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2016-10-28

SSAB: Report for the third quarter 2016: Improved earnings driven by higher prices and lower costs

The quarter

· Sales were SEK 13,477 (13,594) million
· Operating profit before depreciation/amortization was SEK 1,635
(751) million

· Operating profit/loss was SEK 707 (-191) million
· The result after financial items was SEK 461 (-438) million
· Earnings per share were SEK 0.57 (-0.37)
· Operating cash flow was SEK 926 (-160) million
Comments by the CEO

SSAB posted an operating profit of SEK 707 million for the third
quarter of 2016, up by SEK 115 million compared to prior quarter.
Improved earnings were driven mainly by higher prices and further
cost reductions, despite seasonally lower shipments and planned
maintenance costs. Compared with the third quarter of 2015, which was
adversely affected by the costs of relining the blast furnace in
Luleå, earnings were up by SEK 900 million. We are well on track to
realizing our cost reduction plan of SEK 2.8 billion, including
synergies from the Rautaruukki acquisition, and the savings are now
visible in the result.

The market situation in SSAB's home markets, Europe and North America,
differed from each other during the third quarter. In Europe
underlying demand was stable, when adjusted for normal seasonal
slowdown. Also market prices were stable and showed a slight rise due
to continued low imports. Provisional import duties on Chinese
hot-rolled strip and heavy plate imposed by the European Commission
in early October are expected to support price levels in Europe. In
North America, demand for heavy plate was weak and prices declined
throughout the quarter. This led to reduced orders from Steel Service
Centers and lower than expected shipments for SSAB Americas. Imports
of heavy plate into the USA remained at a high level. A preliminary
decision on import duties on heavy plate in the USA is expected
during the fourth quarter. Demand for high-strength steels globally
remained stable, although with some seasonal slowdown.

SSAB presented in April this year the target to reduce net debt by SEK
10 billion from the end of the first quarter 2016 to the end of 2017.
The rights issue during the second quarter of this year raised net
SEK 4.9 billion and the net cash flow during the second and third
quarters amounted to approximately SEK 1.3 billion. The remaining
amount of approximately SEK 3.8 billion will be achieved through cash
flow generated from operations, reduction of working capital and a
possible divestment of non-core assets.

During the third quarter, net cash flow was positive at SEK 612
million and the net debt was reduced to SEK 18.2 billion.

During the past two years, SSAB has focused on the integration between
SSAB and Rautaruukki and realizing the identified synergies. Going
forward, we will continue to implement our "Taking the Lead" strategy
with the goal to reach industry-leading profitability through growth
within certain prioritized strategic initiatives and by driving
efficiency through continuous improvement in all our operations. Our
strategic growth initiatives include growth in Special Steels,
Automotive and other premium products, as well as increased focus on
service and after-market activities.

Invitation to SSAB's third quarter 2016 results briefing
SSAB invites you to a presentation of the results for the third
quarter to be held at 09.30am CEST on Friday October 28, 2016.

The press conference will be held in English and webcast live on
www.ssab.com. It is also possible to participate in the briefing via
telephone.

Venue and time of briefing: World Trade Center (WTC) Stockholm,
Kungsbron 1, Conference room Manhattan, 09.30am CEST.

Telephone numbers:
+46 8 505 564 74 (Sweden),
+44 203 364 5374 (UK),
+1 855 753 2230 (USA).

Link to webcast: Go to webcast
(http://edge.media-server.com/m/p/anjngk5p)

For further information, please contact

Investor Relations: Liisa-Maija Seppänen, Investor Relations Manager,
liisa-maija.seppanen@ssab.com, +358 20 593 9232

Media: Viktoria Karsberg, Head of Corporate Communications,
viktoria.karsberg@ssab.com, +46 8 454 5734

This information is information that SSAB AB is obliged to make public
pursuant to the EU Market Abuse Regulation and the Securities Markets
Act. The information was submitted for publication, through the
agency of the contact persons set out above, at 7.30 am CEST on
October 28, 2016.

SSAB is a Nordic and US-based steel company. SSAB offers value added
products and services developed in close cooperation with its
customers to create a stronger, lighter and more sustainable world.
SSAB has employees in over 50 countries. SSAB has production
facilities in Sweden, Finland and the US. SSAB is listed on the
Nasdaq OMX Nordic Exchange in Stockholm and has a secondary listing
on the Nasdaq OMX in Helsinki. www.ssab.com.

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http://news.cision.com/ssab/r/report-for-the-third-quarter-2016--improve...
http://mb.cision.com/Main/980/2111006/581795.pdf
http://mb.cision.com/Public/980/2111006/95ec131f6f4925e4.pdf

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