2014-10-22 12:00:00 CEST
2014-10-22 12:00:03 CEST
REGULATED INFORMATION
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Stora Enso Oyj - Interim report (Q1 and Q3)
Stora Enso Interim Review January–September 2014
Solid quarterly performance - the transformation journey continues
Helsinki, Finland, 2014-10-22 12:00 CEST (GLOBE NEWSWIRE) -- STORA ENSO OYJ
INTERIM REVIEW 22 October 2014 at 13.00 EET
Q3/2014 (compared with Q3/2013)*
-- Sales at EUR 2 514 (EUR 2 553) million declined 1.5%.
-- Sales excluding the structurally declining paper business increased 3%.
-- Operational EBIT EUR 210 (EUR 184) million, 14% higher than a year ago due
to continued focused cost management.
-- Renewable Packaging continued strong performance for the third quarter
in a row. Operational EBIT increased by 30%.
-- Biomaterials improved its performance despite Montes del Plata ramp-up.
-- Building and Living performance similar to last year's good Q3.
-- Stable performance in Printing and Reading. Cash flow from operations to
sales ratio 7.5% (5.4%).
-- EPS excluding NRI EUR 0.12 (EUR 0.13).
-- Cash flow from operations EUR 257 (EUR 347) million, cash flow after
investing activities EUR 28 (EUR 164) million.
-- Net debt to operational EBITDA 2.8 (3.1), liquidity remained strong at EUR
1.5 (2.1) billion.
-- Operational ROCE 9.7% (8.3%).
Q1-Q3/2014 (compared with Q1-Q3/2013)*
-- Sales EUR 7 661 (EUR 7 951) million, operational EBIT EUR 601 (EUR 426)
million due to lower costs.
Stora Enso's CEO Karl-Henrik Sundström comments the third quarter 2014 results:
“Stora Enso delivered solid performance during the third quarter. Sales,
excluding the structurally declining paper business, were up by 3%. We are
successful in our cost management and the operational EBIT increased 14%
year-on-year. Return on capital employed increased to 9.7%, which is yet
another step in the right direction. Furthermore, we have improved Net
debt/EBITDA compared to a year ago from 3.1 to 2.8.
We have taken several steps in our transformation into a customer focused
renewables materials company. A key milestone was the inauguration of the pulp
mill in Montes del Plata, Uruguay, and we are now ready to ramp up its
production capacity. During the quarter, we also initiated the process to
convert the Varkaus Mill in Finland for production of virgin-fibre-based
containerboard. Moreover, we have invested in a demonstration and market
development plant in the USA for the extraction and separation of highly pure
sugars from biomass to be converted into differentiated biochemicals. The
investment in the consumer board machine in Guangxi, China, proceeds as
planned. Our non-core asset disposal programme is moving ahead with the
divestment of Corenso as the most recent step. Together with innovation in our
existing product range, these initiatives will play a major role in our
transformation.
During the quarter, we have put a partly new Group Leader ship Team in place.
There is a clearer focus, partly due to the fact that we have split Global
Communications and Global Responsibility. Our focus on Responsibility is partly
reflected by the section in our quarterly reporting. We are moving ahead.
When it comes to outlook, the fourth quarter 2014 sales are estimated to be
roughly similar to the EUR 2 514 million in the third quarter 2014. Operational
EBIT is expected to be somewhat lower than the EUR 210 million in the third
quarter 2014 due to normal seasonal weakness in the Renewable Packaging and
Building and Living divisions.
This was my first quarter as the CEO and I am very impressed by all our
competent and committed employees who together build the future of Stora Enso.
It is all about creating value for our customers, today and tomorrow.”
Transformation
-- Montes del Plata Pulp Mill in Uruguay started up in early June and the
ramp-up is moving ahead, but at a slower pace than previously expected. In
2014 Stora Enso's share of its production is expected to be 245 000-275 000
tonnes, 55 000-75 000 tonnes less than anticipated in July.
-- Stora Enso Guangxi Integrated Project and Operations proceeding as planned.
-- Conversion of Varkaus Mill fine paper machine in Finland to produce
virgin-fibre-based containerboard proceeding as planned, expected to start
at the end of 2015.
-- New investment in a demonstration and market development plant in the USA
for the extraction and separation of highly pure sugars from biomass to be
converted into differentiated biochemicals.
Restructuring
-- Stora Enso has signed an agreement to divest its Corenso business
operations to Powerflute Oyj in order to streamline its business and to
transform Stora Enso into a customer-focused renewable materials company.
Closing is expected during Q4/2014.
-- In October the buyer of Uetersen Mill withdrew the merger approval
application due to indicated negative outcome by the competition
authorities. As a consequence the parties agreed to terminate the share
purchase agreement. Stora Enso is currently considering its alternative
options.
Outlook
Q4/2014 sales are estimated to be roughly similar to the EUR 2 514 million in
Q3/2014. Operational EBIT is expected to be somewhat lower than the EUR 210
million in Q3/2014 due to normal seasonal weakness in the Renewable Packaging
and Building and Living divisions.
Key Figures*
EUR Q3/14 Q3/13 Change Q2/14 Change Q1-Q3/ Q1-Q3/ Change 2013
million % % 14 13 %
Q3/14- Q3/14- Q1-Q3/
Q3/13 Q2/14 14-
Q1-Q3/
13
--------------------------------------------------------------------------------
Sales 2 514 2 553 -1.5% 2 579 -2.5% 7 661 7 951 -3.6% 10 563
Operatio 333 319 4.4% 326 2.1% 961 830 15.8% 1 090
nal
EBITDA
Operatio 210 184 14.1% 209 0.5% 601 426 41.1% 578
nal EBIT
Operatin 215 156 37.8% 85 152.9% 495 260 90.4% 50
g profit
(IFRS)
Profit 116 126 -7.9% 145 -20.0% 367 239 53.6% 350
before
tax
excl.
NRI
Profit/l 144 103 39.8% 39 269.2% 313 92 240.2% -189
oss
before
tax
Net 123 84 46.4% 1 n/m 224 89 151.7% -71
profit/
loss for
the
period
Operatio 9.7% 8.3% 9.8% 9.3% 6.3% 6.5%
nal
ROCE, %
Earnings 0.12 0.13 0.13 0.34 0.25 0.40
per
share
(EPS)
excl.
NRI,
EUR
EPS 0.15 0.11 0.00 0.28 0.11 -0.07
(basic)
, EUR
Debt/equ 0.66 0.64 0.66 0.66 0.64 0.61
ity
ratio
Average 29 627 28 997 2.2% 29 704 -0.3% 29 302 29 032 0.9% 28 921
number
of
employe
es
TRI rate 14.1 13.0 8.5% 11.0 28.2% 13.0 14.6 -11.0% 14.0
LTA rate 6.0 5.5 9.1% 4.3 39.5% 5.3 6.3 -15.9% 6.0
--------------------------------------------------------------------------------
* Data for the comparative periods in 2013 have been restated following
adoption of the new IFRS 10 Consolidated Financial Statements, IFRS 11 Joint
Arrangements and IFRS 12 Disclosure of Interests in Other Entities standards.
Data for the comparative periods have been restated in all tables affected.
Operational EBIT comprises the operating profit excluding NRI and fair
valuations of the segments and Stora Enso's share of the operating profit
excluding NRI and fair valuations of its equity accounted investments (EAI).
Fair valuations and non-operational items include equity incentive schemes,
synthetic options net of realised and open hedges, CO2 emission rights and
valuations of biological assets and the Group's share of tax and net financial
items of EAI.
NRI = Non-recurring items. These are exceptional transactions that are not
related to normal business operations. The most common non-recurring items are
capital gains, additional write-downs or reversals of write-downs, provisions
for planned restructuring and penalties. Non-recurring items are normally
disclosed individually if they exceed one cent per share.
TRI (Total recordable incident) rate = number of incidents per one million
hours worked.
LTA (Lost-time accident) rate = number of lost-time accidents per one million
hours worked.
Webcast and conference call for analysts and investors
CEO Karl-Henrik Sundström, CFO Seppo Parvi and SVP Investor Relations Ulla
Paajanen-Sainio will be hosting a combined conference call and webcast today at
14.00 Finnish time (13.00 CET, 12.00 UK time, 07.00 EDT).
To participate, please dial:
UK +44(0)20 3427 1905
Finland +358 (0)9 6937 9590
Sweden +46 (0)8 5065 3936
US +1 646 254 3388
Confirmation Code: 7096089
The live webcast may be accessed at http://www.media-server.com/m/p/ziaee455
For further information, please contact:
Seppo Parvi, CFO, tel. +358 2046 21205
Ulla Paajanen-Sainio, SVP, Investor Relations, tel. +358 2046 21242
Ulrika Lilja, EVP, Global Communications, tel. +46 1046 71668
Stora Enso's fourth quarter and full year 2014 results will be published on 4
February 2015.
www.storaenso.com
www.storaenso.com/investors
Stora Enso is the global rethinker of the paper, biomaterials, wood products
and packaging industry. We always rethink the old and expand to the new to
offer our customers innovative solutions based on renewable materials. Stora
Enso employs some 29 000 people worldwide, and our sales in 2013 amounted to
EUR 10.6 billion. Stora Enso shares are listed on NASDAQ OMX Helsinki (STEAV,
STERV) and Stockholm (STE A, STE R). In addition, the shares are traded in the
USA as ADRs (SEOAY) in the International OTCQX over-the-counter market.
It should be noted that certain statements herein which are not historical
facts, including, without limitation those regarding expectations for market
growth and developments; expectations for growth and profitability; and
statements preceded by “believes”, “expects”, “anticipates”, “foresees”, or
similar expressions, are forward-looking statements within the meaning of the
United States Private Securities Litigation Reform Act of 1995. Since these
statements are based on current plans, estimates and projections, they involve
risks and uncertainties, which may cause actual results to materially differ
from those expressed in such forward-looking statements. Such factors include,
but are not limited to: (1) operating factors such as continued success of
manufacturing activities and the achievement of efficiencies therein, continued
success of product development, acceptance of new products or services by the
Group's targeted customers, success of the existing and future collaboration
arrangements, changes in business strategy or development plans or targets,
changes in the degree of protection created by the Group's patents and other
intellectual property rights, the availability of capital on acceptable terms;
(2) industry conditions, such as strength of product demand, intensity of
competition, prevailing and future global market prices for the Group's
products and the pricing pressures thereto, price fluctuations in raw
materials, financial condition of the customers and the competitors of the
Group, the potential introduction of competing products and technologies by
competitors; and (3) general economic conditions, such as rates of economic
growth in the Group's principal geographic markets or fluctuations in exchange
and interest rates.
STORA ENSO OYJ
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