2009-07-23 08:00:00 CEST
2009-07-23 08:00:08 CEST
REGULATED INFORMATION
Stora Enso Oyj - Interim report (Q1 and Q3)
Stora Enso Interim Review January-June 2009
Clear sequential improvement in operating profit; third consecutive quarter of
solid cash flow from operations - early cost cuts pay off
STORA ENSO OYJ INTERIM REVIEW 23 July 2009 at 06.00 GMT
EUR 49 million operating profit excluding NRI and fair valuations through EUR
276 million (13 margin point) year-on-year reduction mostly in fixed and fibre
costs
EUR 189 million cash flow from operations through third consecutive quarter of
working capital and net debt reductions
EUR 418 million non-cash write-down due to refinancing of NewPage jointly with
Cerberus; 19.9% shareholding in NewPage maintained
Continuing losses in Finland with structural external cost issues, further
capacity cuts necessary
Summary of Second Quarter Results
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| Continuing Operations | | Q2/09 | Q1/09 | Q2/08 |
--------------------------------------------------------------------------------
| Sales | EUR | 2 184.8 | 2 130.5 | 2 871.8 |
| | million | | | |
--------------------------------------------------------------------------------
| EBITDA excl. NRI and fair | EUR | 190.4 | 134.3 | 262.6 |
| valuations | million | | | |
--------------------------------------------------------------------------------
| Operating Profit excl. NRI | EUR | 48.5 | 3.0 | 94.4 |
| and Fair Valuations | million | | | |
--------------------------------------------------------------------------------
| Operating loss/profit (IFRS) | EUR | -209.4 | -0.9 | 71.3 |
| | million | | | |
--------------------------------------------------------------------------------
| Profit/loss before tax excl. | EUR | 47.2 | -82.1 | 31.7 |
| NRI | million | | | |
--------------------------------------------------------------------------------
| Loss/profit before tax | EUR | -370.6 | -48.1 | 30.4 |
| | million | | | |
--------------------------------------------------------------------------------
| Net profit/loss excl. NRI | EUR | 44.9 | -60.2 | 27.5 |
| | million | | | |
--------------------------------------------------------------------------------
| Net loss/profit | EUR | -368.3 | -36.1 | 28.6 |
| | million | | | |
--------------------------------------------------------------------------------
| EPS excl. NRI | EUR | 0.06 | -0.08 | 0.04 |
--------------------------------------------------------------------------------
| EPS | EUR | -0.46 | -0.05 | 0.04 |
--------------------------------------------------------------------------------
| CEPS excl. NRI | EUR | 0.24 | 0.10 | 0.26 |
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| ROCE excl. NRI | % | 2.8 | -1.6 | 2.8 |
--------------------------------------------------------------------------------
| ROCE excl. NRI and fair | % | 2.3 | 0.1 | 3.6 |
| valuations | | | | |
--------------------------------------------------------------------------------
Fair valuations include synthetic options net of realised and open hedges, CO2
emission rights, and valuations of biological assets mainly related to
associated companies' forest assets.
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, provisions for planned restructuring and
penalties. Non-recurring items are normally specified individually if they
exceed one cent per share.
Message from CEO Jouko Karvinen:
“Three months ago we expected the second quarter of 2009 to be a repetition of
the extraordinarily difficult first quarter. We were unfortunately right about
the demand remaining weak. Our continued push for pricing quality, including
heavy curtailments, paid off with a slightly positive year-on-year development
in paper and board pricing, however combined with materially lower pricing of
wood products and market pulp.
“What is important as well is that our cost improvement actions in the past two
years are now paying off. The overall costs went down by about EUR 280 million
(13 margin points) year on year in the second quarter, mostly through a EUR 109
million year-on-year improvement in quarterly fixed costs and EUR 83 million
lower fibre costs. A material part of the latter is due to our actions in
curtailing the high cost Finnish asset base and directing the limited volumes to
our lowest cost assets.
“With all these actions, and in spite of a 17% year-on-year volume reduction,
our second quarter operating profit excluding NRI and fair valuations at EUR 49
million was clearly better than the EUR 3 million in the first quarter, although
still unacceptably poor. Also, the cash flow from operations at EUR 189 million
and cash flow after investments at EUR 81 million remained solid for a third
quarter in a row. This led to another quarter of net debt reduction in an
unprecedentedly difficult demand environment.
“The refinancing plan for NewPage, undertaken jointly with Cerberus, turned the
second quarter operating profit including NRI into an operating loss, with no
cash impact. At the same time, if anything this proves that our early decision
two years ago to disengage ourselves from our North American operations was
correct as we now can, and will, continue optimising our present asset base
further and review strategic growth options.
“We foresee that demand will continue to be weak during the third quarter of
2009. Our lower cost level will help us to defend our earnings against price
pressure in certain paper grades. Our Next Step programme announced in April to
streamline the organisation and cut overhead costs by a further EUR 250 million
is progressing on time and cost targets. However, the completed and announced
actions are still not enough to solve the external cost issues that have made
some of our assets unprofitable, especially in Finland. For three consecutive
quarters, the profit the Group has made outside Finland has been to a large
extent or even completely lost in Finland. We are therefore preparing plans for
not only continuing curtailments, but also permanent capacity closures in areas
where we cannot see a rapid recovery to clearly positive returns. The specific
plans, once finalised will be announced separately during the third quarter of
2009.
“We have not waited for better times, but instead acted, and that has proved to
have been absolutely the right thing to do. We will never say we are ready, we
have done everything - on the contrary, now we want to move even faster.”
Near-term Outlook
The market environment for the Group's products is expected to stay challenging
as no immediate improvement in the economic outlook can be seen. Forecasts for
advertising expenditure have been further revised downwards as a declining share
of GDP is spent on advertising, and printed advertisements are still losing
market share in total advertising expenditure.
Though the pace of contraction is slowing, demand is forecast to remain weaker
than a year ago for newsprint, magazine paper and fine paper in the third
quarter of 2009. However, some seasonal improvement in the newsprint and
magazine paper market in the third quarter is predicted compared with the
previous quarter. Demand for liquid packaging board is forecast to remain the
same as last year, but demand for other packaging products is expected to be
weaker. The demand outlook for wood products remains weak due to depressed
construction markets throughout Europe, Japan and USA.
In Europe some graphic paper grades are exposed to price pressure. Prices for
consumer board and industrial packaging products are forecast to remain largely
unchanged. Production curtailments have led to an improved balance between
supply and demand in wood products. Some wood product prices are expected to
increase.
In China the economy is recovering and demand for uncoated magazine paper is
predicted to be stronger than a year ago. Prices for uncoated magazine paper are
expected to stabilise. Market demand for coated fine paper is forecast to
improve further and prices to maintain their slow improvement. In Latin America
a seasonal improvement in coated magazine paper demand is anticipated in the
autumn. Prices are expected to stabilise.
Stora Enso continues to forecast that its cost deflation excluding internal
actions will be at about 4% for the full year 2009, the main contributor being
the lower costs of fibre raw material (wood, recycled paper and purchased pulp).
Markets
Compared with Q2/2008
In Europe market demand for all the Group's products was significantly weaker.
Market prices in local currencies were higher for newsprint in Europe, magazine
paper, coated fine paper and consumer board, somewhat lower for uncoated fine
paper and industrial packaging, and clearly lower for newsprint in overseas
markets and wood products. Producer inventories were clearly lower in wood
products and slightly lower in newsprint, magazine paper and fine paper.
In Latin America market demand and prices for coated magazine paper were lower.
In China market demand was clearly weaker for uncoated magazine paper and
unchanged for coated fine paper. Prices for both grades were lower.
Compared with Q1/2009
In Europe market demand continued to weaken for publication papers and coated
fine paper, remained fairly stable for uncoated fine paper and recovered
slightly for consumer board, industrial packaging and wood products, mainly due
to seasonal factors. Market prices in local currencies increased somewhat for
newsprint, remained largely unchanged for uncoated magazine paper, coated fine
paper, consumer board and some industrial packaging products, and decreased for
coated magazine paper, uncoated fine paper, SC fluting, coreboard and cores.
Production curtailments have clearly improved the supply and demand balance in
wood products, supporting price increases albeit from the very low levels.
Producer inventories increased to some extent in magazine paper and coated fine
paper, were unchanged in uncoated fine paper and decreased in newsprint and wood
products.
In Latin America market demand for coated magazine paper improved and prices
remained stable.
In China demand for uncoated magazine paper and coated fine paper started to
recover. Prices declined for uncoated magazine paper and rose for coated fine
paper.
Stora Enso Deliveries and Production
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| | Q2/0 | Q1/ | Q2/ | 2008 | Q1-Q | Q1-Q | Chan | Chan | Chan |
| | 9 | 09 | 08 | | 2/09 | 2/08 | ge % | ge % | ge % |
| | | | | | | | Q2/0 | Q2/0 | Q1-Q |
| | | | | | | | 9-Q2 | 9-Q1 | 2/09 |
| | | | | | | | /08 | /09 | - |
| | | | | | | | | | Q1-Q |
| | | | | | | | | | 2/08 |
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| Paper and board | 2 | 2 | 2 | 11 | 4 | 6 | -16. | 6.7 | -19. |
| deliveries (1 | 500 | 343 | 993 | 836 | 843 | 019 | 5 | | 5 |
| 000 tonnes) | | | | | | | | | |
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| Paper and board | 2 | 2 | 2 | 11 | 4 | 6 | -17. | 4.1 | -20. |
| production (1 | 460 | 363 | 966 | 746 | 823 | 028 | 1 | | 0 |
| 000 tonnes) | | | | | | | | | |
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| Wood products | 1 | 1 | 1 | 5 | 2 | 3 | -16. | 16.9 | -20. |
| deliveries (1 | 301 | 113 | 563 | 893 | 414 | 030 | 8 | | 3 |
| 000 m3) | | | | | | | | | |
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| Corrugated | 238 | 228 | 279 | 1 | 466 | 546 | -14. | 4.4 | -14. |
| packaging | | | | 071 | | | 7 | | 7 |
| deliveries | | | | | | | | | |
| (million m2) | | | | | | | | | |
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Mill closures and restructurings reduced comparative deliveries as follows for
the period Q1-Q2/09 compared with Q1-Q2/08: Summa Mill closure in January 2008
by some 39 000 tonnes of newsprint and 8 000 tonnes of magazine paper; Anjala
Mill restructuring in the first quarter of 2008 by some 24 000 tonnes of
magazine paper; Baienfurt Mill closure in December 2008 by some 72 000 tonnes of
cartonboard.
Q2/2009 Results (compared with Q2/2008)
Sales at EUR 2 184.8 million were EUR 687.0 million less than in the second
quarter of 2008. Deliveries were lower in all segments. Prices in local
currencies increased in Newsprint, Magazine Paper and Consumer Board, but
decreased in Fine Paper and Wood Products.
Key Figures
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| EUR million | Q2/ | Q1/ | Q2/0 | Q1-Q | Q1-Q | 2008 | Chang | Chang | Chang |
| | 09 | 09 | 8 | 2/09 | 2/08 | | e % | e % | e % |
| | | | | | | | Q2/09 | Q2/09 | Q1-Q2 |
| | | | | | | | -Q2/0 | -Q1/0 | /09- |
| | | | | | | | 8 | 9 | Q1-Q2 |
| | | | | | | | | | /08 |
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| Continuin | | | | | | | | | |
| g | | | | | | | | | |
| Operation | | | | | | | | | |
| s | | | | | | | | | |
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| Sales | 2 | 2 | 2 | 4 | 5 | 11 | -23.9 | 2.5 | -24.3 |
| | 184.8 | 130 | 871. | 315. | 703. | 028. | | | |
| | | .5 | 8 | 3 | 6 | 8 | | | |
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| EBITDA | 190.4 | 134 | 262. | 324. | 561. | 1 | -27.5 | 41.8 | -42.2 |
| excl. NRI | | .3 | 6 | 7 | 8 | 027. | | | |
| and fair | | | | | | 2 | | | |
| valuation | | | | | | | | | |
| s | | | | | | | | | |
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| Operating | 48.5 | 3.0 | 94.4 | 51.5 | 234. | 388. | -48.6 | n/m | -78.0 |
| profit | | | | | 5 | 4 | | | |
| excl. NRI | | | | | | | | | |
| and fair | | | | | | | | | |
| valuation | | | | | | | | | |
| s | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 59.9 | -34 | 72.6 | 25.0 | 197. | 318. | -17.5 | n/m | -87.3 |
| loss/prof | | .9 | | | 6 | 8 | | | |
| it excl. | | | | | | | | | |
| NRI | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 2.7 | -1. | 2.5 | 0.6 | 3.5 | 2.9 | 8.0 | n/m | -82.9 |
| margin | | 6 | | | | | | | |
| excl. | | | | | | | | | |
| NRI, % | | | | | | | | | |
--------------------------------------------------------------------------------| Operating | -209.4 | -0. | 71.3 | -210 | 196. | -726 | n/m | n/m | -207. |
| loss/prof | | 9 | | .3 | 3 | .6 | | | 1 |
| it (IFRS) | | | | | | | | | |
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| Operating | -9.6 | 0.0 | 2.5 | -4.9 | 3.4 | -6.6 | n/m | n/m | -244. |
| loss/prof | | | | | | | | | 1 |
| it, % of | | | | | | | | | |
| sales | | | | | | | | | |
--------------------------------------------------------------------------------
| Loss/prof | 47.2 | -82 | 31.7 | -34. | 114. | 151. | 48.9 | 157.5 | -130. |
| it before | | .1 | | 9 | 8 | 6 | | | 4 |
| tax and | | | | | | | | | |
| non-contr | | | | | | | | | |
| olling | | | | | | | | | |
| interests | | | | | | | | | |
| excl. NRI | | | | | | | | | |
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| Profit/lo | -370.6 | -48 | 30.4 | -418 | 113. | -893 | n/m | n/m | n/m |
| ss before | | .1 | | .7 | 5 | .8 | | | |
| tax and | | | | | | | | | |
| non-contr | | | | | | | | | |
| olling | | | | | | | | | |
| interests | | | | | | | | | |
--------------------------------------------------------------------------------
| Net | 44.9 | -60 | 27.5 | -15. | 93.6 | 142. | 63.3 | 174.6 | -116. |
| loss/prof | | .2 | | 3 | | 8 | | | 3 |
| it for | | | | | | | | | |
| the | | | | | | | | | |
| period | | | | | | | | | |
| excl. NRI | | | | | | | | | |
--------------------------------------------------------------------------------
| Net | -368.3 | -36 | 28.6 | -404 | 94.7 | -679 | n/m | n/m | n/m |
| loss/prof | | .1 | | .4 | | .0 | | | |
| it for | | | | | | | | | |
| the | | | | | | | | | |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ROCE from | 2.3 | 0.1 | 3.6 | 1.2 | 4.5 | 4.1 | -36.1 | n/m | -73.3 |
| continuin | | | | | | | | | |
| g | | | | | | | | | |
| operation | | | | | | | | | |
| s excl. | | | | | | | | | |
| NRI and | | | | | | | | | |
| fair | | | | | | | | | |
| valuation | | | | | | | | | |
| s, % | | | | | | | | | |
--------------------------------------------------------------------------------
| ROCE from | 2.8 | -1. | 2.8 | 0.6 | 3.8 | 3.4 | 0.0 | n/m | -84.2 |
| continuin | | 6 | | | | | | | |
| g | | | | | | | | | |
| operation | | | | | | | | | |
| s excl. | | | | | | | | | |
| NRI, % | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings | 0.06 | -0. | 0.04 | -0.0 | 0.12 | 0.18 | 50.0 | 175.0 | -116. |
| per share | | 08 | | 2 | | | | | 7 |
| (EPS) | | | | | | | | | |
| excl. | | | | | | | | | |
| NRI, EUR | | | | | | | | | |
--------------------------------------------------------------------------------
| EPS | -0.46 | -0. | 0.04 | -0.5 | 0.12 | -0.8 | n/m | n/m | n/m |
| (basic), | | 05 | | 1 | | 6 | | | |
| EUR | | | | | | | | | |
--------------------------------------------------------------------------------
| Cash | 0.24 | 0.1 | 0.26 | 0.34 | 0.56 | 0.99 | -7.7 | 140.0 | -39.3 |
| earnings | | 0 | | | | | | | |
| per share | | | | | | | | | |
| (CEPS) | | | | | | | | | |
| excl. | | | | | | | | | |
| NRI, EUR | | | | | | | | | |
--------------------------------------------------------------------------------
| CEPS, EUR | -0.29 | 0.1 | 0.26 | -0.1 | 0.56 | 0.94 | -211. | n/m | -130. |
| | | 2 | | 7 | | | 5 | | 4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on | -26.8 | -2. | 1.5 | -14. | 2.5 | -10. | n/m | n/m | n/m |
| equity | | 6 | | 4 | | 1 | | | |
| (ROE), %* | | | | | | | | | |
--------------------------------------------------------------------------------
| Debt/equi | 0.53 | 0.5 | 0.37 | 0.53 | 0.37 | 0.56 | 43.2 | -3.6 | 43.2 |
| ty ratio* | | 5 | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 7.00 | 6.8 | 9.87 | 7.00 | 9.87 | 7.09 | -29.1 | 2.6 | -29.1 |
| per | | 2 | | | | | | | |
| share, | | | | | | | | | |
| EUR* | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 47.0 | 45. | 52.8 | 47.0 | 52.8 | 46.2 | -11.0 | 4.2 | -11.0 |
| ratio, %* | | 1 | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average | 29 116 | 29 | 34 | 29 | 34 | 33 | -15.8 | -1.9 | -15.0 |
| number of | | 695 | 574 | 305 | 474 | 815 | | | |
| employees | | | | | | | | | |
--------------------------------------------------------------------------------
| Average | | | | | | | | | |
| number of | | | | | | | | | |
| shares | | | | | | | | | |
| (million) | | | | | | | | | |
--------------------------------------------------------------------------------
| periodic | 788.6 | 788 | 788. | 788. | 788. | 788. | - | - | - |
| | | .6 | 6 | 6 | 6 | 6 | | | |
--------------------------------------------------------------------------------
| cumulativ | 788.6 | 788 | 788. | 788. | 788. | 788. | - | - | - |
| e | | .6 | 6 | 6 | 6 | 6 | | | |
--------------------------------------------------------------------------------
| cumulativ | 788.6 | 788 | 788. | 788. | 788. | 788. | - | - | - |
| e, | | .6 | 6 | 6 | 6 | 6 | | | |
| diluted | | | | | | | | | |
--------------------------------------------------------------------------------
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, 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 mainly related to
associated companies' forest assets.
* Total operations
Reconciliation of Operating Profit
--------------------------------------------------------------------------------
| EUR million | Q2/0 | Q1/0 | Q2/ | 200 | Q1- | Q1- | Chan | Chan | Chan |
| | 9 | 9 | 08 | 8 | Q2/ | Q2/ | ge % | ge % | ge % |
| | | | | | 09 | 08 | Q2/0 | Q2/0 | Q1-Q |
| | | | | | | | 9-Q2 | 9-Q1 | 2/09 |
| | | | | | | | /08 | /09 | -Q1- |
| | | | | | | | | | Q2/0 |
| | | | | | | | | | 8 |
--------------------------------------------------------------------------------
| Profit/loss from | 42.2 | -10. | 86. | 346 | 31. | 210 | -51. | n/m | -84. |
| operations, excl. | | 3 | 1 | .3 | 9 | .5 | 0 | | 8 |
| NRI | | | | | | | | | |
--------------------------------------------------------------------------------
| Associated | 6.3 | 13.3 | 8.3 | 42. | 19. | 24. | -24. | -52. | -18. |
| companies, | | | | 1 | 6 | 0 | 1 | 6 | 3 |
| operational, | | | | | | | | | |
| excl. fair | | | | | | | | | |
| valuations | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating Profit | 48.5 | 3.0 | 94. | 388 | 51. | 234 | -48. | n/m | -78. |
| excl. NRI and | | | 4 | .4 | 5 | .5 | 6 | | 0 |
| Fair Valuations | | | | | | | | | |
--------------------------------------------------------------------------------
| Fair valuations | 11.4 | -37. | -21 | -69 | -26 | -36 | 152. | 130. | 28.2 |
| | | 9 | .8 | .6 | .5 | .9 | 3 | 1 | |
--------------------------------------------------------------------------------
| Operating | 59.9 | -34. | 72. | 318 | 25. | 197 | -17. | 271. | -87. |
| Profit/Loss, | | 9 | 6 | .8 | 0 | .6 | 5 | 6 | 3 |
| excl. NRI | | | | | | | | | |
--------------------------------------------------------------------------------
| NRI on operating | -269 | 34.0 | -1. | -1 | -23 | -1. | n/m | n/m | n/m |
| profit | .3 | | 3 | 045 | 5.3 | 3 | | | |
| | | | | .4 | | | | | |
--------------------------------------------------------------------------------
| Operating | -209 | -0.9 | 71. | -72 | -21 | 196 | -393 | n/m | -207 |
| Loss/Profit | .4 | | 3 | 6.6 | 0.3 | .3 | .7 | | .1 |
| (IFRS) | | | | | | | | | |
--------------------------------------------------------------------------------
Q2/2009 Results (compared with Q2/2008) (continued)
Operating profit excluding non-recurring items and fair valuations decreased by
EUR 45.9 million to EUR 48.5 million. Operating profit increased by EUR 18.6
million in Consumer Board and improved slightly in Newsprint and Wood Products,
but deteriorated by EUR 23.8 million in Fine Paper, by EUR 19.2 million in
Industrial Packaging and by EUR 8.8 million in Magazine Paper. There was an
operating loss of EUR 8.7 (EUR 10.9) million in Wood Products and an operating
loss of EUR 4.1 million (operating profit EUR 19.7 million) in Fine Paper. In
the segment Other there was an operating loss excluding non-recurring items and
fair valuations of EUR 24.3 (EUR 8.2) million.
In the second quarter of 2009, the Group curtailed paper and board production by
20%, pulp production by 28% and sawnwood production by 31% of capacity.
Higher sales prices in local currencies increased the operating profit of the
paper and board segments by EUR 2 million, excluding the effects of mill
closures. Lower sales prices had a negative impact of EUR 39 million on the Wood
Products operating profit figure, resulting in an operating loss. Lower sales
volumes reduced operating profit by EUR 182 million.
Lower woods costs increased Group operating profit by approximately EUR 44
million. Deliveries of wood to the Group's mills were 26% less than a year
earlier at 7.1 million cubic metres. Fixed costs decreased by EUR 109 million,
mainly due to cost improvement actions, including restructuring.
The share of associated company operational results, excluding non-recurring
items and fair valuations, amounted to EUR 6.3 (EUR 8.3) million. Operating
profit includes a net effect of EUR 11.4 (EUR -21.8) million for fair valuations
related to the accounting of share-based compensation, Total Return Swaps (TRS),
CO2 emission rights and IAS 41 forest valuations mainly related to associated
companies.
Stora Enso has recorded a write-down of EUR 417.8 (USD 575) million related to
its 19.9% NewPage shareholding and vendor note as a non-recurring item in its
second quarter 2009 results due to the poor
prospects of an upturn in the
market and actions taken to reorganise NewPage's capital structure by its
largest shareholder, Cerberus Capital Management, L.P. An adjustment to the
write-down may be recorded in the third quarter of 2009 when the capital
structure reorganisation is completed. The write-down of the shares had a
negative impact of EUR 269.3 million on operating profit and the write-down of
the vendor note a negative impact of EUR 148.5 million on financial items.
Net financial items were EUR -161.2 (EUR -40.9) million. Net interest expenses
decreased from EUR 40.9 million to EUR 22.8 million, mainly due to lower
interest rates. The Group has an interest rate risk policy of synchronising
interest costs with earnings over the business cycle by swapping long-term fixed
interest rates to short-term floating interest rates. Net foreign exchange gains
on borrowings, currency derivatives and bank accounts amounted to EUR 12.6 (EUR
4.2) million, mainly due to euro-denominated loans in Russia. The net loss from
other financial items amounted to EUR -151.0 (EUR -4.2) million, including EUR
-148.5 million due to the impairment of the NewPage vendor note as described
above. The remaining loss of EUR -2.5 million comprises EUR 5.2 million from
payment-in-kind notes, EUR -8.0 million of fair valuation losses on interest
rate swaps, EUR 1.3 million of fair valuation gains on long-term debt and EUR
-1.0 million of other expenses.
Group capital employed was EUR 8 493.4 million on 30 June 2009, a net decrease
of EUR 2 262.7 million due to restructuring of the Group, fixed asset and
goodwill impairments, fair valuations of unlisted shares in Pohjolan Voima and
NewPage, and decreased working capital.
January-June 2009 Results (compared with the same period in 2008)
Sales at EUR 4 315.3 million were EUR 1 388.3 million lower than the EUR 5 703.6
million a year earlier due to lower deliveries.
Operating profit excluding non-recurring items and fair valuations decreased by
EUR 183.0 million to EUR 51.5 million as lower sales volumes and higher energy
costs more than offset the positive impact of fixed and fibre costs.
Q2/2009 Results (compared with Q1/2009)
Sales at EUR 2 184.8 million were EUR 54.3 million higher than the previous
quarter's EUR 2 130.5 million. Operating profit excluding non-recurring items
and fair valuations increased by EUR 45.5 million to EUR 48.5 million as cost
reductions in many areas, especially energy and wood costs, and some increases
in deliveries more than offset lower sales prices in local currencies. Group
capital employed was EUR 8 493.4 million on 30 June 2009, a net increase of EUR
101.2 million.
Capital Structure
--------------------------------------------------------------------------------
| EUR million | 30 Jun | 31 Mar 09 | 31 Dec 08 | 30 Jun 08 |
| | 09 | | | |
--------------------------------------------------------------------------------
| Operative fixed assets | 6 593.7 | 6 648.8 | 6 853.7 | 8 572.8 |
--------------------------------------------------------------------------------
| Associated companies | 1 117.9 | 1 063.5 | 1 042.5 | 1 213.7 |
--------------------------------------------------------------------------------
| Operative working capital | 1 540.6 | 1 435.4 | 1 674.7 | 1 921.3 |
--------------------------------------------------------------------------------
| Non-current interest-free | - 482.6 | - 491.1 | - 513.6 | - 414.0 |
| items, net | | | | |
--------------------------------------------------------------------------------
| Operating Capital Total | 8 769.6 | 8 656.6 | 9 057.3 | 11 293.8 |
--------------------------------------------------------------------------------
| Net tax liabilities | -276.2 | -264.4 | -282.8 | -537.7 |
--------------------------------------------------------------------------------
| Capital Employed | 8 493.4 | 8 392.2 | 8 774.5 | 10 756.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity attributable to | 5 518.8 | 5 382.3 | 5 594.0 | 7 782.5 |
| Company shareholders | | | | |
--------------------------------------------------------------------------------
| Non-controlling interests | 57.0 | 57.3 | 56.5 | 74.8 |
--------------------------------------------------------------------------------
| Net interest-bearing | 2 917.6 | 2 952.6 | 3 124.0 | 2 898.8 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Financing Total | 8 493.4 | 8 392.2 | 8 774.5 | 10 756.1 |
--------------------------------------------------------------------------------
Financing Q2/2009 (compared with Q1/2009)
Cash flow was EUR 189.3 (EUR 263.6) million and cash flow after investing
activities EUR 81.0 (EUR 159.4) million. Despite poor profitability, the cash
flow was solid due to effective working capital management, especially of
inventories, and disciplined capital expenditure. At the end of the period, net
interest-bearing liabilities of the Group were EUR 2 917.6 million, virtually
unchanged from the first quarter of 2009.
Total unutilised committed credit facilities remained unchanged at EUR 1 400
million, and cash and cash-equivalents net of overdrafts increased from EUR 489
million to EUR 645 million. In addition, Stora Enso has access to various
long-term sources of funding totalling EUR 700 million. On 14 May 2009 Stora
Enso announced that it had successfully increased its EUR 517 555 000 5.125%
June 2014 notes by EUR 232 445 000, bringing the total transaction size to EUR
750 000 000. The new notes were issued with a 12.25% yield and were priced at
74.099. The cash received totalled EUR 181 million.
The debt/equity ratio at 30 June 2009 was 0.53 (0.55). The currency effect on
equity was positive EUR 88 million net of the hedging of equity translation
risks. The fair valuation of unlisted equity and debt instruments, mainly
related to NewPage and Pohjolan Voima, included within available-for-sale assets
increased equity by EUR 413 million.
Financing Q2/2009 (compared with Q2/2008)
At the end of the second quarter of 2009 Stora Enso had current borrowings of
EUR 1 449.7 million compared with EUR 819.9 million at the end of the second
quarter of 2008. Cash and cash equivalents at the end of the second quarter of
2009 amounted to EUR 645 million, compared with EUR 475 million at the end of
the second quarter of 2008.
Cash Flow
--------------------------------------------------------------------------------
| EUR million | Q2/ | Q1/0 | Q2/0 | 2008 | Q1-Q | Q1-Q | Chang | Chang | Chang |
| | 09 | 9 | 8 | | 2/09 | 2/08 | e % | e % | e % |
| | | | | | | | Q2/09 | Q2/09 | Q1-Q2 |
| | | | | | | | -Q2/0 | -Q1/0 | /09- |
| | | | | | | | 8 | 9 | Q1-Q2 |
| | | | | | | | | | /08 |
--------------------------------------------------------------------------------
| Continuing | | | | | | | | | |
| Operations | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | -20 | -0.9 | 71.3 | -726 | -210 | 196. | n/m | n/m | -207. |
| loss/profit | 9.4 | | | .6 | .3 | 3 | | | 1 |
--------------------------------------------------------------------------------
| Depreciatio | 366 | 100. | 192. | 1 | 467. | 386. | 90.3 | 263.5 | 21.0 |
| n and other | .8 | 9 | 7 | 443. | 7 | 6 | | | |
| non-cash | | | | 2 | | | | | |
| items | | | | | | | | | |
--------------------------------------------------------------------------------
| Change in | 31. | 163. | 81.9 | 31.8 | 195. | -264 | -61.1 | -80.5 | 173.9 |
| working | 9 | 6 | | | 5 | .4 | | | |
| capital | | | | | | | | | |
--------------------------------------------------------------------------------
| Cash Flow | 189 | 263. | 345. | 748. | 452. | 318. | -45.3 | -28.2 | 42.2 |
| from | .3 | 6 | 9 | 4 | 9 | 5 | | | |
| Operations | | | | | | | | | |
--------------------------------------------------------------------------------
| Capital | -10 | -104 | -194 | -704 | -212 | -328 | 44.3 | -3.9 | 35.3 |
| expenditure | 8.3 | .2 | .3 | .7 | .5 | .3 | | | |
--------------------------------------------------------------------------------
| Cash Flow | 81. | 159. | 151. | 43.7 | 240. | -9.8 | -46.6 | -49.2 | n/m |
| after | 0 | 4 | 6 | | 4 | | | | |
| Investing | | | | | | | | | |
| Activities | | | | | | | | | |
--------------------------------------------------------------------------------
| Discontinue | | | | | | | | | |
| d | | | | | | | | | |
| Operations | | | | | | | | | |
--------------------------------------------------------------------------------
| Cash flow | 0.0 | 0.0 | 34.4 | 51.5 | 0.0 | 51.4 | -100. | n/a | -100. |
| from | | | | | | | 0 | | 0 |
| discontinue | | | | | | | | | |
| d | | | | | | | | | |
| operations | | | | | | | | | |
| after | | | | | | | | | |
| investing | | | | | | | | | |
| activities | | | | | | | | | |
--------------------------------------------------------------------------------
| Total Cash | 81. | 159. | 186. | 95.2 | 240. | 41.6 | -56.5 | -49.2 | n/m |
| Flow after | 0 | 4 | 0 | | 4 | | | | |
| Investing | | | | | | | | | |
| Activities | | | | | | | | | |
--------------------------------------------------------------------------------
Capital Expenditure for January-June 2009
The target capital expenditure for the Group for the full year 2009 is EUR 400
million. Capital expenditure for the first half of 2009 totalled EUR 212.5
million including land acquisitions, which is 78% of depreciation for the first
half of 2009.
The main projects during the first half of 2009 were power plants and
energy-related projects at existing mills (EUR 85 million), development of
existing production (EUR 34 million) and plantations in South America and China
(EUR 23 million).
2009 Impairment Testing
Even though the second quarter results were an improvement on the first quarter
of 2009, the Group does not expect demand to improve materially and therefore
has decided to bring forward the 2009 impairment testing in order to report any
resulting impairment charges earlier than in previous years. The Group will
report the results of the impairment testing during the third quarter if there
are significant charges.
Short-term Risks and Uncertainties
The main short-term risks and uncertainties are related to further deterioration
of the global economy, especially the European economy. Sudden sharp increases
in wood prices would also have a negative impact on the Group.
Energy sensitivity analysis for 2009: the direct effect on 2009 operating profit
of a 10% change in electricity and oil market prices would be about EUR 18
million annual impact, after the effect of hedges.
Wood sensitivity analysis for 2009: the direct effect on 2009 operating profit
of a 10% change in wood prices would be about EUR 160 million annual impact.
Near-term Outlook
The market environment for the Group's products is expected to stay challenging
as no immediate improvement in the economic outlook can be seen. Forecasts for
advertising expenditure have been further revised downwards as a declining share
of GDP is spent on advertising, and printed advertisements are still losing
market share in total advertising expenditure.
Though the pace of contraction is slowing, demand is forecast to remain weaker
than a year ago for newsprint, magazine paper and fine paper in the third
quarter of 2009. However, some seasonal improvement in the newsprint and
magazine paper market in the third quarter is predicted compared with the
previous quarter. Demand for liquid packaging board is forecast to remain the
same as last year, but demand for other packaging products is expected to be
weaker. The demand outlook for wood products remains weak due to depressed
construction markets throughout Europe, Japan and USA.
In Europe some graphic paper grades are exposed to price pressure. Prices for
consumer board and industrial packaging products are forecast to remain largely
unchanged. Production curtailments have led to an improved balance between
supply and demand in wood products. Some wood product prices are expected to
increase.
In China the economy is recovering and demand for uncoated magazine paper is
predicted to be stronger than a year ago. Prices for uncoated magazine paper are
expected to stabilise. Market demand for coated fine paper is forecast to
improve further and prices to maintain their slow improvement. In Latin America
a seasonal improvement in coated magazine paper demand is anticipated in the
autumn. Prices are expected to stabilise.
Stora Enso continues to forecast that its cost deflation excluding internal
actions will be at about 4% for the full year 2009, the main contributor being
the lower costs of fibre raw material (wood, recycled paper and purchased pulp).
Second Quarter Events
April
On 23 April 2009 Stora Enso announced that it was starting co-determination
negotiations in Finland with the aim of reducing capacity at Kitee and Varkaus
sawmills and restructuring Puumerkki operations in Finland and Latvia. Following
the co-determination negotiations, which ended in mid June, the number of
employees is being reduced by 35 and annual capacity by a total of 120 000 cubic
metres.
On 23 April 2009 Stora Enso also announced that it would acquire Myllykoski
Paper's remaining 49% minority shareholding in Sunila Oy in Finland for EUR 6
million. On 15 May 2009 Stora Enso announced that it had finalised the
acquisition after receiving all the necessary approvals from the competition
authorities.
On 23 April 2009 Stora Enso also announced that it planned to reorganise its
operations with the aim of reducing annual costs by EUR 250 million, the
majority of the reduction to be achieved during 2009 and the remainder by the
end of 2010. Up to 2 000 employees would be affected, mainly as a result of the
leaner management structures. The final outcome would depend on the result of
the co-determination procedures.
May
On 18 May 2009 Stora Enso announced that Stora Enso and Arauco, one of the
largest forest industry enterprises in Latin America based in Chile, had signed
a definitive purchase agreement with the Spanish pulp producer Grupo ENCE for
the joint acquisition on a 50/50 basis of approximately 130 000 hectares of
owned land and plantations, 6 000 hectares of leased lands and other operations
owned by Grupo ENCE in the central and western areas of Uruguay. The enterprise
value of the transaction is USD 344 (EUR 253) million, including USD 33 million
of assumed debt. Stora Enso's share of the enterprise value is 50%. The
transaction with Grupo ENCE is expected to close by the end of 2009. Stora Enso
and Arauco intend to combine their existing assets in Uruguay with the newly
acquired operations.
On 20 May 2009 Stora Enso announced that it had appointed Ulla Paajanen-Sainio
as the new Head of Investor Relations with immediate effect. She succeeded Keith
B Russell, SVP, Investor Relations, who had headed the function from the Group's
London office and left Stora Enso at the end of May 2009. She is based in
Helsinki and reports to CFO Markus Rauramo.
June
On 11 June 2009 Stora Enso and Neste Oil inaugurated the demonstration plant at
Varkaus for biomass to liquids (BtL) production utilising forestry residues. A
50/50 joint venture, NSE Biofuels Oy, has been established first to develop
technology and later to produce at commercial scale biocrude for renewable
diesel.
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. The reorganisation is progressing on schedule to
reach the targeted savings. The number of employees affected will depend on the
outcome of the co-determination procedures, the majority of which are planned to
be concluded during 2009. The new cost-reduction programme incorporates the
earlier focused administration project and the restructuring of financial
administration that started in 2007.
Veracel
On 11 July 2008 Stora Enso announced that a federal judge in Brazil had claimed
in a judgement that the permits issued by the State of Bahia to Stora Enso's
associated company Veracel were not valid. The judge also decreed remedial
actions, including reforestation with native trees on part of Veracel's
plantation land and a possible BRL 20 million (EUR 8 million) fine. Veracel
vigorously disputes the findings of the court and has taken legal action against
the judgement. Veracel operates in full compliance with all Brazilian laws, has
undertaken an extensive environmental impact assessment study and has obtained
all the necessary environmental and operating licences for its industrial and
forestry activities. In November 2008, the Federal Court of the municipality of
Eunápolis, Bahia, suspended the effects of the decision as an interim measure.
Veracel has not recorded any provision for the reforestation or the possible
fine.
Inspections by Competition Authorities
In 2007, following US Federal District Court trial, Stora Enso was found not
guilty of charges by the US Department of Justice relating to practices in the
sale of coated magazine paper in the USA in 2002 and 2003. Coincident with this
case, Stora Enso has been named in a number of class action lawsuits filed in
the USA which still are pending.
The Finnish Competition Authority has investigated wood purchase practices in
Finland. The Authority has proposed to the Finnish Market Court that a fine of
EUR 30 million be imposed on Stora Enso for violating competition laws in
purchasing practices during the period from 1997 to 2004. The Market Court is
handling the case and its decision is expected by the end of 2009. Stora Enso
considers the Competition Authority's proposal groundless.
No provisions have been made in Stora Enso's accounts for the above-mentioned
lawsuits and investigation.
Share Capital
During the quarter, the conversion of 347 A shares into R shares was recorded in
the Finnish Trade Register on 12 June 2009.
On 30 June 2009 Stora Enso had 177 152 084 A shares and 612 386 415 R shares in
issue of which the Company held no A shares and 918 512 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.
Changes in shareholdings
In April the number of shares in Stora Enso Oyj held by Norges Bank (Central
Bank of Norway) increased above 5% of the of the paid-up share capital and the
number of shares in Stora Enso Oyj.
In May the number of shares in Stora Enso Oyj held by the funds managed by Orbis
Investment Management Limited, Orbis Asset Management Limited and Orbis
Portfolio Management (Europe) LLP decreased below 5% of the paid-up share
capital and the number of shares in Stora Enso Oyj.
Events after the Period
On 3 July 2009 Stora Enso undertook a partial buyback of the 2009 3.875% Swedish
Medium-Term Note. The nominal value bought back amounted to SEK 867.2 (EUR 80)
million and the cash amount paid was SEK 892.4 (EUR 82.6) million, of which SEK
18.5 (EUR 1.7) million related to interest. A loss of SEK 6.7 (EUR 0.6) million
will be recorded in the third quarter of 2009.
On 22 July 2009 Stora Enso announced that the Finnish National Board of Patents
and Registration had confirmed that Stora Enso could decrease its share premium
fund. The schedule for distribution of funds was also confirmed.
This report is unaudited.
Helsinki, 23 July 2009
Stora Enso Oyj
Board of Directors
Segments Q2/09 compared with Q2/08
Newsprint and Book Paper
--------------------------------------------------------------------------------
| EUR | Q2/ | Q1/ | Q2/0 | 2008 | Q1-Q | Q1-Q | Chang | Chang | Chang |
| million | 09 | 09 | 8 | | 2/09 | 2/08 | e % | e % | e % |
| | | | | | | | Q2/09 | Q2/09 | Q1-Q2 |
| | | | | | | | -Q2/0 | -Q1/0 | /09- |
| | | | | | | | 8 | 9 | Q1-Q2 |
| | | | | | | | | | /08 |
--------------------------------------------------------------------------------
| Sales | 327 | 308 | 389. | 1 | 636. | 775. | -15.8 | 6.1 | -18.0 |
| | .5 | .7 | 0 | 594.7 | 2 | 5 | | | |
--------------------------------------------------------------------------------
| EBITDA* | 57. | 48. | 55.7 | 255.2 | 106. | 110. | 3.9 | 19.6 | -4.1 |
| | 9 | 4 | | | 3 | 9 | | | |
--------------------------------------------------------------------------------
| Operating | 31. | 21. | 27.9 | 140.8 | 52.6 | 54.3 | 11.5 | 44.7 | -3.1 |
| profit* | 1 | 5 | | | | | | | |
--------------------------------------------------------------------------------
| % of sales | 9.5 | 7.0 | 7.2 | 8.8 | 8.3 | 7.0 | 31.9 | 35.7 | 18.6 |
--------------------------------------------------------------------------------
| ROOC, %** | 10. | 7.6 | 9.5 | 12.1 | 9.2 | 9.2 | 14.7 | 43.4 | 0.0 |
| | 9 | | | | | | | | |
--------------------------------------------------------------------------------
| Deliveries, | 610 | 546 | 702 | 2 870 | 1 | 1 | -13.1 | 11.7 | -18.2 |
| 1 000 t | | | | | 156 | 413 | | | |
--------------------------------------------------------------------------------
| Production, | 600 | 573 | 687 | 2 808 | 1 | 1 | -12.7 | 4.7 | -16.3 |
| 1 000 t | | | | | 173 | 402 | | | |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Newsprint and book paper sales were EUR 327.5 million, down 16% on the second
quarter of 2008 due to lower deliveries. Operating profit was EUR 31.1 million,
up 11% on the second quarter of 2008 due to lower production costs, higher
product prices and depreciation of the Swedish krona.
Markets
Compared with Q2/2008
In Europe demand remained much weaker than a year ago due to the economic
slowdown and consequent greatly reduced advertising spending. Contract prices
rose in Europe at the beginning of the year, but overseas prices were clearly
lower.
Compared with Q1/2009
Throughout Europe demand continued to weaken, with some differences country by
country. Deliveries increased, enhanced by seasonal factors such as orders
delayed during the extended negotiations in the first quarter.
Magazine Paper
--------------------------------------------------------------------------------
| EUR | Q2/ | Q1/ | Q2/ | 2008 | Q1-Q | Q1-Q2 | Chang | Chang | Chang |
| million | 09 | 09 | 08 | | 2/09 | /08 | e % | e % | e % |
| | | | | | | | Q2/09 | Q2/09 | Q1-Q2 |
| | | | | | | | -Q2/0 | -Q1/0 | /09- |
| | | | | | | | 8 | 9 | Q1-Q2 |
| | | | | | | | | | /08 |
--------------------------------------------------------------------------------
| Sales | 396 | 380 | 540 | 2 | 776. | 1 | -26.7 | 4.0 | -28.6 |
| | .0 | .8 | .5 | 177.0 | 8 | 087.8 | | | |
--------------------------------------------------------------------------------
| EBITDA* | 33. | 27. | 48. | 223.5 | 61.2 | 108.9 | -29.5 | 24.2 | -43.8 |
| | 9 | 3 | 1 | | | | | | |
--------------------------------------------------------------------------------
| Operating | 5.7 | -0. | 14. | 88.8 | 5.6 | 41.7 | -60.7 | n/m | -86.6 |
| profit* | | 1 | 5 | | | | | | |
--------------------------------------------------------------------------------
| % of sales | 1.4 | 0.0 | 2.7 | 4.1 | 0.7 | 3.8 | -48.1 | n/a | -81.6 |
--------------------------------------------------------------------------------
| ROOC, %** | 1.6 | 0.0 | 3.7 | 6.0 | 0.8 | 5.4 | -56.8 | n/a | -85.2 |
--------------------------------------------------------------------------------
| Deliveries, | 512 | 487 | 698 | 2 786 | 999 | 1 389 | -26.6 | 5.1 | -28.1 |
| 1 000 t | | | | | | | | | |
--------------------------------------------------------------------------------
| Production, | 503 | 501 | 696 | 2 774 | 1 | 1 424 | -27.7 | 0.4 | -29.5 |
| 1 000 t | | | | | 004 | | | | |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Magazine paper sales were EUR 396.0 million, down 27% on the second quarter of
2008 mainly due to weaker demand. Sales were also reduced by the permanent
closures of Kemijärvi and Norrsundet pulp mills in 2008. Operating profit was
EUR 5.7 million, down 61% on the second quarter of 2008 as higher product prices
and lower production costs could not compensate for lower deliveries. Fibre
costs were lower but energy costs higher than a year ago.
Markets
Compared with Q2/2008
In Europe the economic slowdown reduced demand significantly for magazine paper
grades, especially for coated magazine paper. Widespread production curtailments
helped to keep producers' stocks below 2008 levels, although the markets remain
oversupplied. Magazine paper prices were higher.
Demand was weaker in China and Latin America and prices were lower.
Compared with Q1/2009
In Europe demand for coated and uncoated magazine paper weakened slightly, but
the pace of decline seems to be slowing, partly because the catalogue season
boosted orders somewhat. Prices remained stable but under pressure as supply
still exceeded demand.
In Latin America demand for magazine paper improved as customers completed
inventory adjustments early in the second quarter. Prices remained stable.
Seasonally related order inflows are showing the first signs of an upturn in
demand.
In China demand for uncoated magazine paper has been improving steadily since
the beginning of the year, but ongoing oversupply in competing coated magazine
paper still exerted price pressure.
Fine Paper
--------------------------------------------------------------------------------
| EUR | Q2/ | Q1/ | Q2/ | 2008 | Q1-Q | Q1-Q2 | Chang | Chang | Chang |
| million | 09 | 09 | 08 | | 2/09 | /08 | e % | e % | e % |
| | | | | | | | Q2/09 | Q2/09 | Q1-Q2 |
| | | | | | | | -Q2/0 | -Q1/0 | /09- |
| | | | | | | | 8 | 9 | Q1-Q2 |
| | | | | | | | | | /08 |
--------------------------------------------------------------------------------
| Sales | 450 | 431 | 537 | 2 | 882. | 1 | -16.3 | 4.3 | -18.5 |
| | .4 | .9 | .8 | 111.7 | 3 | 083.0 | | | |
--------------------------------------------------------------------------------
| EBITDA* | 25. | 22. | 57. | 219.8 | 47.8 | 131.0 | -55.9 | 11.5 | -63.5 |
| | 2 | 6 | 2 | | | | | | |
--------------------------------------------------------------------------------
| Operating | -4. | -5. | 19. | 80.4 | -9.8 | 57.0 | -120. | 28.1 | -117. |
| profit* | 1 | 7 | 7 | | | | 8 | | 2 |
--------------------------------------------------------------------------------
| % of sales | -0. | -1. | 3.7 | 3.8 | -1.1 | 5.3 | -124. | 30.8 | -120. |
| | 9 | 3 | | | | | 3 | | 8 |
--------------------------------------------------------------------------------
| ROOC, %** | -1. | -1. | 4.3 | 5.3 | -1.5 | 6.5 | -130. | 23.5 | -123. |
| | 3 | 7 | | | | | 2 | | 1 |
--------------------------------------------------------------------------------
| Deliveries, | 638 | 590 | 688 | 2 730 | 1 | 1 414 | -7.3 | 8.1 | -13.2 |
| 1 000 t | | | | | 228 | | | | |
--------------------------------------------------------------------------------
| Production, | 625 | 591 | 694 | 2 707 | 1 | 1 390 | -9.9 | 5.8 | -12.5 |
| 1 000 t | | | | | 216 | | | | |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Fine paper sales were EUR 450.4 million, down 16% on the second quarter of 2008
due to lower deliveries, lower uncoated fine paper sales prices and adverse
changes in exchange rates. The operating loss of EUR 4.1 million was a
deterioration of EUR 23.8 million compared with the second quarter of 2008 as
lower uncoated fine paper sales prices and lower deliveries of all fine paper
grades more than offset lower costs generally, including a reduction in fixed
costs.
Markets
Compared with Q2/2008
In Europe demand for coated fine paper was much weaker than a year ago due to
the economic slowdown and its severe effect on advertising spending. Uncoated
fine paper deliveries were also still clearly lower although the order inflow
came closer to the previous year's level. Coated fine paper prices stayed
clearly higher and uncoated fine paper prices lower than a year ago. Industry
inventories were lower in both grades.
In China coated fine paper demand was similar to a year ago, but prices were
clearly lower.
Compared with Q1/2009
In Europe demand for coated fine paper remained on a lower level, whereas demand
for uncoated fine paper was still somewhat lower than in the previous quarter.
In Europe prices declined for uncoated fine paper and were similar for coated
grades. Industry inventories were slightly higher in coated and unchanged in
uncoated fine paper.
In China coated fine paper demand improved and prices rose.
Consumer Board
--------------------------------------------------------------------------------
| EUR | Q2/ | Q1/ | Q2/ | 2008 | Q1-Q | Q1-Q2 | Chang | Chang | Chang |
| million | 09 | 09 | 08 | | 2/09 | /08 | e % | e % | e % |
| | | | | | | | Q2/09 | Q2/09 | Q1-Q2 |
| | | | | | | | -Q2/0 | -Q1/0 | /09- |
| | | | | | | | 8 | 9 | Q1-Q2 |
| | | | | | | | | | /08 |
--------------------------------------------------------------------------------
| Sales | 460 | 459 | 587 | 2 | 920. | 1 | -21.6 | 0.1 | -20.8 |
| | .3 | .9 | .3 | 231.9 | 2 | 161.7 | | | |
--------------------------------------------------------------------------------
| EBITDA* | 71. | 44. | 59. | 242.0 | 116. | 138.6 | 20.2 | 61.2 | -15.9 |
| | 9 | 6 | 8 | | 5 | | | | |
--------------------------------------------------------------------------------
| Operating | 41. | 15. | 23. | 107.3 | 57.1 | 65.5 | 80.9 | 168.4 | -12.8 |
| profit* | 6 | 5 | 0 | | | | | | |
--------------------------------------------------------------------------------
| % of sales | 9.0 | 3.4 | 3.9 | 4.8 | 6.2 | 5.6 | 130.8 | 164.7 | 10.7 |
--------------------------------------------------------------------------------
| ROOC, %** | 13. | 4.9 | 5.5 | 7.2 | 9.2 | 7.8 | 145.5 | 175.5 | 17.9 |
| | 5 | | | | | | | | |
--------------------------------------------------------------------------------
| Deliveries, | 545 | 529 | 643 | 2 442 | 1 | 1 279 | -15.2 | 3.0 | -16.0 |
| 1 000 t | | | | | 074 | | | | |
--------------------------------------------------------------------------------
| Production, | 551 | 509 | 626 | 2 437 | 1 | 1 286 | -12.0 | 8.3 | -17.6 |
| 1 000 t | | | | | 060 | | | | |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Consumer board sales were EUR 460.3 million, down 22% on the second quarter of
2008 mainly due to lower prices and deliveries of market pulp, lower deliveries
of cartonboard following closure of Baienfurt Mill at the end of 2008 and
production curtailments. Operating profit was EUR 41.6 million, up 81% on the
second quarter of 2008 due to generally higher sales prices for board and lower
variable and fixed costs.
Markets
Compared with Q2/2008
Demand for consumer board was weaker than a year ago. Sales prices in euros were
higher on average.
Compared with Q1/2009
There was seasonal improvement in demand for liquid and food service board,
supported by increased demand in China, but demand for cartonboard was
unchanged. Prices were stable.
Industrial Packaging
--------------------------------------------------------------------------------
| EUR million | Q2/ | Q1/ | Q2/ | 200 | Q1- | Q1- | Chan | Chan | Chan |
| | 09 | 09 | 08 | 8 | Q2/ | Q2/ | ge % | ge % | ge % |
| | | | | | 09 | 08 | Q2/0 | Q2/0 | Q1-Q |
| | | | | | | | 9-Q2 | 9-Q1 | 2/09 |
| | | | | | | | /08 | /09 | - |
| | | | | | | | | | Q1-Q |
| | | | | | | | | | 2/08 |
--------------------------------------------------------------------------------
| Sales | 194 | 197 | 285 | 1 | 391 | 560 | -32. | -1.6 | -30. |
| | .0 | .2 | .4 | 076 | .2 | .9 | 0 | | 3 |
| | | | | .5 | | | | | |
--------------------------------------------------------------------------------
| EBITDA* | 12. | 15. | 35. | 132 | 28. | 77. | -63. | -15. | -63. |
| | 9 | 2 | 5 | .7 | 1 | 1 | 7 | 1 | 6 |
--------------------------------------------------------------------------------
| Operating profit* | 0.9 | 3.5 | 20. | 73. | 4.4 | 47. | -95. | -74. | -90. |
| | | | 1 | 9 | | 7 | 5 | 3 | 8 |
--------------------------------------------------------------------------------
| % of sales | 0.5 | 1.8 | 7.0 | 6.9 | 1.1 | 8.5 | -92. | -72. | -87. |
| | | | | | | | 9 | 2 | 1 |
--------------------------------------------------------------------------------
| ROOC, %** | 0.6 | 2.4 | 10. | 11. | 1.5 | 13. | -94. | -75. | -88. |
| | | | 9 | 2 | | 2 | 5 | 0 | 6 |
--------------------------------------------------------------------------------
| Paper and board | 195 | 191 | 262 | 1 | 386 | 524 | -25. | 2.1 | -26. |
| deliveries, 1 000 t | | | | 008 | | | 6 | | 3 |
--------------------------------------------------------------------------------
| Paper and board | 181 | 189 | 263 | 1 | 370 | 526 | -31. | -4.2 | -29. |
| production, 1 000 t | | | | 020 | | | 2 | | 7 |
--------------------------------------------------------------------------------
| Corrugated | 238 | 228 | 279 | 1 | 466 | 546 | -14. | 4.4 | -14. |
| packaging | | | | 071 | | | 7 | | 7 |
| deliveries, million | | | | | | | | | |
| m2 | | | | | | | | | |
--------------------------------------------------------------------------------
| Corrugated | 239 | 226 | 279 | 1 | 465 | 544 | -14. | 5.8 | -14. |
| packaging | | | | 066 | | | 3 | | 5 |
| production, million | | | | | | | | | |
| m2 | | | | | | | | | |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Industrial packaging sales were EUR 194.0 million, down 32% on the second
quarter of 2008 mainly due to lower deliveries in all main segments. Operating
profit was EUR 0.9 million, down 96% on the second quarter of 2008 also due to
lower deliveries and lower prices.
Markets
Compared with Q2/2008
Demand for industrial packaging remained clearly weaker and prices lower than a
year earlier. Demand for laminating paper for construction-related end uses was
especially weak.
Compared with Q1/2009
Demand for most products strengthened slightly. Prices for corrugated board,
containerboard and laminating paper were stable, but prices for SC fluting,
cores and coreboard decreased.
Wood Products
--------------------------------------------------------------------------------
| EUR | Q2/ | Q1/ | Q2/0 | 2008 | Q1-Q | Q1-Q | Chang | Chang | Chang |
| million | 09 | 09 | 8 | | 2/09 | 2/08 | e % | e % | e % |
| | | | | | | | Q2/09 | Q2/09 | Q1-Q2 |
| | | | | | | | -Q2/0 | -Q1/0 | /09- |
| | | | | | | | 8 | 9 | Q1-Q2 |
| | | | | | | | | | /08 |
--------------------------------------------------------------------------------
| Sales | 315 | 272 | 409. | 1 | 587. | 788. | -22.9 | 16.1 | -25.4 |
| | .8 | .0 | 8 | 503.3 | 8 | 4 | | | |
--------------------------------------------------------------------------------
| EBITDA* | -1. | -14 | 1.8 | -19.4 | -15. | -8.9 | -161. | 92.3 | -73.0 |
| | 1 | .3 | | | 4 | | 1 | | |
--------------------------------------------------------------------------------
| Operating | -8. | -23 | -10. | -67.5 | -32. | -34. | 20.2 | 63.3 | 5.5 |
| profit/loss | 7 | .7 | 9 | | 4 | 3 | | | |
| * | | | | | | | | | |
--------------------------------------------------------------------------------
| % of sales | -2. | -8. | -2.7 | -4.5 | -5.5 | -4.4 | -3.7 | 67.8 | -25.0 |
| | 8 | 7 | | | | | | | |
--------------------------------------------------------------------------------
| ROOC, %** | -5. | -15 | -5.6 | -9.8 | -10. | -8.9 | -5.4 | 62.4 | -21.3 |
| | 9 | .7 | | | 8 | | | | |
--------------------------------------------------------------------------------
| Deliveries, | 1 | 1 | 1 | 5 893 | 2 | 3 | -16.8 | 16.9 | -20.3 |
| 1 000 m3 | 301 | 113 | 563 | | 414 | 030 | | | |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Wood product sales were EUR 315.8 million, down 23% on the second quarter of
2008 mainly due to lower sales prices and deliveries. Operating loss was EUR 8.7
million, an improvement of EUR 2.2 million compared with the second quarter of
2008 as cost-saving measures, lower raw material costs and lower depreciation
more than offset lower sales prices and deliveries.
Production continued to be severely curtailed to adapt to the difficult market.
The production capacities of the sawmills at Kitee and Varkaus in Finland and
Ybbs in Austria were permanently reduced, and Swietajno sawmill in Poland was
shut down indefinitely. Puumerkki operations in Finland and Latvia were
restructured.
Markets
Compared with Q2/2008
Demand and prices were clearly lower than a year ago due to the sharp decline in
construction activity in most markets.
Compared with Q1/2009
Although demand remained generally weak, a seasonal improvement and tightening
of supply supported price increases throughout the product range. However, the
price increases were insufficient to restore operations to sustainable
profitability.
Financials
Basis of Preparation
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 2008, except for the
effects of the adoption of the standards described below:
IFRS 8 Operating Segments
The Group's reportable segments remain unchanged from those reported in previous
interim reports. The adoption of this standard has had no impact on the reported
results or financial position of the Group.
IAS 1 (revised 2007) Presentation of Financial Statements
The revised standard has introduced a number of terminology changes and revised
titles for the primary statements, however the adoption of this standard has had
no impact on the reported results or financial position of the Group.
Discontinued Operations
The divestment of the Merchants segment in 2008 has been accounted for as a
discontinued operation. The income statements have been re-presented to disclose
the results from discontinued operations separately, but the Statement of
Financial Position and Statement of Cash Flows are presented as previously
reported.
Condensed Consolidated Income Statement
--------------------------------------------------------------------------------
| EUR million | Q2/0 | Q1/0 | Q2/0 | Q1- | Q1- | 2008 | Chang | Chang | Chang |
| | 9 | 9 | 8 | Q2/ | Q2/ | | e % | e % | e % |
| | | | | 09 | 08 | | Q2/09 | Q2/09 | Q1-Q2 |
| | | | | | | | -Q2/0 | -Q1/0 | /09- |
| | | | | | | | 8 | 9 | Q1-Q2 |
| | | | | | | | | | /08 |
--------------------------------------------------------------------------------
| Continuing | | | | | | | | | |
| Operations | | | | | | | | | |
--------------------------------------------------------------------------------
| Sales | 2 | 2 | 2 | 4 | 5 | 11 | -23.9 | 2.5 | -24.3 |
| | 184. | 130. | 871. | 315 | 703 | 028. | | | |
| | 8 | 5 | 8 | .3 | .6 | 8 | | | |
--------------------------------------------------------------------------------
| Other | 31.4 | 51.8 | -1.6 | 83. | 44. | 120. | n/m | -39.4 | 85.3 |
| operating | | | | 2 | 9 | 2 | | | |
| income | | | | | | | | | |
--------------------------------------------------------------------------------
| Materials | -1 | -1 | -1 | -2 | -3 | -6 | 20.8 | 0.6 | 21.0 |
| and services | 363. | 371. | 720. | 735 | 462 | 905. | | | |
| | 4 | 6 | 4 | .0 | .5 | 0 | | | |
--------------------------------------------------------------------------------
| Freight and | -196 | -211 | -286 | -40 | -56 | -1 | 31.2 | 6.7 | 28.3 |
| sales | .9 | .1 | .1 | 8.0 | 8.7 | 127. | | | |
| commissions | | | | | | 1 | | | |
--------------------------------------------------------------------------------
| Personnel | -325 | -376 | -454 | -70 | -90 | -1 | 28.4 | 13.4 | 22.3 |
| expenses | .6 | .0 | .7 | 1.6 | 2.4 | 669. | | | |
| | | | | | | 1 | | | |
--------------------------------------------------------------------------------
| Other | -401 | -114 | -177 | -51 | -30 | -752 | -126. | -249. | -67.9 |
| operating | .1 | .7 | .1 | 5.8 | 7.2 | .7 | 5 | 7 | |
| expenses | | | | | | | | | |
--------------------------------------------------------------------------------
| Share of | 6.0 | 19.4 | 12.4 | 25. | 36. | 0.7 | -51.6 | -69.1 | -30.0 |
| results of | | | | 4 | 3 | | | | |
| associated | | | | | | | | | |
| companies | | | | | | | | | |
--------------------------------------------------------------------------------
| Depreciation | -144 | -129 | -173 | -27 | -34 | -1 | 16.4 | -11.9 | 21.3 |
| and | .6 | .2 | .0 | 3.8 | 7.7 | 422. | | | |
| impairment | | | | | | 4 | | | |
--------------------------------------------------------------------------------
| Operating | -209 | -0.9 | 71.3 | -21 | 196 | -726 | n/m | n/m | -207. |
| Loss/Profit | .4 | | | 0.3 | .3 | .6 | | | 1 |
--------------------------------------------------------------------------------
| Net | -161 | -47. | -40. | -20 | -82 | -167 | n/m | -241. | -151. |
| financial | .2 | 2 | 9 | 8.4 | .8 | .2 | | 5 | 7 |
| items | | | | | | | | | |
--------------------------------------------------------------------------------
| Loss/Profit | -370 | -48. | 30.4 | -41 | 113 | -893 | n/m | n/m | n/m |
| before Tax | .6 | 1 | | 8.7 | .5 | .8 | | | |
--------------------------------------------------------------------------------
| Income tax | 2.3 | 12.0 | -1.8 | 14. | -18 | 214. | 227.8 | -80.8 | 176.1 |
| | | | | 3 | .8 | 8 | | | |
--------------------------------------------------------------------------------
| Net | -368 | -36. | 28.6 | -40 | 94. | -679 | n/m | n/m | n/m |
| Loss/Profit | .3 | 1 | | 4.4 | 7 | .0 | | | |
| for the | | | | | | | | | |
| Period from | | | | | | | | | |
| Continuing | | | | | | | | | |
| Operations | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Discontinued | | | | | | | | | |
| Operations | | | | | | | | | |
--------------------------------------------------------------------------------
| Profit after | - | - | -1.8 | - | 3.3 | 4.3 | n/m | n/a | -100. |
| tax for the | | | | | | | | | 0 |
| period from | | | | | | | | | |
| discontinued | | | | | | | | | |
| operations | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net | -368 | -36. | 26.8 | -40 | 98. | -674 | n/m | n/m | n/m |
| Loss/Profit | .3 | 1 | | 4.4 | 0 | .7 | | | |
| for the | | | | | | | | | |
| Period | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable | | | | | | | | | |
| to: | | | | | | | | | |
--------------------------------------------------------------------------------
| Owners of | -367 | -38. | 23.3 | -40 | 93. | -673 | n/m | n/m | n/m |
| the Parent | .9 | 2 | | 6.1 | 8 | .4 | | | |
--------------------------------------------------------------------------------
| Non-controll | -0.4 | 2.1 | 3.5 | 1.7 | 4.2 | -1.3 | -111. | -119. | -59.5 |
| ing | | | | | | | 4 | 0 | |
| interests | | | | | | | | | |
--------------------------------------------------------------------------------
| | -368 | -36. | 26.8 | -40 | 98. | -674 | n/m | n/m | n/m |
| | .3 | 1 | | 4.4 | 0 | .7 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per | | | | | | | | | |
| Share | | | | | | | | | |
--------------------------------------------------------------------------------
| Basic | -0.4 | -0.0 | 0.03 | -0. | 0.1 | -0.8 | n/m | n/m | n/m |
| earnings per | 6 | 5 | | 51 | 2 | 5 | | | |
| share, EUR | | | | | | | | | |
--------------------------------------------------------------------------------
| Diluted | -0.4 | -0.0 | 0.03 | -0. | 0.1 | -0.8 | n/m | n/m | n/m |
| earnings per | 6 | 5 | | 51 | 2 | 5 | | | |
| share, EUR | | | | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | | | | | | | | | |
| Share from | | | | | | | | | |
| Continuing | | | | | | | | | |
| Operations | | | | | | | | | |
--------------------------------------------------------------------------------
| Basic | -0.4 | -0.0 | 0.04 | -0. | 0.1 | -0.8 | n/m | n/m | n/m |
| earnings per | 6 | 5 | | 51 | 2 | 6 | | | |
| share, EUR | | | | | | | | | |
--------------------------------------------------------------------------------
| Diluted | -0.4 | -0.0 | 0.04 | -0. | 0.1 | -0.8 | n/m | n/m | n/m |
| earnings per | 6 | 5 | | 51 | 2 | 6 | | | |
| share, EUR | | | | | | | | | |
--------------------------------------------------------------------------------
Consolidated Statement of Comprehensive Income
--------------------------------------------------------------------------------
| EUR million | Q2/09 | Q1/09 | Q2/08 | Q1-Q2 | Q1-Q2/ | 2008 |
| | | | | /09 | 08 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net loss/profit for the | -368. | -36.1 | 26.8 | -404. | 98.0 | -674.7 |
| period | 3 | | | 4 | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Other Comprehensive Income | | | | | | |
--------------------------------------------------------------------------------
| Actuarial gains and losses | - | - | - | - | - | -12.7 |
| on defined benefit pension | | | | | | |
| plans | | | | | | |
--------------------------------------------------------------------------------
| Buy-out of non-controlling | - | - | - | - | - | -0.7 |
| interests | | | | | | |
--------------------------------------------------------------------------------
| Asset revaluation on step | 3.9 | - | - | 3.9 | - | - |
| acquisition | | | | | | |
--------------------------------------------------------------------------------
| Available for sale | 334.4 | -183. | 515.5 | 150.9 | 385.6 | -398.0 |
| financial assets | | 5 | | | | |
--------------------------------------------------------------------------------
| Currency and commodity | 103.3 | 2.3 | 95.7 | 105.6 | 42.1 | -312.2 |
| hedges | | | | | | |
--------------------------------------------------------------------------------
| Share of other | 2.2 | -12.6 | 7.2 | -10.4 | 6.9 | -9.5 |
| comprehensive income of | | | | | | |
| associates | | | | | | |
--------------------------------------------------------------------------------
| Currency translation | 85.0 | 18.5 | 89.3 | 103.5 | 29.7 | -310.2 |
| movements on equity net | | | | | | |
| investments (CTA) | | | | | | |
--------------------------------------------------------------------------------
| Net investment hedges | 21.0 | 4.5 | -14.4 | 25.5 | 6.1 | 0.6 |
--------------------------------------------------------------------------------
| Items from equity | -13.0 | - | -10.6 | -13.0 | -10.6 | -32.4 |
| recognised in Income | | | | | | |
| Statement | | | | | | |
--------------------------------------------------------------------------------
| Income tax relating to | -32.3 | -4.0 | -55.5 | -36.3 | -11.1 | 89.7 |
| components of other | | | | | | |
| comprehensive income | | | | | | |
--------------------------------------------------------------------------------
| Other Comprehensive | 504.5 | -174. | 627.2 | 329.7 | 448.7 | -985.4 |
| Income, Net of Tax | | 8 | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Total Comprehensive Income | 136.2 | -210. | 654.0 | -74.7 | 546.7 | -1 |
| | | 9 | | | | 660.1 |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Total Comprehensive Income | | | | | | |
| Attributable to: | | | | | | |
--------------------------------------------------------------------------------
| Owners of the Parent | 136.5 | -211. | 648.4 | -75.2 | 543.8 | -1 |
| | | 7 | | | | 644.7 |
--------------------------------------------------------------------------------
| Non-controlling interests | -0.3 | 0.8 | 5.6 | 0.5 | 2.9 | -15.4 |
--------------------------------------------------------------------------------
| | 136.2 | -210. | 654.0 | -74.7 | 546.7 | -1 |
| | | 9 | | | | 660.1 |
--------------------------------------------------------------------------------
Condensed Consolidated Statement of Cash Flows
--------------------------------------------------------------------------------
| EUR million | Q1-Q2/09 | Q1-Q2/08 |
--------------------------------------------------------------------------------
| Cash Flow from Operating Activities | | |
--------------------------------------------------------------------------------
| Operating loss/profit | -210.3 | 207.3 |
--------------------------------------------------------------------------------
| Hedging result from OCI | 113.4 | 18.7 |
--------------------------------------------------------------------------------
| Adjustments for non-cash items | 467.7 | 398.0 |
--------------------------------------------------------------------------------
| Change in net working capital | 255.9 | -352.6 |
--------------------------------------------------------------------------------
| Cash Flow Generated by Operations | 626.7 | 271.4 |
--------------------------------------------------------------------------------
| Net financials items paid | -91.6 | -145.1 |
--------------------------------------------------------------------------------
| Income taxes paid | -4.2 | -74.2 |
--------------------------------------------------------------------------------
| Net Cash Provided by Operating Activities | 530.9 | 52.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash Flow from Investing Activities | | |
--------------------------------------------------------------------------------
| Acquisitions of subsidiaries | -8.3 | -3.4 |
--------------------------------------------------------------------------------
| Acquisitions of associated companies | -0.1 | -25.4 |
--------------------------------------------------------------------------------
| Proceeds from sale of fixed assets and shares | 62.5 | 206.8 |
--------------------------------------------------------------------------------
| Capital expenditure | -212.5 | -330.7 |
--------------------------------------------------------------------------------
| Payment of non-current receivables, net | -36.4 | -13.1 |
--------------------------------------------------------------------------------
| Net Cash Used in Investing Activities | -194.8 | -165.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash Flow from Financing Activities | | |
--------------------------------------------------------------------------------
| Proceeds from issue of new long-term debt | 223.0 | 61.7 |
--------------------------------------------------------------------------------
| Long-term debt, payments | -98.8 | -63.1 |
--------------------------------------------------------------------------------
| Change in short-term borrowings | -178.7 | 73.2 |
--------------------------------------------------------------------------------
| Dividends paid | - | -354.9 |
--------------------------------------------------------------------------------
| Equity repayment and dividend to | -6.0 | -2.7 |
| non-controlling interests | | |
--------------------------------------------------------------------------------
| Net Cash Used in Financing Activities | -60.5 | -285.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net Increase/Decrease in Cash and Cash | 275.6 | -399.5 |
| Equivalents | | |
--------------------------------------------------------------------------------
| Cash and bank in disposed companies | - | -8.8 |
--------------------------------------------------------------------------------
| Cash and bank in acquired companies | 4.4 | - |
--------------------------------------------------------------------------------
| Translation adjustment | -8.1 | 3.5 |
--------------------------------------------------------------------------------
| Net cash and cash equivalents at the | 372.6 | 879.3 |
| beginning of period | | |
--------------------------------------------------------------------------------
| Net Cash and Cash Equivalents at Period End | 644.5 | 474.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and Cash Equivalents at Period End | 647.8 | 489.3 |
--------------------------------------------------------------------------------
| Bank Overdrafts at Period End | -3.3 | -14.8 |
--------------------------------------------------------------------------------
| Net Cash and Cash Equivalents at Period End | 644.5 | 474.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Acquisitions of Subsidiary Companies | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 4.4 | - |
--------------------------------------------------------------------------------
| Fixed assets | 14.4 | 4.2 |
--------------------------------------------------------------------------------
| Working capital | 20.4 | 0.0 |
--------------------------------------------------------------------------------
| Tax assets and liabilities | 15.1 | -0.5 |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | -40.0 | -1.0 |
--------------------------------------------------------------------------------
| Non-controlling interests | -2.1 | 0.7 |
--------------------------------------------------------------------------------
| Fair Value of Net Assets | 12.2 | 3.4 |
--------------------------------------------------------------------------------
| Goodwill | - | - |
--------------------------------------------------------------------------------
| Gain from step acquisition realised directly | -3.9 | - |
| in equity | | |
--------------------------------------------------------------------------------
| Total Purchase Consideration | 8.3 | 3.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Disposal of Subsidiary Companies | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | - | 8.8 |
--------------------------------------------------------------------------------
| Fixed assets | 0.1 | 299.7 |
--------------------------------------------------------------------------------
| Working capital | 0.2 | 165.1 |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | - | -230.4 |
--------------------------------------------------------------------------------
| Tax liabilities | - | -25.8 |
--------------------------------------------------------------------------------
| Net Assets in Divested Companies | 0.3 | 217.4 |
--------------------------------------------------------------------------------
| Income Statement capital gain | - | 4.2 |
--------------------------------------------------------------------------------
| Total Disposal Consideration Received in Cash | 0.3 | 221.6 |
| and Kind | | |
--------------------------------------------------------------------------------
Property, Plant and Equipment, Intangible Assets and Goodwill
--------------------------------------------------------------------------------
| EUR million | Q1-Q2/09 | Q1-Q2/08 | 2008 |
--------------------------------------------------------------------------------
| Carrying value at 1 January | 5 899.4 | 7 232.4 | 7 232.4 |
--------------------------------------------------------------------------------
| Acquisition of subsidiary companies | 14.4 | 4.2 | 3.9 |
--------------------------------------------------------------------------------
| Capital expenditure | 192.9 | 304.5 | 648.2 |
--------------------------------------------------------------------------------
| Additions in biological assets | 19.6 | 26.2 | 58.7 |
--------------------------------------------------------------------------------
| Change in emission rights | -26.5 | 80.6 | 61.8 |
--------------------------------------------------------------------------------
| Disposals | -24.1 | -48.5 | -54.7 |
--------------------------------------------------------------------------------
| Disposals of subsidiary companies | -0.1 | -299.7 | -281.8 |
--------------------------------------------------------------------------------
| Depreciation and impairment, | -273.8 | -347.7 | -1 422.4 |
| continuing operations | | | |
--------------------------------------------------------------------------------
| Depreciation and impairment, | - | -22.1 | -46.1 |
| discontinued operations | | | |
--------------------------------------------------------------------------------
| Translation difference and other | 10.3 | 6.9 | -300.6 |
--------------------------------------------------------------------------------
| Statement of Financial Position | 5 812.1 | 6 936.8 | 5 899.4 |
| Total | | | |
--------------------------------------------------------------------------------
Borrowings
--------------------------------------------------------------------------------
| EUR million | 30 Jun 09 | 31 Dec 08 | 30 Jun 08 |
--------------------------------------------------------------------------------
| Non-current borrowings | 2 500.9 | 3 007.8 | 3 161.8 |
--------------------------------------------------------------------------------
| Current borrowings | 1 449.7 | 1 068.3 | 819.9 |
--------------------------------------------------------------------------------
| | 3 950.6 | 4 076.1 | 3 981.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Q1-Q2/09 | 2008 | Q1-Q2/08 |
--------------------------------------------------------------------------------
| Carrying value at 1 January | 4 076.1 | 4 441.4 | 4 441.4 |
--------------------------------------------------------------------------------
| Debt acquired with new subsidiaries | 40.0 | 1.0 | 1.0 |
--------------------------------------------------------------------------------
| Debt disposed with sold | - | -230.4 | -230.4 |
| subsidiaries | | | |
--------------------------------------------------------------------------------
| Payments of borrowings (net) | -151.2 | -59.7 | -217.2 |
--------------------------------------------------------------------------------
| Translation difference and other | -14.3 | -76.2 | -13.1 |
--------------------------------------------------------------------------------
| Total Borrowings | 3 950.6 | 4 076.1 | 3 981.7 |
--------------------------------------------------------------------------------
Condensed Consolidated Statement of Financial Position
--------------------------------------------------------------------------------
| EUR million | | 30 Jun 09 | 31 Dec 08 | 30 Jun 08 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fixed Assets and Other | | | | |
| Non-current Investments | | | | |
--------------------------------------------------------------------------------
| Fixed assets | O | 5 617.6 | 5 698.8 | 6 748.7 |
--------------------------------------------------------------------------------
| Biological assets | O | 154.0 | 133.6 | 102.3 |
--------------------------------------------------------------------------------
| Emission rights | O | 40.5 | 67.0 | 85.8 |
--------------------------------------------------------------------------------
| Investment in associated | O | 1 117.9 | 1 042.5 | 1 213.7 |
| companies | | | | |
--------------------------------------------------------------------------------
| Available-for-sale: Listed | I | 58.0 | 154.9 | 194.1 |
| securities | | | | |
--------------------------------------------------------------------------------
| Available-for-sale: Unlisted | O | 781.6 | 954.3 | 1 636.0 |
| shares | | | | |
--------------------------------------------------------------------------------
| Non-current loan receivables | I | 167.1 | 130.3 | 139.3 |
--------------------------------------------------------------------------------
| Deferred tax assets | T | 143.1 | 74.5 | 65.4 |
--------------------------------------------------------------------------------
| Other non-current assets | O | 19.6 | 16.2 | 25.6 |
--------------------------------------------------------------------------------
| | | 8 099.4 | 8 272.1 | 10 210.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current Assets | | | | |
--------------------------------------------------------------------------------
| Inventories | O | 1 491.5 | 1 693.6 | 1 888.2 |
--------------------------------------------------------------------------------
| Tax receivables | T | 35.0 | 25.0 | 42.4 |
--------------------------------------------------------------------------------
| Operative receivables | O | 1 437.4 | 1 583.2 | 1 988.6 |
--------------------------------------------------------------------------------
| Interest-bearing receivables | I | 160.1 | 251.1 | 260.2 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | I | 647.8 | 415.8 | 489.3 |
--------------------------------------------------------------------------------
| | | 3 771.8 | 3 968.7 | 4 668.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total Assets | | 11 871.2 | 12 240.8 | 14 879.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity and Liabilities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Owners of the Parent | | 5 518.8 | 5 594.0 | 7 782.5 |
--------------------------------------------------------------------------------
| Non-controlling interests | | 57.0 | 56.5 | 74.8 |
--------------------------------------------------------------------------------
| Total Equity | | 5 575.8 | 5 650.5 | 7 857.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current Liabilities | | | | |
--------------------------------------------------------------------------------
| Post-employment benefit | O | 300.9 | 299.0 | 300.9 |
| provisions | | | | |
--------------------------------------------------------------------------------
| Other provisions | O | 179.3 | 202.3 | 117.0 |
--------------------------------------------------------------------------------
| Deferred tax liabilities | T | 318.0 | 277.5 | 571.2 |
--------------------------------------------------------------------------------
| Non-current debt | I | 2 500.9 | 3 007.8 | 3 161.8 |
--------------------------------------------------------------------------------
| Other non-current operative | O | 22.0 | 28.5 | 21.7 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| | | 3 321.1 | 3 815.1 | 4 172.6 |
--------------------------------------------------------------------------------
| Current Liabilities | | | | |
--------------------------------------------------------------------------------
| Current portion of long-term | I | 1 067.0 | 437.4 | 265.2 |
| debt | | | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | I | 382.7 | 630.9 | 554.7 |
--------------------------------------------------------------------------------
| Operative liabilities | O | 1 388.3 | 1 602.1 | 1 955.5 |
--------------------------------------------------------------------------------
| Tax liabilities | T | 136.3 | 104.8 | 74.3 |
--------------------------------------------------------------------------------
| | | 2 974.3 | 2 775.2 | 2 849.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total Liabilities | | 6 295.4 | 6 590.3 | 7 022.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total Equity and Liabilities | | 11 871.2 | 12 240.8 | 14 879.6 |
--------------------------------------------------------------------------------
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 | Sh | Sh | Re | Tr | Ste | Av | Cu | Ass | CTA | Ret | Attr | Non | To |
| mill | ar | ar | se | ea | p | ai | rr | oci | & | ain | ibut | -co | ta |
| ion | e | e | rv | su | Acq | la | en | ate | Net | ed | able | ntr | l |
| | Ca | Pr | e | ry | uis | bl | cy | s | Inv | Ear | to | oll | |
| | pi | em | Fu | Sh | iti | e | an | | est | nin | Owne | ing | |
| | ta | iu | nd | ar | on | fo | d | | men | gs | rs | Int | |
| | l | m | | es | Rev | r | Co | | t | | of | ere | |
| | | | | | alu | Sa | mm | | Hed | | the | sts | |
| | | | | | ati | le | od | | ges | | Pare | | |
| | | | | | on | Fi | it | | | | nt | | |
| | | | | | Sur | na | y | | | | | | |
| | | | | | plu | nc | He | | | | | | |
| | | | | | s | ia | dg | | | | | | |
| | | | | | | l | es | | | | | | |
| | | | | | | As | | | | | | | |
| | | | | | | se | | | | | | | |
| | | | | | | ts | | | | | | | |
--------------------------------------------------------------------------------
| Bala | 1 | 2 | 23 | -1 | 0.0 | 89 | 62 | -1. | -11 | 3 | 7 | 71. | 7 |
| nce | 34 | 03 | 8. | 0. | | 9. | .4 | 1 | 5.6 | 140 | 593. | 9 | 66 |
| at | 2. | 7. | 9 | 2 | | 1 | | | | .4 | 6 | | 5. |
| 31 | 2 | 5 | | | | | | | | | | | 5 |
| Dece | | | | | | | | | | | | | |
| mber | | | | | | | | | | | | | |
| 2007 | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Prof | - | - | - | - | - | - | - | - | - | 93. | 93.8 | 4.2 | 98 |
| it | | | | | | | | | | 8 | | | .0 |
| for | | | | | | | | | | | | | |
| the | | | | | | | | | | | | | |
| peri | | | | | | | | | | | | | |
| od | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| OCI | - | - | - | - | - | 38 | 42 | 6.9 | 26. | - | 461. | -1. | 45 |
| befo | | | | | | 5. | .1 | | 5 | | 1 | 3 | 9. |
| re | | | | | | 6 | | | | | | | 8 |
| tax | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Inco | - | - | - | - | - | 2. | -1 | - | -1. | - | -11. | - | -1 |
| me | | | | | | 6 | 2. | | 6 | | 1 | | 1. |
| tax | | | | | | | 1 | | | | | | 1 |
| rela | | | | | | | | | | | | | |
| ting | | | | | | | | | | | | | |
| to | | | | | | | | | | | | | |
| comp | | | | | | | | | | | | | |
| onen | | | | | | | | | | | | | |
| ts | | | | | | | | | | | | | |
| of | | | | | | | | | | | | | |
| OCI | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Tota | - | - | - | - | - | 38 | 30 | 6.9 | 24. | 93. | 543. | 2.9 | 54 |
| l | | | | | | 8. | .0 | | 9 | 8 | 8 | | 6. |
| Comp | | | | | | 2 | | | | | | | 7 |
| rehe | | | | | | | | | | | | | |
| nsiv | | | | | | | | | | | | | |
| e | | | | | | | | | | | | | |
| Inco | | | | | | | | | | | | | |
| me | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Divi | - | - | - | - | - | 0. | 0. | 0.0 | 0.0 | -35 | -354 | 0.0 | -3 |
| dend | | | | | | 0 | 0 | | | 4.9 | .9 | | 54 |
| (EUR | | | | | | | | | | | | | .9 |
| 0.45 | | | | | | | | | | | | | |
| per | | | | | | | | | | | | | |
| shar | | | | | | | | | | | | | |
| e) | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Bala | 1 | 2 | 23 | -1 | 0.0 | 1 | 92 | 5.8 | -90 | 2 | 7 | 74. | 7 |
| nce | 34 | 03 | 8. | 0. | | 28 | .4 | | .7 | 879 | 782. | 8 | 85 |
| at | 2. | 7. | 9 | 2 | | 7. | | | | .3 | 5 | | 7. |
| 30 | 2 | 5 | | | | 3 | | | | | | | 3 |
| June | | | | | | | | | | | | | |
| 2008 | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Loss | - | - | - | - | - | - | - | - | - | -76 | -767 | -5. | -7 |
| for | | | | | | | | | | 7.2 | .2 | 5 | 72 |
| the | | | | | | | | | | | | | .7 |
| peri | | | | | | | | | | | | | |
| od | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| OCI | - | - | - | - | - | -7 | -3 | -16 | -35 | -13 | -1 | -12 | -1 |
| befo | | | | | | 83 | 54 | .4 | 4.4 | .4 | 522. | .8 | 53 |
| re | | | | | | .6 | .3 | | | | 1 | | 4. |
| tax | | | | | | | | | | | | | 9 |
--------------------------------------------------------------------------------
| Inco | - | - | - | - | - | 6. | 95 | - | 1.3 | -3. | 100. | - | 10 |
| me | | | | | | 9 | .9 | | | 3 | 8 | | 0. |
| tax | | | | | | | | | | | | | 8 |
| rela | | | | | | | | | | | | | |
| ting | | | | | | | | | | | | | |
| to | | | | | | | | | | | | | |
| comp | | | | | | | | | | | | | |
| onen | | | | | | | | | | | | | |
| ts | | | | | | | | | | | | | |
| of | | | | | | | | | | | | | |
| OCI | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Tota | - | - | - | - | - | -7 | -2 | -16 | -35 | -78 | -2 | -18 | -2 |
| l | | | | | | 76 | 58 | .4 | 3.1 | 3.9 | 188. | .3 | 20 |
| Comp | | | | | | .7 | .4 | | | | 5 | | 6. |
| rehe | | | | | | | | | | | | | 8 |
| nsiv | | | | | | | | | | | | | |
| e | | | | | | | | | | | | | |
| Inco | | | | | | | | | | | | | |
| me | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Bala | 1 | 2 | 23 | -1 | 0.0 | 51 | -1 | -10 | -44 | 2 | 5 | 56. | 5 |
| nce | 34 | 03 | 8. | 0. | | 0. | 66 | .6 | 3.8 | 095 | 594. | 5 | 65 |
| at | 2. | 7. | 9 | 2 | | 6 | .0 | | | .4 | 0 | | 0. |
| 31 | 2 | 5 | | | | | | | | | | | 5 |
| Dece | | | | | | | | | | | | | |
| mber | | | | | | | | | | | | | |
| 2008 | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Loss | - | - | - | - | - | - | - | - | - | -40 | -406 | 1.7 | -4 |
| for | | | | | | | | | | 6.1 | .1 | | 04 |
| the | | | | | | | | | | | | | .4 |
| peri | | | | | | | | | | | | | |
| od | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| OCI | - | - | - | - | 3.9 | 15 | 10 | -10 | 117 | | 367. | -1. | 36 |
| befo | | | | | | 0. | 5. | .4 | .2 | | 2 | 2 | 6. |
| re | | | | | | 9 | 6 | | | | | | 0 |
| tax | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Inco | - | - | - | - | - | -3 | -2 | - | -6. | | -36. | - | -3 |
| me | | | | | | .1 | 6. | | 6 | | 3 | | 6. |
| tax | | | | | | | 6 | | | | | | 3 |
| rela | | | | | | | | | | | | | |
| ting | | | | | | | | | | | | | |
| to | | | | | | | | | | | | | |
| comp | | | | | | | | | | | | | |
| onen | | | | | | | | | | | | | |
| ts | | | | | | | | | | | | | |
| of | | | | | | | | | | | | | |
| OCI | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Tota | 0. | 0. | 0. | 0. | 3.9 | 14 | 79 | -10 | 110 | -40 | -75. | 0.5 | -7 |
| l | 0 | 0 | 0 | 0 | | 7. | .0 | .4 | .6 | 6.1 | 2 | | 4. |
| Comp | | | | | | 8 | | | | | | | 7 |
| rehe | | | | | | | | | | | | | |
| nsiv | | | | | | | | | | | | | |
| e | | | | | | | | | | | | | |
| Inco | | | | | | | | | | | | | |
| me | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Bala | 1 | 2 | 23 | -1 | 3.9 | 65 | -8 | -21 | -33 | 1 | 5 | 57. | 5 |
| nce | 34 | 03 | 8. | 0. | | 8. | 7. | .0 | 3.2 | 689 | 518. | 0 | 57 |
| at | 2. | 7. | 9 | 2 | | 4 | 0 | | | .3 | 8 | | 5. |
| 30 | 2 | 5 | | | | | | | | | | | 8 |
| June | | | | | | | | | | | | | |
| 2009 | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
CTA = Cumulative Translation Adjustment
OCI = Other Comprehensive Income
Commitments and Contingencies
--------------------------------------------------------------------------------
| EUR million | 30 Jun 09 | 31 Dec 08 | 30 Jun 08 |
--------------------------------------------------------------------------------
| On Own Behalf | | | |
--------------------------------------------------------------------------------
| Pledges given | 0.8 | 0.8 | 0.8 |
--------------------------------------------------------------------------------
| Mortgages | 72.5 | 62.0 | 81.9 |
--------------------------------------------------------------------------------
| On Behalf of Associated | | | |
| Companies | | | |
--------------------------------------------------------------------------------
| Guarantees | 193.0 | 180.5 | 221.7 |
--------------------------------------------------------------------------------
| On Behalf of Others | | | |
--------------------------------------------------------------------------------
| Guarantees | 127.9 | 156.3 | 149.5 |
--------------------------------------------------------------------------------
| Other Commitments, Own | | | |
--------------------------------------------------------------------------------
| Operating leases, in next 12 | 25.2 | 28.9 | 28.4 |
| months | | | |
--------------------------------------------------------------------------------
| Operating leases, after next 12 | 84.8 | 95.0 | 104.7 |
| months | | | |
--------------------------------------------------------------------------------
| Pension liabilities | 0.2 | 0.2 | 0.2 |
--------------------------------------------------------------------------------
| Other commitments | 160.7 | 40.4 | 26.4 |
--------------------------------------------------------------------------------
| Total | 665.1 | 564.1 | 613.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Pledges given | 0.8 | 0.8 | 0.8 |
--------------------------------------------------------------------------------
| Mortgages | 72.5 | 62.0 | 81.9 |
--------------------------------------------------------------------------------
| Guarantees | 320.9 | 336.8 | 371.2 |
--------------------------------------------------------------------------------
| Operating leases | 110.0 | 123.9 | 133.1 |
--------------------------------------------------------------------------------
| Pension liabilities | 0.2 | 0.2 | 0.2 |
--------------------------------------------------------------------------------
| Other commitments | 160.7 | 40.4 | 26.4 |
--------------------------------------------------------------------------------
| Total | 665.1 | 564.1 | 613.6 |
--------------------------------------------------------------------------------
Purchase Agreement Commitments
--------------------------------------------------------------------------------
| EUR million | Scheduled Contract Payments |
--------------------------------------------------------------------------------
| Type of Supply | Contract | Q3-Q4/ | 2010-1 | 2012-1 | 2014+ |
| | Total | 09 | 1 | 3 | |
--------------------------------------------------------------------------------
| | Fibre | 1 305.1 | 106.3 | 307.1 | 292.0 | 599.7 |
--------------------------------------------------------------------------------
| | Energy | 1 819.6 | 201.7 | 604.0 | 298.4 | 715.5 |
--------------------------------------------------------------------------------
| | Logistics | 509.5 | 33.5 | 130.4 | 100.5 | 245.1 |
--------------------------------------------------------------------------------
| | Other production costs | 710.5 | 87.8 | 121.9 | 69.3 | 431.5 |
--------------------------------------------------------------------------------
| | | 4 344.7 | 429.3 | 1 | 760.2 | 1 |
| | | | | 163.4 | | 991.8 |
--------------------------------------------------------------------------------
| Capital expenditure | 176.0 | 96.4 | 79.6 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Total Contractual Commitments | 4 520.7 | 525.7 | 1 | 760.2 | 1 |
| at 30 June 2009 | | | 243.0 | | 991.8 |
--------------------------------------------------------------------------------
Fair Values of Derivative Financial Instruments
--------------------------------------------------------------------------------
| EUR million | | 30 Jun | | | 31 Dec | 30 Jun |
| | | 09 | | | 08 | 08 |
--------------------------------------------------------------------------------
| | Positive | Negativ | Net | | Net | Net |
| | Fair | e | Fai | | Fair | Fair |
| | Values | Fair | r | | Values | Values |
| | | Values | Values | | | |
--------------------------------------------------------------------------------
| Interest rate | 213.1 | -34.0 | 179.1 | | 227.2 | 19.8 |
| swaps | | | | | | |
--------------------------------------------------------------------------------
| Interest rate | - | -26.9 | -26.9 | | -38.0 | -9.5 |
| options | | | | | | |
--------------------------------------------------------------------------------
| Forward contracts | 15.6 | -139.8 | -124.2 | | -73.9 | -31.0 |
--------------------------------------------------------------------------------
| Currency options | 33.7 | -26.7 | 7.0 | | -14.6 | 17.3 |
--------------------------------------------------------------------------------
| Commodity | 25.2 | -74.5 | -49.3 | | -90.7 | 136.2 |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Equity swaps | 0.9 | -31.4 | -30.5 | | -57.4 | -114.2 |
| ("TRS") and equity | | | | | | |
| options | | | | | | |
--------------------------------------------------------------------------------
| Total | 288.5 | -333.3 | -44.8 | | -47.4 | 18.6 |
--------------------------------------------------------------------------------
Nominal Values of Derivative Financial Instruments
--------------------------------------------------------------------------------
| EUR million | 30 Jun 09 | 31 Dec 08 | 30 Jun 08 |
--------------------------------------------------------------------------------
| Interest Rate Derivatives | | | |
--------------------------------------------------------------------------------
| Interest rate swaps | | | |
--------------------------------------------------------------------------------
| Maturity under 1 year | 1 262.5 | 592.8 | 76.0 |
--------------------------------------------------------------------------------
| Maturity 2-5 years | 2 412.5 | 1 683.4 | 2 084.9 |
--------------------------------------------------------------------------------
| Maturity 6-10 years | 874.3 | 2 341.6 | 2 257.7 |
--------------------------------------------------------------------------------
| | 4 549.3 | 4 617.8 | 4 418.6 |
--------------------------------------------------------------------------------
| Interest rate options | 343.4 | 394.3 | 349.8 |
--------------------------------------------------------------------------------
| Total | 4 892.7 | 5 012.1 | 4 768.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Foreign Exchange Derivatives | | | |
--------------------------------------------------------------------------------
| Forward contracts | 2 721.7 | 3 049.4 | 3 102.4 |
--------------------------------------------------------------------------------
| Currency options | 2 025.3 | 1 438.9 | 1 994.8 |
--------------------------------------------------------------------------------
| Total | 4 747.0 | 4 488.3 | 5 097.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Commodity Derivatives | | | |
--------------------------------------------------------------------------------
| Commodity contracts | 482.5 | 604.6 | 352.6 |
--------------------------------------------------------------------------------
| Total | 482.5 | 604.6 | 352.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total Return (Equity) Swaps | | | |
--------------------------------------------------------------------------------
| Equity swaps ("TRS") | 104.7 | 158.2 | 217.2 |
--------------------------------------------------------------------------------
| Equity options | - | 22.0 | 21.9 |
--------------------------------------------------------------------------------
| Total | 104.7 | 180.2 | 239.1 |
--------------------------------------------------------------------------------
Sales by Segment
--------------------------------------------------------------------------------
| EUR million | Q2/09 | Q1/0 | 2008 | Q4/08 | Q3/08 | Q2/08 | Q1/08 |
| | | 9 | | | | | |
--------------------------------------------------------------------------------
| Newsprint and | 327.5 | 308. | 1 | 414.0 | 405.2 | 389.0 | 386.5 |
| Book Paper | | 7 | 594.7 | | | | |
--------------------------------------------------------------------------------
| Magazine Paper | 396.0 | 380. | 2 | 544.3 | 544.9 | 540.5 | 547.3 |
| | | 8 | 177.0 | | | | |
--------------------------------------------------------------------------------
| Fine Paper | 450.4 | 431. | 2 | 484.8 | 543.9 | 537.8 | 545.2 |
| | | 9 | 111.7 | | | | |
--------------------------------------------------------------------------------
| Consumer Board | 460.3 | 459. | 2 | 506.3 | 563.9 | 587.3 | 574.4 |
| | | 9 | 231.9 | | | | |
--------------------------------------------------------------------------------
| Industrial | 194.0 | 197. | 1 | 242.5 | 273.1 | 285.4 | 275.5 |
| Packaging | | 2 | 076.5 | | | | |
--------------------------------------------------------------------------------
| Wood Products | 315.8 | 272. | 1 | 348.7 | 366.2 | 409.8 | 378.6 |
| | | 0 | 503.3 | | | | |
--------------------------------------------------------------------------------
| Other | 507.8 | 682. | 3 | 794.6 | 857.0 | 947.7 | 987.6 |
| | | 5 | 586.9 | | | | |
--------------------------------------------------------------------------------
| Inter-segment | -467. | -602 | -3 | -732.7 | -831.5 | -825.7 | -863.3 |
| sales | 0 | .5 | 253.2 | | | | |
--------------------------------------------------------------------------------
| Continuing | 2 | 2 | 11 | 2 | 2 | 2 871.8 | 2 |
| Operations | 184.8 | 130. | 028.8 | 602.5 | 722.7 | | 831.8 |
| | | 5 | | | | | |
--------------------------------------------------------------------------------
| Discontinued | - | - | 708.7 | -1.8 | 0.4 | 180.5 | 529.6 |
| operations | | | | | | | |
--------------------------------------------------------------------------------
| Inter-segment | - | - | -179.3 | 0.9 | 0.0 | -45.8 | -134.4 |
| sales | | | | | | | |
--------------------------------------------------------------------------------
| Total | 2 | 2 | 11 | 2 | 2 | 3 006.5 | 3 |
| | 184.8 | 130. | 558.2 | 601.6 | 723.1 | | 227.0 |
| | | 5 | | | | | |
--------------------------------------------------------------------------------
Operating Profit by Segment excluding NRI and Fair Valuations
--------------------------------------------------------------------------------
| EUR million | Q2/09 | Q1/0 | 2008 | Q4/08 | Q3/08 | Q2/08 | Q1/08 |
| | | 9 | | | | | |
--------------------------------------------------------------------------------
| Newsprint and | 31.1 | 21.5 | 140.8 | 53.0 | 33.5 | 27.9 | 26.4 |
| Book Paper | | | | | | | |
--------------------------------------------------------------------------------
| Magazine Paper | 5.7 | -0.1 | 88.8 | 19.7 | 27.4 | 14.5 | 27.2 |
--------------------------------------------------------------------------------
| Fine Paper | -4.1 | -5.7 | 80.4 | -9.7 | 33.1 | 19.7 | 37.3 |
--------------------------------------------------------------------------------
| Consumer Board | 41.6 | 15.5 | 107.3 | 4.3 | 37.5 | 23.0 | 42.5 |
--------------------------------------------------------------------------------
| Industrial | 0.9 | 3.5 | 73.9 | 6.2 | 20.0 | 20.1 | 27.6 |
| Packaging | | | | | | | |
--------------------------------------------------------------------------------
| Wood Products | -8.7 | -23. | -67.5 | -18.9 | -14.3 | -10.9 | -23.4 |
| | | 7 | | | | | |
--------------------------------------------------------------------------------
| Other | -24.3 | -21. | -77.4 | -48.2 | -7.8 | -8.2 | -13.2 |
| | | 3 | | | | | |
--------------------------------------------------------------------------------
| Operating | 42.2 | -10. | 346.3 | 6.4 | 129.4 | 86.1 | 124.4 |
| Loss/Profit | | 3 | | | | | |
| excl. NRI by | | | | | | | |
| Segment | | | | | | | |
--------------------------------------------------------------------------------
| Share of | 6.3 | 13.3 | 42.1 | 22.0 | -3.9 | 8.3 | 15.7 |
| results of | | | | | | | |
| associated | | | | | | | |
| companies excl. | | | | | | | |
| fair valuations | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 48.5 | 3.0 | 388.4 | 28.4 | 125.5 | 94.4 | 140.1 |
| Profit excl. | | | | | | | |
| NRI and Fair | | | | | | | |
| Valuations* | | | | | | | |
--------------------------------------------------------------------------------
| Fair | 11.4 | -37. | -69.6 | -47.9 | 15.2 | -21.8 | -15.1 |
| valuations* | | 9 | | | | | |
--------------------------------------------------------------------------------
| Operating | 59.9 | -34. | 318.8 | -19.5 | 140.7 | 72.6 | 125.0 |
| Loss/Profit | | 9 | | | | | |
| excl. NRI | | | | | | | |
--------------------------------------------------------------------------------
| NRI | -269. | 34.0 | -1 | -764.7 | -279.4 | -1.3 | - |
| | 3 | | 045.4 | | | | |
--------------------------------------------------------------------------------
| Operating | -209. | -0.9 | -726.6 | -784.2 | -138.7 | 71.3 | 125.0 |
| Loss/Profit | 4 | | | | | | |
| (IFRS) | | | | | | | |
--------------------------------------------------------------------------------
| Net financial | -161. | -47. | -167.2 | -61.4 | -23.0 | -40.9 | -41.9 |
| items | 2 | 2 | | | | | |
--------------------------------------------------------------------------------
| Loss/Profit | -370. | -48. | -893.8 | -845.6 | -161.7 | 30.4 | 83.1 |
| before Tax and | 6 | 1 | | | | | |
| Non-controlling | | | | | | | |
| Interests | | | | | | | |
--------------------------------------------------------------------------------
| Income tax | 2.3 | 12.0 | 214.8 | 191.0 | 42.6 | -1.8 | -17.0 |
| expense | | | | | | | |
--------------------------------------------------------------------------------
| Net Loss/Profit | -368. | -36. | -679.0 | -654.6 | -119.1 | 28.6 | 66.1 |
| from Continuing | 3 | 1 | | | | | |
| Operations | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Discontinued | | | | | | | |
| Operations | | | | | | | |
--------------------------------------------------------------------------------
| Net profit/loss | - | - | 4.3 | 0.1 | 0.9 | -1.8 | 5.1 |
| after tax for | | | | | | | |
| the period from | | | | | | | |
| discontinued | | | | | | | |
| operations | | | | | | | |
--------------------------------------------------------------------------------
| Net Loss/Profit | -368. | -36. | -674.7 | -654.5 | -118.2 | 26.8 | 71.2 |
| | 3 | 1 | | | | | |
--------------------------------------------------------------------------------
* Fair valuations include synthetic options net of realised and open hedges, CO2
emission rights, and valuations of biological assets mainly related to
associated companies' forest assets.
NRI by Segment
--------------------------------------------------------------------------------
| EUR million | Q2/09 | Q1/0 | 2008 | Q4/08 | Q3/08 | Q2/08 | Q1/08 |
| | | 9 | | | | | |
--------------------------------------------------------------------------------
| Newsprint and | - | 29.0 | -15.2 | -5.0 | -7.8 | -2.4 | - |
| Book Paper | | | | | | | |
--------------------------------------------------------------------------------
| Magazine Paper | - | - | -60.4 | -19.1 | -38.7 | -2.6 | - |
--------------------------------------------------------------------------------
| Fine Paper | - | - | -394.2 | -399.7 | -1.5 | 7.0 | - |
--------------------------------------------------------------------------------
| Consumer Board | - | - | -301.4 | -118.9 | -178.2 | -4.3 | - |
--------------------------------------------------------------------------------
| Industrial | - | - | -64.6 | -45.4 | -18.2 | -1.0 | - |
| Packaging | | | | | | | |
--------------------------------------------------------------------------------
| Wood Products | - | - | -88.0 | -80.0 | -8.0 | - | - |
--------------------------------------------------------------------------------
| Other | -269. | 5.0 | -121.6 | -96.6 | -27.0 | 2.0 | - |
| | 3 | | | | | | |
--------------------------------------------------------------------------------
| NRI on | -269. | 34.0 | -1 | -764.7 | -279.4 | -1.3 | - |
| Operating | 3 | | 045.4 | | | | |
| Profit | | | | | | | |
--------------------------------------------------------------------------------
| NRI on | -148. | - | - | - | - | - | - |
| financial items | 5 | | | | | | |
--------------------------------------------------------------------------------
| NRI on tax | 4.6 | -9.9 | 223.6 | 177.3 | 43.9 | 2.4 | - |
--------------------------------------------------------------------------------
| NRI on Net | -413. | 24.1 | -821.8 | -587.4 | -235.5 | 1.1 | - |
| Profit | 2 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Discontinued | | | | | | | |
| Operations | | | | | | | |
--------------------------------------------------------------------------------
| NRI in | - | - | -4.5 | - | - | -4.5 | - |
| discontinued | | | | | | | |
| operations | | | | | | | |
--------------------------------------------------------------------------------
Operating Profit by Segment
--------------------------------------------------------------------------------
| EUR million | Q2/09 | Q1/0 | 2008 | Q4/08 | Q3/08 | Q2/08 | Q1/08 |
| | | 9 | | | | | |
--------------------------------------------------------------------------------
| Newsprint and | 31.1 | 50.5 | 125.6 | 48.0 | 25.7 | 25.5 | 26.4 |
| Book Paper | | | | | | | |
--------------------------------------------------------------------------------
| Magazine Paper | 5.7 | -0.1 | 28.4 | 0.6 | -11.3 | 11.9 | 27.2 |
--------------------------------------------------------------------------------
| Fine Paper | -4.1 | -5.7 | -313.8 | -409.4 | 31.6 | 26.7 | 37.3 |
--------------------------------------------------------------------------------
| Consumer Board | 41.6 | 15.5 | -194.1 | -114.6 | -140.7 | 18.7 | 42.5 |
--------------------------------------------------------------------------------
| Industrial | 0.9 | 3.5 | 9.3 | -39.2 | 1.8 | 19.1 | 27.6 |
| Packaging | | | | | | | |
--------------------------------------------------------------------------------
| Wood Products | -8.7 | -23. | -155.5 | -98.9 | -22.3 | -10.9 | -23.4 |
| | | 7 | | | | | |
--------------------------------------------------------------------------------
| Other | -281. | -60. | -227.2 | -133.5 | -25.1 | -32.1 | -36.5 |
| | 9 | 3 | | | | | |
--------------------------------------------------------------------------------
| Share of result | 6.0 | 19.4 | 0.7 | -37.2 | 1.6 | 12.4 | 23.9 |
| of associated | | | | | | | |
| companies | | | | | | | |
--------------------------------------------------------------------------------
| Operating | -209. | -0.9 | -726.6 | -784.2 | -138.7 | 71.3 | 125.0 |
| Loss/Profit | 4 | | | | | | |
| (IFRS) | | | | | | | |
--------------------------------------------------------------------------------
| Net financial | -161. | -47. | -167.2 | -61.4 | -23.0 | -40.9 | -41.9 |
| items | 2 | 2 | | | | | |
--------------------------------------------------------------------------------
| Loss/Profit | -370. | -48. | -893.8 | -845.6 | -161.7 | 30.4 | 83.1 |
| before Tax and | 6 | 1 | | | | | |
| Non-controlling | | | | | | | |
| Interests | | | | | | | |
--------------------------------------------------------------------------------
| Income tax | 2.3 | 12.0 | 214.8 | 191.0 | 42.6 | -1.8 | -17.0 |
| expense | | | | | | | |
--------------------------------------------------------------------------------
| Net Loss/Profit | -368. | -36. | -679.0 | -654.6 | -119.1 | 28.6 | 66.1 |
| from Continuing | 3 | 1 | | | | | |
| Operations | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Discontinued | | | | | | | |
| Operations | | | | | | | |
--------------------------------------------------------------------------------
| Net loss/profit | - | - | 4.3 | 0.1 | 0.9 | -1.8 | 5.1 |
| after tax for | | | | | | | |
| the period from | | | | | | | |
| discontinued | | | | | | | |
| operations | | | | | | | |
--------------------------------------------------------------------------------
| Net Loss/Profit | -368. | -36. | -674.7 | -654.5 | -118.2 | 26.8 | 71.2 |
| | 3 | 1 | | | | | |
--------------------------------------------------------------------------------
Key Exchange Rates for the Euro
--------------------------------------------------------------------------------
| One Euro is | Closing Rate | Average Rate |
--------------------------------------------------------------------------------
| | 30 Jun 09 | 31 Dec 08 | 30 Jun 09 | 31 Dec 08 |
--------------------------------------------------------------------------------
| SEK | 10.8125 | 10.8700 | 10.8601 | 9.6280 |
--------------------------------------------------------------------------------
| USD | 1.4134 | 1.3917 | 1.3344 | 1.4710 |
--------------------------------------------------------------------------------
| GBP | 0.8521 | 0.9525 | 0.8939 | 0.7972 |
--------------------------------------------------------------------------------
Transaction Risk and Hedges in Main Currencies as at 30 June 2009
--------------------------------------------------------------------------------
| EUR million | USD | GBP | SEK | JPY |
--------------------------------------------------------------------------------
| Estimated annual net operating cash | 500 | 500 | -1 000 | 30 |
| flow exposure | | | | |
--------------------------------------------------------------------------------
| Transaction hedges as at 30 June 2009 | 300 | 325 | -675 | 20 |
--------------------------------------------------------------------------------
| Hedging percentage as at 30 June 2009 | 60% | 65% | 68% | 67% |
| for the next 12 months | | | | |
--------------------------------------------------------------------------------
Changes in Exchange Rates on Operating Profit
--------------------------------------------------------------------------------
| Operating Profit: Currency effect +/- 10% | EUR m |
--------------------------------------------------------------------------------
| | |
--------------------------------------------------------------------------------
| USD | 50 |
--------------------------------------------------------------------------------
| SEK | -100 |
--------------------------------------------------------------------------------
| GBP | 50 |
--------------------------------------------------------------------------------
The sensitivity is based on expected 2009 net operating cash flow. The
calculation does not take into account currency hedges, and assumes no changes
occur other than a single currency exchange rate movement.
Stora Enso Shares
Trading volume
--------------------------------------------------------------------------------
| | Helsinki | Stockholm |
--------------------------------------------------------------------------------
| | A share | R share | A share | R share |
--------------------------------------------------------------------------------
| April | 224 296 | 201 094 101 | 308 735 | 48 289 726 |
--------------------------------------------------------------------------------
| May | 114 294 | 113 918 693 | 223 213 | 29 308 029 |
--------------------------------------------------------------------------------
| June | 88 067 | 80 136 412 | 167 611 | 23 917 659 |
--------------------------------------------------------------------------------
| Total | 426 657 | 395 149 206 | 699 559 | 101 515 414 |
--------------------------------------------------------------------------------
Closing Price
--------------------------------------------------------------------------------
| | Helsinki, EUR | Stockholm, SEK |
--------------------------------------------------------------------------------
| | A share | R share | A share | R share |
--------------------------------------------------------------------------------
| April | 5.35 | 4.36 | 54.50 | 45.90 |
--------------------------------------------------------------------------------
| May | 4.87 | 4.22 | 53.25 | 45.40 |
--------------------------------------------------------------------------------
| June | 4.73 | 3.76 | 52.25 | 40.90 |
--------------------------------------------------------------------------------
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
1) Capital employed = Operating capital - Net tax liabilities
2) Average for the financial period
For further information, please contact:
Jouko Karvinen, CEO, tel. +358 2046 21410
Markus Rauramo, CFO, tel. +358 2046 21121
Lauri Peltola, Head of Group Communications, tel. +358 2046 21380
Ulla Paajanen-Sainio, Head of Investor Relations, tel. +358 2046 21242
Stora Enso's third quarter 2009 results will be published on 22 October 2009.
Press conference in Helsinki
Time: 11.30 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 8609 1270 Continental Europe and the UK
09 8171
0318 Finland
08 5661 9353 Sweden
1 703 621 9128 USA
Access code: 267250#
The live webcast may be accessed at www.storaenso.com/investors
Stora Enso 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 included in the Global 100 list of the world's
most sustainable companies. Stora Enso is also listed in the Dow Jones
Sustainability Index, the FTSE4Good Index, and the Climate Disclosure Leadership
Index. Stora Enso employs 29 000 people worldwide, and our sales in 2008
amounted to EUR 11.0 billion.
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
Jari Suvanto Ulla Paajanen-Sainio
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