2011-02-08 12:00:00 CET
2011-02-08 12:00:13 CET
REGULATED INFORMATION
Stora Enso Oyj - Financial Statement Release
Stora Enso Fourth Quarter and Full Year Results 2010
Another solid quarter finishing a strong year, dividend increase to EUR 0.25
proposed
Helsinki, Finland, 2011-02-08 12:00 CET (GLOBE NEWSWIRE) -- STORA ENSO OYJ
ANNUAL FINANCIAL STATEMENT RELEASE 8 February 2011 at 13.00 EET
-- EUR 167 million quarterly operating profit excluding NRI and fair
valuations, up by EUR 29 million, 21% year-on-year, EBITDA excluding NRI
and fair valuations up by 27%.
-- EUR 754 million full year operating profit excluding NRI and fair
valuations, up by EUR 434 million, 135%, EBITDA excluding NRI and fair
valuations up by 51%.
-- Maintenance costs were EUR 34 million higher in Q4 2010 than Q3 2010.
Volumes lost due to maintenance decreased operating profit by EUR 20
million.
-- Cost inflation forecast to be 3% for the full year 2011, primarily in the
first half of the year, own actions targeted to compensate all of it.
-- Strong pricing momentum continues, especially in newsprint and magazine
paper.
-- Operating profit excluding NRI and fair valuations is expected to be
sequentially higher in Q1 2011.
Summary of Fourth Quarter Results
Q4/10 2010 Q4/09 2009
--------------------------------------------------------------------------------
Sales EUR 2 685.2 10 296.9 2 398.8 8 945.1
million
EBITDA excl. NRI and fair EUR 288.8 1 216.5 227.2 807.8
valuations million (1 (1
Operating Profit excl. NRI and EUR 166.8 754.1 137.5 320.5
Fair Valuations million
Operating profit/loss (IFRS) EUR 410.9 1 026.8 105.3 -607.6
million
Profit before tax excl. NRI EUR 187.0 745.7 122.7 194.2
million
Profit/loss before tax EUR 389.2 925.9 80.6 -886.8
million
Net profit excl. NRI EUR 148.7 627.0 76.0 153.2
million
Net profit/loss EUR 313.0 769.3 45.9 -878.2
million
EPS excl. NRI EUR 0.19 0.79 0.09 0.19
EPS EUR 0.39 0.97 0.05 -1.12
CEPS excl. NRI EUR 0.37 1.46 0.29 0.92
ROCE excl. NRI % 9.9 10.3 7.5 3.9
ROCE excl. NRI and fair % 7.9 9.2 7.0 3.9
valuations
1) See Key Figures table.
Fair valuations include synthetic options net of realised and open hedges, CO2
emission rights, and valuations of biological assets related to forest assets
in equity accounted investments.
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
specified individually if they exceed one cent per share.
Markets
Compared with Q4/2009
Product Market Demand Price
-----------------------------------------------------------------------------
Newsprint Europe slightly stronger significantly lower
Coated magazine paper Europe significantly stronger stable
Uncoated magazine paper Europe slightly stronger lower
Coated fine paper Europe weaker higher
Uncoated fine paper Europe slightly weaker significantly higher
Consumer board Europe stronger higher
Industrial packaging Europe stronger significantly higher
Wood products Europe stable significantly higher
Industry inventories were significantly lower for newsprint and uncoated
magazine paper, slightly higher for wood products, and higher for coated
magazine paper and fine paper.
Compared with Q3/2010
Product Market Demand Price
------------------------------------------------------------------------
Newsprint Europe stronger stable
Coated magazine paper Europe significantly stronger stable
Uncoated magazine paper Europe significantly stronger stable
Coated fine paper Europe stable slightly higher
Uncoated fine paper Europe stable slightly higher
Consumer board Europe stable slightly higher
Industrial packaging Europe stable slightly higher
Wood products Europe slightly weaker slightly lower
Industry inventories were significantly lower for newsprint and magazine paper,
slightly lower for fine paper and slightly higher for wood products.
Stora Enso Deliveries and Production
Q4/10 Q3/10 Q4/09 2010 2009 Change % Change Change
Q4/10-Q4 % %
/09 Q4/10-Q 2010-20
3/10 09
----------------------------------------------------------------
Paper and board 2 724 2 717 2 744 10 758 10 174 -0.7 0.3 5.7
deliveries (1
000 tonnes)
Paper and board 2 665 2 686 2 587 10 812 10 036 3.0 -0.8 7.7
production (1
000 tonnes)
Wood products 1 259 1 333 1 298 5 198 4 902 -3.0 -5.6 6.0
deliveries (1
000 m3)
Corrugated 271 250 255 1 027 966 6.3 8.4 6.3
packaging
deliveries
(million m2)
----------------------------------------------------------------
Q4/2010 Results (compared with Q4/2009)
Sales at EUR 2 685 million were EUR 286 million higher than in the fourth
quarter of 2009. Prices for the Group's products were generally higher, but
newsprint and magazine paper prices in local currencies decreased. Volume
recovery and favourable exchange rates also increased sales. Pulp delivery
volumes and prices increased considerably.
Key Figures
EUR Q4/2010 Q3/10 Q4/2009 2010 2009 Change Change Change
million % % %
Q4/10- Q4/10- 2010-2
Q4/09 Q3/10 009
--------------------------------------------------------------------------------
Sales 2 685.2 2 623.6 2 398.8 10 296.9 8 945.1 11.9 2.3 15.1
EBITDA 288.8 365.8 227.2(1 1 216.5 807.8(1 27.1 -21.0 50.6
excl. NRI
and fair
valuations
Operating 166.8 255.0 137.5 754.1 320.5 21.3 -34.6 135.3
profit
excl. NRI
and fair
valuations
Operating 6.2 9.7 5.7 7.3 3.6 8.8 -36.1 102.8
margin
excl. NRI
and fair
valuations
, %
Operating 410.9 276.9 105.3 1 026.8 -607.6 290.2 48.4 269.0
profit/los
s (IFRS)
Operating 15.3 10.6 4.4 10.0 -6.8 247.7 44.3 247.1
profit/los
s, % of
sales
Profit/los 187.0 220.4 122.7 745.7 194.2 52.4 -15.2 284.0
s before
tax excl.
NRI
Profit/los 389.2 225.8 80.6 925.9 -886.8 n/m 72.4 204.4
s before
tax
Net 148.7 188.9 76.0 627.0 153.2 95.7 -21.3 n/m
profit/los
s for the
period
excl. NRI
Net 313.0 194.3 45.9 769.3 -878.2 n/m 61.1 187.6
profit/los
s for the
period
Capital 138.8 73.5 101.9 400.4 423.8 36.2 88.8 -5.5
expenditur
e
Fixed 142.5 132.7 129.3 529.4 548.7 10.2 7.4 -3.5
asset
depreciati
on and
impairment
charges
excl. NRI
ROCE excl. 7.9 12.4 7.0 9.2 3.9 12.9 -36.3 135.9
NRI and
fair
valuations
, %
ROCE excl. 9.9 13.2 7.5 10.3 3.9 32.0 -25.0 164.1
NRI, %
Earnings 0.19 0.23 0.09 0.79 0.19 111.1 -17.4 n/m
per share
(EPS)
excl. NRI,
EUR
EPS 0.39 0.25 0.05 0.97 -1.12 n/m 56.0 186.6
(basic),
EUR
Cash 0.37 0.40 0.29 1.46 0.92 27.6 -7.5 58.7
earnings
per share
(CEPS)
excl. NRI,
EUR
CEPS, EUR 0.27 0.43 0.28 1.33 0.35 -3.6 -37.2 280.0
Return on 20.8 13.8 3.6 13.5 -16.2 n/m 50.7 183.3
equity
(ROE), %
Debt/equit 0.39 0.43 0.51 0.39 0.51 -23.5 -9.3 -23.5
y ratio
Equity per 7.87 7.27 6.50 7.87 6.50 21.1 8.3 21.1
share, EUR
Equity 48.0 45.8 44.7 48.0 44.7 7.4 4.8 7.4
ratio, %
Average 26 535 27 785 27 612 27 383 28 696 -3.9 -4.5 -4.6
number of
employees
Average
number of
shares
(million)
periodic 788.6 788.6 788.6 788.6 788.6 0.0 0.0 0.0
cumulative 788.6 788.6 788.6 788.6 788.6 0.0 0.0 0.0
cumulative 788.6 788.6 788.6 788.6 788.6 0.0 0.0 0.0
, diluted
1) Restated (decreased EUR 14.9 million), no impact on other reported profit
figures.
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
specified individually if they exceed one cent per share.
Fair valuations include synthetic options net of realised and open hedges, CO2
emission rights, and valuations of biological assets related to forest assets
in equity accounted investments.
Reconciliation of Operating Profit
EUR million Q4/10 Q3/10 Q4/09 2010 2009 Change % Change Change
Q4/10-Q4 % %
/09 Q4/10-Q 2010-20
3/10 09
--------------------------------------------------------------------------------
Profit/loss 146.4 233.1 101.7 687.1 259.1 44.0 -37.2 165.2
from
operations,
excl. NRI
Equity 20.4 21.9 35.8 67.0 61.4 -43.0 -6.8 9.1
accounted
investments,
operational,
excl. NRI and
fair
valuations
-----------------------------------------------------------------
Operating 166.8 255.0 137.5 754.1 320.5 21.3 -34.6 135.3
Profit excl.
NRI and
Fair
Valuations
Fair 41.9 16.5 9.9 92.5 4.4 n/m 153.9 n/m
valuations
Operating 208.7 271.5 147.4 846.6 324.9 41.6 -23.1 160.6
Profit/Loss,
excl. NRI
NRI 202.2 5.4 -42.1 180.2 -932.5 n/m n/m 119.3
Operating 410.9 276.9 105.3 1 026.8 -607.6 290.2 48.4 269.0
Profit/Loss
(IFRS)
-----------------------------------------------------------------
Q4/2010 Results (compared with Q4/2009)
(continued)
Operating profit atEUR 167 million excluding non-recurring items and fair
valuations was EUR 29 million higher than a year ago. This represents an
operating margin of 6%.
Price increases in local currencies and a favourable product mix increased
operating profit by EUR 117 million. Higher volumes increased operating profit
by EUR 44 million. Paper and board production was curtailed by 7% (15%) and
sawnwood production by 7% (15%) of capacity.
Higher costs for pulp, fibre, chemicals and corrugated raw materials decreased
operating profit, but early cost saving and efficiency improvement measures
partially compensated the cost increases. The net impact of the increase in
variable and fixed costs in local currencies was a negative EUR 113 million.
Market pulp had a positive net impact of EUR 12 million, mainly in Magazine
Paper, as profit improvement through external pulp sales more than offset the
higher cost of externally purchased pulp.
The favourable impact of exchange rates on sales was significantly offset by
the unfavourable impact of exchange rates on costs, especially due to the
Swedish krona, the net impact being some EUR 12 million, after hedges.
Depreciation increased by EUR 13 million, partly due to the reversal of
previous impairments.
The share of the operational results of equity accounted investments amounted
to EUR 20 (EUR 36) million, with the largest contribution from Bergvik Skog.
The Group recorded a net positive EUR 202 million of non-recurring items at
operating profit level in the fourth quarter of 2010. Following the fixed asset
impairment testing undertaken in the fourth quarter of 2010, the Group recorded
a net reversal of impairments of EUR 238 million. The Group also recorded a
negative non-cash NRI of approximately EUR 15 million related to permanent
impairment of certain shares in equity accounted investments and a negative NRI
with cash impact of EUR 21 million following the Finnish Supreme Court ruling
on performance-based rewards that had been withheld because of illegal strikes.
Net financial items were EUR -22 (EUR -25) million. Net interest expenses
increased from EUR 21 million to EUR 26 million.
Group capital employed was EUR 8 665 million on 31 December 2010, a net
increase of EUR 888 million due to the impairment reversal, strengthening of
the Swedish krona and Brazilian real, and PVO valuation.
January-December 2010 Results (compared with the same period in 2009)
Sales increased by EUR 1 352 million year-on-year to EUR 10 297 million.
Operating profit excluding non-recurring items and fair valuations was EUR 434
million higher than a year ago at EUR 754 million. Higher volumes improved
operating profit by EUR 332 million, and the improved product mix and price
increases in local currencies improved operating profit by EUR 183 million,
more than compensating for EUR 147 million increases in costs. The favourable
impact of exchange rates on sales was partially offset by the unfavourable
impact of exchange rates on costs, the net impact being EUR 57 million
positive.
Q4/2010 Results (compared with Q3/2010)
Sales were slightly up by EUR 62 million on the previous quarter. Operating
profit excluding non-recurring items and fair valuations was EUR 88 million
lower than in the previous quarter at EUR 167 million, as higher sales prices
in local currencies did not fully compensate for higher costs, especially for
maintenance, and somewhat lower volumes. Maintenance costs were EUR 34 million
higher in the fourth quarter of 2010 than the third quarter of 2010. Volumes
lost due to maintenance decreased operating profit by EUR 20 million. Exchange
rates were unfavourable. Quarterly depreciation increased by EUR 7 million as a
result of the reversal of impairments completed during the fourth quarter of
2010. Group capital employed was EUR 8 665 million on 31 December 2010, a net
increase of EUR 438 million.
Capital Structure
EUR million 31 Dec 30 Sep 30 June 31 Mar 31 Dec
10 10 10 10 09
Operative fixed assets 6 445.2 6 065.7 6 068.4 6 084.6 5 936.2
Equity accounted investments 1 744.0 1 656.7 1 687.1 1 572.0 1 481.3
Operative working capital 1 399.3 1 389.5 1 323.2 1 256.2 1 171.2
Non-current interest-free -493.9 -474.3 -519.2 -499.6 -498.1
items, net
------------------------------------------------
Operating Capital Total 9 094.6 8 637.6 8 559.5 8 413.2 8 090.6
Net tax liabilities -429.9 -411.2 -356.4 -350.9 -314.3
Capital Employed 8 664.7 8 226.4 8 203.1 8 062.3 7 776.3 ------------------------------------------------
Equity attributable to Company 6 202.9 5 731.3 5 457.1 5 206.6 5 124.3
shareholders
Non-controlling interests 51.8 50.3 52.7 58.8 58.2
Net interest-bearing 2 410.0 2 444.8 2 698.0 2 811.9 2 593.8
liabilities
Held for sale -- -- -4.7 -15.0 --
Financing Total 8 664.7 8 226.4 8 203.1 8 062.3 7 776.3
------------------------------------------------
Financing Q4/2010 (compared with Q3/2010)
Cash flow from operations remained strong at EUR 265 (EUR 304) million. Capital
expenditure was EUR 139 million in the fourth quarter. Cash flow after
investing activities was EUR 126 (EUR 230) million. At the end of the period,
interest-bearing net liabilities of the Group were EUR 2 410million, a decrease
of EUR 35million. In December 2010 the entire USD 421 million bond maturing in
2011 was repurchased.
Total unutilised committed credit facilities were unchanged at EUR 1 400
million, and cash and cash equivalents net of overdrafts remained strong at EUR
1 103 million, which is EUR 18 million less than for the previous quarter. In
addition, Stora Enso has access to various long-term sources of funding up to
EUR 700 million. In November 2010 Stora Enso tapped two five-year bonds for a
total of SEK 1 500 million under its EMTN (Euro Medium Term Note) programme.
There are no financial covenants in the new debt. In December 2010 Stora Enso
signed a new EUR 700 million committed credit facility agreement with a
syndicate of 16 banks effective in January 2011. The new facility matures in
January 2014.
The debt/equity ratio at 31 December 2010 was 0.39 (0.43). The currency effect
on owners' equity was positive EUR 70 million net of the hedging of equity
translation risks. The fair valuations of operative securities, mainly related
to the unlisted Finnish power supply company Pohjolan Voima, included within
available-for-sale assets increased equity by EUR 94 million.
Cash Flow
EUR million Q4/10 Q3/10 Q4/09 2010 2009 Change Change Change
% % %
Q4/10-Q Q4/10-Q 2010-20
4/09 3/10 09
--------------------------------------------------------------------------------
Operating 410.9 276.9 105.3 1 026.8 -607.6 290.2 48.4 269.0
profit/loss
Depreciation -130.3 100.2 101.1 172.4 1 262.0 -228.9 -230.0 -86.3
and other
non-cash
items
Change in -16.1 -73.2 289.1 -207.1 606.5 -105.6 78.0 -134.1
working
capital
-------------------------------------------------------------------
Cash Flow 264.5 303.9 495.5 992.1 1 260.9 -46.6 -13.0 -21.3
from
Operations
Capital -138.8 -73.5 -101.9 -400.4 -423.7 -36.2 -88.8 5.5
expenditure
-------------------------------------------------------------------
Cash Flow 125.7 230.4 393.6 591.7 837.2 -68.1 -45.4 -29.3
after
Investing
Activities
Capital Expenditure for January-December 2010
Capital expenditure for 2010 totalled EUR 400 million, which is 76% of
depreciation in the same period. Capital expenditure for the Group for the full
year 2011 will be approximately EUR 550 million. Annual depreciation in 2011
will be about EUR 570 million. The equity injection into Montes del Plata, a
joint venture in Uruguay, will be approximately EUR 120 million.
The main projects during 2010 were power plants and energy-related projects at
existing mills (EUR 142 million) and development of existing production (EUR 85
million).
Short-term Risks and Uncertainties
The main short-term risks and uncertainties are related to lower demand due to
increasing prices, foreign exchange volatility, the effects of possible
increases in raw material costs and possible decreases in pulp market prices.
Energy sensitivity analysis for 2011: the direct effect on 2011 operating
profit of a 10% increase in electricity, oil and other fossil fuel market
prices would be about negative EUR 14 million annual impact, after the effect
of hedges.
Wood sensitivity analysis for 2011: the direct effect on 2011 operating profit
of a 10% increase in wood prices would be about negative EUR 234 million annual
impact.
Pulp sensitivity analysis for 2011: the direct effect on 2011 operating profit
of a 10% increase in yearly average pulp prices would be about positive EUR 49
million annual impact.
A decrease of energy, wood or pulp prices would have the opposite impact.
Foreign exchange rates sensitivity analysis for the next twelve months: the
direct effect on operating profit of a 10% strengthening in the value of the US
dollar, Swedish krona and British pound against the euro would be about
positive EUR 110 million, negative EUR 110 million and positive EUR 60 million
annual impact, respectively. Weakening of the currencies would have the
opposite impact. These numbers are before the effect of hedges and assuming no
changes occur other than a single currency exchange rate movement.
Near-term Outlook
Demand for newsprint is expected to be slightly weaker in Europe but unchanged
on a year ago in overseas markets. In Europe demand for coated magazine paper
is forecast to be slightly stronger and demand for uncoated magazine paper
stronger than a year ago.
Demand for fine paper is predicted to be similar to a year ago, although
seasonally slightly stronger than in the fourth quarter of 2010. Demand for
consumer board is expected to be stronger and demand for industrial packaging
slightly stronger than a year ago. Demand for wood products is anticipated to
be slightly stronger than a year ago but slightly weaker than in the fourth
quarter of 2010.
Newsprint prices in euros in the first half of 2011 are expected to be similar
to 2009 levels in Europe and significantly higher than 2009 levels in overseas
markets. With the majority of biannual magazine paper contracts signed,
magazine paper sales prices in local currencies are expected to be higher in
the first half of 2011 than the previous quarter.
Fine paper prices are predicted to be similar to the previous quarter. Consumer
board and industrial packaging prices are forecast to be slightly higher than
in the previous quarter. Slightly lower prices forwood products than in the
fourth quarter of 2010 are anticipated.
The political turmoil in North Africa and floods in Australia are expected to
have a negative impact on the earnings capability of Wood Products in the first
quarter of 2011.
Group operating profit excluding NRI and fair valuations is anticipated to be
higher in the first quarter of 2011 than the fourth quarter of 2010 due to the
improved cost position and prices.
The Group expects its cost inflation excluding internal actions to be 3% for
the full year 2011, primarily in the first half of the year. Stora Enso's own
actions are expected to compensate all of the effects of cost inflation. Actual
cost inflation excluding internal actions was 2% for the full year 2010.
Fourth Quarter Events
In October Stora Enso announced that its joint venture with Neste Oil, NSE
Biofuels Oy, would commence environmental impact assessments for a
commercial-scale biorefinery at Porvoo and at Imatra in Finland. Stora Enso
announced the appointments to its Nomination Board. The Group also announced
that it had signed an agreement to acquire 51% of the Chinese packaging company
Inpac International.
In November Stora Enso announced early redemption of its entire USD 421 million
2011 bond and successful tapping of its two five-year SEK bonds.
In December Stora Enso announced that it would be investing EUR 30 million in
its newsprint machine at Sachsen Mill in Germany. Stora Enso also announced
that it had refinanced its revolving credit facility.
Restructuring Actions
On 23 April 2009 Stora Enso announced that it was reorganising its operations
with the aim of reducing annual fixed costs by EUR 250 million, mainly through
savings in administration. All the cost reductions were achieved by the end of
2010. The final impact will be apparent in the Group's operating profit from
2011 onwards.
Veracel
On 11 July 2008 Stora Enso announced that a federal judge in Brazil had issued
a decision claiming that the permits issued by the State of Bahia for the
operations of Stora Enso's equity accounted investment Veracel were not valid.
The judge also ordered Veracel to take certain actions, including reforestation
with native trees on part of Veracel's plantations and a possible BRL 20
million (EUR 9 million) fine. Veracel disputes the decision and has filed an
appeal against it. Veracel operates in full compliance with all Brazilian laws
and has obtained all the necessary environmental and operating licences for its
industrial and forestry activities from the competent authorities. In November
2008 a Federal Court suspended the effects of the decision as an interim
measure. Veracel has not recorded any provision for the reforestation or the
possible fine.
On 30 September 2009 a judge in the State of Bahia issued an interim decision
ordering the State Government of Bahia not to grant Veracel further plantation
licences in the municipality of Eunápolis in response to claims by a state
prosecutor that Veracel's plantations exceeded the legal limits, which Veracel
disputes. Veracel's position is supported by documentation issued by the State
environmental authority.
Class action lawsuits in USA
In the context of magazine paper sales in the USA in 2002 and 2003, Stora Enso
was sued in a number of class action (and other civil) lawsuits filed in the
USA by various magazine paper purchasers that claimed damages for alleged
antitrust violations. On 14 December 2010 a US federal court granted a motion
for summary judgement that Stora Enso had filed seeking dismissal of the direct
purchaser class action claims. The ruling, which the plaintiffs have appealed,
means that the court has ruled in favour of Stora Enso and found the direct
purchaser class action claims to be without legal foundation. The ruling, if it
stands on appeal, will also provide a strong legal basis to seek similar
dismissals of other remaining civil cases. No provisions have been made in
Stora Enso's accounts for these lawsuits.
Changes in Group Management
Elisabet Salander Björklund, Executive Vice President and a member of the Group
Executive Team, relinquished her duties with Stora Enso on 31 August 2010.
On 13 August 2010 Stora Enso announced that it had appointed Lars Häggström as
Head of Group Human Resources and member of the Group Executive Team, effective
as of 1 October 2010. He reports to CEO Jouko Karvinen.
Personnel
On 31 December 2010 there were 26 379 employees in the Group, 1 011 less than
at the end of 2009. The decrease is due to disposal of the Group's integrated
mills at Kotka, earlier announced mill closures and the Next Step restructuring
programme. The average number of employees in 2010 was 27 383, which was 1 313
less than the average number in 2009.
Share Capital
During the quarter, the conversion of 300 A shares into R shares was recorded
in the Finnish trade register on 15 December 2010.
On 31 December 2010 Stora Enso had 177 149 784 A shares and 612 388 715 R
shares in issue of which the Company held no A shares and 919 317 R shares with
a nominal value of EUR 1.6 million. The holding represents 0.12% of the
Company's share capital and 0.04% of the voting rights.
Events after the Period
In January 2011 Stora Enso announced that it would invest EUR 285 million in a
new containerboard machine at Ostrołęka in Poland and that Montes del Plata,
its joint venture with Arauco, would invest USD 1.9 billion in building a
state-of-the-art 1.3 million tonnes per year pulp mill at Punta Pereira in
Uruguay. In January Stora Enso also announced that it would continue to grow in
Building Solutions by investing EUR 23 million in constructing a CLT unit at
Ybbs Sawmill in Austria.
Annual General Meeting
The Annual General Meeting (AGM) will be held at 16.00 (Finnish time) on
Wednesday 20 April 2011 at Marina Congress Center, Katajanokanlaituri 6,
Helsinki, Finland.
The decision proposals relating to the agenda of the AGM, shareholders'
initiatives as well as the AGM notice will be available on Stora Enso Oyj's
website at www.storaenso.com/agm. The annual report, the report of the Board of
Directors and the auditor's report of Stora Enso Oyj will be published on Stora
Enso's website at www.storaenso.com/investors during the week commencing Monday
21 February 2011. The proposals for decisions and the other above-mentioned
documentswill also be available at the AGM. Copies of these documents and the
AGM notice will be sent to shareholders upon request. The minutes of the AGM
will be available on Stora Enso Oyj's website at www.storaenso.com/agm from
Wednesday 4 May 2011.
The Board of Directors' Proposal for the Distribution of Profit and the Payment
of Dividend
The Board of Directors has decided to propose to the AGM that the Company
distributes a dividend of EUR 0.25 per share for the year 2010.
The dividend shall be paid to shareholders that on the dividend record date, 27
April 2011, are recorded in the shareholders' register maintained by Euroclear
Finland Ltd or in the separate register of shareholders maintained by Euroclear
Sweden AB for Euroclear Sweden registered shares. Dividends payable for
Euroclear Sweden registered shares will be forwarded by Euroclear Sweden AB and
paid in Swedish krona. Dividends payable to ADR holders will be forwarded by
Deutsche Bank Trust Company Americas and paid in US dollars.
The Board of Directors proposes to the AGM that the dividend payment shall be
issued by the Company on 11 May 2011.
This report is unaudited.
Helsinki, 8 February 2011
Stora Enso Oyj
Board of Directors
Segments Q4/10 compared with Q4/09
Newsprint and Book Paper
EUR Q4/10 Q3/10 Q4/09 2010 2009 Change % Change % Change %
million Q4/10-Q4/ Q4/10-Q3/ 2010-200
09 10 9
--------------------------------------------------------------------------------
Sales 326.2 322.9 359.6 1 261.6 1 325.8 -9.3 1.0 -4.8
EBITDA* 20.6 23.6 63.3 80.6 228.2 -67.5 -12.7 -64.7
Operating -2.7 0.1 41.3 -10.8 128.7 -106.5 n/m -108.4
loss/prof
it*
% of -0.8 0.0 11.5 -0.9 9.7 -107.0 n/m -109.3
sales
ROOC, %** -1.2 0.0 15.9 -1.1 11.9 -107.5 n/m -109.2
Deliverie 658 649 675 2 576 2 453 -2.5 1.4 5.0
s, 1 000
t
Productio 619 653 651 2 554 2 451 -4.9 -5.2 4.2
n, 1 000
t
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Newsprint and book paper sales were EUR 326 million, down 9% on the fourth
quarter of 2009. There was an operating loss of EUR 3million, which was a
deterioration of EUR 44 million on the fourth quarter of 2009 as favourable
exchange rates could not compensate for lower sales prices and higher RCP
costs. Volumes were slightly lower than a year ago as the permanent shutdown of
the newsprint machines at Varkaus Mill in Finland at the end of the third
quarter of 2010 and the newsprint machine at Maxau Mill in Germany at the end
of November 2010 reduced production volumes.
Markets
Produc Market Demand Q4/10 Demand Q4/10 Price Q4/10 Price Q4/10
t compared with compared with compared with compared with
Q4/09 Q3/10 Q4/09 Q3/10
--------------------------------------------------------------------------------
Newspr Europe slightly stronger significantly stable
int stronger lower
--------------------------------------------------------------------------------
Newspr Overse weaker stable significantly stable
int as higher
Industry inventories were significantly lower than in the fourth quarter of
2009 and the previous quarter.
Magazine Paper
EUR Q4/10 Q3/10 Q4/09 2010 2009 Change % Change % Change %
million Q4/10-Q4/ Q4/10-Q3/ 2010-200
09 10 9
--------------------------------------------------------------------------------
Sales 547.5 541.0 430.2 2 054.2 1 676.0 27.3 1.2 22.6
EBITDA* 47.5 71.1 28.8 191.9 145.3 64.9 -33.2 32.1
Operating 19.5 45.5 4.1 90.9 40.3 n/m -57.1 125.6
profit/lo
ss*
% of 3.6 8.4 1.0 4.4 2.4 260.0 -57.1 83.3
sales
ROOC, %** 5.7 13.7 1.3 7.1 3.1 n/m -58.4 129.0
Deliverie 659 613 586 2 396 2 150 12.5 7.5 11.4
s, 1 000
t***
Productio 618 616 551 2 398 2 110 12.2 0.3 13.6
n, 1 000
t***
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital *** Excluding pulp
Magazine Paper segment's sales were EUR 548 million, up 27% on the fourth
quarter of 2009. Operating profit was EUR 20 million, up EUR 15 million on a
year ago as higher paper and pulp volumes, higher pulp prices and the net
favourable impact of exchange rates more than compensated for higher fibre
costs. Pulp volumes were higher as Sunila Pulp Mill was temporarily shut down
during most of the fourth quarter of 2009.
The major maintenance stoppages at Sunila Pulp Mill in Finland and Skutskär
Pulp Mill in Sweden were completed as planned during the fourth quarter of
2010.
Markets
Product Market Demand Q4/10 Demand Q4/10 Price Q4/10 Price Q4/10
compared with compared with compared with compared with
Q4/09 Q3/10 Q4/09 Q3/10
--------------------------------------------------------------------------------
Coated Europe significantly significantly stable stable
magazine stronger stronger
paper
--------------------------------------------------------------------------------
Coated Latin significantly significantly higher slightly
magazine Americ stronger weaker higher
paper a
Uncoated Europe slightly significantly lower stable
magazine stronger stronger
paper
Uncoated China significantly significantly higher stable
magazine stronger stronger
paper
Coated magazine paper inventories were higher than in the fourth quarter of
2009, but significantly lower than in the previous quarter.Uncoated magazine
paper inventories were significantly lower than in the fourth quarter of 2009
and the previous quarter.
Fine Paper
EUR Q4/10 Q3/10 Q4/09 2010 2009 Change % Change % Change %
million Q4/10-Q4/ Q4/10-Q3/ 2010-200
09 10 9
--------------------------------------------------------------------------------
Sales 533.5 563.3 492.0 2 125.7 1 823.9 8.4 -5.3 16.5
EBITDA* 90.6 90.8 44.7 344.5 134.5 102.7 -0.2 156.1
Operating 67.6 70.9 22.1 259.4 32.7 205.9 -4.7 n/m
profit/lo
ss*
% of 12.7 12.6 4.5 12.2 1.8 182.2 0.8 n/m
sales
ROOC, %** 29.1 30.5 9.3 27.4 2.8 212.9 -4.6 n/m
Deliverie 621 665 694 2 596 2 538 -10.5 -6.6 2.3
s, 1 000
t***
Productio 638 642 652 2 622 2 507 -2.1 -0.6 4.6
n, 1 000
t***
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital *** Excluding pulp
Fine paper sales were EUR 534 million, up 8% on the fourth quarter of 2009.
Operating profit was EUR 68 million, up EUR 46 million on the previous year as
the improved product mix due to restructuring, higher sales prices and higher
volumes more than offset higher pulp and chemical costs. There were no annual
maintenance stoppages in the fourth quarter of 2010.
Markets
Product Market Demand Q4/10 Demand Q4/10 Price Q4/10 Price Q4/10
compared with compared with compared with compared with
Q4/09 Q3/10 Q4/09 Q3/10
--------------------------------------------------------------------------------
Coated Europe weaker stable higher slightly
fine higher
paper
--------------------------------------------------------------------------------
Coated China slightly slightly slightly stable
fine stronger stronger lower
paper
Uncoated Europe slightly stable significantly slightly
fine weaker higher higher
paper
Industry inventories for coated and uncoated fine paper were higher than in the
fourth quarter of 2009 but slightly lower than in the previous quarter.
Consumer Board
EUR Q4/10 Q3/10 Q4/09 2010 2009 Change % Change % Change %
million Q4/10-Q4/ Q4/10-Q3/ 2010-200
09 10 9
--------------------------------------------------------------------------------
Sales 611.5 593.8 505.0 2 314.7 1 895.9 21.1 3.0 22.1
EBITDA* 90.1 109.8 74.1 410.4 284.3 21.6 -17.9 44.4
Operating 52.1 77.6 42.9 277.1 164.9 21.4 -32.9 68.0
profit*
% of 8.5 13.1 8.5 12.0 8.7 0.0 -35.1 37.9
sales
ROOC, %** 14.9 24.1 14.5 21.1 13.7 2.8 -38.2 54.0
Deliverie 591 594 560 2 326 2 201 5.5 -0.5 5.7
s, 1 000
t***
Productio 596 579 512 2 367 2 161 16.4 2.9 9.5
n, 1 000
t***
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital *** Excluding pulp
Consumer board sales were EUR 612 million, up 21% on the fourth quarter of
2009. Operating profit was EUR 52 million, up EUR 9 million on a year ago as
higher board and pulp sales prices and volumes more than compensated for higher
raw material and maintenance costs, and unfavourable exchange rates, especially
appreciation of the Swedish krona. Impairment reversal increased depreciation
by EUR 5 million.
Although the supply of birch pulpwood improved towards end of the year, pulp
production was curtailed at Imatra Mills in Finland in October. The annual
major maintenance stoppage at Skoghall Mill in Sweden was completed as planned
during the fourth quarter of 2010.
Markets
Product Market Demand Q4/10 Demand Q4/10 Price Q4/10 Price Q4/10
compared with compared with compared with compared with
Q4/09 Q3/10 Q4/09 Q3/10
--------------------------------------------------------------------------------
Consume Europe stronger stable higher slightly
r board higher
--------------------------------------------------------------------------------
Industrial Packaging
EUR million Q4/10 Q3/10 Q4/09 2010 2009 Change % Change % Change
Q4/10-Q4 Q4/10-Q3 %
/09 /10 2010-20
09
--------------------------------------------------------------------------------
Sales 241.7 225.4 220.6 949.5 815.5 9.6 7.2 16.4
EBITDA* 34.3 30.2 14.8 114.0 65.4 131.8 13.6 74.3
Operating 22.0 18.7 2.9 65.5 17.6 n/m 17.6 272.2
profit*
% of sales 9.1 8.3 1.3 6.9 2.2 n/m 9.6 213.6
ROOC, %** 14.2 12.0 2.0 11.0 3.0 n/m 18.3 266.7
Paper and board 195 196 229 864 832 -14.8 -0.5 3.8
deliveries, 1
000 t
Paper and board 194 196 221 871 807 -12.2 -1.0 7.9
production, 1
000 t
Corrugated 271 250 255 1 027 966 6.3 8.4 6.3
packaging
deliveries,
million m2
Corrugated 272 253 258 1 033 962 5.4 7.5 7.4
packaging
production,
million m2
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Industrial packaging sales were EUR 242 million, up 10% on the fourth quarter
of 2009. Operating profit was EUR 22 million, up EUR 19 million on the previous
year as higher sales prices and volumes for containerboard and corrugated
packaging more than offset higher variable costs, especially for corrugated raw
material. The laminating paper business was divested in summer 2010.
Markets
Product Market Demand Q4/10 Demand Q4/10 Price Q4/10 Price Q4/10 compared with compared with compared with compared with
Q4/09 Q3/10 Q4/09 Q3/10
--------------------------------------------------------------------------------
Industria Europe stronger stable significantly slightly
l higher higher
packaging
--------------------------------------------------------------------------------
Wood Products
EUR Q4/10 Q3/10 Q4/09 2010 2009 Change % Change % Change %
million Q4/10-Q4/ Q4/10-Q3/ 2010-200
09 10 9
--------------------------------------------------------------------------------
Sales 410.3 424.1 344.9 1 588.7 1 239.6 19.0 -3.3 28.2
EBITDA* 21.1 35.2 23.9 110.7 25.6 -11.7 -40.1 n/m
Operating 10.2 25.2 15.0 70.9 -8.0 -32.0 -59.5 n/m
profit/lo
ss*
% of 2.5 5.9 4.3 4.5 -0.6 -41.9 -57.6 n/m
sales
ROOC, %** 6.8 16.8 10.4 12.3 -1.4 -34.6 -59.5 n/m
Deliverie 1 223 1 299 1 298 5 057 4 902 -5.8 -5.9 3.2
s, 1 000
m3
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Wood product sales were EUR 410 million, up 19% on the fourth quarter of 2009.
Operating profit was EUR 10 million, down EUR 5 million on a year earlier as
higher sales prices could not fully compensate for higher costs, especially
wood costs.
Production was temporarily curtailed in the fourth quarter of 2010 to respond
to seasonally weak demand and secure healthy inventory levels. However, the
curtailments were less than a year ago. Eridomic Oy, a wooden building element
manufacturer based at Pälkäne in Finland, was acquired in the fourth quarter of
2010, in line with the Wood Products Building Solutions growth strategy.
Markets
Produc Market Demand Q4/10 Demand Q4/10 Price Q4/10 Price Q4/10
t compared with compared with compared compared with
Q4/09 Q3/10 with Q4/09 Q3/10
--------------------------------------------------------------------------------
Wood Europe stable slightly significantl slightly
produc weaker y higher lower
ts
--------------------------------------------------------------------------------
Wood Asia, Middle slightly slightly significantl stable
produc East and stronger weaker y higher
ts North Africa
Industry inventories were slightly higher than in the fourth quarter of 2009
and the previous quarter.
Financials
Basis of Preparation
Except as described below, this unaudited interim financial report has been
prepared in accordance with the accounting policies set out in International
Accounting Standard 34 on Interim Financial Reporting and in the Group's Annual
Report for 2009:
The following amendments to standards and interpretations were adopted from 1
January 2010 but had no impact on the Group financial statements;
-- IFRS 1 First-time Adoption of International Financial Reporting Standards -
Additional Exemptions for First-time Adopters (Amendments).
-- IFRS 2 Group Cash-settled Share-based Payment Arrangements clarifies the
scope and the accounting for group cash-settled share-based payment
transactions.
-- IAS 39 Financial Instruments: Recognition and Measurement - Eligible Hedged
Items (Amendment) clarifies that an entity is permitted to designate a
portion of the fair value changes or cash flow variability of a financial
instrument as a hedged item. This also covers the designation of inflation
as a hedged risk or portion in particular situations.
IFRIC 17 Distributions on Non-cash Assets to Owners provides guidance on the
appropriate accounting treatment when an entity distributes assets other than
cash as dividends to its shareholders.
Condensed Consolidated Income Statement
EUR Q4/10 Q3/10 Q4/09 2010 2009 Change Change Change
millio % % %
n Q4/10- Q4/10- 2010-
Q4/09 Q3/10 2009
--------------------------------------------------------------------------------
Sales 2 685.2 2 623.6 2 398.8 10 296.9 8 945.1 11.9 2.3 15.1
Other 54.3 38.6 58.9 159.1 172.8 -7.8 40.7 -7.9
operat
ing
income
Materi -1 747.8 -1 574.2 -1 529.4 -6 391.4 -5 668.1 -14.3 -11.0 -12.8
als
and
servic
es
Freigh -253.7 -267.3 -218.4 -1 010.1 -833.6 -16.2 5.1 -21.2
t and
sales
commis
sions
Person -374.8 -309.7 -349.9 -1 375.3 -1 349.6 -7.1 -21.0 -1.9
nel
expens
es
Other -102.1 -119.8 -161.4 -482.2 -833.1 36.7 14.8 42.1
operat
ing
expens
es
Share 54.1 24.4 77.6 112.5 111.8 -30.3 121.7 0.6
of
result
s of
equity
accoun
ted
invest
ments
Deprec 95.7 -138.7 -170.9 -282.7 -1 152.9 156.0 169.0 75.5
iation
and
impair
ment
-------------------------------------------------------------------------
Operat 410.9 276.9 105.3 1 026.8 -607.6 290.2 48.4 269.0
ing
Profit
/Loss
Net -21.7 -51.1 -24.7 -100.9 -279.2 12.1 57.5 63.9
financ
ial
items
-------------------------------------------------------------------------
Profit 389.2 225.8 80.6 925.9 -886.8 n/m 72.4 204.4
/Loss
before
Tax
Income -76.2 -31.5 -34.7 -156.6 8.6 -119.6 -141.9 n/m
tax
-------------------------------------------------------------------------
Net 313.0 194.3 45.9 769.3 -878.2 n/m 61.1 187.6
Profit
/Loss
for
the
Period
Attrib
utable
to:
Owners 312.2 193.2 46.1 766.0 -879.7 n/m 61.6 187.1
of the
Parent
Non-co 0.8 1.1 -0.2 3.3 1.5 n/m -27.3 120.0
ntroll
ing
intere
sts
-------------------------------------------------------------------------
313.0 194.3 45.9 769.3 -878.2 n/m 61.1 187.6
Earnin
gs per
Share
Basic 0.39 0.25 0.05 0.97 -1.12 n/m 56.0 186.6
earnin
gs per
share,
EUR
Dilute 0.39 0.25 0.05 0.97 -1.12 n/m 56.0 186.6
d
earnin
gs per
share,
EUR
Consolidated Statement of Comprehensive Income
EUR million 2010 2009
--------------------------------------------------------------------------------
Net profit/loss for the period 769.3 -878.2
Other Comprehensive Income
Actuarial gains and losses on defined benefit pension plans -32.5 -20.4
Asset revaluation on step acquisition -- 3.9
Available for sale financial assets 95.9 180.3
Currency and commodity hedges 107.7 224.1
Share of other comprehensive income of equity accounted 9.2 -8.5
investments
Currency translation movements on equity net investments (CTA) 305.6 252.6
Currency translation movements on non-controlling interests 5.1 5.9
Net investment hedges -9.8 0.7
Income tax relating to components of other comprehensive income -13.4 -65.0
Other Comprehensive Income, net of tax 467.8 573.6
----------------
Total Comprehensive Income 1 237.1 -304.6
----------------
Total Comprehensive Income Attributable to:
Owners of the Parent 1 228.7 -312.0
Non-controlling interests 8.4 7.4
1 237.1 -304.6
----------------
Condensed Consolidated Statement of Cash Flows
EUR million 2010 2009
Cash Flow from Operating Activities
Operating profit/loss 1 026.8 -607.6
Hedging result from OCI 97.3 233.4
Adjustments for non-cash items 172.4 1 262.0
Change in net working capital -271.7 638.0
Cash Flow Generated by Operations 1 024.8 1 525.8
------------------
Net financials items paid -150.9 -220.3
Income taxes paid, net -62.0 -3.0
Net Cash Provided by Operating Activities 811.9 1 302.5
------------------
Cash Flow from Investing Activities
Acquisitions of subsidiaries -13.0 -8.4
Acquisitions of equity accounted investments -16.3 -128.5
Proceeds from sale of fixed assets and shares 24.2 98.0
Capital expenditure -400.4 -423.7
Proceeds/payment of the non-current receivables, net 42.9 -24.2
Net Cash Used in Investing Activities -362.6 -486.8
------------------
Cash Flow from Financing Activities
Proceeds from issue of new long-term debt 791.8 636.1
Long-term debt, payments -1 180.6 -411.3
Change in short-term borrowings 318.5 -359.9
Capital repayments paid -157.7 -157.7
Dividend to non-controlling interests -1.2 -7.7
Net Cash Used in Financing Activities -229.2 -300.5
------------------
Net Increase in Cash and Cash Equivalents 220.1 515.2
Cash and bank in acquisition companies 0.5 4.4
Cash and bank in disposed companies -2.9 -0.1
Translation adjustment 8.4 -15.1
Net cash and cash equivalents at the beginning of period 877.0 372.6
------------------
Net Cash and Cash Equivalents at Period End 1 103.1 877.0
Cash and Cash Equivalents at Period End 1 110.9 890.4
Bank Overdrafts at Period End -7.8 -13.4
------------------
Net Cash and Cash Equivalents at Period End 1 103.1 877.0
Acquisitions of Subsidiary Companies
Cash and cash equivalents 0.5 4.4
Fixed assets 4.8 17.6
Working capital 0.1 20.4
Tax assets and liabilities -0.6 16.0
Interest-bearing liabilities -0.8 -44.1
Non-controlling interests 6.0 -2.0
------------------
Fair Value of Net Assets 10.0 12.3
Gain from step acquisition realised directly in equity -- -3.9
Goodwill 3.0 --
------------------
Total Purchase Consideration 13.0 8.4
------------------
Disposal of Subsidiary Companies
Cash and cash equivalents 2.9 0.1
Fixed assets 0.8 92.6
Working capital 6.7 2.1
Interest-bearing liabilities -5.6 --
Tax liabilities -8.6 --
------------------
Net Assets in Divested Companies -3.8 94.8
Income Statement capital gain/loss 5.3 --
------------------
Total Disposal Consideration Received in Cash and Kind 1.5 94.8
Property, Plant and Equipment, Intangible Assets and Goodwill
EUR million 2010 2009
--------------------------------------------------------
Carrying value at 1 January 5 157.7 5 899.4
Acquisition of subsidiary companies 7.8 17.6
Capital expenditure 377.0 394.4
Additions in biological assets 23.4 35.5
Change in emission rights 15.7 -41.7
Disposals -25.1 -27.9
Disposals of subsidiary companies -0.8 -92.6
Depreciation and impairment -282.7 -1 152.9
Translation difference and other 292.8 125.9
Statement of Financial Position Total 5 565.8 5 157.7
------------------
Borrowings
EUR million 31 Dec 10 31 Dec 09
-----------------------------------------------------------
Non-current borrowings 3 259.2 2 898.4
Current borrowings 752.0 1 038.3
---------------------
4 011.2 3 936.7
---------------------
2010 2009
---------------------
Carrying value at 1 January 3 936.7 4 076.1
Debt acquired with new subsidiaries 0.8 44.1
Debt disposed with sold subsidiaries -5.6 --
Payments of borrowings (net) -111.2 -255.1
Translation difference and other 190.5 71.6
---------------------
Statement of Financial Position Total 4 011.2 3 936.7
---------------------
Condensed Consolidated Statement of Financial Position
EUR million 31 Dec 10 31 Dec 09
-----------------------------------------------------------------------
Assets
Fixed Assets and Other Non-current Investments
Fixed assets O 5 334.3 4 979.9
Biological assets O 190.5 152.5
Emission rights O 41.0 25.3
Equity accounted investment O 1 744.0 1 481.3
Available-for-sale: Interest-bearing I 78.7 71.7
Available-for-sale: Operative O 879.4 778.5
Non-current loan receivables I 126.5 159.6
Deferred tax assets T 111.0 155.8
Other non-current assets O 37.2 30.4
---------------------
8 542.6 7 835.0
---------------------
Current Assets
Inventories O 1 474.6 1 281.6
Tax receivables T 1.7 2.4
Operative receivables O 1 621.8 1 362.6
Interest-bearing receivables I 285.1 221.2
Cash and cash equivalents I 1 110.9 890.4
---------------------
4 494.1 3 758.2
Total Assets 13 036.7 11 593.2
---------------------
Equity and Liabilities
Owners of the Parent 6 202.9 5 124.3
Non-controlling Interests 51.8 58.2
---------------------
Total Equity 6 254.7 5 182.5
---------------------
Non-current Liabilities
Post-employment benefit provisions O 320.5 305.0
Other provisions O 148.6 180.4
Deferred tax liabilities T 422.6 364.4
Non-current debt I 3 259.2 2 898.4
Other non-current operative liabilities O 62.0 43.1
4 212.9 3 791.3
---------------------
Current Liabilities
Current portion of long-term debt I 303.5 814.8
Interest-bearing liabilities I 448.5 223.5
Operative liabilities O 1 697.1 1 473.0
Tax liabilities T 120.0 108.1
---------------------
2 569.1 2 619.4
---------------------
---------------------
Total Liabilities 6 782.0 6 410.7
Total Equity and Liabilities 13 036.7 11 593.2
Items designated with “O” comprise Operating Capital
Items designated with “I” comprise Interest-bearing Net Liabilities
Items designated with “T” comprise Net Tax Liabilities
Statement of Changes in Equity
EUR Share Share Invested Treasu Step Availa Curren Curren
CTA Retaine Attribu Non-co Total
millio Capital Premium Non-Rest ry Acquis ble cy and cy and &
d table ntroll
n & ricted Shares ition for Commod Commod Net
Earning to ing
Reserve Equity Revalu Sale ity ity
Invest s Owners Intere
fund Fund ation Financ Hedges Hedges
ment of the sts
Surplu ial of
Hedges Parent
s Assets Equity
Accoun
ted
Invest
ments
--------------------------------------------------------------------------------
-------------------------------
Balanc 1 342.2 2 276.4 -- -10.2 -- 510.6 -166.1 -10.5
-443.8 2 095.4 5 594.0 56.5 5 650.5
e at
31
Decemb
er
2008
--------------------------------------------------------------------------------
--------------------------------------
Loss -- -- -- -- -- -- -- --
-- -879.7 -879.7 1.5 -878.2
for
the
period
OCI -- -- -- -- 3.9 180.3 224.1 -8.5
253.3 -20.4 632.7 5.9 638.6
before
tax
Income -- -- -- -- -- -6.7 -58.8 --
-4.1 4.6 -65.0 -- -65.0
tax
relati
ng to
compon
ents
of OCI
--------------------------------------------------------------------------------
-------------------------------
Total -- -- -- -- 3.9 173.6 165.3 -8.5
249.2 -895.5 -312.0 7.4 -304.6
Compre
hensiv
e
Income
--------------------------------------------------------------------------------
-------------------------------
Divide -- -- -- -- -- -- -- --
-- -- -- -2.2 -2.2
nds
relati
ng to
2008
Acquis -- -- -- -- -- -- -- --
-- -- -- -3.4 -3.4
itions
and
dispos
als
Buy-ou -- -- -- -- -- -- -- --
-- -- -- -0.1 -0.1
t of
non-co
ntroll
ing
intere
st
Transf -- -2 042.1 2 042.1 -- -- -- -- --
-- -- -- -- --
er to
distri
butabl
e
reserv
es
Return -- -157.7 -- -- -- -- -- --
-- -- -157.7 -- -157.7
of
capita
l (EUR
0.20
per
share)
Balanc 1 342.2 76.6 2 042.1 -10.2 3.9 684.2 -0.8 -19.0
-194.6 1 199.9 5 124.3 58.2 5 182.5
e at
31
Decemb
er
2009
--------------------------------------------------------------------------------
-------------------------------
Profit -- -- -- -- -- -- -- --
-- 766.0 766.0 3.3 769.3
for
the
period
OCI -- -- -- -- -- 95.9 107.7 9.2
295.8 -32.5 476.1 5.1 481.2
before
tax
Income -- -- -- -- -- -0.1 -29.0 --
2.5 13.2 -13.4 -- -13.4
tax
relati
ng to
compon
ents
of OCI
----------------------------------------- --------
Total -- -- -- -- -- 95.8 78.7 9.2
298.3 746.7 1 228.7 8.4 1 237.1
Compre
hensiv
e
Income
--------------------------------------------------------------------------------
-------------------------------
Divide -- -- -- -- -- -- -- --
-- -- -- -1.2 -1.2
nds
relati
ng to
2009
Acquis -- -- -- -- -- -- -- --
-- -- -- -6.0 -6.0
itions
and
dispos
als
Buy-ou -- -- -- -- -- -- -- --
-- 7.6 7.6 -7.6 --
t of
non-co
ntroll
ing
intere
st
Return -- -- -157.7 -- -- -- -- --
-- -- -157.7 -- -157.7
of
capita
l (EUR
0.20
per
share)
Transf -- -- -1 251.3 -- -- -- -- --
-- 1 251.3 -- -- --
er to
retain
ed
earnin
gs
Balanc 1 342.2 76.6 633.1 -10.2 3.9 780.0 77.9 -9.8
103.7 3 205.5 6 202.9 51.8 6 254.7
e at
31
Decemb
er
2010
--------------------------------------------------------------------------------
-------------------------------
CTA = Cumulative Translation Adjustment
OCI = Other Comprehensive Income
Commitments and Contingencies
EUR million 31 Dec 10 31 Dec 09
---------------------------------------------------------------
On Own Behalf
Mortgages 5.2 16.2
On Behalf of Equity Accounted Investments
Guarantees 154.6 180.2
On Behalf of Others
Guarantees 108.3 121.7
Other Commitments, Own
Operating leases, in next 12 months 32.3 27.2
Operating leases, after next 12 months 88.3 79.3
Pension liabilities 0.4 0.3
Other commitments 94.8 36.4
Total 483.9 461.3
Mortgages 5.2 16.2
Guarantees 262.9 301.9
Operating leases 120.6 106.5
Pension liabilities 0.4 0.3
Other commitments 94.8 36.4
Total 483.9 461.3
Purchase Agreement Commitments
--------------------------------------------------------------------------------
EUR million Scheduled Contract Payments
--------------------------------------------------------------------------------
Type of Supply Contract Total 2011 2012-2013 2014-2015 2016+
Fibre 1 646.5 241.5 449.0 432.5 523.5
Energy 1 662.8 376.7 404.2 334.5 547.4
Logistics 410.1 62.6 95.9 76.1 175.5
Other production costs 676.8 76.1 78.2 29.4 493.1
-----------------------------------------------------
Capital Expenditure 58.5 49.0 9.5 0.0 0.0
Total Contractual 4 454.7 805.9 1 036.8 872.5 1 739.5
Commitments at 31 Dec 2010
-----------------------------------------------------
Fair Values of Derivative Financial Instruments
EUR million 31 Dec 10 31 Dec 09
-----------------------------------------------------------------------------
Positive Negative Net Fair Values Net
Fair Values Fair Values Fair Values
Interest rate swaps 176.2 -40.8 135.4 156.6
Interest rate options -- -35.3 -35.3 -26.7
Forward contracts 95.7 -48.1 47.6 20.5
Currency options 34.0 -11.9 22.1 13.9
Commodity contracts 24.4 -12.8 11.6 -21.8
Equity swaps ("TRS") 21.9 -8.1 13.8 -14.1
Total 352.2 -157.0 195.2 128.4
-------------------------------------------------------
Nominal Values of Derivative Financial Instruments
EUR million 31 Dec 10 31 Dec 09
--------------------------------------------------
Interest Rate Derivatives
Interest rate swaps
Maturity under 1 year 827.5 666.8
Maturity 2-5 years 2 569.8 2 384.0
Maturity 6-10 years 804.7 861.8
---------------------
4 202.0 3 912.6
Interest rate options 601.0 387.4
---------------------
Total 4 803.0 4 300.0
---------------------
Foreign Exchange Derivatives
Forward contracts 2 333.1 2 935.7
Currency options 2 683.4 1 590.7
---------------------
Total 5 016.5 4 526.4
---------------------
Commodity Derivatives
Commodity contracts 297.6 396.7
---------------------
Total 297.6 396.7
---------------------
Total Return (Equity) Swaps
Equity swaps ("TRS") 83.1 104.7
Total 83.1 104.7
---------------------
Sales by Segment
EUR 2010 Q4/10 Q3/10 Q2/10 Q1/10 2009 Q4/09
Q3/09 Q2/09 Q1/09
millio
n
--------------------------------------------------------------------------------
------------------
Newspr 1 261.6 326.2 322.9 325.1 287.4 1 325.8 359.6
330.0 327.5 308.7
int
and
Book
Paper
Magazi 2 054.2 547.5 541.0 530.2 435.5 1 676.0 430.2
469.0 396.0 380.8
ne
Paper
Fine 2 125.7 533.5 563.3 554.4 474.5 1 823.9 492.0
449.6 450.4 431.9
Paper
Consum 2 314.7 611.5 593.8 586.3 523.1 1 895.9 505.0
470.7 460.3 459.9
er
Board
Indust 949.5 241.7 225.4 259.2 223.2 815.5 220.6
203.7 194.0 197.2
rial
Packag
ing
Wood 1 588.7 410.3 424.1 422.7 331.6 1 239.6 344.9
306.9 315.8 272.0
Produc
ts
Other 2 524.6 627.3 623.4 648.6 625.3 2 175.2 619.4
450.1 507.8 597.9
Inter- -2 522.1 -612.8 -670.3 -634.3 -604.7 -2 006.8 -572.9
-449.0 -467.0 -517.9
segmen
t
sales
--------------------------------------------------------------------------------
-----------
Total 10 296.9 2 685.2 2 623.6 2 692.2 2 295.9 8 945.1 2 398.8 2
231.0 2 184.8 2 130.5
--------------------------------------------------------------------------------
-----------
Operating Profit/Loss by Segment excluding NRI and Fair Valuations
EUR 2010 Q4/10 Q3/10 Q2/10 Q1/10 2009 Q4/09 Q3/09 Q2/09 Q1/09
millio
n
--------------------------------------------------------------------------------
-
Newspr -10.8 -2.7 0.1 -6.6 -1.6 128.7 41.3 34.8 31.1
21.5
int
and
Book
Paper
Magazi 90.9 19.5 45.5 22.0 3.9 40.3 4.1 30.6 5.7
-0.1
ne
Paper
Fine 259.4 67.6 70.9 79.4 41.5 32.7 22.1 20.4 -4.1
-5.7
Paper
Consum 277.1 52.1 77.6 76.9 70.5 164.9 42.9 64.9 41.6
15.5
er
Board
Indust 65.5 22.0 18.7 17.1 7.7 17.6 2.9 10.3 0.9
3.5
rial
Packag
ing
Wood 70.9 10.2 25.2 30.1 5.4 -8.0 15.0 9.4 -8.7
-23.7
Produc
ts
Other -65.9 -22.3 -4.9 -16.5 -22.2 -117.1 -26.6 -44.9 -24.3
-21.3
--------------------------------------------------------------------------
Operat 687.1 146.4 233.1 202.4 105.2 259.1 101.7 125.5 42.2
-10.3
ing
Profit
/Loss
excl.
NRI by
Segmen
t
Share 67.0 20.4 21.9 10.5 14.2 61.4 35.8 6.0 6.3
13.3
of
result
s of
equity
accoun
ted
invest
ments
excl.
fair
valuat
ions
--------------------------------------------------------------------------
Operat 754.1 166.8 255.0 212.9 119.4 320.5 137.5 131.5 48.5
3.0
ing
Profit
excl.
NRI
and
Fair
Valuat
ions*
Fair 92.5 41.9 16.5 11.2 22.9 4.4 9.9 21.0 11.4
-37.9
valuat
ions*
--------------------------------------------------------------------------
Operat 846.6 208.7 271.5 224.1 142.3 324.9 147.4 152.5 59.9
-34.9
ing
Profit
/Loss
excl.
NRI
NRI 180.2 202.2 5.4 -8.5 -18.9 -932.5 -42.1 -655.1 -269.3
34.0
--------------------------------------------------------------------------
Operat 1 026.8 410.9 276.9 215.6 123.4 -607.6 105.3 -502.6 -209.4
-0.9
ing
Profit
/Loss
(IFRS)
Net -100.9 -21.7 -51.1 -22.6 -5.5 -279.2 -24.7 -46.1 -161.2
-47.2
financ
ial
items
--------------------------------------------------------------------------
Profit 925.9 389.2 225.8 193.0 117.9 -886.8 80.6 -548.7 -370.6
-48.1
/Loss
before
Tax
and
Non-co
ntroll
ing
Intere
sts
Income -156.6 -76.2 -31.5 -33.1 -15.8 8.6 -34.7 29.0 2.3
12.0
tax
expens
e
--------------------------------------------------------------------------
Net 769.3 313.0 194.3 159.9 102.1 -878.2 45.9 -519.7 -368.3
-36.1
Profit
/Loss
* Fair valuations include synthetic options net of realised and open hedges,
CO2 emission rights, and valuations of biological assets related to forest
assets in equity accounted investments.
NRI by Segment
EUR 2010 Q4/10 Q3/10 Q2/10 Q1/10 2009 Q4/09 Q3/09 Q2/09
Q1/09
millio
n
--------------------------------------------------------------------------------
-
Newspr -58.5 -1.1 -44.4 -13.0 -- -52.2 -1.1 -80.1 --
29.0
int
and
Book
Paper
Magazi 2.4 -1.1 -- 9.2 -5.7 -163.5 -11.4 -152.1 --
--
ne
Paper
Fine 68.9 60.4 -- 8.5 -- -314.2 -0.6 -313.6 --
--
Paper
Consum 217.4 167.6 49.8 -- -- -34.2 1.6 -35.8 --
--
er
Board
Indust -21.5 -5.0 -- -3.3 -13.2 -28.7 -0.5 -28.2 --
--
rial
Packag
ing
Wood 4.0 1.9 -- 0.5 1.6 -7.7 1.0 -8.7 --
--
Produc
ts
Other -32.5 -20.5 -- -10.4 -1.6 -332.0 -31.1 -36.6 -269.3
5.0
--------------------------------------------------------------------------
NRI on 180.2 202.2 5.4 -8.5 -18.9 -932.5 -42.1 -655.1 -269.3
34.0
Operat
ing
Profit
NRI on -- -- -- -- -- -148.5 -- -- -148.5
--
financ
ial
items
NRI on -37.9 -37.9 -- -- -- 49.6 12.0 42.9 4.6
-9.9
tax
NRI on 142.3 164.3 5.4 -8.5 -18.9 -1 031.4 -30.1 -612.2 -413.2
24.1
Net
Profit
--------------------------------------------------------------------------
Operating Profit/Loss by Segment
EUR 2010 Q4/10 Q3/10 Q2/10 Q1/10 2009 Q4/09 Q3/09 Q2/09
Q1/09
millio
n
--------------------------------------------------------------------------------
-
Newspr -69.3 -3.8 -44.3 -19.6 -1.6 76.5 40.2 -45.3 31.1
50.5
int
and
Book
Paper
Magazi 93.3 18.4 45.5 31.2 -1.8 -123.2 -7.3 -121.5 5.7
-0.1
ne
Paper
Fine 328.3 128.0 70.9 87.9 41.5 -281.5 21.5 -293.2 -4.1
-5.7
Paper
Consum 494.5 219.7 127.4 76.9 70.5 130.7 44.5 29.1 41.6
15.5
er
Board
Indust 44.0 17.0 18.7 13.8 -5.5 -11.1 2.4 -17.9 0.9
3.5
rial
Packag
ing
Wood 74.9 12.1 25.2 30.6 7.0 -15.7 16.0 0.7 -8.7
-23.7
Produc
ts
Other -51.4 -34.6 9.1 -20.1 -5.8 -495.1 -89.6 -63.3 -281.9
-60.3
Share 112.5 54.1 24.4 14.9 19.1 111.8 77.6 8.8 6.0
19.4
of
result
s of
equity
accoun
ted
invest
ments
--------------------------------------------------------------------------
Operat 1 026.8 410.9 276.9 215.6 123.4 -607.6 105.3 -502.6 -209.4
-0.9
ing
Profit
/Loss
(IFRS)
Net -100.9 -21.7 -51.1 -22.6 -5.5 -279.2 -24.7 -46.1 -161.2
-47.2
financ
ial
items
--------------------------------------------------------------------------
Profit 925.9 389.2 225.8 193.0 117.9 -886.8 80.6 -548.7 -370.6
-48.1
/Loss
before
Tax
and
Non-co
ntroll
ing
Intere
sts
Income -156.6 -76.2 -31.5 -33.1 -15.8 8.6 -34.7 29.0 2.3
12.0
tax
expens
e
--------------------------------------------------------------------------
Net 769.3 313.0 194.3 159.9 102.1 -878.2 45.9 -519.7 -368.3
-36.1
Profit
/Loss
Key Exchange Rates for the Euro
One Euro is Closing Rate Average Rate
------------
31 Dec 10 31 Dec 09 31 Dec 10 31 Dec 09
-------------------------------------------
SEK 8.9655 10.2520 9.5464 10.6180
USD 1.3362 1.4406 1.3272 1.3941
GBP 0.8608 0.8881 0.8583 0.8909
-------------------------------------------
Transaction Risk and Hedges in Main Currencies as at 31 December 2010
EUR million EUR USD GBP SEK Other Total
--------------------------------------------------------------------------------
Sales during 2010 6 030 1 430 620 1 190 1 030 10 300
------------------------------------
Costs during 2010 -5 380 -500 -70 -1 990 -1 160 -9 100
Net Operating Cash Flow 650 930 550 -800 -130 1 200
--------------------------------------------
Estimated annual net operating cash 1 100 600 -1 100
flow exposure
Transaction hedges as at 31 -600 -290 550
December 2010
Hedging percentage as at 31 55% 48% 50%
December 2010 for the next 12
months
--------------------------------------------
Changes in Exchange Rates on Operating Profit
Operating Profit: Currency strengthening of + 10% EUR million
--------------------------------------------------------------
--------------------------------------------------
USD 110
SEK -110
GBP 60
The sensitivity is based on estimated net operating cash flow in next 12
months. The calculation does not take into account currency hedges, and assumes
no changes occur other than a single currency exchange rate movement. Weakening
would have the opposite impact.
Stora Enso Shares
Trading volume Helsinki Stockholm
------------------------------------------
A share R share A share R share
---------------------------------------------------------
October 103 824 83 662 226 222 891 21 139 042
November 108 127 86 256 886 281 276 20 697 179
December 131 186 84 577 995 290 040 29 349 281
Total 343 137 254 497 107 794 207 71 185 502
------------------------------------------
Closing Price Helsinki, EUR Stockholm, SEK
------------------------------------------
A share R share A share R share
---------------------------------------------------------
October 7.32 7.14 68.05 66.75
November 7.21 6.63 66.15 60.80
December 7.90 7.69 70.70 69.40
Calculation of Key Figures
Return on capital employed,
ROCE (%) 100 x
Operating profit
Capital employed 1) 2)
Return on operating capital, 100 x
Operating profit
ROOC (%)
Operating capital 1) 2)
Return on equity, 100 x
Profit before tax and non-controlling items - taxes
ROE (%)
Total equity 2)
Equity ratio (%) 100 x
Total equity
Total assets
Interest-bearing net liabilities
Interest-bearing liabilities - interest-bearing assets
Debt/equity ratio
Interest-bearing net liabilities
Equity
Fixed asset
CEPS
Net profit/loss for the period 3) - depreciation and impairment
Average number of shares
EPS
Net profit/loss for the period 3)
Average number of shares
1) Capital employed = Operating capital - Net tax liabilities
2) Average for the financial period
3) Attributable to owners of the Parent
For further information, please contact:
Jouko Karvinen, CEO, tel. +358 2046 21410
Markus Rauramo, CFO, tel. +358 2046 21121
Ulla Paajanen-Sainio, Head of Investor Relations, tel. +358 2046 21242
Lauri Peltola, Head of Communications and Global Responsibility, tel. +358 2046
21380
Stora Enso's first quarter 2011 results will be published on 20 April 2011 at
13.00 EET.
Annual General Meeting on 20 April 2011 at 16.00 EET.
PRESS CONFERENCE IN HELSINKI
Time: 13.30 local time today
Location: Stora Enso Oyj
Address: Kanavaranta 1
Hosts: Jouko Karvinen, CEO
Markus Rauramo, CFO
The conference will be held in Finnish. Questions can be addressed to Jouko
Karvinen and Markus Rauramo after the presentation.
ANALYST CONFERENCE CALL
CEO Jouko Karvinen and CFO Markus Rauramo will be hosting a combined conference
call and webcast today at 16.00 Finnish time (15.00 CET, 14.00 UK time, 9.00 US
Eastern time).
If you wish to participate, please dial:
+44 (0)20 7136 2053 Continental Europe and the UK
+358 (0)9 2319 4345 Finland
+46 (0)8 5352 6439 Sweden
+1 212 444 0481 USA
Access code: 4721213#
The live webcast may be accessed at www.storaenso.com/investors
Stora Enso is a global paper, packaging and wood products company producing
newsprint and book paper, magazine paper, fine paper, consumer board,
industrial packaging and wood products. The Group is the world leader in forest
industry sustainability. We offer our customers solutions based on renewable
raw materials. Our products provide a climate-friendly alternative to many
non-renewable materials, and have a smaller carbon footprint. Stora Enso is
listed in the Dow Jones Sustainability Index and the FTSE4Good Index. Stora
Enso employs some 26 000 people worldwide, and our sales in 2010 amounted to
EUR 10.3 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.
www.storaenso.com
www.storaenso.com/investors
STORA ENSO OYJ
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