SSAB — Interim / Quarterly Report 2010

Feb 11, 2011

Results for 2010

The full year

• Sales increased by 34% to SEK 39,883 (29,838) million
• Operating profit of SEK 1,084 (-1,592) million
• Profit after financial items of SEK 682 (-2,061) million
• Earnings per share of SEK 2.21 (-2.69)
• Operating cash flow of SEK -212 (4,868) million and cash flow from current operations of SEK -731 (3,387) million
• Net debt/equity ratio of 58 (49)%
• Return of 2% on both working capital and equity, while these figures were negative for 2009
• Proposed dividend of SEK 2.00 (1.00) per share, equal to SEK 648 (324) million.

The quarter

• Sales increased by 23% to SEK 10,205 (8,284) million
• Operating profit of SEK -81 (430) million
• Profit after financial items of SEK -176 (348) million
• Earnings per share of SEK -0.39 (1.09)
• Operating cash flow of SEK -123 (799) million and cash flow from current operations of SEK -376 (856) million

Unless otherwise stated, the report relates to the continuing operations, i.e. excluding the tubular business. In the report, amounts within brackets refer to the same period last year.

Comments by the CEO

As a consequence of the recovery in 2010, operating profit improved by SEK 2.7 billion compared with 2009, to SEK 1.1 billion. Although the pace of the recovery slowed down somewhat towards the end of the year, we perceive a positive trend, among other things, in sales of niche products. Capacity utilization during the year was approx. 85 (55) per cent. We have not yet been able to fully compensate for increased raw material costs. During 2010, the strong Swedish krona negatively impacted on operating profit by approx. SEK 1.5 billion. We continue to focus on improving our cost efficiency.

The result for the fourth quarter is in line with the announcement published on December 23, 2010. Demand during the quarter was weaker than expected, particularly in Europe and North America, while Latin America and China demonstrated continued stable demand. The strongest segments during the fourth quarter were mining and heavy transports, while the lifting remained weak. Furthermore, earnings were negatively affected by a disruption in production at one of the blast furnaces in Oxelösund. In light of the weak market conditions during the quarter, the opportunity was taken to bring forward a maintenance outage at the plant in Mobile.

Having now entered the first quarter, the market picture is somewhat brighter than we experienced during the fourth quarter of 2010. It is believed that demand in Europe will generally continue to develop positively, although still slowly during the first quarter. The market for SSAB's strip products is expected to strengthen. The mining and heavy transports are the strongest segments within Europe, while the lifting segment has not yet shown any signs of recovery.

In North and Latin America, the mining segment and parts of the energy segment are expected to continue to be the strongest segments during the first quarter, but the heavy transport and automotive segments are recovering. Positive signals are being received from the wind power industry, and orders from that industry have begun to increase. Overall, the SSAB Americas business area now has a good order book and we are fully booked for the first quarter.

In Asia and Oceania, the mining and heavy transport segments are expected to continue to perform well, although the floods in Australia may temporarily dampen consumption of abrasion-resistant steel. The lifting and automotive segments began the year with a clear recovery, following a slowdown during the second half of 2010.

Market prices for raw materials are showing an upward trend, which in the case of coal is reinforced by the floods in Australia. Thanks to current stocks of coal, the floods will have no impact on our production capability during the first quarter. In regards to iron ore, our contracted prices in dollar terms are unchanged in the first quarter. Scrap metal prices in North America have risen.

Within EMEA, the fall in prices during the fourth quarter of 2010 is expected to have a somewhat negative impact on contracts signed for shipment during the first quarter, while prices on newly executed contracts for later shipment are increasing. Improved demand and higher scrap metal prices in North America are expected to lead to increased steel prices, but we will not, however, cover in full the increased scrap metal prices during the first quarter.

The cold winter weather and the large-scale stoppages in rail traffic in Sweden had a negative impact on our shipment capability at the beginning of the first quarter.

The capital expenditure programs to increase our production capacity of niche products are proceeding according to plan.

My assessment is that we are in a period of continued recovery. The objective is to continue to gradually compensate for increased raw materials costs.

Consolidated income statement

Consolidated income statement

	2010	2009	2010	2009
SEK millions	Q 4	Q 4	Full year	Full year
Sales	10,205	8,284	39,883	29,838
Operating profit	-81	430	1,084	-1,592
Of which operating profit per business area
- SSAB EMEA	-69	185	374	-1,693
- SSAB Americas	207	374	1,119	595
- SSAB APAC	17	-13	232	70
- Tibnor	18	-6	421	-38
- Amortization on surplus values 1)	-202	-209	-870	-942
- Other 2)	-52	99	-192	416
	-81	430	1,084	-1,592
Financial items	-95	-82	-402	-469
Profit after financial items	-176	348	682	-2,061
Tax	52	2	82	1,182
Profit after tax for continuing operations	-124	350	764	-879
Profit after tax for discontinued operations 3)	0	-131	-164	-131
Profit for the period after tax	-124	219	600	-1,010

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

2) Earnings for the full year include a profit of SEK 0 (313) million on sales of emission rights, of which SEK 0 (13) million in SSAB EMEA and SEK 0 (0) million in the fourth quarter. Earnings for 2009 also included a positive item regarding dissolution of a structural reserve in the amount of SEK +76 million, of which SEK +59 million in the fourth quarter.

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

Key numbers	2010	2009	2010	2009
	Q 4	Q 4	Full year	Full year
Return on capital employed before tax (%)	-	-	2	neg
Return on equity after tax (%)	-	-	2	neg
Earnings per share (SEK)	-0.39	0.68	1.70	-3.09
-of which for continuing operations (SEK)	-0.39	1.09	2.21	-2.69
Equity (SEK millions)	30,076	31,002	30,076	31,002
Net debt (SEK millions)	17,587	15,314	17,587	15,314
Net debt/equity ratio (%)	58	49	58	49

Market

According to the World Steel Association (WSA), global crude steel production in 2010 increased by 15%, following a weak market in 2009. Total production amounted to slightly more than 1.4 (1.2) billion tonnes, which is the highest annual level ever. The largest percentage increase occurred in North America (36%) while production in the EU increased by 25%. Production in China increased by 9% and China's share of global crude steel production was 44 (47)%.

Towards the end of the fourth quarter, demand for steel showed signs of recovery, after having developed weakly since the summer. The combination of increased demand and rising raw material prices led to an increase in spot prices for steel products during December. The improvement in demand is partly attributable to speculative purchasing behavior pending anticipated price increases at the beginning of 2011. Steel Business Briefing (SBB) notes in its most recent Global Market Outlook that there is a risk that prices will decline if the underlying demand does not continue to increase during the spring of 2011.

Inventory levels at European steel distributors relative to the past three months' sales increased in December compared with November. According to statistics from the Metals Service Centre Institute, December's seasonally adjusted plate inventories at Steel Service Centers in the US represented 2.6 months of actual sales, which continues to be at historically low levels.

SSAB's order intake for niche products, especially from the mining and heavy transport segments, continued to be good. Demand for ordinary products also demonstrated a positive trend during the quarter.

Short-term prospects

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

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

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

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

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

Scrap metal prices in the US have risen sharply in recent months and the current price is some 27% higher than at the end of September. The assessment is that seasonal factors will cause scrap metal prices to continue to increase during the first months of the year.

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

The Group

The full year in summary

Shipments and production

SSAB's shipments in 2010 increased by 40% compared with 2009 and amounted to 4,606 (3,298) thousand tonnes. Shipments of niche products increased by 43% compared with 2009 and reached 1,484 (1,041) thousand tonnes. In total, niche products accounted for 32 (32)% of total shipments in 2010.

Crude steel production increased by 62% and steel production increased by 49% compared with 2009.

Sales

Full-year sales amounted to SEK 39,883 (29,838) million, an increase of SEK 10,045 million or 34% compared with the full year 2009. Higher volumes accounted for a positive effect of 40 percentage points, higher prices for a positive effect of 1 percentage point, while exchange rate movements had a negative effect of slightly more than 6 percentage points and mixeffects a negative effect of 1 percentage point.

Earnings

Operating profit for the full year improved by SEK 2,676 million to SEK 1,084 (-1,592) million. Exchange rate movements compared with 2009 had a negative impact of approx. SEK 1.5 billion on operating profit during the year. The profit analysis is shown in the table below.

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

Part of the reduction in fixed costs in 2009 was due to the sharp cut-back in production. In 2010, fixed costs increased as production returned to a more normal level. However, the long-term reduction in fixed costs is in line with the target set out in the cost savings program 2008.

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

Profit after tax and earnings per share

Profit after tax (attributable to the shareholders) excluding divested operations amounted to SEK 716 (-871) million, equal to SEK 2.21 (-2.69) per share. Tax was SEK 82 (1,182) million.

Financing and liquidity

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

	2010	2009	2010	2009
SEK millions	Q 4	Q 4	Full year	Full year
SSAB EMEA	-692	609	-1,736	2,113
SSAB Americas	396	172	1,421	1,464
SSAB APAC	44	-82	162	141
Tibnor	172	162	42	725
Other 1)	-43	-62	-101	425
Operating cash flow	-123	799	-212	4,868
Financial items	-104	-96	-392	-538
Taxes	-149	153	-127	-943
Cash flow from current operations	-376	856	-731	3,387
Strategic investments	-476	-210	-1,170	-944
Divestment of businesses and operations 2)	-503	0	-559	31
Cash flow before dividend and financing	-1,355	646	-2,460	2,474
Dividend	0	0	-324	-1,296
Revaluation of debts against equity (hedge) 3)	-144	-301	599	475
Other	53	3	-88	25
Change, net debt (increase-/decrease+)	-1,446	348	-2,273	1,678

Operating cash flow per business area

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

2) For 2010, the item comprises a payment of SEK 591 million under warranty undertakings regarding tax to the purchaser of the tubular business. 3) Revaluation for hedging of currency risk in foreign operations.

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

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

The Group's liquidity preparedness

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

Return on capital employed/equity

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

Equity

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

Capital expenditures

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

Development during the fourth quarter

Raw materials

Agreements have been reached regarding new prices for Australian coal for the first quarter of 2011; these entail a price increase in USD of 8% compared with the price in the fourth quarter. Because of the ice conditions in the Baltic Sea during the winter, coal requirements for the winter period are purchased in the autumn, and thus current coal stocks are expected to last until the middle of May. Therefore the price increase will have no impact on earnings during the first quarter of 2011.

An agreement regarding the price of iron ore for 2010 was entered into at the beginning of June and entailed price increases in line with the market in general. The full impact of the price increases was felt during the third quarter. The price for the first quarter of 2011 has been agreed upon and remains unchanged in USD.

The American operations regularly purchase scrap metal as a raw material for their production. Scrap metal market prices in the US fluctuated during the first three quarters of the year but gradually increased during the fourth quarter and, at the end of the year, were 59% higher than at the end of 2009.

Shipments and production

SSAB's shipments during the fourth quarter increased by 2% compared with the fourth quarter of 2009. Shipments of niche products increased by 6% compared with the fourth quarter of last year. All in all, niche products accounted for 37 (35)% of total shipments during the quarter.

Crude steel production increased by 7% and steel production increased by 4% compared with the fourth quarter of 2009.

Sales

Sales during the quarter were SEK 10,205 (8,284) million, an increase of SEK 1,921 million or 23% compared with the fourth quarter of 2009. Higher volumes accounted for a positive effect of 15 percentage points, higher prices for 11 percentage points and an improved product mix for 3 percentage points, while exchange rate movements had a negative effect of slightly more than 6 percentage points.

Earnings

Operating profit during the quarter weakened by SEK 511 million compared with the fourth quarter of 2009 and amounted to SEK -81 (430) million. Exchange rate movements compared with 2009 had a negative impact during the quarter of approx. SEK 0.6 billion on operating profit. The profit analysis is presented in the table below.

Change in operating profit between the fourth quarter of 2010 and 2009 (SEK millions)
Exchange rate impact on operating profit	-600
Steel operations
- Higher prices	1,100
- Higher volumes	250
- Higher variable production costs	-1,300
- Unabsorbed fixed costs 2009	330
- Higher sales of by-products	70
Tibnor
- Higher volumes, changed mix and margins	40
Higher fixed costs	-254
Other	-147
Change in operating profit	-511

Financial items for the quarter amounted to SEK -95 (-82) million.

Profit after financial items for the quarter was SEK -176 (348) million.

Profit after tax and earnings per share

Profit after tax (attributable to the shareholders) for the quarter, excluding divested operations, was SEK -125 (352) million or SEK -0.39 (1.09) per share. Tax for the quarter was SEK +52 (+2) million.

Financing and liquidity

Operating cash flow during the quarter amounted to SEK -123 (799) million, primarily as a consequence of a negative development of working capital in SSAB EMEA.

Cash flow before financing and dividend amounted to SEK -1,355 (646) million. Cash flow for the quarter was negatively affected by a non-recurring item of SEK 503 million in the form of payment under warranty undertakings regarding tax to the purchaser of the tubular business. Following translation effects on debts in foreign currency, net debt increased by SEK 1,446 million during the quarter. As of December 31, the net debt was SEK 17,587 (15,314) million. The net debt/equity ratio was 58 (49)%.

Capital expenditures

During the quarter, decisions were made regarding new capital expenditures totaling SEK 324 (123) million, of which SEK 115 (0) million involved strategic investments. Capital expenditure payments during the fourth quarter amounted to SEK 653 (537) million, of which SEK 476 (210) million involved strategic investments.

SSAB EMEA

		2010	2009	2010	2009
SEK millions		Q 4	Q 4	Full year	Full year
Sales		5,720	4,119	21,428	15,252
Profit before depreciation		213	471	1,495	-620
Operating profit		-69	185	374	-1,693
Operating margin (%)		-1%	4%	2%	-11%
Return on capital employed (%)		-	-	3%	neg
Shipments ('000 tonnes)	- Quenched steels	77	46	269	167
	- AHSS	120	88	464	282
	- Ordinary	289	361	1,301	1,026
Production ('000 tonnes)	- Crude steel	864	744	3,418	1,887
	- Steel	713	652	2,720	1,750
Operating cash flow		-692	609	-1,736	2,113
Maintenance capital expenditures		-138	-185	-632	-799
Strategic capital expenditures		-235	-199	-694	-744

Demand remained stable within the mining segment and within heavy transports, while the construction and lifting segment demonstrated a continued weak demand during the quarter. Steel shipments declined by 2% compared with the fourth quarter of 2009 and amounted to 486 (495) thousand tonnes. Shipments of niche products increased by 47% compared with the fourth quarter of 2009 and amounted to 197 (134) thousand tonnes. Shipments of niche products thereby accounted for 41 (27)% of total shipments.

Prices in local currency for advanced high-strength steels (AHSS) increased by 1% compared with the third quarter, this was, however, offset by negative exchange rate movements and thus the total price changes were -1%. Quenched steel prices increased by 2% in local currency but, following mix effects and the effect of exchange rate movements, prices were unchanged. Prices of ordinary steel fell by 5% compared with the third quarter of 2010, but following a seasonally adjusted weaker mix (-7%) and exchange rate movements of -1%, the total price changes were -13%. See table below.

Crude steel production increased by 16% compared with the fourth quarter of 2009. The increase was due to the fact that parts of production were suspended during the fourth quarter of 2009. Production during the fourth quarter of 2010 was negatively affected by an unscheduled outage at one of the blast furnaces in Oxelösund in December. Steel production increased by 9% compared with the fourth quarter of 2009.

Sales increased by 39% compared with the fourth quarter of 2009 and reached SEK 5,720 (4,119) million. Higher prices accounted for a positive effect of 17 percentage points, an improved product mix including niche products volume increases accounted for 29 percentage points, while exchange rate movements had a negative impact of 7 percentage points.

Operating profit for the quarter was SEK -69 (185) million, a decrease of SEK 254 million compared with the fourth quarter of last year. The profit analysis is shown in the table below.

Operating cash flow during the quarter was positively impacted by the cash flow from the current operations and by a reduction in accounts receivable, but negatively impacted by reduced accounts payable (primarily due to payment of coal shipments delivered during the third quarter), and amounted to SEK -692 (609) million.

During the quarter, decisions were made on new capital expenditures totaling SEK 295 (106) million. Capital expenditure payments during the quarter amounted to SEK 373 (384) million, of which SEK 235 (199) million involved strategic investments. The largest ongoing project is an investment for the production of quenched steel at the plant in Borlänge. The line is expected to be brought into commission in 2012.

Unabsorbed fixed costs 2009	250
Fixed costs	-194
Sale of by-products	70
Other	-90
Change in operating profit	-254

Analysis of operating profit quarter 4/09 to 4/10	SEK millions	Price analysis quarter 3/10 to 4/10	Ordinary steel	Quenched steel	AHSS
Exchange rate impact, operating profit	-500	Price change, local currency	-5%	2%	1%
Price	800	Changed product mix	-7%	1%	0%
Volume	300	Exchange rate movements	-1%	-3%	-2%
Variable costs	-890	Net price change	-13%	0%	-1%

SSAB Americas

	2010	2009	2010	2009
SEK millions	Q 4	Q 4	Full year	Full year
Sales	3,608	3,294	14,581	10,712
Profit before depreciation	302	472	1,522	1,018
Operating profit 1)	207	374	1,119	595
Operating margin (%)	6%	11%	8%	6%
Return on capital employed (%) 2)	-	-	1%	neg
Shipments ('000 tonnes) - Quenched steels	46	31	178	108
- AHSS	126	192	384	376
- Ordinary	426	354	1,794	1,230
Production ('000 tonnes) - Crude steel	567	594	2,334	1,666
- Steel	553	564	2,209	1,563
Operating cash flow	396	172	1,421	1,464
Maintenance capital expenditures	-17	-9	-158	-99
Strategic capital expenditures	-184	-10	-418	-199

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

2) The return is calculated based on operating profit including amortization on surplus values.

Except for a degree of seasonal decline towards the end of the year, demand remained good during the fourth quarter. Steel shipments were 4% higher than during the fourth quarter of 2009 and amounted to 598 (577) thousand tonnes. Shipments of niche products were 23% lower than during the fourth quarter of 2009 and amounted to 172 (223) thousand tonnes. However, some 65 thousand tonnes of niche product shipments during the fourth quarter of 2009 related to a major project order which had been brought forward. Shipments of niche products thereby accounted for 29 (39)% of total deliveries during the fourth quarter.

AHSS prices in USD increased by 2% compared with the third quarter but, following mix effects of -3%, the total price change was -1%. Quenched steel prices were unchanged in local currency but, following mix effects of -2%, the total price change was -2%. Prices of ordinary steel fell by 2% compared with the third quarter of 2010 and, following mix effects of -1%, the total change was -3%. See table below.

Sales during the fourth quarter increased by 10% compared with the fourth quarter of 2009 and amounted to SEK 3,608 (3,294) million. Higher prices accounted for a positive effect of 9 percentage points, volume increases for a positive effect of 4 percentage points, while exchange rate movements accounted for a negative effect of 3 percentage points.

Operating profit for the quarter was SEK 207 (374) million, a decline of SEK 167 million. The profit analysis is presented in the table below.

Operating cash flow during the fourth quarter was positively impacted by cash flow from current operations and a reduction in working capital, and amounted to SEK 396 (172) million.

During the quarter, decisions were made regarding new capital expenditures totaling 20 (9) million. Capital expenditure payments during the quarter amounted to SEK 201 (19) million, of which SEK 184 (10) million involved strategic investments. The largest ongoing project is the expansion of the quenching line in Mobile, Alabama in order to increase quenched steel production capacity by approx. 200 thousand tonnes. The quenching line is expected to be brought into commission during the first half of 2012.

Unabsorbed fixed costs 2009	50
Fixed costs	-41
Other	44
Change in operating profit	-167

Analysis of operating profit	SEK	Price analysis	Ordinary	Quenched
quarter 4/09 to 4/10	millions	quarter 3/10 to 4/10	steel	steel	AHSS
Price	300	Price change, local currency	-2%	0%	2%
Volume	-50	Changed product mix	-1%	-2%	-3%
Variable costs	-470	Net price change in USD	-3%	-2%	-1%

SSAB APAC

	2010	2009	2010	2009
SEK millions	Q 4	Q 4	Full year	Full year
Sales	518	323	2,326	1,583
Profit before depreciation	19	-11	238	76
Operating profit	17	-13	232	70
Operating margin (%)	3%	-4%	10%	4%
Return on capital employed (%)	-	-	33%	13%
Shipments ('000 tonnes) - Quenched steels	23	19	100	62
- AHSS	21	14	89	46
- Ordinary	0	0	27	1
Operating cash flow	44	-82	162	141
Maintenance capital expenditures	0	-1	-2	-6
Strategic capital expenditures	-57	0	-58	0

Demand continues to be stable in China and Australia, with demand being particularly strong for quenched steels. However, in China a degree of slowdown in the rate of increase could be discerned towards the end of the quarter within both the automotive segment and the lifting segment. Shipments of niche products increased by 33% compared with the fourth quarter of 2009 and amounted to 44 (33) thousand tonnes, representing 100 (100)% of total shipments.

Prices in local currencies on shipments of quenched steels fell by 1% compared to the third quarter and, following mix effects and the effect of exchange rate movements (each -1%) the total price changes were -3%. AHSS prices in local currencies fell by 2% compared with the third quarter of 2010 and following mix effect and the effect of exchange rate movements (each -1%), total price changes were -5%. See table below.

Sales increased by 60% compared with the fourth quarter of 2009 and reached SEK 518 (323) million. Higher prices accounted for a positive effect of 13 percentage points and higher volumes for 59 percentage points, while a weaker product mix accounted for a negative effect of 8 percentage points and exchange rate movements for a negative effect of 4 percentage points.

Operating profit for the quarter was SEK 17 (-13) million, an improvement of SEK 30 million. The profit analysis is shown in the table below.

Operating cash flow during the fourth quarter was positively impacted by cash flow from current operations and a reduction in working capital. The operating cash flow was SEK 44 (-82) million.

No decisions regarding new capital expenditures were made 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 in the middle of 2011. 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 57 (1) million, of which SEK 57 (0) million involved strategic investments.

Analysis of operating profit	SEK	Price analysis	Quenched
quarter 4/09 to 4/10	millions	quarter 3/10 to 4/10	steel	AHSS
Exchange rate impact, operating profit	-40	Price change, local currency	-1%	-3%
Price	20	Changed product mix	-1%	-1%
Volume	10	Exchange rate movements	-1%	-1%
Variable costs	30	Net price change	-3%	-5%
Unabsorbed fixed costs 2009	30
Fixed costs	-22
Other	2
Change in operating profit	30

Price analysis	Quenched
quarter 3/10 to 4/10	steel	AHSS
Price change, local currency	$-1\%$	$-3%$
Changed product mix	$-1\%$	$-1\%$
Exchange rate movements	$-1\%$	$-1\%$
Net price change	$-3%$

	2010	2009	2010	2009
SEK millions	Q 4	Q 4	Full year	Full year
Sales	1, 801	1, 267	6, 696	5, 286
Profit before depreciation	29	9	470	22
Operating profit	18	-6	421	-38
Operating margin (%)	1%	0%	6%	-1%
Return on capital employed (%)	-	-	22%	neg
Shipments ('000 tonnes)	158	119	613	471
Operating cash flow	172	162	42	725
Maintenance capital expenditures	-21	-16	-47	-65

Tibnor

Shipments increased by 33% during the fourth quarter compared with the fourth quarter of 2009.

Sales were up 42% compared with the fourth quarter of 2009 and amounted to SEK 1,801 (1,267) million. The increase was due to higher volumes, which had a positive effect of 32 percentage points, and higher prices (12 percentage points), while exchange rate movements negatively impacted on sales by 2 percentage points.

Operating profit for the fourth quarter was SEK 18 (-6) million, an increase of SEK 24 million. The profit analysis is shown in the table below.

Operating cash flow during the fourth quarter was SEK 172 (162) million. The operating cash flow was positively impacted primarily by lower inventory volumes.

During the quarter, decisions were made regarding new capital expenditures totaling SEK 9 (8) million. Capital expenditure payments during the fourth quarter amounted to SEK 21 (16) million.

Analysis of operating profit	SEK
quarter 4/09 to 4/10	millions
Exchange rate impact, operating profit	-30
Margin	-50
Volume/mix	90
Fixed costs	3
Other	11
Change in operating profit	24

Sustainability work during the quarter

During the autumn, an Environmental Court hearing was held regarding a new permit for the operations in Luleå. The permit was granted in December and entails permission to continue the operations and a right to certain increased production, as well as for the establishment of additional deposit facilities for waste products. The permit has been appealed.

Other important events

In December 2010, Martin Lindqvist was appointed to succeed Olof Faxander as President and CEO of SSAB as from January 1, 2011.

Since the end of the year, the Board has decided to introduce, commencing 2011, a long-term incentive program for approx. 50 key persons in the Group, outside of North America, including the Company's President and other senior executives. The program is cash-based and linked to the total return on the SSAB share relative to a comparison group comprising the Company's competitors. The program extends for rolling three year periods and the result is capped at between 15 and 25% of fixed salary. The program has been introduced in order to promote the Company's ability to recruit and retain particularly important employees and also to stimulate such employees' own holdings of shares in the Company. A long-term incentive plan has been part of the North American compensation program since prior to the IPSCO acquisition. A long-term incentive program will continue to be part of the North American compensation in accordance with local market conditions.

Dividend

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

Annual General Meeting

The Annual General Meeting will be held on April 12, 2011 in Borlänge. The annual report is expected to be distributed in the week of March 21 and will be available the week before at the Company's head office and on the website, www.ssab.com.

Notice of intention to attend the Annual General Meeting may be given commencing March 8, 2011, up to an including 12 noon on April 6, 2011. Notice may be given via SSAB's website or by telephone on +46 8-45 45 760.

Proposal from the Nomination Committee

For the AGM 2011 in SSAB the Nomination Committee has decided to propose the re-election of the current directors Anders G Carlberg, Sverker Martin-Löf, Anders Nyrén, Matti Sundberg, John Tulloch and Lars Westerberg, and the election of new directors, namely Annika Lundius, Jan Johansson and Martin Lindqvist. It is also proposed that Sverker Martin-Löf be re-elected as Chairman of the Board. Carl Bennet, Marianne Nivert and Olof Faxander have declined re-election.

Annika Lundius holds a Master of Law. She is Deputy Director-General of the Confederation of Swedish Enterprise and Director of Storebrand. Formerly Director General Legal Affairs and Director General Financial Institutions and Markets at the Swedish Ministry of Finance and CEO of Swedish Insurance Federation and Swedish Insurance Employers Association.

Jan Johansson holds a Master of Law. He is President and CEO of SCA and Director of SCA and Handelsbanken. Formerly President and CEO of Boliden. He has also had various senior positions within Vattenfall and the Shell Group.

Martin Lindqvist holds a Bachelor of Science in Economics. Since 2011 he is President and CEO of SSAB. He has been employed at SSAB since 1998. Formerly Head of SSAB EMEA business area, CFO of SSAB, CFO of SSAB Strip Products and Chief Controller at NCC.

The Nomination Committee's complete proposal, including fees for the Board and election of auditors etc., will be presented in the notice of the shareholders' meeting and on the company's web site in connection with the notice.

Risks and uncertainties

For information regarding significant risks and uncertainty factors, see the detailed description in the annual report. The transition to shorter term contracts for coal and iron ore purchases entails increased volatility as regards to the costs for these raw materials. This will probably lead to a transition to shorter term price agreements in conjunction with sales. Apart from the increased uncertainty which currently prevails on the currency markets, no significant new or changed risks and uncertainty factors have been identified during the quarter.

Accounting principles

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

Commencing January 1, 2010, the Group applies IAS 27 (Revised). The revised change applies going forward to transactions with minority owners and, among other things, the designation "minority owners" has been changed to "non-controlling interests". The change also means, among other things, that earnings attributable to minority owners must always be reported even if this means that the portion attributable to minority owners is negative; that transactions with minority owners must always be reported in equity; and that in those cases where a parent company relinquishes controlling influence, any remaining holding must be reappraised at fair value. The revised standard has had no effect on previously executed transactions with non-controlling interests.

Commencing January 1, 2010, the Group applies IFRS 3 (Revised). The application entails a change in the way in which future acquisitions are reported, among other things, the reporting of transaction costs, any conditional purchase price and step acquisitions. No acquisitions took place in 2010 and the change has had no effect on previously executed acquisitions. The revised standard has had no impact on the consolidated financial statements.

Commencing January 1, 2010, the Group applies IFRS 5 (Amendment) "Non-current assets held for sale and discontinued operations". The amendment clarifies that a subsidiary's entire assets and liabilities must be classified as being held for sale where a plan for a partial divestment results in the loss of controlling influence. Where the definition of discontinued operations is fulfilled, necessary disclosure must be provided regarding such a subsidiary. The Group has held no non-current assets for sale and discontinued operations during 2010, and the amendment has had no effect on previously executed divestments. Thus, this amendment has had no impact on the consolidated financial statements.

The accounting principles are otherwise unchanged compared with the annual accounts for 2009 and 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.

Review report

These results have not been reviewed by the auditors.

Stockholm, February 10, 2011

Martin Lindqvist President and CEO

Sensitivity analysis

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

	Change,%	Effect on profit, SEK millions	Effect on earnings per share, SEK 2)
Steel prices – steel operations	10	3,150	7.15
Volumes – steel operations	10	320	0.75
Iron ore prices	10	520	1.20
Coal prices	10	290	0.65
Scrap metal prices	10	610	1.40
	1 percentage
Interest rates	point	160	0.35
Krona index 1)	5	240	0.55

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

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

Production and shipments

Thousand tonnes	1/09	2/09	3/09	4/09	1/10	2/10	3/10	4/10
Crude steel production
- SSAB EMEA	492	418	233	744	874	941	739	864
- SSAB Americas	280	278	514	594	585	599	583	567
- Total	772	696	747	1,338	1,459	1,540	1,322	1,431
Steel production 1)
- SSAB EMEA	372	441	285	652	738	764	505	713
- SSAB Americas	260	262	477	564	558	553	545	553
- Total	632	703	762	1,216	1,296	1,317	1,050	1,266
Steel shipments
- SSAB EMEA	344	341	295	495	547	600	401	486
- SSAB Americas	308	319	510	577	565	610	583	598
- SSAB APAC	26	25	25	33	70	58	44	44
- Total	678	685	830	1,105	1,182	1,268	1,028	1,128
of which
- AHSS, SSAB EMEA 2)	64	71	59	88	111	130	103	120
- Quenched steels, SSAB EMEA	63	29	29	46	59	75	58	77
- AHSS, SSAB Americas 2)	45	40	99	192	86	79	93	126
- Quenched steels, SSAB Americas	25	23	29	31	40	51	41	46
- AHSS, SSAB APAC 2)	11	10	11	14	19	26	23	21
- Quenched steels, SSAB APAC	15	15	13	19	25	31	21	23
- Total niche products	223	188	240	390	340	392	339	413

1) Including subcontract rolling.

2) AHSS = Advanced High Strength Steels.

Consolidated income statement

	2010	2009	2010	2009
SEK millions	Q 4	Q 4	Full year	Full year
Sales	10,205	8,284	39,883	29,838
Costs of goods sold	-9,504	-7,276	-35,938	-29,020
Gross profit	701	1,008	3,945	818
Selling and administrative costs	-814	-696	-2,832	-3,052
Other operating income and expenses 1)	23	110	-86	635
Affiliated companies, profit after tax	9	8	57	7
Operating profit/loss	-81	430	1,084	-1,592
Financial income	-12	3	30	50
Financial expenses	-83	-85	-432	-519
Profit/loss for the period after financial items	-176	348	682	-2,061
Tax	52	2	82	1,182
Profit/loss for the period after tax for continuing operations	-124	350	764	-879
Profit for the period after tax for discontinued operations 2)	0	-131	-164	-131
Profit/loss for the period after tax	-124	219	600	-1,010
Of which attributable to:
- the parent company's shareholders	-125	221	552	-1,002
- non-controlling interests	1	-2	48	-8

Key figures	2010	2009	2010	2009
	Q 4	Q 4	Full year	Full year
Operating margin (%)	-1	5	3	-5
Return on capital employed before tax (%)	-	-	2	neg
Return on equity after tax (%)	-	-	2	neg
Earnings per share (SEK) 3)	-0.39	0.68	1.70	-3.09
- of which continuing operations (SEK) 3)	-0.39	1.09	2.21	-2.69
Equity per share (SEK)	92.26	95.21	92.26	95.21
Equity ratio including non-controlling interests (%)	49	51	49	51
Net debt/equity ratio (%)	58	49	58	49
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
Average number of employees	-	-	8,477	8,334

1) The results for the quarter include primarily exchange rate profits/losses on operating receivables/liabilities of SEK 30 (80) million.

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

	2010	2009	2010	2009
SEK millions	Q 4	Q 4	Full year	Full year
Profit/loss for the period after tax	-124	219	600	-1,010
Other comprehensive income
Translation differences for the period	441	950	-1,762	-2,219
Cash flow hedges	96	17	181	-2
Hedging of currency risks in foreign operations	-144	-301	599	475
Share in other comprehensive income of affiliated companies
and joint ventures	0	9	0	16
Tax attributable to other comprehensive income	13	74	-205	-125
Other comprehensive income for the period, net after tax	406	749	-1,187	-1,855
Total comprehensive income for the period	282	968	-587	-2,865
Of which attributable to:
- parent company's shareholders	280	970	-632	-2,857
- non-controlling interests	2	-2	45	-8

Consolidated statement of changes in equity

Equity attributable to the parent company's shareholders
SEK millions	Share capital	Other con tributed funds	Reserves	Retained earnings	Total	Non controlling interests	Total equity
Equity, December 31, 2008	2,851	9,944	939	21,260	34,994	199	35,193
Changes Jan 1 – Dec 31, 2009 Comprehensive income for the period Dividend Equity, December 31, 2009	2,851	9,944	-1,855 -916	-1,002 -1,296 18,962	-2,857 -1,296 30,841	-8 -30 161	-2,865 -1,326 31,002
Changes Jan 1 – Dec 31, 2010 Adjusted opening balance Comprehensive income for the			53	-53	0		0
period			-1,184	552	-632	45	-587
Dividend				-324	-324	-15	-339
Equity, December 31, 2010	2,851	9,944	-2 047	19,137	29,885	191	30,076

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

Consolidated balance sheet

	Dec 31	Dec 31
SEK millions	2010	2009
Assets
Goodwill	18,643	19,701
Other intangible assets	4,309	5,374
Tangible non-current assets	17,063	17,137
Participations in affiliated companies	395	348
Financial assets	77	55
Deferred tax receivables	159	164
Total non-current assets	40,646	42,779
Inventories	11,389	8,221
Accounts receivable	5,057	4,435
Current tax receivables	742	667
Other current receivables	1,905	665
Cash and cash equivalents	1,314	3,652
Total current assets	20,407	17,640
Total assets	61,053	60,419
Equity and liabilities
Equity for shareholders in the company	29,885	30,841
Non-controlling interests	191	161
Total equity	30,076	31,002
Deferred tax liabilities	4,952	5,283
Other non-current provisions	254	550
Non-current interest-bearing liabilities	16,786	14,878
Total non-current liabilities	21,992	20,711
Current interest-bearing liabilities	2,977	3,998
Current tax liabilities	200	96
Accounts payable	4,048	3,063
Other current liabilities	1,760	1,549
Total current liabilities	8,985	8,706
Total equity and liabilities	61,053	60,419

Cash flow

	2010	2009	2010	2009
SEK millions	Q 4	Q 4	Full year	Full year
Operating profit/loss	-81	430	1,084	-1,592
Adjustments for depreciation and impairment	592	610	2,451	2,506
Adjustment for other non-cash items	22	-188	-112	-450
Received and paid interest	-104	-69	-392	-511
Tax paid	-149	153	-127	-943
Change in working capital	-500	121	-2,852	5,135
Cash flow from operations	-220	1,057	52	4,145
Capital expenditure payments	-652	-420	-2,011	-1,912
Divested companies and businesses 1)	-503	0	-559	31
Other investing activities	19	9	57	210
Cash flow from investing activities	-1,136	-411	-2,513	-1,671
Dividend	0	0	-324	-1,296
Change in loans	3,273	-2,338	1,428	-759
Change in financial investments	-1,029	0	-1,029	142
Other financing activities	-356	-301	48	456
Cash flow from financing activities	1,888	-2,639	123	-1,457
Cash flow for the period	532	-1,993	-2,338	1,017
Cash and cash equivalents at beginning of period	790	5,639	3,652	2,713
Exchange rate difference in cash and cash equivalents	-8	6	0	-78
Cash and cash equivalents at end of period	1,314	3,652	1,314	3,652

1) During the quarter, payment has taken place under a warranty undertaking regarding tax to the purchaser of the tubular business.

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

										Return on
						Sales,		Operating		capital em
		Sales				external		profit/loss		ployed (%) 4)
	2010	2009	Change		2010	2009	2010	2009	2010	2009
	Full	Full			Full	Full	Full	Full	Full	Full
SEK millions	year	year	in %	in % 3)	year	year	year	year	year	year
SSAB EMEA	21,428	15,252	40%	47%	16,536	12,453	374	-1,693	3	neg
SSAB Americas	14,581	10,712	36%	43%	14,498	10,684	1,119	595	1	neg
SSAB APAC	2,326	1,583	47%	50%	2,326	1,574	232	70	33	13
Tibnor	6,696	5,286	27%	30%	6,523	5,127	421	-38	22	neg
Amortization on
surplus values 1)							-870	-942
Other 2)	-5,148	-2,995			0	0	-192	416	-	-
Total	39,883	29,838	34%	40%	39,883	29,838	1,084	-1,592	2	neg

1 Amortization on surplus values on intangible and tangible assets related to the acquisition of IPSCO.

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

3) Adjusted for exchange rate movements.

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

The Group's results per quarter

SEK millions	1/09	2/09	3/09	4/09	1/10	2/10	3/10	4/10
Sales	8,035	6,583	6,936	8,284	8,865	10,911	9,902	10,205
Operating expenses	-7,499	-6,911	-7,269	-7,252	-8,093	-9,602	-9,007	-9,703
Depreciation	-652	-633	-611	-610	-611	-630	-618	-592
Affiliated companies	-18	9	8	8	7	29	12	9
Financial items	-81	-144	-162	-82	-85	-84	-138	-95
Profit/loss after financial items	-215	-1,096	-1,098	348	83	624	151	-176

Sales per quarter and business area

SEK millions	1/09	2/09	3/09	4/09	1/10	2/10	3/10	4/10
SSAB EMEA	4,414	3,551	3,168	4,119	4,836	5,678	5,194	5,720
SSAB Americas	2,566	1,943	2,909	3,295	3,142	4,037	3,794	3,608
SSAB APAC	427	492	341	323	589	688	531	518
Tibnor	1,578	1,319	1,122	1,267	1,474	1,834	1,587	1,801
Other	-950	-722	-604	-720	-1,176	-1,326	-1,204	-1,442
Sales	8,035	6,583	6,936	8,284	8,865	10,911	9,902	10,205

Operating profit/loss per quarter and business area

SEK millions	1/09	2/09	3/09	4/09	1/10	2/10	3/10	4/10
SSAB EMEA	-43	-757	-1,078	185	214	338	-109	-69
SSAB Americas	1	-107	327	374	134	334	444	207
SSAB APAC	13	62	8	-13	10	96	109	17
Tibnor	-82	-12	62	-6	79	188	136	18
Amortization on surplus values 1)	-263	-248	-222	-209	-223	-233	-212	-202
Other	240	110	-33	99	-46	-15	-79	-52
Operating profit/loss	-134	-952	-936	430	168	708	289	-81

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

The Parent Company's income statement

	2010	2009	2010	2009
SEK millions	Q 4	Q 4	Full year	Full year
Gross profit	0	0	0	0
Administrative expenses	-51	-12	-202	-165
Other operating income/expenses 1)	23	-94	1,925	122
Operating profit/loss	-28	-106	1,723	-43
Dividend from subsidiaries	8	0	98	431
Financial items	-24	-32	-233	-256
Profit/loss after financial items	-44	-138	1,588	132
Appropriations	-42	0	-42	5
Tax	19	9	99	11
Profit/loss after tax	-67	-129	1,645	148

1) Earnings include profit on the sale of emission rights in the amount of SEK 0 (300) million, of which SEK 0 (0) million in the fourth quarter. Earnings also include the result of SEK 2,010 million from the sale of SSAB Tunnplåt to SSAB Oxelösund, which constituted a first stage in the merger of the two subsidiaries.

The Parent Company's balance sheet

	Dec 31	Dec 31
SEK millions	2010	2009
Assets
Non-current assets	38,818	36,786
Other current assets	12,647	10,109
Cash and cash equivalents	843	2,184
Total assets	52,308	49,079
Equity and liabilities
Restricted equity	3,753	3,753
Unrestricted equity	27,234	25,528
Total equity	30,987	29,281
Untaxed reserves	694	652
Non-current liabilities and provisions	16,456	14,957
Current liabilities 2)	4,171	4,189
Total equity and liabilities	52,308	49,079

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

The report for the first quarter of 2011:

The report for the first quarter of 2011 will be published on April 29, 2011.

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