SSAB Results for 2011

The quarter

• Sales were up 7%, to SEK 10,898 (10,205) million                                             
• Operating profit improved to SEK 50 (-55) million 
• Profit after financial items improved to SEK -98 (-150) million        
• Earnings per share of SEK -0.23 (-0,37)  
• Operating cash flow improved to SEK 1,671 (-105) million and cash flow from current operations amounted to SEK 1,828 (-376) million         

The full year

• Sales were up 12%, to SEK 44,640 (39,883) million 
• Operating profit improved to SEK 2,512 (1,132) million                       
• Profit after financial items improved to SEK 1,998 (730) million 
• Earnings per share of SEK 4.82 (2.23)      
• Operating cash flow of SEK 2,821 (-172) million and cash flow from current operations of SEK 2,200 (-731) million              
• Niche products now account for 37 (32)% of steel shipments             
• Proposed divided of SEK 2.00 (2.00) per share, equal to SEK 648 (648) million  

(In the report, amounts in brackets refer to the corresponding period of last year. Periods have been adjusted as a consequence of changed accounting principles; see page 22 for details).

Comments by the CEO

The operating profit of SEK 50 (-55) million for the fourth quarter reflects a continued weak trend in, first and foremost, Europe. In line with the information provided in the third quarter report, during the fourth quarter we noted lower prices for our standard products in both Europe and North America, whereas our high strength steels experienced a more moderate fall in prices.                                        

During the fourth quarter, we essentially eliminated the inventories that had been built up to address any shortages during the major capital expenditure and maintenance outages of the summer and autumn, and this contributed to an improvement in operating cash flow to SEK 1.7 (-0.1) billion.

The weak trend in Europe resulted in significant inventory reductions at our customers during the autumn. We have also noted inventory reductions on other markets, but not to the same extent.

As a consequence of the low demand in Europe, one of our blast furnaces in Oxelösund remained inoperative during the fourth quarter. Consequently, capacity utilization in our Swedish operations was approximately 70 percent. Carbon dioxide emissions from the operations fell as a consequence of the lower production, and thus during the fourth quarter we were able to sell those emission rights that we did not need to utilize. Apart from a scheduled maintenance outage in Montpelier, we have produced at normal capacity utilization in our Americas operations. The Americas business area continues to deliver good results and, in independent customer surveys, has been designated as the best supplier among steel producers on the North American market.

We expect the investment in the new quenching line in Mobile to be brought into commission during the second quarter. Together with the investment in a new cooling line in Borlänge and the investment in thick quenched plate production in Oxelösund, we enjoy a world-unique breadth in our range of quenched steels. We are strengthening the Group Executive Committee with two positions in order to further exploit the possibilities on the market and to increase endeavors in the work on developing high strength steels. One of the positions involves overall responsibility for marketing and sales issues, while the other entails a corresponding responsibility for technical and product development.

The trend going forward varies depending on market. There are clear signs that a recovery has begun in North America, and several plate producers have announced price increases as regards shipments during the first quarter. Demand in Europe remains weak, with low price levels. We have thus initiated an efficiency program within EMEA which, through structural measures, increase of flexibility and a general review of costs, will lead to a reduction of approximately SEK 800 million in the cost base. The payback time for the program will be less than a year. In Asia and Latin America, the stable trend is continuing. The trend of declining prices in large parts of the world during the fourth quarter will have a negative impact on SSAB's prices in the first quarter of 2012. Due to lower iron ore prices, our iron ore agreements for deliveries during the first quarter have been renegotiated, and this will impact positively on earnings for the second quarter.

Martin Lindqvist
President & CEO

SSAB is a global leader in value added, high strength steel. SSAB offers products developed in close cooperation with its customers to create a stronger, lighter and more sustainable world. SSAB has employees in over 45 countries and operates production facilities in Sweden and the US. SSAB is listed on the NASDAQ OMX Nordic Exchange, Stockholm. www.ssab.com.

This information is such that SSAB must disclose in accordance with the Securities Markets Act. The information was submitted for publication on February 10, 2012 at 08.00 am.

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