SSAB — Interim / Quarterly Report 2007

Oct 29, 2007

Report for the First Three Quarters of 2007

The quarter

• Sales during the third quarter amounted to SEK 13,686 (7,020) million, of which SEK 5,838 million derive from IPSCO.
• Profit (EBITDA) amounted to SEK 1,946 (1,366) million and, excluding nonrecurring items, to SEK 2,956 (1,289) million. Operating profit amounted to SEK 1,255 (1,127) million and, excluding non-recurring items, to SEK 2,265 (1,050) million. Profit after financial items amounted to SEK 497 (1,119) million and, excluding non-recurring items, to SEK 1,768 (1,042) million. The profit for the third quarter includes non-recurring items of SEK -1,271 (77) million, which were previously reported in the prospectus for SSAB's new issue.

9 months

• Sales increased by 39% to SEK 31,565 (22,738) million, of which SEK 5,838 million (26 percentage points) of the increase was due to the acquisition of IPSCO.
• Operating profit increased by SEK 784 million to SEK 5,249 (4,465) million. Excluding non-recurring items of SEK -972 (77) million, operating profit amounted to SEK 6,221 (4,388) million.
• Profit after financial items increased by SEK 55 million to SEK 4,508 (4,453) million. Excluding non-recurring items of SEK -1,233 (77) million, profit amounted to SEK 5,741 (4,376) million. Profit after tax amounted to SEK 3,293 (3,169) million, entailing earnings per share of SEK 11.17 (10.63).
• Return on capital employed for the most recent twelve-month period was 23% and return on equity was 25%.
• Cash flow from current operations for the quarter amounted to SEK 986 (932) million and, for the first three quarters, to SEK 2,866 (3,148) million.
• On July 18, all shares in the North American steel company, IPSCO, were acquired for just over USD 7.5 billion. IPSCO is reported as a separate division in the SSAB Group.
• A new issue with pre-emption rights for existing shareholders was carried out during the quarter whereupon SEK 10 billion in equity was raised.
• The Swedish steel operations' deliveries of the core niche products, quenched and advanced high-strength steels, increased during the third quarter by 20% compared with last year, and so far this year have increased by 14%. In total, the core niche products accounted for 44% of deliveries from the Swedish steel operations.

CEO's comments

SSAB once again presents strong third quarter results. Sales amounted to SEK 13,686 (7,020) million, of which SEK 5,838 million is attributable to the acquisition of the North American steel company, IPSCO. Profit before depreciation (EBITDA) and non-recurring items amounted to SEK 2,956 (1,289) million.

The single most important event during the quarter was that SSAB completed the acquisition of IPSCO. During the quarter, a great deal of work has been expended on bringing the two companies together, and IPSCO is now organizationally fully integrated into SSAB. The acquisition of IPSCO lays the foundations for continued strong growth for SSAB's niche products.

The first stage in the merger of SSAB and IPSCO has now been successfully completed. The work on achieving synergies is underway and proceeding according to plan. SSAB's and IPSCO's management teams have developed an extremely positive cooperation which made possible a successful integration process.

In terms of earnings, IPSCO is performing as we had anticipated, apart from the fact that we have witnessed a certain weakening due to inventory liquidation by North American pipe customers during 2007.

As a consequence of the acquisition of IPSCO, the results before tax include non-recurring items of SEK -1,271 million. These items relate primarily to the allocation of the goodwill that has arisen in conjunction with the transaction.

The original part of SSAB has shown a strong earnings trend with an increased proportion of core niche products.

In August, SSAB carried out a new issue of SEK 10 billion as part of the financing of the acquisition. Interest was extremely strong among current and new shareholders, both in Sweden and internationally.

Consolidated income statement

	2007	2006	2007	2006	Oct 06-	2006
SEK millions	Q 3	Q 3	Qs 1-3	Qs 1-3	Sept-07	Full year
Sales	13,686	7,020	31,565	22,738	39,881	31,054
Operating profit	1,255	1,127	5,249	4,465	6,838	6,054
Of which operating profit per business area
- Strip products	682	551	2,584	2,090	3,350	2,856
- Plate	500	303	1,877	1,713	2,398	2,234
- IPSCO 1)	880	-	880	-	880	-
- Tibnor	159	202	717	529	964	776
- Amortization, IPSCO's surplus value, inventory 2)	-1,010	-	-1,010	-	-1,010	-
- Other	44	71	201	133	256	188
	1,255	1,127	5,249	4,465	6,838	6,054
Financial items	-758	-8	-741	-12	-731	-2
Of which
- current financial items	-497	-8	-480	-12	-470	-2
- arrangement costs, bridging loans	-261	-	-261	-	-261	-
Profit after financial items	497	1,119	4,508	4,453	6,107	6,052
Tax	-84	-289	-1,215	-1,284	-1,642	-1,711
Profit after tax	413	830	3,293	3,169	4,465	4,341
Key ratios, the Group
Return on capital employed before tax (%)	-	-	-	-	23	36
Return on equity after tax (%)	-	-	-	-	25	29
Earnings per share (SEK) 3)	1.34	2.85	11.17	10.63	15.21	14.66
Goodwill (SEK millions)	29,564	0	29,564	0	29,564	0
Equity (SEK millions)	27,580	14,413	27,580	14,413	27,580	15,551
Net debt (SEK millions) 4)	44,039	495	44,039	495	44,039	-176
Net debt/equity ratio (%)	160	3	160	3	160	-1

IPSCO is included in the Group commencing July 18, 2007, i.e. for almost 2.5 months.

1) IPSCO's operating profit has been affected by SEK 233 million in depreciation on the provisionally allocated surplus values of intangible and tangible fixed assets.

2) The surplus value on IPSCO's inventory at the time of the acquisition amounted to SEK 1,010 million; this has been dissolved in its entirety and has affected the result for the third quarter.

3) Earnings per share have been adjusted based on the bonus issue element in the new issue.

4) Net debt has been calculated in accordance with the definition provided in the most recent annual report which, among other things, entails that interest-bearing receivables and liabilities include current tax claims and tax liabilities.

The Market

The international steel market has continued to perform positively during the third quarter, although demand is believed to have increased at a somewhat lower rate than during the first half of the year. Global production of crude steel increased by 7% during the first nine months and by 6% during the third quarter, compared with the same period of 2006.

In its autumn forecast, the International Iron and Steel Institute (IISI) forecasts that global steel demand in 2007 will increase by almost 7%, which is in line with the trend thus far during the year.

All geographic markets have generally performed well, with the exception of North America. In 2008, global steel consumption is expected to increase by almost 7%.

The North American market has been weak during the first nine months and deliveries from steel producers have fallen by 10%. Important factors underlying this downturn include liquidation of inventories by distributors as well as weaker demand from important durable consumer goods sectors such as automobiles and the building industry. IISI assesses that demand for steel in North America will fall by 5% for the full year of 2007, but is expected to increase by 4% in 2008.

Demand for steel in Europe, including Eastern Europe, has grown very strongly during the year, which has led to increased imports from, among other countries, China.

In line with the rest of Europe, steel consumption on the Nordic market has been high with strong demand from the engineering industry and the building sector, which has had a positive impact on both the Strip Products Division as well as the subsidiaries, Tibnor and Plannja.

The flows of trade in steel have continued to develop in the same direction as during the first half of the year. China continued to be a major net exporter during the quarter, but at a somewhat lower level than in the second quarter. Compared with the first three quarters of last year, net exports from China have increased substantially, among other things to Europe, but at the same time exports to North America have declined.

The strong growth on the global market is propelled primarily by investments in sectors that are important for SSAB. The market for the Group's core niche products, AHSS (Advanced High Strength Steel, previously designated as extra and ultra high-strength sheet), and quenched steels within heavy plate, have continued to be strong during the third quarter. However, from a seasonal perspective the third quarter is the weakest quarter of the year.

The order situation continues to be favorable among SSAB's customers. Investments continue to be at a high level within infrastructure-related industry and mining industry equipment, as well as heavy transports. The market for quenched steels is favored by the continued strong trend within investment goods, both in mature economies as well as in developing regions. SSAB's deliveries of quenched steels increased by 16% during the third quarter and by 9% during the first three quarters. Within quenched steels, production capacity still remains a restricting factor for SSAB.

Compared with last year, deliveries of advanced high-strength steel increased by 23% during the third quarter and by 18% during the first three quarters. The increase is primarily attributable to the heavy transport sector in the United States and Asia.

Compared with last year, IPSCO increased its deliveries by 8% during the third quarter and by 7% during the first three quarters. Plate deliveries fell by 15 thousand tonnes to 1,846 (1,861) thousand tonnes, while deliveries of pipes increased by 219 thousand tonnes to 1,123 (904) thousand tonnes. The increase in pipe deliveries is due to the acquisition of NS Group, which was completed at the end of 2006.

The acquisition of IPSCO

On May 3, a public tender offer was announced for the North American steel company, IPSCO, of USD 160 cash per share or just over USD 7.5 billion for all shares. The offer was approved at IPSCO's extraordinary general meeting on July 16 and the entire company was taken over on July 18. Commencing that date, IPSCO is included as a division in the SSAB Group.

The acquisition of IPSCO had been financed through borrowed funds as well as an issue of new shares for SEK 10 billion, which was carried out in August.

In 2006, IPSCO reported sales of almost USD 3.8 billion and an operating profit of approx. USD 1 billion. In 2006, IPSCO delivered approx. 3.7 million tonnes of steel and pipes and had just over 4,400 employees.

At the time of the acquisition, IPSCO had booked assets of SEK 28.7 billion, current and long-term liabilities of SEK 12.7 billion, i.e. booked net assets of SEK 16.0 billion. The purchase price including acquisition costs exceeded the net assets by SEK 34.5 billion. Provisionally, SEK 1.0 billion has been allocated on the surplus value in inventory, SEK 6.6 billion on tangible fixed assets, SEK 5.0 billion on intangible fixed assets and SEK -4.4 billion on deferred tax liabilities, after which the remaining SEK 26.3 billion has been reported as goodwill. Assumed net debt amounts to SEK 4.9 billion.

The full impact of the surplus value in inventory has been felt in the result for the third quarter, while provisional surplus values in machinery and equipment, as well as customer relations, will be depreciated over a period of 10 years. A review is currently taking place in order to conclusively determine the surplus values and their depreciation periods.

IPSCO, including non-recurring items, has affected the Group's profit after financial items by SEK -893 million. Excluding non-recurring items, IPSCO has contributed in accordance with the table below:

	Commencing the	Pro forma as if the
	acquisition date,	acquisition had occurred
SEK millions	July 18, 2007	on January 1, 2007
Sales	5,838	21,042
Operating profit before depreciation, EBITDA	1,352	5,010
Operating profit, EBIT	880	3,229
Profit after financial items	377	1,135
Effect on earnings per share	0.76	2.28

Contribution from IPSCO 1)

1) Based on IPSCO's accounting up to and including July 17 and, commencing July 18, on the figures which are consolidated in SSAB. The presentation has included neither the non-recurring costs incurred by IPSCO in connection with SSAB's acquisition, the non-recurring amortization of surplus values in inventory which has taken place, nor the non-recurring costs for the arrangement of bridging loans. On the other hand, EBIT has been affected by depreciation on the provisional surplus values identified at the time of the acquisition. In total, the depreciation amounts to SEK 233 million, July 18 – September 30, and to SEK 903 million pro forma for the first three quarters. The tax rate has been calculated at 35%. The effect on earnings per share has been calculated based on the outstanding number of shares, i.e. 323.9 million.

Had IPSCO been owned from the beginning of the year, pro forma earnings per share would have increased by 19%.

Since the acquisition, the integration of IPSCO has been carried out in a number of projects and the work is proceeding according to plan. The organizational integration has been completed and work is taking place on exploiting identified synergies.

The Group

Sales increased by 39% to SEK 31,565 (22,738) million. Of the increase, SEK 5,838 (26 percentage points) comprised additional sales through the acquisition of IPSCO. Higher prices and an improved mix accounted for 11 percentage points and increased volumes for 2 percentage points of the increase.

Operating profit for the third quarter increased by SEK 128 million to SEK 1,255 (1,127) million. Excluding non-recurring items, profit amounted to SEK 2,265 (1,050) million, an increase of 116%. Operating profit for the third quarter in the "old SSAB", excluding nonrecurring items, amounted to SEK 1,385 (1,050) million, an increase of 32%.

Operating profit for the first three quarters increased by SEK 784 million to SEK 5,249 (4,465) million. Excluding non-recurring items, profit amounted to SEK 6,221 (4,388) million, an increase of SEK 1,833 million, or 42%.

The profit analysis is set forth in the table below.

Change in operating profit excl. non-recurring items between the first
three quarters of 2007 and 2006 (SEK millions)
Strip Products Division
- Increased proportion of core niche products	+130
- Improved margins	+730
Plate Division
- Increased proportion of core niche products	+210
- Improved margins	+200
IPSCO Division
- Operating profit after the acquisition	+880
(of which depreciation on preliminary surplus values, -233)
Tibnor
- Improved margins (incl. price changes, inventory)	+40
- Higher volumes/improved mix	+200
Fixed costs
	-560
Other	+3
Change in operating profit excl. non-recurring items	+1,833

Thus far this year, profit has been affected by SEK 185 million with respect to the ongoing skills replacement program, of which SEK 65 million during the third quarter.

Fixed costs have also been affected by an increased cost level due to SEK 110 million in expansion investments in the Swedish steel operations, of which SEK 50 million in the third quarter.

Financial items have been affected by interest expenses on the net debt which arose in connection with the acquisition of IPSCO and amounted to SEK -741 (-12) million. The financial items include non-recurring financing costs of SEK 261 million. Profit after

financial items thus amounted to SEK 4,508 (4,453) million and profit after tax to SEK 3,293 (3,169) million. The average tax rate for the third quarter has been positively affected by adjustments of almost SEK 40 million in IPSCO's tax assessments for 2005 and 2006. Earnings per share increased to SEK 11.17 (10.63). (Earnings per share have been adjusted based on the bonus issue element in the new issue).

Non-recurring items

During the third quarter, non-recurring amortization of surplus values in inventory has affected the result by SEK 1,010 million. These surplus values were recorded in conjunction with the acquisition of IPSCO, when inventory as a part of the acquisition analysis was stated at actual value. The surplus value is thereafter amortized as the acquired inventory is sold. The surplus value on IPSCO's inventories has been amortized in its entirety during the third quarter and is included in the line "Other operating revenue and expenses".

During the third quarter, financial items have been affected by non-recurring costs for the financing of IPSCO in the amount of SEK 261 million. These costs comprise fees to the banks that arranged the bridging loans. Additional such costs of almost SEK 200 million will affect net interest during the term of the loans, up to 5 years.

During the first half of the year, Tibnor sold four property companies, which in total generated a capital gain of SEK 38 million, which is included in the line "Other operating revenue and expenses".

During the third quarter of last year, the 25% stake in Cogent Power was sold to Corus, generating a tax-exempt capital gain of SEK 77 million. Last year, SSAB's share in Cogent's profit before tax up to the date of the sale amounted to SEK 83 million. This profit share is included in the line "Affiliated companies" in the income statement for the preceding year, while the capital gain is included in the line "Other operating revenue and expenses". The sale contributed SEK 248 million to liquidity, which was reported in the third quarter of last year.

Thus, non-recurring items are included in the third quarter's profit after financial items in the amount of SEK -1,271 (77) million and, for the three quarters in total, SEK -1,233 (77) million.

Return on capital and equity

The return on capital employed before tax for the most recent twelve-month period was 23% and the return on equity after tax was 25%. For the full year of 2006, the corresponding figures were 36% and 29%.

Capital expenditures

During the first three quarters, decisions were taken regarding new investments, excluding the investment in IPSCO, totaling SEK 1,442 (1,888) million, of which SEK 471 (1,260) million related to expansion investments. Of the expansion investments, SEK 84 million comprised Plannja's acquisition of Steinwalls Plåt AB, as well as new wrapping and packing lines in the Strip Products Division for SEK 135 million. In IPSCO, no major expansion investment decisions were taken. Capital expenditure payments amounted to SEK 1,856 (999) million, of which SEK 1,113 (308) million related to expansion investments and acquisitions.

Financing and liquidity

Cash flow from current operations consists of cash flow after financial items and paid tax, changes in working capital as well as regular maintenance investments. During the first three quarters, cash flow from current operations amounted to SEK 2,866 (3,148) million.

Cash flow per business area
	2007	2006	2007	2006	Oct 06-	2006
SEK millions	Q 3	Q 3	Qs 1-3	Qs 1-3	Sept-07	Full year
Strip Products	560	510	2,133	2,091	2,845	2,803
Plate	375	529	1,902	2,015	2,034	2,147
IPSCO	1,072	0	1,072	0	1,072	0
Tibnor	1	108	54	283	282	511
Other	173	97	-25	-26	154	153
Operating cash flow	2,181	1,244	5,136	4,363	6,387	5,614
Financial items	-758	-9	-741	-13	-730	-2
Taxes	-437	-303	-1,529	-1,202	-1,981	-1,654
Cash flow from current operations	986	932	2,866	3,148	3,676	3,958
Acquisition of companies and operations 1)	-50,270	0	-50,601	0	-50,601	0
Expansion investments	-552	-111	-1,113	-308	-1,319	-514
Disposals of companies and operations 2)	0	247	96	248	198	350
Cash flow before dividends and financing	-49,836	1,068	-48,752	3,088	-48,046	3,794
Dividends/redemption	0	0	-1,166	-3,023	-1,166	-3,023
New issue	9,941	0	9,941	0	9,941	0
Assumed net debt of acquired companies	-4,880	0	-4,880	0	-4,880	0
Currency translation, etc.	723	-35	642	-153	607	-188
Change in net debt	-44,052	1,033	-44,215	-88	-43,544	583

1) IPSCO was acquired on July 18, 2007 and Steinwalls Plåt AB was acquired in April 2007.

2) Sold operations for 2006 relate to the purchase price for Cogent in the amount of SEK 248 million and, for 2006 and 2007, a number of property companies within Tibnor.

The cash flow presentation differs from a presentation in accordance with IFRS in so far as the cash flow is affected by current tax costs, i.e. the tax which is to be paid. The difference between this tax and the tax which has actually been paid is thereby regarded as a financial debt/claim. In a presentation in accordance with IFRS, on the other hand, the cash flow from the ongoing operations is affected by the tax actually paid during the year.

The reduced cash flow in Tibnor is largely explained by increased inventory values and accounts receivable.

The net debt at the end of the quarter amounted to SEK 44,039 (495) million, equal to a net debt/equity ratio of 160 (3)%. The gross loan debt amounted to SEK 45,958 million. Of the debt, SEK 41,686 million was in USD/CAD after the proceeds from the new issue were used for loan repayment. Net assets in USD/CAD are hedged in an equity hedge through currency swaps.

Business areas

The steel operations jointly

New annual agreements for iron ore and coal were entered into during the first quarter and entailed, in USD, a price increase of 7% for iron ore and a reduction of 13% for coal. The deliveries have been hedged and, as a consequence, iron ore prices in Swedish kronor increased by 2%. For coal, the net effect in Swedish kronor was a price reduction of just over 10%. Iron ore agreements entered into force at the beginning of the year and thus the full impact on costs has largely been felt. The coal agreements entered into force on April 1; however, due to existing stocks, the impact on earnings was not felt until the third quarter.

Scrap metal, which is an important raw material for IPSCO, is regularly purchased on the market through, among other things, IPSCO's own scrap metal collection companies. During the first quarter of 2007, scrap metal prices increased substantially and have thereafter stabilized at a higher level than in 2006. IPSCO's scrap metal costs per tonne of produced steel during the third quarter were USD 218 (200). IPSCO's second important input material is electricity, in respect of which long-term contracts are signed, mainly at fixed prices. Electricity contracts extend until 2011, 2016 and 2018.

Strip Products Division

Strip prices were increased by almost 2% in local currencies with respect to agreements renegotiated pending the third quarter. Together with an improved mix, this meant that strip prices in total were 2% higher than during the preceding quarter. Accordingly, prices so far this year have been 15% higher than during the first three quarters of last year.

Sales increased by 9% compared with the third quarter of last year and reached SEK 3,756 (3,450) million. In total, for the first three quarters sales amounted to SEK 12,708 (11,281) million.

Operating profit for the quarter amounted to SEK 682 (551) million. In total, operating profit for the first three quarters was SEK 2,584 (2,090) million.

Deliveries of steel during the third quarter amounted to 530 (525) thousand tonnes and, during the first three quarters, to 1,851 (1,850) thousand tonnes.

Deliveries of advanced high-strength steel during the quarter amounted to 189 (154) thousand tonnes, up 23% on the third quarter of last year. The increase is primarily attributable to the heavy transport sector in the United States and Asia. In total, deliveries of advanced highstrength steel for the first three quarters increased by 18% to 614 (519) thousand tonnes, representing 33 (28)% of total strip deliveries. The proportion of ordinary steel products outside the Nordic Region has continued to decline in accordance with the Strip Product Division's plan to concentrate the ordinary steel business on the Nordic Region.

Crude steel production was at a stable, high level during the third quarter, whereas strip production in the hot strip rolling mill was affected by a number of minor disruptions. Crude steel production amounted to 539 (487) thousand tonnes and strip production to 548 (539) thousand tonnes. In total, crude steel production for the first three quarters amounted to 1,700 (1,604) thousand tonnes and strip production to 1,961 (1,982) thousand tonnes.

During the first three quarters, decisions were taken regarding new capital expenditures totaling SEK 673 (532) million. SEK 135 million of the decided investments relate to new wrapping and packing lines in Borlänge and SEK 180 million to new overhead cranes in Luleå.

Plate Division

Demand for quenched steels remains strong and prices increased marginally compared with the second quarter. Deliveries increased by 16% compared with last year and amounted to 129 (111) thousand tonnes, but continued to be restricted by available production capacity. During the quarter, production and deliveries of quenched steels continued to be negatively affected by the ongoing investment projects as well as by a number of minor disruptions in production. In total, deliveries of quenched steels for the first three quarters amounted to 411 (378) thousand tonnes, constituting 91 (83)% of total plate deliveries.

Sales increased by 20% compared with the third quarter of last year and reached SEK 2,443 (2,043) million. In total, sales for the first three quarters amounted to SEK 8,194 (7,438) million.

Operating profit for the quarter improved by SEK 197 million to SEK 500 (303) million, primarily due to higher prices and a high proportion of quenched steels. In total, operating profit for the first three quarters amounted to SEK 1,877 (1,713) million.

Plate production during the third quarter was 123 (120) thousand tonnes. In total, plate production during the first three quarters amounted to 418 (434) thousand tonnes.

Crude steel production during the third quarter amounted to 316 (291) thousand tonnes and, in total for the first three quarters, to 1,220 (1,189) thousand tonnes. Production during the third quarter of last year was restricted, however, due to a relining of the smaller blast furnace in Oxelösund.

During the first three quarters, decisions were taken regarding new capital expenditures totaling SEK 259 (1,275) million. Of investments already decided upon, SEK 770 million relate to expansion projects within quenched steels. Among other things, a line is being constructed for quenching of thick plate in Oxelösund and a distribution center with cutting to size capacity in China. Implementation is taking place gradually during 2007-2009 and will increase quenched steel production capacity to 700 thousand tonnes. The distribution center in China was brought into operation in August 2007.

A further SEK 225 million relates to investments in increased capacity for after-treatment of crude steel in Oxelösund. The plant is being brought into operation in the fall of 2007.

IPSCO Division

IPSCO has been included as a division in SSAB since the acquisition date, July 18 2007, i.e. for almost 2.5 months of the third quarter.

End user demand for plate products has been stable at a high level thanks to a strong business cycle with investment goods. Deliveries to distributors and service centers are, however, generally at a lower level due to the fact that these customers are carrying higher than normal inventory levels. In total, IPSCO's deliveries within flat products have been at the same level as last year.

Demand from the energy market for small diameter pipes has been lower than last year as a consequence of a higher inventory level which, however, is currently declining, among customers, distributors and producers. A further factor underlying the lower demand is the

low level of activity due to the weather during the first half of the year.

Demand from other sectors for small dimension pipes has been stable during the third quarter and at a higher level than in the first half of the year. To a large extent, demand is driven by the general activity in the industrial economy. Demand for large dimension pipes is very strong and the order situation is extremely satisfactory thanks to a strong project-driven market. The market for seamless pipes has improved somewhat during the period.

IPSCO's external deliveries of plate during the shortened third quarter amounted to 532 thousand tonnes. For the corresponding period last year, plate deliveries amounted to 505 thousand tonnes, an increase of 5%. Deliveries of pipes also increased by 36%, to 295 (217) thousand tonnes. However, the entire increase was due to added volumes from NSG, which was acquired in December 2006.

Plate production during the shortened third quarter amounted to 709 (713) thousand tonnes, while pipe production amounted to 256 (187) thousand tonnes.

IPSCO's sales during the entire third quarter amounted to USD 1,074 million, as compared with USD 987 million and USD 999 million during the first and second quarters of the year respectively.

Operating profit for the full quarter, before the write off of surplus values and excluding costs associated with the transaction, amounted to USD 205 million, as compared with USD 204 million and USD 192 million during the first and second quarters of the year respectively.

During the quarter, decisions were taken regarding new capital expenditures totaling SEK 268 million. Of investments already decided upon, SEK 115 million relate to a new vacuum treatment plant at the steel mill in Montpelier, which was taken into operation during the past quarter. During the quarter, a steel processing facility for pipe production in Regina was completed. Total capital expenditure payments during the quarter amounted to SEK 358 million, of which SEK 258 million related to expansion investments.

Tibnor

The sales trend during the quarter continued to be strong on all of the geographical markets on which Tibnor operates. The rate of deliveries during the quarter remained at a high level and, in total, deliveries were 7% up on the first three quarters of last year.

Sales increased by 8% compared with the third quarter of last year and amounted to SEK 2,283 (2,115) million. In total, sales for the first three quarters amounted to SEK 7,826 (6,525) million.

Operating profit declined by 21% compared with the third quarter of last year, to SEK 159 (202) million. This was primarily due to the fact that price changes on inventory for the quarter amounted to SEK -4 million, compared with SEK +75 million last year. In total, operating profit for the first three quarters amounted to SEK 717 (529) million.

Events since the end of the quarter

Since the expiry of the quarter, agreements have been signed regarding refinancing of USD 2,210 million of the bridging loans which were taken up in connection with the acquisition of IPSCO. The refinancing will result in lower interest expenses.

Prospect for the remainder of the year

The general demand situation is expected to remain unchanged during the fourth quarter.

The price of IPSCO's most important raw material, scrap metal, is expected to be unchanged.

During the fourth quarter, the steel mill in Regina will be idle for 17 days for a planned maintenance stop, which will have a negative impact on operating profit of approx. SEK 150 million.

Fixed costs during the fourth quarter will be negatively affected by a further approx. SEK 70 million as a consequence of ongoing rationalizations and skills replacement programs entailing that, in total, approximately 400 people are expected to leave SSAB in 2007. These measures, which are primarily based on a voluntary approach, will generate annual cost savings in excess of SEK 200 million commencing 2008.

Accounting principles

This quarterly report has been prepared in accordance with IAS 34 and RR31. The accounting principles are unchanged since the annual accounts for 2006 and are based on International Financial Reporting Standards in the form adopted by the EU. Accounting standards and applications introduced during the year have had no impact on the Group's earnings and financial position. The allocation of costs for sold goods as well as selling and administrative expenses have been adjusted during 2007. Last year's figures have been adjusted in order to correspond therewith, entailing that costs for sold goods fell by SEK 504 million for the full year of 2006, while a corresponding increase occurred with respect to selling and administrative expenses.

The parent company's closing accounts have been prepared in accordance with RR 32:06.

Risks and uncertainty

As a consequence of the acquisition of IPSCO, the net debt/equity ratio has increased significantly and SSAB's sensitivity to downturns in the earnings level has thus increased.

Since the investment in IPSCO has largely been financed through loans, the effects of interest rate changes may be of great significance for SSAB's financial position and earnings.

With the acquisition of IPSCO, approximately one half of the Group's operating profit will be derived from North America, as a consequence of which the Group's exposure in USD and CAD has increased substantially.

Changes in the price of scrap metal, which is an important raw material for IPSCO, will be of greater importance for SSAB's earnings trend.

Changes in the price of sheet and plate products, which in the future also includes pipes, will continue to be the most important factor for SSAB's earnings trend.

For further information regarding material risks and uncertainty factors, reference is made to the detailed description in the 2006 annual report.

Stockholm, October 29, 2007

Olof Faxander President and CEO

Review report

Each year, the auditors review the report for January – June. This quarterly report has thus not been subject to review by the auditors.

The results for 2007 will be published on February 6, 2008.

Production and Deliveries – Steel Operations

'000 tonnes	1/05	2/05	3/05	4/05	1/06	2/06	3/06	4/06	1/07	2/07	3/07
Crude steel production
- Strip	589	573	563	514	563	554	487	602	580	581	539
- Plate	469	483	338	437	461	437	291	341	456	449	316
- Total		1,058 1,056	901	951	1,024	991	778	943	1,036	1,030	855
Steel production
- Strip	700	629	520	591	710	733	539	678	727	686	548
- Plate	174	174	113	171	156	158	120	152	149	146	123
- Total	874	803	633	762	866	891	659	830	876	832	671
Steel deliveries
- Strip	620	591	515	585	646	679	525	624	665	656	530
- Plate	186	178	138	159	169	162	127	164	165	151	137
- Total	806	769	653	744	815	841	652	788	830	807	667
of which
- AHSS 1)	136	143	102	126	170	195	154	180	212	213	189
- Quenched steels	122	126	105	118	134	133	111	132	145	137	129
- Total core niche products	258	269	207	244	304	328	265	312	357	350	318

1) Advanced high-strength steel

Acquisition of IPSCO 1)

	Reported	Fair	Fair value
	value in	value	reported in
SEK billion	IPSCO	adjustment	the Group
Intangible fixed assets	8.5	5.0	13.5
Tangible fixed assets	9.0	6.6	15.6
Other fixed assets	0.8		0.8
Current assets	10.4	1.0	11.4
Deferred taxes and other provisions	-3.6	-4.4	-8.0
Long-term liabilities	-5.2		-5.2
Current liabilities	-3.9		-3.9
Identifiable net assets	16.0	8.2	24.2
Goodwill			26.3
Purchase price paid			50.5

1) The presentation is still provisional and is based on assumptions in connection with the acquisition. A more detailed analysis of the fair values is underway and it is expected that this can be reported in conjunction with the annual accounts.

The total purchase price paid amounted to USD 7,596 million, including directly related costs of USD 40 million.

In the intangible fixed assets, goodwill from IPSCO's acquisition of NSG is included with SEK 4.0 billion.

Consolidated Income Statement

	2007	2006	2007	2006	Oct 06-	2006
SEK millions	Q 3	Q 3	Qs 1-3	Qs 1-3	Sept-07	Full year
Sales	13,686	7,020	31,565	22,738	39,881	31,054
Cost of goods sold 1)	-10,622	-5,539	-23,250	-16,899	-29,438	-23,087
Gross profit	3,064	1,481	8,315	5,839	10,443	7,967
Selling and administrative expenses 1)	-779	-491	-2,138	-1,644	-2,835	-2,341
Other operating revenues and expenses 2)	-1,056	94	-1,044	76	-931	189
Affiliated companies, profit before tax	26	43	116	194	161	239
Operating profit	1,255	1,127	5,249	4,465	6,838	6,054
Financial income	133	16	192	68	220	96
Financial expenses	-891	-24	-933	-80	-951	-98
Profit after financial items	497	1,119	4,508	4,453	6,107	6,052
Tax	-84	-289	-1,215	-1,284	-1,642	-1,711
Profit after tax	413	830	3,293	3,169	4,465	4,341
Of which attributable to: - the parent company's shareholders	397	807	3,216	3,110	4,359	4,253
- minority interests	16	23	77	59	106	88
Key ratios
Return on capital employed before tax (%)	-	-	-	-	23	36
Return on equity after tax (%)	-	-	-	-	25	29
Earnings per share (SEK) 3)	1.34	2.85	11.17	10.63	15.21	14.66
Equity per share (SEK)	84.50	54.89	84.50	54.89	84.50	59.18
Equity ratio incl. minority (%)	31	67	31	67	31	68
Net debt/equity ratio (%)	160	3	160	3	160	-1
Average no. of shares during the period (mil.)	296.9	283.2	287.8	292.5	286.7	290.2
Number of shares at end of period (mil.) 4)	323.9	259.1	323.9	259.1	323.9	259.1
Average number of employees 5)	-	-	-	-	8,899	8,031

1) The principles for allocation of costs for sold goods and selling and administrative expenses have been partially revised. Figures for the preceding year have been adjusted in order to correspond with this, entailing SEK 115 million for Q3 and SEK 383 million for Qs 1-3 2006, as well as SEK 504 million for the full year of 2006.

2) The item includes non-recurring amortization of surplus values in inventory of SEK -1,010 million.

3) Earnings per share have been adjusted based on the bonus issue element in the new issue.

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

5) The average number of employees is reported in accordance with the Swedish Accounting Standards Board's new definition. Figures for the preceding year have been adjusted in order to correspond thereto. Commencing with the acquisition, IPSCO has an average of 855 employees. A rolling annual figure for IPSCO yields an average of 4,218 employees and, for SSAB as a whole, 12,262.

Consolidated Balance Sheet

	30 Sept	30 Sept	31 Dec
SEK millions	2007	2006	2006
Assets
Intangible fixed assets	40,305	11	10
Tangible fixed assets	22,596	7,971	7,962
Interests in affiliated companies	352	245	283
Financial fixed assets	308	15	15
Deferred tax claims	507	83	70
Total fixed assets	64,068	8,325	8,340
Inventories	13,486	6,366	6,951
Accounts receivable	8,566	5,086	4,926
Current tax claims	826	37	37
Other current interest-bearing receivables	0	0	495
Other current receivables	1,595	750	673
Liquid assets	1,056	1,004	1,373
Total current assets	25,529	13,243	14,455
Total assets	89,597	21,568	22,795
Equity and liabilities
Equity for shareholders in the company	27,373	14,225	15,335
Minority shares	207	188	216
Total equity	27,580	14,413	15,551
Deferred tax liabilities	8,379	1,353	1,302
Other long-term provisions	443	153	154
Long-term interest-bearing liabilities	31,518	1,100	850
Total long-term liabilities	40,340	2,606	2,306
Current interest-bearing liabilities	13,952	70	306
Current tax liabilities	159	240	448
Accounts payable	4,614	2,321	2,362
Other current liabilities	2,952	1,918	1,822
Total current liabilities	21,677	4,549	4,938
Total equity and liabilities	89,597	21,568	22,795

The Group's Changes in Equity

		Other
	Share	Contrib	Translation	Retained			Total
SEK millions	capital	uted funds	reserves	earnings	Total	Minority	equity
Equity, December 31, 2005	2,273	560	30	11,321	14,184	180	14,364
Changes Jan 1 – Sept. 30, 2006
Translation difference			-46		-46	0	-46
Result for the period				3,110	3,110	59	3,169
Redemption of shares	-114			-2,091	-2,205		-2,205
Bonus issue	121	-7		-114	0		0
Dividends				-818	-818	-51	-869
Equity, Sept 30, 2006	2,280	553	-16	11,408	14,225	188	14,413
Changes Oct. 1 – Dec. 31, 2006
Translation difference			-33		-33	-1	-34
Result for the period				1,143	1,143	29	1,172
Dividends					0		0
Equity, 31 Dec. 2006	2,280	553	-49	12,551	15,335	216	15,551
Changes Jan 1 – Sept. 30, 2007
Translation difference			46		46	1	47
Result for the period				3,216	3,216	77	3,293
New issue 1)	571	9,371		0	9,942		9,942
Dividends				-1,166	-1,166	-87	-1,253
Equity Sept. 30, 2007	2,851	9,924	-3	14,601	27,373	207	27,580

1) A new issue in August 2007 resulted in 64.8 million new shares and increased the share capital by SEK 571 million. After deduction of issuance costs of SEK 100 million, the premium in the new issue increased other contributed funds by SEK 9,371 million. After the new issue, there are thus 323,934,775 shares, with a quotient value of SEK 8.80.

Cash Flow

	2007	2006	2007	2006	Oct 06-	2006
SEK millions	Q 3	Q 3	Qs 1-3	Qs 1-3	Sept-07	Full year
Cash flow from ongoing operations	158	892	3,262	3,554	4,808	5,100
Change in working capital	781	238	-255	112	-632	-265
Cash flow from ongoing operations	939	1,130	3,007	3,666	4,176	4,835
Investing activities	-51,204	-360	-52,372	-999	-52,630	-1,257
Sold operations 1)	0	248	0	248	0	248
Cash flow from investing activities	-51,204	-112	-52,372	-751	-52,630	-1,009
Dividend/redemption to shareholders	0	0	-1,166	-3,023	-1,166	-3,023
New issue	9,941	0	9,941	0	9,941	0
Other financing activities	39,767	-546	40,273	227	39,732	-314
Cash flow from financing activities	49,708	-546	49,048	-2,796	48,507	-3,337
Change in liquid assets	-557	472	-317	119	53	489

1) 'Sold operations' for 2006 relates to the purchase price received for Cogent.

The Divisions'/Subsidiaries' Sales, Operating Profit and Return on Capital Employed

	Sales		Operating profit			Return on capital employed (%) 4)
	2007	2006	2007	2006	Oct 06-	2006
SEK millions	Q 3	Q 3	Qs 1-3	Qs 1-3	Sept-07	Full year
Division/Subsidiary
Strip Products Division	12,708	11,281	2,584	2,090	40	34
Plate Division	8,194	7,438	1,877	1,713	38	40
IPSCO Division 1)	5,838	-	880	-	9 (22)	-
Tibnor	7,826	6,525	717	529	53	50
Other subsidiaries 2)	2,117	1,802	149	127	-	-
Parent company	-	-	-66	-83	-	-
Affiliated companies	-	-	106	101	-	-
Amortization IPSCO's surplus value, inventory 3)	-	-	-1,010	-	-	-
Other Group adjustments	-5,118	-4,308	12	-12	-	-
Total	31,565	22,738	5,249	4,465	23	36

1) IPSCO's operating profit has been affected by SEK 233 million in depreciation on provisionally allocated surplus values on intangible and tangible fixed assets.

2) "Other subsidiaries" also includes Plannja.

3) The surplus value of IPSCO's inventory at the time of the acquisition amounted to SEK 1,010 million; this has been dissolved in its entirety and affected the result during the third quarter.

4) IPSCO's return on capital employed has been calculated by converting the outcome for the shortened quarter to an annual figure and comparing this with capital employed in September 2007. Within brackets is the return on capital employed for IPSCO without surplus values from the acquisition. The return on capital employed is otherwise calculated on a result for the most recent twelve months in relation to the average capital employed for the most recent twelve months.

Profit per Quarter for Remaining Operations

SEK millions	1/05	2/05	3/05	4/05	1/06	2/06	3/06	4/06	1/07	2/07	3/07
Sales	7,060	7,444	6,294	7,006	7,622	8,096	7,020	8,316	8,780	9,099	13,686
Operating expenses	-5047	-5,505	-5,131	-5,530	-5,895	-6,169	-5,697	-6,515	-6,420	-7,043	-11,766
Depreciation	-237	-236	-239	-239	-232	-235	-239	-257	-253	-259	-691
Affiliated companies	28	62	24	-19	62	89	43	45	38	52	26
Financial items	-12	-17	-15	-20	1	-5	-8	10	2	15	-758
Profit after financial items	1,792	1,748	933	1,198	1,558	1,776	1,119	1,599	2,147	1,864	497

Profit per Quarter and Division/Subsidiary

SEK millions	1/05	2/05	3/05	4/05	1/06	2/06	3/06	4/06	1/07	2/07	3/07
Strip Products Division	1,196	1,006	485	488	662	877	551	766	1,023	879	682
Plate Division	478	578	294	644	752	658	303	521	783	594	500
IPSCO											880
Tibnor	165	137	69	55	141	186	202	247	267	291	159
Amort., surplus value inventory											-1,010
Other incl. parent company	-35	44	100	31	2	60	71	55	72	85	44
Operating profit	1,804	1,765	948	1,218	1,557	1,781	1,127	1,589	2,145	1,849	1,255

Parent Company's Profit/Loss

	2007	2006	2007	2006	Oct 06-	2006
SEK millions	Q 3	Q 3	Qs 1-3	Qs 1-3	Sept-07	Full year
Gross profit	0	0	0	0	0	0
Administrative expenses	-40	-21	-105	-85	-131	-111
Other operating revenue	1	1	39	2	39	2
Operating profit/loss	-39	-20	-66	-83	-92	-109
Dividends from subsidiaries	10	7	506	3,195	3,976	6,665
Financial items	-123	31	-24	117	12	153
Profit after financial items	-152	18	416	3,229	3,896	6,709
Tax	61	-2	41	-3	47	3
Profit after tax	-91	16	457	3,226	3,943	6,712

Parent Company's Balance Sheet

	30 Sept	30 Sept	31 Dec.
SEK millions	2007	2006	2006
Assets
Tangible assets	1	1	1
Financial assets	45,193	2,307	2,307
Deferred tax claims	1	1	1
Total fixed assets	45,195	2,309	2,309
Receivables from subsidiaries	8,563	5,826	8,854
Current tax claims	45	0	-
Other current interest-bearing receivables	-	-	495
Other current receivables	84	73	181
Liquid assets	945	661	974
Total current asset	9,637	6,560	10,504
Total assets	54,832	8,869	12,813
Equity and liabilities
Share capital	2,851	2,280	2,280
Statutory reserve	902	902	902
Retained earnings	15,032	451	458
Profit for the year	457	3,226	6,712
Total equity	19,242	6,859	10,352
Pensions provisions	6	5	6
Liabilities to subsidiaries	1	1	1
Long-term interest-bearing liabilities	20,350	1,048	800
Total long-term liabilities and provisions	20,357	1,054	807
Liabilities to subsidiaries	1,355	742	1,216
Current interest-bearing liabilities	13,359	51	275
Current tax liabilities	3	4	1
Accounts payable	9	3	4
Other current liabilities	507	156	158
Total current liabilities	15,233	956	1,654
Total equity and liabilities	54,832	8,869	12,813

The parent company reports a profit after tax for the first three months of SEK 457 million, of which SEK 506 million consists of dividends from subsidiaries. The financial items for the third quarter include non-recurring costs in conjunction with the taking up of financing for the acquisition of IPSCO in the amount of SEK 245 million.

Liquid assets amounted to SEK 945 million.

In April, dividends were paid out to the company's shareholders in the amount of SEK 1,166 million (SEK 4.50/share).

On July 18, IPSCO was acquired, entailing that as per September 30 the parent company had SEK 42,886 million in shares and claims on the holding companies which carried out the acquisition.