full-year summary

Shipments and production

SSAB's full year shipments declined by 10% compared with the full year of 2011 and amounted to 4,184 (4,661) thousand tonnes. Shipments of niche products were 7% lower compared with the full year of 2011. All in all, in 2012 niche products accounted for 38 (37)% of total shipments.

Crude steel production and steel production declined by 7% and 9% respectively compared with the full year of 2011.

Sales

Full year sales amounted to SEK 38,923 (44,640) million, a fall of 13%. Compared with the full year of 2011, an improved mix accounted for a positive effect of 3 percentage points and currency effects for 1 percentage point, while lower prices accounted for a negative effect of 5 percentage points and lower volumes for 12 percentage points.

Earnings

Operating profit/loss in 2012 was SEK 2,608 million lower than in 2011 and amounted to SEK -96 (2,512) million.

Financial items for the full year amounted to SEK -597 (-514) million and earnings after financial items amounted to SEK -693 (1,998) million.

Profit/loss after tax and earnings per share

Profit/loss after tax for 2012 was SEK 15 (1,560) million, or SEK 0.05 (4.82) per share. Tax for 2012 was SEK 708 (-438) million. The tax for 2012 includes a positive non-recurring effect of SEK 253 million attributable to the change in the Swedish tax rate from 26.3% to 22.0%. As a consequence of the tax rate change, upon the closing of the books for 2012 deferred tax receivables and tax liabilities in the Group's Swedish companies have been reappraised at the new tax rate.

Financing and liquidity

The operating cash flow for the full year was SEK 4,929 (2,821) million. Cash flow was positively affected by lower working capital, especially reduced inventories.

Operating cash flow
	2012	2011	2012	2011
SEK millions	Q4	Q4	Full year	Full year
Operating profit/loss before amortization/depreciation	-19	677	2,491	4,857
Change in working capital	1,353	1,329	2,974	-827
Maintenance expenditures	-220	-345	-775	-1,279
Other	137	10	239	70
Operating cash flow	1,251	1,671	4,929	2,821

Net cash flow amounted to SEK 2,622 (-817) million. Net cash flow was affected by, among other things, capital expenditure payments of SEK 1,431 (3,111) million, of which SEK 656 (1,832) million involved strategic capital expenditures and SEK 30 (492) million involved business acquisitions. During 2012, the net debt fell by SEK 2,977 million and amounted to SEK 15,498 million on December 31. The net debt/equity ratio declined by 6 percentage points compared with the end of 2011 and was 54%.

	2012	2011	2012	2011
SEK millions	Q4	Q4	Full year	Full year
SSAB EMEA	478	691	2,260	1,261
SSAB Americas	567	555	2,390	1,296
SSAB APAC	102	151	99	24
Tibnor	181	321	378	356
Other	-77	-47	-198	-116
Operating cash flow	1,251	1,671	4,929	2,821
Financial items	-219	-180	-572	-481
Taxes	17	337	-432	-140
Cash flow from current operations	1,049	1,828	3,925	2,200
Strategic capital expenditures	-99	-446	-656	-1,832
Acquisitions of businesses and operations	-	3	-30	-99
Divestments of businesses and operations	-	-	31	-
Cash flow before dividend and financing	950	1,385	3,270	269
Dividend to the Parent Company's shareholders	-	-	-648	-648
Dividend to the minority in Tibnor	-	-	0	-45
Acquisition of the minority in Tibnor	-	-	0	-393
Net cash flow	950	1,385	2,622	-817
Net debt at beginning of period	-16,391	-19,862	-18,475	-17,589
Net cash flow	950	1,385	2,622	-817
Revaluation of liabilities against equity 1)	78	-74	610	-155
Currency effects 2)	-135	76	-255	86
Net debt at end of period	-15,498	-18,475	-15,498	-18,475

Operating cash flow per business area

1) Revaluation of hedging of currency risks in foreign operations.

2) Mainly consisting of cash flow effects on derivative instruments and revaluation of other financial liabilities in foreign currency.

As of December 31, the term to maturity on the total loan portfolio averaged 4.8 (5.1) years, with an average fixed interest period of 1.2 (1.1) years. Of the loan portfolio of SEK 19,382 (20,547) million, SEK 956 (1,957) million comprised short-term financing and SEK 18,426 (18,590) million comprised long-term financing with an average term to maturity of 5.0 (5.6) years.

The Group's liquidity preparedness

	2012	2011
SEK millions	Dec 31	Dec 31
Cash and cash equivalents	3,004	1,648
Committed long-term credit facilities	8,695	11,693
Liquidity preparedness	11,699	13,341
-as a percentage of annual sales (rolling 12 months)	30%	30%
Less commercial paper	-866	-1,922
Liquidity preparedness excluding commercial paper	10,833	11,419
- as percentage of annual sales (rolling 12 months)	28%	26%

Return on capital employed/equity

Both the return on capital employed before tax and return on equity after tax for the most recent twelve-month period amounted to 0%, while for the full year of 2011 they both amounted to 5%.

Equity

Following the addition of profit for the period of SEK 15 million and other comprehensive income of SEK -1,366 million (primarily comprising currency translation differences), and after deduction of dividend amounting to SEK 648 million, the shareholders' equity in the Company amounted to SEK 28,769 (30,768) million, corresponding to SEK 88.81 (94.98) per share.

Capital expenditures

Capital expenditure payments including business acquisitions during the full year amounted to SEK 1,461 (3,603) million, of which SEK 656 (1,832) million involved strategic capital expenditures. The capital expenditure payments in 2011 also included SEK 393 million regarding acquisition of the minority stake in Tibnor. The direct quenching line in Borlänge, the quenching line in Mobile and the finishing line in Kunshan are now fully operational. Business acquisitions during the full year amounted to SEK 30 (99) million. Depreciation and amortization amounted to SEK 2,586 (2,345) million.

Development during the fourth quarter

Shipments and production

SSAB's shipments during the fourth quarter declined by 1% compared with the third quarter of 2012 and by 13% compared with the fourth quarter of 2011. Shipments amounted to 945 (1,086) thousand tonnes. Shipments of niche products fell by 5% compared with the third quarter of the year and by 11% compared with the fourth quarter of 2011. All in all, during the fourth quarter of 2012 niche products accounted for 37 (36)% of total shipments.

Crude steel production was 13% higher than in the third quarter of the year, but 5% lower compared with the fourth quarter of 2011. In response to market conditions, one of the blast furnaces in Oxelösund continued to be out of operation throughout the quarter. Steel production was unchanged compared with the third quarter of the year but 13% lower than in the fourth quarter of 2011.

Sales

Fourth quarter sales were SEK 8,354 (10,898) million. Compared with the fourth quarter of 2011, an improved mix accounted for a positive effect of 3 percentage points, while lower volumes accounted for a negative effect of 16 percentage points and lower prices and negative currency effects accounted for 8 and 2 percentage points respectively.

Earnings

At SEK -665 (50) million, operating profit/loss for the fourth quarter was SEK 715 million lower than in the fourth quarter of 2011.

Change in operating profit/loss between the fourth quarter of 2012 and 2011 (SEK millions)
Exchange rate movements compared with Q4, 2011	-300
Steel operations
-Lower prices	-800
-Lower volumes	-550
-Lower capacity utilization (under-absorption)	-60
-Lower variable production costs	1,100
-Sales of byproducts	20
Tibnor
-Lower volumes, changed mix and margins	-80
Lower fixed costs	130
Other	-175
Change in operating profit/loss	-715

Financial items for the fourth quarter amounted to SEK -177 (-148) million and profit after financial items was SEK -842 (-98) million.

Loss after tax and earnings per share

Loss after tax for the fourth quarter was SEK -227 (-76) million or SEK -0.70 (-0.23) per share. Tax for the fourth quarter was SEK 615 (22) million. The tax was positively affected in the amount of SEK 253 million due to the reduced corporate tax rate in Sweden.

Financing and liquidity

The operating cash flow for the fourth quarter was SEK 1,251 (1,671) million. Net cash flow was SEK 950 (1,385) million. The net cash flow was affected by, among other things, capital expenditure payments of SEK 319 (791) million, of which SEK 99 (446) million involved strategic capital expenditures. The net debt/equity ratio was 54 (60)%.

SSAB EMEA's efficiency program

As part of the ongoing efficiency program, at the beginning of the fourth quarter SSAB EMEA gave notice of redundancy to 450 employees in the Swedish operations. The entire efficiency program is aimed at achieving increased flexibility in the operations. The program has been accelerated and is expected to be implemented in full by the end of the first quarter of 2013. The annual cost savings are estimated at SEK 800 million.

Commencing December 2012, a program involving a cut in work hours and pay has been introduced for both blue-collar employees and white-collar staff in SSAB Sweden. This program extends until the end of May 2013. This program is expected to generate cost savings of SEK 80 million. The program is an important part in the efforts to increase flexibility.

SSAB EMEA

	2012	2011	2012	2011
SEK millions	Q4	Q4	Full year	Full year
Sales	4,529	5,820	20,258	23,768
Operating profit/loss	-545	-248	-930	649
Operating cash flow	478	691	2,260	1,261
Number of employees at end of period	6,504	6,742	6,504	6,742

Demand during the fourth quarter remained weak within most segments, with inventory reductions and a waitand-see approach from the customers. The Heavy Transport segment, however, demonstrated a degree of improvement during the fourth quarter.

Steel shipments during the fourth quarter were 1% lower than in the third quarter of 2012 and 18% lower than in the fourth quarter of 2011, and amounted to 373 (455) thousand tonnes. Shipments of niche products fell by 8% compared with the third quarter of 2012 and by 9% compared with the fourth quarter of 2011, and amounted to 172 (190) thousand tonnes. Shipments of niche products thereby accounted for 46 (42)% of total shipments.

During the fourth quarter, prices of both standard steels and niche steels in local currency were lower than in the third quarter. See the table below.

Crude steel production increased by 29% compared with the third quarter of the year but was 4% lower than in the fourth quarter of 2011. During the quarter, 107 thousand tonnes of slabs were produced for external sales. The smaller blast furnace in Oxelösund was out of operation throughout the quarter.

Steel production increased by 5% compared with the third quarter of this year but was 17% lower than in the fourth quarter of 2011.

Sales declined by 22% compared with the fourth quarter of 2011 and amounted to SEK 4,529 (5,820) million. An improved product mix accounted for a positive effect of 2 percentage points, while lower volumes accounted for a negative effect of 18 percentage points, and lower prices and currency effects accounted for a negative effect of 6 percentage points.

Operating loss for the quarter was SEK -545 (-248) million, which was SEK 297 million below the fourth quarter of 2011. The weaker result was due to lower capacity utilization, lower prices and lower volumes.

The operating cash flow for the fourth quarter was SEK 478 (691) million. Cash flow was positively affected primarily by a reduction in inventories.

Capital expenditure payments during the quarter amounted to SEK 212 (419) million, of which SEK 17 (142) million involved strategic capital expenditures.

Price analysis quarter 3/12 to 4/12	Niche steels	Standard steels
Price change, local currency	-3%	-8%
Changed product mix	0%	-6%
Exchange rate movements	1%	1%
Net price change	-2%	-13%

SSAB Americas

	2012	2011	2012	2011
SEK millions	Q4	Q4	Full year	Full year
Sales	3,238	4,207	16,173	17,099
Operating profit 1)	110	414	1,568	2,109
Operating cash flow	567	555	2,390	1,296
Number of employees at end of period	1,394	1,338	1,394	1,338

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

Demand during the fourth quarter was in line with the third quarter within most segments.

During the fourth quarter, steel shipments were 2% lower than in the third quarter of 2012 and 9% lower than in the fourth quarter of 2011. Steel shipments amounted to 529 (579) thousand tonnes. Shipments of niche products were 6% lower than in the third quarter of 2012 and 10% lower than in the fourth quarter of 2011. Shipments of niche products amounted to 135 (150) thousand tonnes and thereby accounted for 26 (26)% of total shipments.

Compared with the third quarter of 2012, prices of both standard steels and niche steels fell in local currency. See the table below.

Crude steel production was 4% lower than in the third quarter of this year and 7% lower compared with the fourth quarter of 2011. Steel production was 6% lower than in the third quarter of 2012 and 9% lower than in the fourth quarter of 2011.

Fourth quarter sales were 23% lower than in the fourth quarter of 2011 and amounted to SEK 3,238 (4,207) million. An improved product mix accounted for a positive effect of 1 percentage point, while lower prices accounted for a negative effect of 14 percentage points, and lower volumes and currency effects for a negative effect of 10 percentage points.

Operating profit for the quarter was SEK 110 (414) million, which was SEK 304 million below the fourth quarter of 2011. The weaker result was primarily attributable to lower prices and lower volumes.

The operating cash flow during the fourth quarter was SEK 567 (555) million. Cash flow was positively affected by a reduction in working capital.

Capital expenditure payments during the quarter amounted to SEK 88 (311) million, of which SEK 71 (257) million involved strategic capital expenditures. The largest project has been the construction of a second quenching line in Mobile, Alabama in order to increase quenched steel production capacity by approximately 200 thousand tonnes. The quenching line is now fully operational and in operation.

Price analysis quarter 3/12 to 4/12	Niche steels	Standard steels
Price change, local currency	-4%	-12%
Changed product mix	4%	1%
Exchange rate movements	0%	1%
Net price change in USD	0%	-10%

SSAB APAC

	2012	2011	2012	2011
SEK millions	Q4	Q4	Full year	Full year
Sales	559	708	2,318	2,811
Operating profit	46	96	167	324
Operating cash flow	102	151	99	24
Number of employees at end of period	220	171	220	171

Demand strengthened somewhat during the fourth quarter compared with the third quarter. Demand increased particularly within the mobile crane industry in the Construction Machinery segment.

Shipments of niche products increased by 11% compared with the third quarter of 2012 but were 23% lower than in the fourth quarter of 2011. Shipments of niche products amounted to 40 (52) thousand tonnes and accounted for 95 (100)% of total shipments.

Prices for niche steels in local currencies were unchanged compared with the third quarter, but the net effect was negative as a consequence of a weaker product mix and negative currency effects. See the table below.

Sales fell by 21% compared with the fourth quarter of 2011 and amounted to SEK 559 (708) million. Lower volumes and currency effects accounted for the entire change.

Operating profit for the quarter was SEK 46 (96) million, a reduction of SEK 50 million compared with the fourth quarter of 2011. The weaker result was primarily attributable to lower volumes.

The operating cash flow during the fourth quarter was SEK 102 (151) million. Cash flow was positively affected by a reduction in working capital.

Capital expenditure payments during the quarter amounted to SEK 13 (44) million, of which SEK 11 (44) million involved strategic capital expenditures. The largest project comprises the finishing line in Kunshan, China. Production began during the second quarter and, following testing during the third quarter, the finishing line is fully operational. The investment also includes a research and development center which focuses on processing and applications development of high strength steels.

Price analysis
quarter 3/12 to 4/12	Niche steels
Price change, local currency	0%
Changed product mix	-1%
Exchange rate movements	-1%
Net price change	-2%

Tibnor

	2012	2011	2012	2011
SEK millions	Q4	Q4	Full year	Full year
Sales	1,288	1,699	5,961	7,244
Operating profit	-42	15	104	254
Operating cash flow	181	321	378	356
Number of employees at end of period	797	798	797	798

Total shipments increased by 5% during the fourth quarter compared with the third quarter of 2012, but were 18% lower than in the fourth quarter of 2011. Most product groups reported reduced shipments compared with the fourth quarter of 2011.

Sales fell by 24% compared with the fourth quarter of 2011 and amounted to SEK 1,288 (1,699) million. The decrease is attributable to lower prices with a negative effect of 4 percentage points and lower volumes with a negative effect of 18 percentage points, as well as currency effects with a negative effect of 2 percentage points.

Operating profit/loss for the quarter was SEK -42 (15) million, a reduction of SEK 57 million compared with the fourth quarter of 2011. The weaker result was primarily attributable to lower prices and lower volumes.

The operating cash flow for the fourth quarter was SEK 181 (321) million. Cash flow was positively affected by a reduction in working capital.

Emission rights

SSAB EMEA's production plants in Sweden are included in the European carbon dioxide emission rights trading system. In December 2011, the Swedish Environmental Protection Agency announced the provisional allocation of emission rights for the third trading period, 2013–2020. The allocation proposal involves a lower allocation than for the current period. Final allocation will be announced later in 2013.

Dividend

The Board of Directors proposes to the Annual General Meeting a dividend of SEK 1.00 (2.00) per share, equal to SEK 324 (648) million.

Annual General Meeting

The Annual General Meeting will be held on April 12, 2013 in Stockholm. The annual report is expected to be distributed during the week of March 25th, and will be available at the Company's head office and on the website, www.ssab.com, commencing March 22, 2013.

Notice of attendance at the Annual General Meeting may be given commencing March 8, 2013 up to and including 12 noon on April 8, 2013. Notice of attendance may be given via SSAB's website or by telephone on +46 8-45 45 760.

Risks and uncertainties

For information regarding material risks and uncertainty factors, reference is made to the detailed description in the annual report. No material new or changed risks and uncertainty factors were identified during the year.

Accounting principles

This 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 report for 2011.

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

Stockholm, February 7, 2013

Martin Lindqvist President and CEO

Consolidated income statement

	2012	2011	2012	2011
SEK millions	Q4	Q4	Full year	Full year
Sales	8,354	10,898	38,923	44,640
Cost of goods sold	-8,218	-10,488	-36,129	-39,859
Gross profit	136	410	2,794	4,781
Selling and administrative costs	-836	-700	-2,976	-2,926
Other operating income and expenses 1)	34	328	54	613
Affiliated companies, profit after tax	1	12	32	44
Operating profit/loss	-665	50	-96	2,512
Financial income	6	11	61	35
Financial expenses	-183	-159	-658	-549
Profit/loss for the period after financial items	-842	-98	-693	1,998
Tax	615	22	708	-438
Profit/loss for the period after tax	-227	-76	15	1,560
Of which attributable to:
- the Parent Company's shareholders	-227	-76	15	1,560
- non-controlling interests	-	-	-	-

Key numbers	2012	2011	2012	2011
	Q4	Q4	Full year	Full year
Operating margin (%)	-8	0	0	6
Return on capital employed before tax (%)	-	-	-	5
Return on equity after tax (%)	-	-	-	5
Earnings per share (SEK) 2)	-0.70	-0.23	0.05	4.82
Equity per share (SEK)	88.81	94.98	88.81	94.98
Equity ratio (%)	49	49	49	49
Net debt/equity ratio (%)	54	60	54	60
Average number of shares during the period (millions)	323.9	323.9	323.9	323.9
Number of shares at end of period (millions)	323.9	323.9	323.9	323.9
Number of employees at end of period	8,978	9,107	8,978	9,107

1) Results for the quarter primarily include currency effects on operating receivables/liabilities in the amount of SEK -20 (7) million as well as capital gains on sales of emission rights in the amount of SEK - (270) million. For the full year, the results primarily include currency effects on operating receivables/liabilities in the amount of SEK -61 (112) million and capital gains on the sales of emission rights in the amount of SEK 1 (275) million.

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

Consolidated statement of comprehensive income

	2012	2011	2012	2011
SEK millions	Q4	Q4	Full year	Full year
Profit/loss for the period after tax	-227	-76	15	1,560
Other comprehensive income
Translation differences for the period	-224	194	-1,750	482
Cash flow hedges	-79	225	-84	-102
Hedging of currency risks in foreign operations 1)	78	-74	610	-155
Actuarial profits and losses, pensions	-10	-2	-10	-2
Share in other comprehensive income of affiliated companies
and joint ventures	2	-9	3	-18
Tax attributable to other comprehensive income	4	-38	-135	69
Other comprehensive income for the period, net after tax 1)	-229	296	-1,366	274
Total comprehensive income for the period	-456	220	-1,351	1,834
Of which attributable to:
- Parent Company's shareholders	-456	220	-1,351	1,834
- non-controlling interests	-	-	-	-

1) The hedging is structured so that the net debt/equity ratio is unchanged when the exchange rate fluctuates.

Consolidated statement of changes in equity

Equity attributable to the Parent Company's shareholders
----------------------------------------------------------

SEK millions	Share capital	Other contributed funds	Reserves	Retained earnings	Total	Non controlling interests	Total equity
Equity, December 31, 2010	2,851	9,944	-2,041	19,075	29,829	191	30,020
Changes Jan 1 –Dec 31, 2011
Comprehensive income for the period			275	1,559	1,834	-	1,834
Dividend to non-controlling interests					-	-45	-45
Acquisition of non-controlling interests 1)			-3	-244	-247	-146	-393
Dividend				-648	-648	-	-648
Equity, December 31, 2011	2,851	9,944	-1,769	19,742	30,768	-	30,768
Changes Jan 1 - Dec 31, 2012
Comprehensive income for the period			-1,359	8	-1,351	-	-1,351
Dividend				-648	-648	-	-648
Equity, December 31, 2012	2,851	9,944	-3,128	19,102	28,769	-	28,769

There are 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

	Dec 31	Dec 31
SEK millions	2012	2011
Assets
Goodwill	17,882	18,911
Other intangible assets	2,734	3,638
Tangible fixed assets	17,610	18,693
Participations in affiliated companies	327	349
Financial assets	1,035	106
Deferred tax receivables 1)	668	702
Total fixed assets	40,256	42,399
Inventories	9,435	11,687
Accounts receivable	4,383	5,734
Current tax receivables	426	381
Other current receivables	1,115	1,590
Cash and cash equivalents	3,004	1,648
Total current assets	18,363	21,040
Total assets	58,619	63,439
Equity and liabilities
Equity for shareholders in the company	28,769	30,768
Total equity	28,769	30,768
Deferred tax liabilities	3,820	4,919
Other long-term provisions	306	298
Deferred income 1)	456	543
Long-term interest-bearing liabilities	18,267	16,940
Total long-term liabilities	22,849	22,700
Short-term interest-bearing liabilities	1,115	3,607
Current tax liabilities	243	188
Accounts payable	3,470	4,296
Other current liabilities	2,173	1,880
Total current liabilities	7,001	9,971
Total equity and liabilities	58,619	63,439

1) Of the deferred tax receivable, SEK 455 (542) million constitutes a valuation of the future tax credits regarding investments in Alabama, USA. Since the credits have not yet been booked as income, a corresponding liability has been booked as a Long-term deferred income.

Cash flow

	2012	2011	2012	2011
SEK millions	Q4	Q4	Full year	Full year
Operating profit/loss	-665	50	-96	2,512
Adjustments for depreciation/amortization and write downs	646	627	2,586	2,345
Adjustment for other non-cash items	105	40	193	99
Received and paid interest	-219	-179	-572	-481
Tax paid	16	337	-433	-140
Change in working capital	1,353	1,329	2,974	-827
Cash flow from operations activities	1,236	2,204	4,652	3,508
Capital expenditure payments	-319	-791	-1,431	-3,111
Acquisitions, businesses and operations	-	3	-30	-99
Divested businesses and operations 1)	-	-	31	-
Other investing activities	33	-31	48	-29
Cash flow from investing activities	-286	-819	-1,382	-3,239
Dividend	-	-	-648	-648
Change in loans	1,110	-890	-601	518
Change in financial investments	83	52	413	511
Acquisition of non-controlling interests 2)	-	-	-	-393
Other financing activities	-1,231	44	-976	80
Cash flow from financing activities	-38	-794	-1,812	68
Cash flow for the period	912	591	1,458	337
Cash and cash equivalents at beginning of period	2,166	1,039	1,648	1,314
Translation difference in cash and cash equivalents	-74	18	-102	-3
Cash and cash equivalents at end of period	3,004	1,648	3,004	1,648
1) In 2012, Plannja's panel manufacturing unit was divested.

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)
	2012	2011	Change		2012	2011	2012	2011	2012	2011
	Full	Full			Full	Full	Full	Full	Full	Full
SEK millions	year	year	in %	in % 2)	year	year	year	year	year	year
SSAB EMEA	20,258	23,768	-15%	-13%	14,839	17,849	-930	649	-6	4
SSAB Americas	16,173	17,099	-5%	-9%	15,978	16,933	1,568	2,109	18	27
SSAB APAC	2,318	2,811	-18%	-20%	2,318	2,811	167	324	11	29
Tibnor	5,961	7,244	-18%	-17%	5,788	7,047	104	254	7	14
Amortization on							-861	-758
surplus values 1)
Other	-5,787	-6,282					-144	-66	-	-
Total	38,923	44,640	-13%	-14%	38,923	44,640	-96	2,512	0	5

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 Americas' return is calculated excluding surplus values. Inclusive of surplus values, the returns are 2% and 5% respectively.

The Group's results per quarter

SEK millions	1/10	2/10	3/10	4/10	1/11	2/11	3/11	4/11	1/12	2/12	3/12	4/12
Sales Operating	8,865	10,911	9,902	10,205	11,056	11,769	10,917	10,898	11,023	10,816	8,730	8,354
expenses	-8,089	-9,594	-8,997	-9,677	-9,868	-9,901	-9,825	-10,233	-9,922	-9,439	-8,730	-8,374
Depreciation Affiliated	-611	-630	-618	-592	-572	-561	-585	-627	-629	-643	-668	-646
companies	7	29	12	9	5	23	4	12	7	21	3	1
Financial items	-85	-84	-138	-95	-112	-144	-110	-148	-150	-146	-124	-177
Profit/loss after
financial items	87	632	161	-150	509	1,186	401	-98	329	609	-789	-842

Sales per quarter and business area

SEK millions	1/10	2/10	3/10	4/10	1/11	2/11	3/11	4/11	1/12	2/12	3/12	4/12
SSAB EMEA	4,836	5,678	5,194	5,720	6,071	6,386	5,491	5,820	5,780	5,400	4,549	4,529
SSAB Americas	3,142	4,037	3,794	3,608	3,984	4,403	4,505	4,207	4,609	4,657	3,669	3,238
SSAB APAC	589	688	531	518	690	788	625	708	585	661	513	559
Tibnor	1,474	1,834	1,587	1,801	1,951	1,957	1,637	1,699	1,771	1,636	1,266	1,288
Other	-1,176	-1,326	-1,204	-1,442	-1,640	-1,765	-1,341	-1,536	-1,722	-1,538	-1,267	-1,260
Sales	8,865	10,911	9,902	10,205	11,056	11,769	10,917	10,898	11,023	10,816	8,730	8,354

Operating profit/loss per quarter and business area

SEK millions	1/10	2/10	3/10	4/10	1/11	2/11	3/11	4/11	1/12	2/12	3/12	4/12
SSAB EMEA	214	338	-109	-70	236	664	-3	-248	-124	383	-644	-545
SSAB Americas	137	342	455	235	383	651	661	414	670	537	251	110
SSAB APAC	10	96	109	17	102	67	59	96	65	40	16	46
Tibnor Amortization on	79	188	136	18	128	99	12	15	105	67	-26	-42
surplus values 1)	-223	-233	-212	-202	-189	-183	-189	-197	-197	-225	-218	-221
Other	-46	-15	-79	-53	-39	32	-29	-30	-40	-47	-44	-13
Operating
profit/loss	171	716	300	-55	621	1,330	511	50	479	755	-665	-665

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

The Parent Company's income statement

2012	2011	2012	2011
Q4	Q4	Full year	Full year
-	-	-	-
-52	-71	-245	-219
29	288	103	374
-23	217	-142	155
7	8	1,083	266
-85	-44	-325	-146
-101	181	616	275
-105	156	-105	156
68	-87	160	-40
-138	250	671	391

The Parent Company's statement of comprehensive income
	2012	2011	2012	2011
SEK millions	Q4	Q4	Full year	Full year
Profit/loss after tax	-138	250	671	391
Other comprehensive income
Hedging of currency risks in foreign operations	78	-74	610	-155
Cash flow hedges	-12	9	-28	-13
Tax attributable to other comprehensive income	-20	22	-156	44
Other comprehensive income, net after tax	46	-61	426	-124
Total comprehensive income for the year	-92	189	1,097	267

1) In accordance with changed accounting rules for 2012, received/given group contributions are reported as appropriations. In 2011, they were reported as a financial income/expense. 2011 has been adjusted.

The Parent Company's balance sheet

	Dec 31	Dec 31
SEK millions	2012	2011
Assets
Fixed assets	39,264	39,282
Other current assets	12,809	14,463
Cash and cash equivalents	539	999
Total assets	52,612	54,744
Equity and liabilities
Restricted equity	3,753	3,753
Unrestricted equity	27,303	26,853
Total equity	31,056	30,606
Untaxed reserves	175	661
Long-term liabilities and provisions	16,455	15,138
Current liabilities and provisions	4,926	8,339
Total equity and liabilities	52,612	54,744

S S A B R E S U L T S F O R 2 0 1 2

Production and shipments

Thousand tonnes	1/10	2/10	3/10	4/10	1/11	2/11	3/11	4/11	1/12	2/12	3/12	4/12
Crude steel production
- SSAB EMEA	874	941	739	864	943	957	612	741	832	867	551	713
- SSAB Americas	585	599	583	567	631	624	607	556	624	609	540	517
-Total	1,459	1,540	1,322	1,431	1,574	1,581	1,219	1,297	1,456	1,476	1,091	1,230
Steel production 1)
- SSAB EMEA	738	764	505	713	765	755	506	591	638	664	466	491
- SSAB Americas	558	553	545	553	592	579	563	537	591	571	516	487
-Total	1,296	1,317	1,050	1,266	1,357	1,334	1,069	1,128	1,229	1,235	982	978
Steel shipments
- SSAB EMEA	547	600	401	486	571	556	418	455	511	437	378	373
- SSAB Americas	565	610	583	598	623	628	612	579	622	626	540	530
- SSAB APAC	70	58	44	44	57	64	46	52	41	46	38	42
-Total	1,182	1,268	1,028	1,128	1,251	1,248	1,076	1,086	1,174	1,109	956	945
of which niche products
- SSAB EMEA	170	205	161	197	233	244	187	190	227	215	186	172
- SSAB Americas	126	130	134	172	170	154	171	150	193	154	143	135
- SSAB APAC	44	57	44	44	56	61	45	52	39	45	36	40
-Total niche products	340	392	339	413	459	459	403	392	459	414	365	347

1) Including subcontract rolling.

Sensitivity analysis

The approximate full-year effect on earnings after financial items and earnings per share of changes in material factors is shown in the following sensitivity analysis.

	Change, %	Effect on earnings, SEK million	Effect on earnings per share, SEK 2)
Steel prices/steel operations	10	3,100	7.47
Volume/steel operations 1)	10	320	0.77
Iron ore prices	10	400	0.96
Coal prices	10	330	0.79
Scrap prices	10	620	1.49
Interest rate	1% point	100	0.24
Krona index 3)	5	310	0.75

1) Excluding the effect of lower capacity utilization (under-absorption).

2) Calculated based on 22% tax.

3) Calculated based on SSAB's exposure without currency hedging. If the krona weakens, this entails a positive effect.

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

Report for the first quarter of 2013:

The report for the first quarter of 2013 will be published on April 25, 2013.

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