First quarter 2007 Olof Faxander (CEO) Martin Lindqvist (CFO) - PowerPoint PPT Presentation

First quarter 2007 Olof Faxander (CEO) Martin Lindqvist (CFO) April 2007

SSAB – Highlights first quarter 2007 • Favorable conditions in the world steel market • Continued strong demand in our main markets • Steel prices continue to increase • Product mix in SSAB improved further • Strong earnings growth • Investment programs on track • SSAB 2010 – projects are running

SSAB – Core niche products 400 50 • Mix improvement continued 43% 45 • 43% of shipments in Q107 (37%) 350 40 • 41% 12 months rolling 300 35 Ktonnes 250 30 • Continued strong growth (%) 19% 200 25 • +17% in Q107 (+18%) 20 150 • Investment driven markets 15 100 10 50 • Prices increased in Q107 5 0 0 2 2 3 3 4 4 5 5 6 6 7 0 0 0 0 0 0 0 0 0 0 0 Q Q Q Q Q Q Q Q Q Q Q 1 3 1 3 1 3 1 3 1 3 1 Core niche products - shipments Share of shipments (%) Growth (%) 2006 1Q06 1Q07 Core niche products +24 +18 +17

SSAB – Key drivers in our business Energy Safety consumption Strength Weight Durability Productivity Use of steel

SSAB – Steel Sheet Division • EHS/UHS 32% (26%) of shipments 20% 21% • Growth in EHS/UHS mainly in heavy 2006 10% 10% transport in North America and Asia 39% • Strong demand in Nordic countries but lower growth than in 2006 Heavy transport Light transport • Very strong construction market in Nordic Sweden – some lagging effects from Building Q406 Ordinary outside Nordic Growth (%) 2006 1Q06 1Q07 • Continued reduction in sales of EHS/UHS steel sheet +38 +25 +25 ordinary material outside Nordic region

SSAB – Heavy Plate Division • Q&T heavy plate 88% (80) of shipments – 100% in 2009 20% 30% • Still capacity constrained – more capacity added after the summer 20% 20% 10% • Southern Europe - Strong demand dumpers for heavy trucks and aftermarket OEM-Yellow goods OEM-Mining Recycling Aftermarket Other • Central Europe – Strong demand infrastructure and export industry Growth (%) 2006 1Q06 1Q07 focused on eastern Europe Q&T heavy plate +8 +11 +8

SSAB – Tibnor • Strong demand in Swedish 5% 19% 15% engineering and construction sectors • Indications of investment projects in 12% energy and petrochemical industries 30% 13%6% • Long products (Steel) – demand remains strong – shortage of material Steel Steel sheet Heavy plate Specialty steel Stainless steel Metals • Reinforcing – market boom, prices Reinforcing have increased rapidly Growth (%) 2006 1Q06 1Q07 Tibnor shipments +11 +9 +11

Steel market – Production and demand growth 1Q07 Demand figures Q107 and FY2007 are estimates C.I.S. EU27 5 10 6 1,5 ~5 Japan China USA -7 -4 -6 1 1 5 22 13 13 Asia total South America 16 9 7 6 World Production growth Q107a (%) Demand growth Q107e (%) 10 6 Demand growth 2007e (%) Source: IISI, Eurofer, SSAB

Steel market – Trade flow first quarter 2007 (million tonnes) (+) Net imports (-) Net exports (all estimates) EU27 USA 0 5 Japan 5 4 China 185 186 -7 -1 -7 -8 120 88 79 104 356 379 Steel market demand 2006 Net flow 1Q2006 Production 2006 (10% yield loss) Net flow 1Q2007e Source: IISI, Eurofer, SSAB

Steel market update - Summary • Trade flows • High export levels from China to Europe • Somewhat lower imports into the US • Demand • Strong demand growth in Europe and Asia • Weaker demand in North America – housing construction and automotive down • IISI predict about + 6% growth in world demand 2007 • Lower world demand growth than in 2006, but remains at historically high levels • Customers in our core niche markets have strong order books • Infrastructure, mining, heavy transport • Demand for core niche products from SSAB is expected to remain strong

SSAB 2010 – Our vision Market concept SSAB 2010 – The Vision Expansion Product portfolio Productivity Fixed costs Corporate governance Supporting functions Working capital Key competence Purchasing

SSAB – Financial highlights first quarter 2007 • Strongest quarter in the history of SSAB • Gross margins improved • Core niche products grew • Stable raw materials costs • Somewhat higher fixed costs

SSAB – Strongest quarterly result in the history 2500 2000 1500 SEKm 1000 500 0 -500 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2

SSAB – Financial highlights first quarter 2007 • Strongest quarter in the history of SSAB • Gross margins improved • Core niche products grew • Stable raw materials costs • Somewhat higher fixed costs • Steel prices increased from Q406 + 4% steel sheet + 4% Q&T + 4% mix in heavy plate • + 5 % total steel operation

SSAB – Steel price development (average steel operation) Steel prices in SEK Q306 Q406 Q107 Q106 Q206 108 109 114 100 100 FY 2006 + 11% 103 Mars April Nov Mars Jan Feb Maj Juni Jul Aug Sep Okt Dec Jan Feb

SSAB – Financial highlights first quarter 2007 • Strongest quarter in the history of SSAB • Gross margins improved • Core niche products grew • Stable raw materials costs • Somewhat higher fixed costs • Steel prices increased from Q406 + 4% steel sheet + 4% Q&T + 4% mix in heavy plate • + 5 % total steel operation • Shipments increased from Q106 • Total steel operation + 2% • Tibnor + 11% • Plannja + 29% • Oxygen plant explosion Q406 – negative effect of SEK 100m

SSAB – Profit and loss account (%) (SEKm) 1Q06 1Q07 ch Sales 7,622 8,780 15 Price/mix +12%, Volume +3% EBIT 1,557 2,145 38 Gross margins and core niche EBIT margin (%) 20.4 24.4 - Profit before tax 1,558 2,147 38 Profit after tax 1,113 1,544 39 Non-recurring 0 0 - Profit before tax - adjusted 1,558 2,147 38 EPS 4.02 5.84 45 ROCE (%)– Pre-tax 33 38 - ROE (%) – Post tax 28 31 -

SSAB – Divisions and Subsidiaries (SEKm) 1Q06 1Q07 % ch Division Steel Sheet Sales 3,735 4,389 +18 EBIT 662 1,023 +55 Price/volume/mix EBIT margin (%) 17.7 23.3 - Division Heavy Plate Sales 2,792 2,856 +2 EBIT 752 783 +4 Price/mix EBIT margin (%) 26.9 27.4 - Plannja Sales 226 318 +41 EBIT -14 3 n.a. Volume EBIT margin (%) -6.2 0.9 - Tibnor Sales 2,109 2,774 +32 EBIT 141 267 +89 Price/volume EBIT margin (%) 6.7 9.6 -

SSAB – Change in EBIT (SEKm) 1Q06 to 1Q07 Division Steel Sheet - Higher gross margins +415 - Increased share of EHS/UHS +70 Division Heavy Plate - Lower gross margins -20 - Increased share of Q & T heavy plate +35 Plannja - Higher gross margins +10 - Higher volumes/improved mix +20 Tibnor - Higher gross margins +35 Price change in inventory - Higher volumes/improved mix +100 + 23.0m (+8.6) Fixed costs -82 Other +5 Change in EBIT + 588

SSAB – Profitability ROCE - (%) 2004 2005 2006 1Q07 Steel Sheet Division 37 40 34 48 Heavy Plate Division 17 39 40 39 Tibnor 36 27 50 56 Plannja 21 20 30 34 Group 34 34 36 38 Group ROE 33 30 29 31

SSAB – Cash flow and financial position 1Q06 1Q07 Cash flow (SEKm) Steel Sheet + 616 + 345 Heavy Plate + 435 + 432 Plannja 0 -54 Tibnor + 38 + 13 Other - 58 + 47 Cash flow from operations + 1,031 + 783 Expansion investments -77 -264 Divestments + 1 + 26 Cash flow before dividend and financing + 955 + 545 Financial position Net debt (SEKm) - 521 514 Net gearing (net debt / equity) (%) -3 3 Equity ratio incl. minority (%) 69 66 Equity per share (SEK) 56.01 60.67

SSAB - Guidance Full year 2007 Second Quarter 2007 • Shipments of core niche products – • Based on contracts closed so far - marginally higher steel prices in local Q&T heavy plate and EHS/UHS steel sheet – are expected to continue to currency compared to the first quarter increase • Fixed costs during 2007 will be affected negatively by the planned redundancies – approx. SEK 200m • Steel prices in the first quarter of 2007 where 11% higher compared to the average for the full year 2006 • Iron ore +7% in USD and +2% in SEK • Coal -13% in USD and -15% in SEK • (New contract from April 1)

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