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Rautaruukki Oyj (HEL:RTRKS) Rautaruukki Oyj Stock Exchange release 1 October 2008 at 10.55
Rautaruukki is holding its annual Capital Market Day for investors and analysts in Vaasa, Finland on 1-2 October 2008. Topics covered this year include the company's main growth segments, actions to further improve operations and the company's latest technology solutions.
Highlights: - EBIT target increased to 15 per cent (was 12 per cent) - Focus on fastest growing businesses - New operational excellence programme
-Our company's profitable growth is based on sustainable fundamentals. Rautaruukki's revised EBIT target is to exceed 15 per cent instead of 12 per cent as earlier. Efficient operations, strong growth segments, actions already carried out to improve profitability and our new operational excellence programme create the fundamentals for us to raise our EBIT target, says Rautaruukki's President & CEO, Sakari Tamminen.
Other financial targets and the company's dividend policy remain unchanged.
Rautaruukki's management expects continued growth in the company's main market areas, especially in Central Eastern and Eastern Europe. The company believes the impact of the current general factors of uncertainty in the global economy is likely to be less in its core market areas - the Nordic countries, Central Eastern Europe and especially in Russia and Ukraine.
Earnings forecast for 2008 unchanged
Comparable consolidated net sales growth during the current year is expected to meet the target and exceed 10 per cent. Operating profit in 2008 is expected to be higher than in 2007.
Main focus on selected growth segments
Rautaruukki's divisions are focusing on growth in the following geographical areas and business segments:
- Ruukki Construction: non-residential construction market in Central Eastern Europe and CIS countries. The division's rolling net sales for the 12 months ending 30 June 2008 in the above business areas totalled EUR 518 million. - Ruukki Engineering: lifting, handling and transportation equipment industry and machinery and equipment manufacturers in the energy industry. The division's rolling net sales for the 12 months ending 30 June 2008 in these business segments totalled EUR 461 million.
- Ruukki Metals: special steels. The division's rolling net sales for the 12 months ending 30 June 2008 in the special steels business totalled EUR 534 million.
Based on forecasts in customer industries, Rautaruukki estimates a compound annual growth rate (CAGR) of 8-12 per cent in Ruukki Construction's Central Eastern European market and 10-18 per cent in CIS countries between 2008 and 2011. The company estimates an annual market growth rate of 5-7 per cent in Ruukki Engineering's lifting, handling and transportation equipment industry and 7-11 per cent in the energy industry, and Ruukki Metals' special steel market is expected to grow at an annual rate of 6-7 per cent over the same period.
Savings achieved by Ruukki United profitability improvement programme
Ruukki United, Rautaruukki's programme to harmonise and rationalise ways of working, aims at cost savings and permanently freeing up capital employed compared to the cost structure in 2004.
The current status of the annual cost savings to be achieved by year-end 2008 is EUR 130 million (target: EUR 150 million) and freed up capital employed EUR 125 million (target: 150 million). Savings have been made mainly in the form of more efficient sourcing and production and the divestment of non-core businesses.
New operational excellence programme
Rautaruukki is to launch a corporate-wide operational excellence programme, "Boost", which aims at further operational efficiency and at ensuring the company retains its sustainable competitive edge and good profitability in the future. The Boost programme aims at a EUR 150 million improvement in the company's operating profit by year-end 2011, compared to 2008 level.
The company will focus on the growing markets and long-term customer relationships with growth potential. In addition, the company will launch new products and technologies. The production network will be optimised by improving supply chain management, plant capacity utilisation and sourcing. The production plants will shorten lead times, improve productivity and quality, automate bottlenecks and ramp up new investments. Work will continue on further developing and improving the efficiency of business support functions.
The company will continue to divest non-core businesses and to discontinue unprofitable operations to further improve cost-efficiency.
Capital Market Day material
The Capital Market Day presentation material in English will be available on the company's website on 1 October at about 1:30pm Finnish time at www.ruukki.com/investors
FOR FURTHER INFORMATION, PLEASE CONTACT: Sakari Tamminen, President & CEO, tel. +358 20 592 9075 Mikko Hietanen, CFO, tel. +358 20 592 9030 Anne Pirilä, SVP, Corporate Communications and Investor Relations, tel. +358 20 592 8802
Rautaruukki Corporation
Anne Pirilä SVP, Corporate Communications and Investor Relations
Rautaruukki supplies metal-based components, systems and integrated systems to the construction and engineering industries. The company has a wide selection of metal products and services. Rautaruukki has operations in 25 countries and employs 14,990 people. Net sales in 2007 totalled EUR 3.9 billion. The company's share is quoted on the OMX Nordic Exchange Helsinki (Rautaruukki Oyj: RTRKS). The Corporation uses the marketing name Ruukki.
DISTRIBUTION OMX Nordic Exchange Helsinki Main media www.ruukki.com
