2011-10-21 12:00:00 CEST
2011-10-21 12:00:32 CEST
REGULATED INFORMATION
Stora Enso Oyj - Interim report (Q1 and Q3)
Stora Enso Interim Review January-September 2011
Firm quarter with strong cash flow
Helsinki, Finland, 2011-10-21 12:00 CEST (GLOBE NEWSWIRE) -- STORA ENSO OYJ
INTERIM REVIEW 21 October 2011 at 13.00 EET
-- EUR 204 million quarterly operating profit excluding NRI and fair
valuations, EUR 51 million lower year-on-year due to cost inflation and
unfavourable exchange rates, partially offset by clearly higher sales
prices.
-- Profit before tax negatively impacted by EUR 128 million NRI related to
NewPage.
-- Strong quarterly cash flow after capital expenditure at EUR 282 million due
to working capital management, liquidity improved at EUR 1 181 million.
-- Production curtailments to control inventory levels increased in Q3 and
will continue in Q4.
-- Q4 operating profit excluding NRI and fair valuations forecast to be
somewhat lower year on year.
-- Completed Inpac acquisition, Montes del Plata project and containerboard
investment in Poland progressing as planned.
-- Strong financial and cash position gives a solid platform to pursue
selected growth.
Summary of Third Quarter Results
Q3/11 Q2/11 Q3/10
--------------------------------------------------------------------------------
Sales EUR 2 739.3 2 817.1 2 623.6
million
EBITDA excl. NRI and fair valuations EUR 339.2 357.6 365.8
million
Operating Profit excl. NRI and Fair EUR 204.2 228.3 255.0
Valuations million
Operating profit (IFRS) EUR 176.1 184.7 276.9
million
Profit before tax excl. NRI EUR 110.9 181.8 220.4
million
Loss/profit before tax EUR -17.3 150.1 225.8
million
Net profit excl. NRI EUR 78.3 164.1 188.9
million
Net loss/profit EUR -49.9 136.0 194.3
million
EPS excl. NRI EUR 0.10 0.21 0.23
EPS EUR -0.06 0.17 0.25
CEPS excl. NRI EUR 0.27 0.39 0.40
ROCE excl. NRI and fair valuations % 9.3 10.4 12.4
Fair valuations include equity incentive schemes, synthetic options net of
realised and open hedges, CO2 emission rights and valuations of biological
assets related to forest assets in equity accounted investments.
NRI = Non-recurring items. These are exceptional transactions that are not
related to normal business operations. The most common non-recurring items are
capital gains, additional write-downs, or reversals of write-downs, provisions
for planned restructuring and penalties. Non-recurring items are normally
specified individually if they exceed one cent per share.
Markets
Compared with Q3/2010
Product Market Demand Price
----------------------------------------------------------------------
Consumer board Europe stable higher
Industrial packaging Europe stable significantly higher
Newsprint Europe weaker significantly higher
Coated magazine paper Europe slightly weaker higher
Uncoated magazine paper Europe slightly weaker higher
Coated fine paper Europe weaker slightly lower
Uncoated fine paper Europe slightly weaker higher
Wood products Europe weaker stable
Industry inventories were slightly lower for magazine paper, lower for coated
fine paper, unchanged for newsprint and wood products, and significantly higher
for uncoated fine paper.
Compared with Q2/2011
Product Market Demand Price
-----------------------------------------------------------------------
Consumer board Europe weaker stable
Industrial packaging Europe stable stable
Newsprint Europe significantly weaker stable
Coated magazine paper Europe slightly weaker stable
Uncoated magazine paper Europe significantly stronger stable
Coated fine paper Europe stronger slightly lower
Uncoated fine paper Europe weaker stable
Wood products Europe significantly weaker slightly lower
Industry inventories were significantly lower for coated fine paper, lower for
uncoated magazine paper and wood products, unchanged for coated magazine paper,
slightly higher for uncoated fine paper and significantly higher for newsprint.
Stora Enso Deliveries and Production
Q3/11 Q2/11 Q3/10 2010 Q1-Q3/ Q1-Q3/ Change Change Change
11 10 % % % Q3/11- Q3/11- Q1-Q3/1
Q3/10 Q2/11 1-Q1-Q3
/10
--------------------------------------------------------------------------------
Paper and 2 609 2 609 2 717 10 758 7 724 8 034 -4.0 0.0 -3.9
board
deliverie
s (1 000
tonnes)
Paper and 2 586 2 630 2 686 10 812 7 834 8 147 -3.7 -1.7 -3.8
board
productio
n (1 000
tonnes)
Wood 1 234 1 423 1 333 5 198 3 895 3 939 -7.4 -13.3 -1.1
products
deliverie
s (1 000
m3)
Market 281 247 242 1 009 841 764 16.1 13.8 10.1
pulp
deliverie
s
(1 000
tonnes)
Corrugated 256 242 250 1 027 745 756 2.4 5.8 -1.5
packaging
deliverie
s (million
m2)
---------------------------------------------------------------------
Breakdown of Sales Change Q3/2010 to Q3/2011
Sales
-------------------------------------------
Q3/10, EUR million 2 623.6
-------------------------------------------
Price and mix, % 5
Currency, % -1
Volume, % 1
Other sales*, % -
-------------------------------------------
Total before structural changes, % 5
Structural change**, % -1
Total, % 4
Q3/11, EUR million 2 739.3
-------------------------------------------
*Wood, energy, RCP, by-products etc.
**Asset closures, major investments, divestments and acquisitions
Key Figures
EUR Q3/11 Q2/11 Q3/10 Q1-Q3/1 Q1-Q3/1 2010 Change Change
Change
milli 1 0 % %
%
on Q3/11- Q3/11-
Q1-Q3/
Q3/10 Q2/11
11-Q1-
Q3/10
--------------------------------------------------------------------------------
-----
Sales 2 739.3 2 817.1 2 623.6 8 283.3 7 611.7 10 296.9 4.4 -2.8
8.8
EBITDA 339.2 357.6 365.8 1 065.1 927.7 1 216.5 -7.3 -5.1
14.8
excl.
NRI
and
fair
valua
tions
Operat 204.2 228.3 255.0 680.5 587.3 754.1 -19.9 -10.6
15.9
ing
profi
t
excl.
NRI
and
fair
valua
tions
Operat 7.5 8.1 9.7 8.2 7.7 7.3 -22.7 -7.4
6.5
ing
margi
n
excl.
NRI
and
fair
valua
tions,
%
Operat 176.1 184.7 276.9 598.0 615.9 1 026.8 -36.4 -4.7
-2.9
ing
profi
t
(IFRS
)
Operat 6.4 6.6 10.6 7.2 8.1 10.0 -39.6 -3.0
-11.1
ing
margi
n
(IFRS
), %
Profit 110.9 181.8 220.4 505.9 558.7 745.7 -49.7 -39.0
-9.5
befor
e tax
excl.
NRI
Loss/p -17.3 150.1 225.8 318.8 536.7 925.9 -107.7 -111.5
-40.6
rofit
befor
e tax
Net 78.3 164.1 188.9 417.7 478.3 627.0 -58.5 -52.3
-12.7
profi
t for
the
perio
d
excl.
NRI
Net -49.9 136.0 194.3 242.0 456.3 769.3 -125.7 -136.7
-47.0
loss/
profit
for
the
perio
d
Capita 79.9 85.4 73.5 222.6 261.6 400.4 8.7 -6.4
-14.9
l
expen
diture
Deprec 138.4 140.1 132.7 413.9 387.0 529.4 4.3 -1.2
7.0
iation
and
impai
rment
charg
es
excl.
NRI
ROCE 9.3 10.4 12.4 10.5 9.8 9.2 -25.0 -10.6
7.1
excl.
NRI
and
fair
valua
tions,
%
ROCE 8.0 9.8 13.2 10.1 10.6 10.3 -39.4 -18.4
-4.7
excl.
NRI,
%
Earnin 0.10 0.21 0.23 0.53 0.60 0.79 -56.5 -52.4
-11.7
gs per
share
(EPS)
excl.
NRI,
EUR
EPS -0.06 0.17 0.25 0.31 0.58 0.97 -124.0 -135.3
-46.6
(basi
c),
EUR
Cash 0.27 0.39 0.40 1.05 1.09 1.46 -32.5 -30.8
-3.7
earni
ngs
per
share
(CEPS
)
excl.
NRI,
EUR
CEPS, 0.12 0.35 0.43 0.86 1.06 1.33 -72.1 -65.7
-18.9
EUR
Return -3.2 8.6 13.8 5.3 11.1 13.5 -123.2 -137.2
-52.3
on
equit
y
(ROE)
, %
Debt/e 0.45 0.41 0.43 0.45 0.43 0.39 4.7 9.8
4.7
quity
ratio
Equity 7.53 7.90 7.27 7.53 7.27 7.87 3.6 -4.7
3.6
per
share
, EUR
Equity 46.5 48.5 45.8 46.5 45.8 48.0 1.5 -4.1
1.5
ratio
, %
Averag 28 771 27 019 27 785 27 458 27 595 27 383 3.5 6.5
-0.5
e
numbe
r of
emplo
yees
Averag
e
numbe
r of
share
s
(mill
ion)
period 788.6 788.6 788.6 788.6 788.6 788.6
ic
cumula 788.6 788.6 788.6 788.6 788.6 788.6
tive
cumula 788.6 788.6 788.6 788.6 788.6 788.6
tive,
dilut
ed
NRI = Non-recurring items. These are exceptional transactions that are not
related to normal business operations. The most common non-recurring items are
capital gains, additional write-downs or reversals of write-downs, provisions
for planned restructuring and penalties. Non-recurring items are normally
specified individually if they exceed one cent per share.
Fair valuations include equity incentive schemes, synthetic options net of
realised and open hedges, CO2 emission rights, and valuations of biological
assets related to forest assets in equity accounted investments.
Reconciliation of Operating Profit
EUR million Q3/11 Q2/11 Q3/10 2010 Q1-Q3/ Q1-Q3/ Change Change
Change
11 10 % %
%
Q3/11- Q3/11-
Q1-Q3/
Q3/10 Q2/11
11-Q1-
Q3/10
--------------------------------------------------------------------------------
-
Profit from 200.8 217.5 233.1 687.1 651.2 540.7 -13.9 -7.7
20.4
operations
, excl. NRI
and fair
valuations
Equity 3.4 10.8 21.9 67.0 29.3 46.6 -84.5 -68.5
-37.1
accounted
investment
s,
operationa
l,
excl. fair
valuations
---------------------------------------------------------------------
Operating 204.2 228.3 255.0 754.1 680.5 587.3 -19.9 -10.6
15.9
Profit
excl. NRI
and
Fair
Valuations
Fair -28.1 -11.9 16.5 92.5 -23.6 50.6 -270.3 -136.1
-146.6
valuations
Operating 176.1 216.4 271.5 846.6 656.9 637.9 -35.1 -18.6
3.0
Profit,
excl. NRI
NRI on - -31.7 5.4 180.2 -58.9 -22.0 -100.0 100.0
-167.7
operating
profit
---------------------------------------------------------------------
Operating 176.1 184.7 276.9 1 026.8 598.0 615.9 -36.4 -4.7
-2.9
Profit
(IFRS)
---------------------------------------------------------------------
Q3/2011 Results (compared with Q3/2010)
Operating profit at EUR 204 million excluding non-recurring items and fair
valuations was EUR 51 million lower than a year ago. This represents an
operating margin of 7.5% (9.7%).
Price increases in local currencies and a favourable product mix increased
operating profit by EUR 142 million, but lower volumes reduced operating profit
by EUR 31 million. Paper and board production was curtailed by 9% (8%) and
sawnwood production by 8% (5%) of capacity.
The costs of chemicals, fibre, transportation and other variable raw materials
were higher than a year ago, but productivity improvements and cost savings
partly compensated for the cost increases. The overall net impact of the
increase in variable costs in local currencies was a negative EUR 92 million.
The net impact of market pulp remained strong and similar to a year ago.
Fixed costs were similar to the third quarter of 2010. Increased depreciation
had a negative impact of EUR 11 million due to impairment reversals recorded in
the fourth quarter of 2010.
Exchange rates had negative impacts on sales and on costs totalling EUR 29
million, after hedges. In addition, exchange rates had a negative impact of EUR
12 million on equity accounted investments mainly due to valuation of Veracel
loans denominated in US dollars.
The share of the operational results of equity accounted investments amounted
to EUR 3 (EUR 22) million.
The Group recorded a provision of EUR 128 (USD 180) million as a negative
financial non-recurring item in arriving at profit before tax in the third
quarter of 2011 due to NewPage Corporation's Chapter 11 filing in the USA as
announced on 7 September 2011.
Net financial items were EUR -193 (EUR -51) million. Net interest expenses
increased from EUR 24 million to EUR 36 million. Net foreign exchange losses
amounted to EUR 11 (EUR 18) million and the net loss from other financial items
totalled EUR 146 (EUR 9) million, including a negative EUR 128 million
provision due to the NewPage lease guarantee as described above. The remaining
loss of EUR 18 million was mainly related to the fair valuation of interest
rate derivatives.
Group capital employed was EUR 8 665 million on 30 September 2011, a net
increase of EUR 439 million mainly due to an increase of EUR 250 million in
operative working capital, EUR 240 million of impairment reversal in the fourth
quarter of 2010, increased value in equity accounted investments of EUR 120
million mainly due to equity injection into the Montes del Plata pulp mill
project, EUR 70 million for the Inpac acquisition and an increase of EUR 50
million in the PVO valuation. The increase was partly offset by EUR 230 million
due to low capital expenditure compared with depreciation and by EUR 90 million
due to weakening of the Brazilian real, Swedish krona and Polish zloty.
January-September 2011 Results (compared with January-September 2010)
Sales increased by EUR 672 million year-on-year to EUR 8 283 million. Operating
profit excluding non-recurring items and fair valuations increased by EUR 93
million to EUR 681 million. Significantly higher sales prices in local
currencies and a favourable product mix more than compensated for higher
variable costs and unfavourable exchange rate trends.
Q3/2011 Results (compared with Q2/2011)
Sales were EUR 78 million down on the previous quarter at EUR 2 739 million.
Operating profit excluding non-recurring items and fair valuations was EUR 24
million lower than in the previous quarter at EUR 204 million. Reductions in
fixed costs could not compensate for significantly higher production
curtailments to manage inventory.
Capital Structure
EUR million 30 Sep 11 30 June 31 Dec 10 30 Sep 10
11
--------------------------------------------------------------------------------
Operative fixed assets 6 155.1 6 289.1 6 445.2 6 065.7
Equity accounted investments 1 726.8 1 716.0 1 744.0 1 656.7
Operative working capital, net 1 586.5 1 653.0 1 399.3 1 389.5
Non-current interest-free items, net -435.6 -450.9 -493.9 -474.3
-------------------------------------------
Operating Capital Total 9 032.8 9 207.2 9 094.6 8 637.6
Net tax liabilities -367.4 -368.2 -429.9 -411.2
Capital Employed 8 665.4 8 839.0 8 664.7 8 226.4
-------------------------------------------
Equity attributable to Company 5 934.5 6 229.2 6 202.9 5 731.4
shareholders
Non-controlling interests 83.4 49.1 51.8 50.2
Net interest-bearing liabilities 2 647.5 2 560.7 2 410.0 2 444.8
-------------------------------------------
Financing Total 8 665.4 8 839.0 8 664.7 8 226.4
-------------------------------------------
Financing Q3/2011 (compared with Q2/2011)
Cash flow from operations was strong at EUR 362 (EUR 207) million due to
working capital management. Cash flow after investing activities was EUR 282
(EUR 122) million. Interest-bearing net liabilities of the Group increased by
EUR 87 million to EUR 2 648 million due to the NewPage lease guarantee
provision and the Inpac acquisition.
Total unutilised committed credit facilities were unchanged at EUR 700 million,
and cash and cash equivalents net of overdrafts remained strong at EUR 1 181
million, which is EUR 185 million more than for the previous quarter. In
addition, Stora Enso has access to various long-term sources of funding up to
EUR 550 million.
In September 2011 Stora Enso raised a long-term loan of EUR 30 million from IKB
Deutsche Industriebank to finance the newsprint machine investment at Sachsen
Mill in Germany announced in December 2010.
The debt/equity ratio at 30 September 2011 was 0.45 (0.41) following the
NewPage lease guarantee provision of EUR 128 million posted during the third
quarter and presented as a financial liability, the negative EUR 96 million
currency effect on owners' equity net of the hedging of equity translation
risks and the EUR 86 million decrease in the PVO valuation.
Cash Flow
EUR Q3/11 Q2/11 Q3/10 2010 Q1-Q3/ Q1-Q3/ Change Change Change
million 11 10 % % %
Q3/11- Q3/11- Q1-Q3/
Q3/10 Q2/11 11-
Q1-Q3/
10
--------------------------------------------------------------------------------
Operating 176.1 184.7 276.9 1 026.8 598.0 615.9 -36.4 -4.7 -2.9
profit
Depreciat 145.7 182.5 100.2 172.4 432.8 302.7 45.4 -20.2 43.0
ion and
other
non-cash
items
Change in 40.1 -160.0 -73.2 -207.1 -298.8 -191.0 154.8 125.1 -56.4
working
capital
----------------------------------------------------------------------
Cash Flow 361.9 207.2 303.9 992.1 732.0 727.6 19.1 74.7 0.6
from
Operatio
ns
Capital -79.9 -85.4 -73.5 -400.4 -222.6 -261.6 -8.7 6.4 14.9
expendit
ure
----------------------------------------------------------------------
Cash Flow 282.0 121.8 230.4 591.7 509.4 466.0 22.4 131.5 9.3
after
Investin
g
Activiti
es
Capital Expenditure for January-September 2011
Capital expenditure for the first three quarters of 2011 totalled EUR 223
million, which is 51% of depreciation in the same period. The capital
expenditure forecast for the Group for the full year 2011 has changed from the
second quarter 2011 estimate of EUR 500 million to approximately EUR 450
million with no impact on strategic project timings. Annual depreciation in
2011 will be about EUR 560 million. The equity injection into Montes del Plata,
a joint venture in Uruguay, will be approximately EUR 120 million. Close to 80%
of capital expenditure including equity injections is allocated for the
strategic high-return growth areas in 2011.
The main projects during the first three quarters of 2011 were power plants,
the Ostrołęka containerboard machine and the Skoghall woodyard investment.
Near-term Outlook
Demand (compared with Q4/2010)
Demand for consumer board is forecast to be weaker than a year ago, as well as
seasonally weaker than in the previous quarter. Demand is forecast to be
slightly weaker for industrial packaging. Demand in Europe is expected to be
significantly weaker for newsprint and coated magazine paper, and weaker for
uncoated magazine paper. Demand is forecast to be stable for coated fine paper
and slightly weaker for uncoated fine paper. Weaker demand for wood products is
anticipated.
Prices (compared with Q3/2011)
Prices are expected to be stable for consumer board and lower for industrial
packaging. In Europe prices are forecast to be stable for newsprint, magazine
paper and coated fine paper, slightly lower for uncoated fine paper and lower
for wood products.
In Consumer Board proactive reduction of customer and own inventories is
expected to lead to significantly lower operating profit excluding NRI and fair
valuations year-on-year.
The Group expects its cost inflation excluding internal actions to remain
unchanged at approximately 4% for the full year 2011. Actions continue to
mitigate cost inflation. Production curtailments to control inventory levels
increased in the third quarter and will continue in the fourth quarter of 2011.
In the fourth quarter of 2011, as in the third quarter, foreign exchange rates
are expected to have a negative impact on the results.
In the fourth quarter of 2011 year-on-year higher pricing is forecast to be
more than offset by diminishing cost inflation and significant production
curtailments, and the Group's operating profit excluding NRI and fair
valuations is forecast to be somewhat lower than in the fourth quarter of 2010.
Segments Q3/11 compared with Q3/10
Consumer Board
Consumer Board manufactures all major types of consumer board, such as liquid
packaging board, food service board, graphical board and cartonboard for
packaging food, cigarettes, pharmaceuticals, cosmetics and luxury products.
EUR million Q3/11 Q2/11 Q3/10 2010 Q1-Q3/1 Q1-Q3/1
Change Change Change
1 0
% % %
Q3/11- Q3/11- Q1-Q3/
Q3/10 Q2/11 11-Q1-
Q3/10
--------------------------------------------------------------------------------
-----------------------
Sales 626.2 662.2 593.8 2 314.7 1 935.4 1 703.2
5.5 -5.4 13.6
EBITDA* 102.2 122.8 109.8 410.4 359.1 320.3
-6.9 -16.8 12.1
Operating profit* 64.4 84.5 77.6 277.1 244.7 225.0
-17.0 -23.8 8.8
% of sales 10.3 12.8 13.1 12.0 12.6 13.2
-21.4 -19.5 -4.5
ROOC, %** 17.5 22.6 24.1 21.1 22.3 24.3
-27.4 -22.6 -8.2
Paper and board deliveries, 1 583 627 594 2 326 1 804 1 735
-1.9 -7.0 4.0
000 t***
Paper and board production, 1 575 603 579 2 367 1 823 1 771
-0.7 -4.6 2.9
000 t***
Market pulp deliveries, 1 000 t 112 98 86 388 330 283
30.2 14.3 16.6
-----------------------------------------------------------------------
* Excluding non-recurring items and fair valuations ** ROOC = 100% x Operating
profit/Operating capital
*** Excluding pulp
-- The Skoghall Mill
in Sweden
investment project is proceeding according to plan.
-- There will be an annual maintenance stoppage at Skoghall Mill during the
fourth quarter of 2011.
Consumer board sales were EUR 626 million, up 6% on the third quarter of 2010.
Operating profit was EUR 64 million, down EUR 13 million on the third quarter
of 2010. Higher variable and fixed costs, higher depreciation and lower board
volumes caused by inventory management were not fully compensated by higher
sales prices and higher market pulp volumes.
Markets
Product Market Demand Q3/11 Demand Q3/11 Price Q3/11 Price Q3/11
compared with compared with compared with compared with
Q3/10 Q2/11 Q3/10 Q2/11
--------------------------------------------------------------------------------
Consume Europe stable weaker higher stable
r board
--------------------------------------------------------------------------------
Industrial Packaging
Industrial Packaging manufactures corrugated packaging and containerboard,
cores and coreboard, and also paper sacks, and sack and kraft paper.
EUR million Q3/11 Q2/11 Q3/10 2010 Q1-Q3/
Q1-Q3/ Change Change Change
11
10 % % %
Q3/11- Q3/11- Q1-Q3/
Q3/10 Q2/11 11-Q1-
Q3/10
--------------------------------------------------------------------------------
-------------------------------
Sales 253.8 240.0 225.4 949.5 737.2
707.8 12.6 5.8 4.2
EBITDA* 34.3 33.3 30.2 114.0 99.8
79.7 13.6 3.0 25.2
Operating profit* 20.1 19.5 18.7 65.5 59.0
43.5 7.5 3.1 35.6
% of sales 7.9 8.1 8.3 6.9 8.0
6.1 -4.8 -2.5 31.1
ROOC, %** 11.6 11.7 12.0 11.0 11.7
9.8 -3.3 -0.9 19.4
Paper and board deliveries, 1 000 t 189 194 196 864 588
669 -3.6 -2.6 -12.1
Paper and board production, 1 000 t 193 195 196 871 594
677 -1.5 -1.0 -12.3
Corrugated packaging deliveries, million m2 256 242 250 1 027 745
756 2.4 5.8 -1.5
Corrugated packaging production, million m2 251 242 253 1 033 742
761 -0.8 3.7 -2.5
-------------------------------------------------------------------
* Excluding non-recurring items and fair valuations ** ROOC = 100% x Operating
profit/Operating capital
· Stora Enso completed the acquisition of 51% of the Chinese packaging
company Inpac International in July 2011. The integration is proceeding well
and additional business is anticipated.
Industrial packaging sales were EUR 254 million, up 13% on the third quarter of
2010. Operating profit was EUR 20 million, up 8% on the previous year as higher
sales prices in local currencies more than offset raw material cost increases.
Markets
Product Market Demand Q3/11 Demand Q3/11 Price Q3/11 Price Q3/11
compared with compared with compared compared with
Q3/10 Q2/11 with Q3/10 Q2/11
--------------------------------------------------------------------------------
Industria Europe stable stable significantly stable
l higher
packagin
g
--------------------------------------------------------------------------------
Newsprint and Book Paper
Newsprint and Book Paper manufactures a wide range of standard and improved
newsprint, and book and directory paper grades.
EUR Q3/11 Q2/11 Q3/10 2010 Q1-Q3/ Q1-Q3/ Change Change Change
millio 11 10 % % %
n Q3/11-Q Q3/11-Q Q1-Q3/1
3/10 2/11 1-Q1-Q3
/10
--------------------------------------------------------------------------------
Sales 330.7 334.6 322.9 1 261.6 979.8 935.4 2.4 -1.2 4.7
EBITDA* 56.6 50.4 23.6 80.6 152.4 60.0 139.8 12.3 154.0
Operati 33.6 27.5 0.1 -10.8 87.1 -8.1 n/m 22.2 n/m
ng
profit
/loss*
% of 10.2 8.2 0.0 -0.9 8.9 -0.9 n/m 24.4 n/m
sales
ROOC, 14.5 11.6 0.0 -1.1 12.5 -1.1 n/m 25.0 n/m
%**
Paper 574 585 649 2 576 1 713 1 918 -11.6 -1.9 -10.7
delive
ries, 1
000 t
Paper 577 581 653 2 554 1 716 1 935 -11.6 -0.7 -11.3
produc
tion, 1
000 t
------------------------------------------------------------------------
* Excluding non-recurring items and fair valuations ** ROOC = 100% x Operating
profit/Operating capital
· Industry inventories were similar to the third quarter of 2010 but
significantly higher than in the previous quarter.
Newsprint and book paper sales were EUR 331 million, up 2% on the third quarter
of 2010. Operating profit was EUR 34 million, up EUR 34 million on the previous
year as higher sales prices in local currencies and lower fixed costs more than
offset variable cost increases, mainly in RCP. Volumes were lower than a year
earlier as the permanent shutdown of the newsprint machines at Varkaus Mill in
Finland at the end of the third quarter of 2010 and the newsprint machine at
Maxau Mill in Germany at the end of November 2010 reduced production volumes.
Markets
Produc Market Demand Q3/11 Demand Q3/11 Price Q3/11 Price Q3/11
t compared with compared with compared with compared with
Q3/10 Q2/11 Q3/10 Q2/11
--------------------------------------------------------------------------------
Newspr Europe weaker significantly significantly stable
int weaker higher
Newspr Overse weaker stable slightly slightly
int as higher higher
--------------------------------------------------------------------------------
Magazine Paper
Magazine Paper manufactures uncoated magazine paper mainly for periodicals and
advertising, and coated matt, silk and glossy magazine paper for specialist and
general interest magazines, supplements, home shopping catalogues and magazine
covers.
EUR million Q3/11 Q2/11 Q3/10 2010 Q1-Q3/1 Q1-Q3/1
Change Change Change
1 0
% % %
Q3/11- Q3/11- Q1-Q3/
Q3/10 Q2/11 11-Q1-
Q3/10
--------------------------------------------------------------------------------
-----------------------
Sales 562.0 517.2 541.0 2 054.2 1 561.2 1 506.7
3.9 8.7 3.6
EBITDA* 74.1 58.7 71.1 191.9 187.1 144.4
4.2 26.2 29.6
Operating profit* 48.3 33.9 45.5 90.9 110.4 71.4
6.2 42.5 54.6
% of sales 8.6 6.6 8.4 4.4 7.1 4.7
2.4 30.3 51.1
ROOC, %** 14.4 10.1 13.7 7.1 10.9 7.3
5.1 42.6 49.3
Paper deliveries, 1 000 t*** 641 577 613 2 396 1 721 1 737
4.6 11.1 -0.9
Paper production, 1 000 t*** 619 601 616 2 398 1 778 1 780
0.5 3.0 -0.1
Market pulp deliveries, 1 000 t 131 128 141 526 410 413
-7.1 2.3 -0.7
-----------------------------------------------------------------------
* Excluding non-recurring items and fair valuations ** ROOC = 100% x Operating
profit/Operating capital
*** Excluding pulp
-- Kvarnsveden Mill in Sweden has launched a new uncoated magazine paper grade
with a combination of high brightness and superior gloss.
-- Industry inventories were slightly lower than a year ago, and similar to
the previous quarter for coated magazine paper and lower than in the
previous quarter for uncoated magazine paper.
-- The annual maintenance stoppage at Sunila Pulp Mill in Finland is scheduled
during the fourth quarter of 2011.
The Magazine Paper segment's sales were EUR 562 million, up 4% on the third
quarter of 2010. Operating profit was EUR 48 million, up EUR 3 million on a
year ago as higher sales prices in local currencies more than offset increases
in variable costs and unfavourable exchange rate trends.
Markets
Product Market Demand Q3/11 Demand Q3/11 Price Q3/11 Price Q3/11
compared with compared with compared compared
Q3/10 Q2/11 with Q3/10 with Q2/11
--------------------------------------------------------------------------------
Coated Europe slightly slightly higher stable
magazine weaker weaker
paper
Coated Latin stable stronger slightly stable
magazine Ameri higher
paper ca
Uncoated Europe slightly significantly higher stable
magazine weaker stronger
paper
Uncoated China significantly weaker slightly slightly
magazine stronger higher lower
paper
--------------------------------------------------------------------------------
Fine Paper
Fine Paper manufactures high quality graphic and office paper for printers and
publishers, merchants, envelope converters, office equipment manufacturers and
office suppliers.
EUR million Q3/11 Q2/11 Q3/10 2010 Q1-Q3/1 Q1-Q3/1
Change Change Change
1 0
% % %
Q3/11- Q3/11- Q1-Q3/
Q3/10 Q2/11 11-Q1-
Q3/10
--------------------------------------------------------------------------------
-----------------------
Sales 529.6 532.2 563.3 2 125.7 1 625.1 1 592.2
-6.0 -0.5 2.1
EBITDA* 60.4 71.5 90.8 344.5 234.3 253.9
-33.5 -15.5 -7.7
Operating profit* 37.8 48.7 70.9 259.4 166.4 191.8
-46.7 -22.4 -13.2
% of sales 7.1 9.2 12.6 12.2 10.2 12.0
-43.7 -22.8 -15.0
ROOC, %** 15.8 20.2 30.5 27.4 23.3 27.9
-48.2 -21.8 -16.5
Paper deliveries, 1 000 t*** 622 626 665 2 596 1 898 1 975
-6.5 -0.6 -3.9
Paper production, 1 000 t*** 622 650 642 2 622 1 923 1 984
-3.1 -4.3 -3.1
Market Pulp deliveries, 1 000 t 38 21 15 95 101 68
153.3 81.0 48.5
-----------------------------------------------------------------------
* Excluding non-recurring items and fair valuations ** ROOC = 100% x Operating
profit/Operating capital
*** Excluding pulp
-- Product swaps between coated fine paper mills have resulted in improved
flexibility in capacity utilisation. Uetersen Mill in Germany will increase
speciality paper production and at the same time Stora Enso will reduce
standard woodfree coated fine paper production capacity by approximately
140 000 tonnes annually.
-- Cost-efficiency improvements are ongoing at various mills.
-- Industry inventories for coated fine paper were lower than a year ago and
significantly lower than in the previous quarter.
-- Industry inventories for uncoated fine paper were significantly higher than
a year ago and slightly higher than in the previous quarter.
-- The annual maintenance stoppage at Veitsiluoto Mill in Finland will be in
the fourth quarter of 2011.
-- Production curtailments are anticipated in the fourth quarter to secure
cash flow and balance inventories.
Fine paper sales were EUR 530 million, down 6% on the third quarter of 2010.
Operating profit was EUR 38 million, down EUR 33 million on the previous year
as higher sales prices in local currencies could not fully compensate for
higher variable costs, mainly for chemicals, unfavourable exchange rate trends,
lower volumes and early production curtailments to manage inventories. Annual
maintenance stoppages at Suzhou Mill in China, and Varkaus and Oulu mills in
Finland were completed during the third quarter 2011.
Markets
Product Market Demand Q3/11 Demand Q3/11 Price Q3/11 Price Q3/11
compared with compared with compared compared with
Q3/10 Q2/11 with Q3/10 Q2/11
--------------------------------------------------------------------------------
Coated Europe weaker stronger slightly slightly lower
fine lower
paper
Coated China stronger stronger slightly lower
fine lower
paper
Uncoated Europe slightly weaker higher stable
fine weaker
paper
--------------------------------------------------------------------------------
Wood Products
Wood Products manufactures wood-based products for construction and interior
decoration, and solid biofuels for the energy sector. Its recyclable products
are made from high quality renewable European pine or spruce.
EUR Q3/11 Q2/11 Q3/10 2010 Q1-Q3/1 Q1-Q3/1 Change Change Change %
milli 1 0 % % Q1-Q3/11
on Q3/11- Q3/11- -Q1-Q3/1
Q3/10 Q2/11 0
--------------------------------------------------------------------------------
Sales 414.0 465.4 424.1 1 588.7 1 289.1 1 178.4 -2.4 -11.0 9.4
EBITDA 19.6 44.7 35.2 110.7 86.9 89.6 -44.3 -56.2 -3.0
*
Operat 9.8 35.2 25.2 70.9 56.8 60.7 -61.1 -72.2 -6.4
ing
profi
t*
% of 2.4 7.6 5.9 4.5 4.4 5.2 -59.3 -68.4 -15.4
sales
ROOC, 6.7 23.9 16.8 12.3 13.0 13.8 -60.1 -72.0 -5.8
%**
Delive 1 199 1 379 1 299 5 057 3 777 3 834 -7.7 -13.1 -1.5
ries,
1 000
m3
-------------------------------------------------------------------------
* Excluding non-recurring items and fair valuations ** ROOC = 100% x Operating
profit/Operating capital
-- Wood Products is taking several actions to mitigate margin deterioration:
o The permanent closure of Kopparfors Sawmill in Sweden has been brought
forward to October, instead of the end of 2011 as previously announced, but the
pellet mill will remain in operation until the end of 2011.
o It is planned to restructure part of the further processing operations at
Honkalahti Sawmill in Finland during the fourth quarter of 2011.
o There is pressure for further curtailments at several sites in Europe
subject to product and raw material development. All authorisations for
temporary lay-offs are already in place in Finland and shift reductions have
been implemented in Austria.
-- Industry inventories were similar to a year ago and lower than in the
previous quarter.
-- Stora Enso will build a new combined heat and power (CHP) plant at Zdírec
Sawmill in the Czech Republic. The EUR 21 million investment will optimise
energy production and usage at the mill by boosting its heat supply.
-- Major
cross-laminated timber (CLT) projects are ongoing in London and Vienna. In
September Stora Enso announced that Wood Products will participate in
construction of the Finnish Nature Centre Haltia in Espoo, which will be
the first public building constructed of CLT in Finland.
-- Stora Enso plans to undertake a unique wooden construction project in
Helsinki called Wood City in collaboration with the construction company
SRV.
Wood Products sales were EUR 414 million, down 2% on the third quarter of 2010.
Operating profit was EUR 10 million, down EUR 15 million on a year earlier
mainly due to lower volumes.
Markets
Produc Market Demand Q3/11 Demand Q3/11 Price Q3/11 Price Q3/11
t compared compared compared compared
with Q3/10 with Q2/11 with Q3/10 with Q2/11
--------------------------------------------------------------------------------
Wood Europe weaker significantly stable slightly
produ weaker lower
cts
Wood Asia, Middle significantly significantly stable stable
produ East and weaker weaker
cts North Africa
--------------------------------------------------------------------------------
Short-term Risks and Uncertainties
The main short-term risks and uncertainties are related to continuing economic
uncertainty and its potential impact on demand for the Group's products.
Energy sensitivity analysis for 2011: the direct effect on 2011 operating
profit of a 10% increase in electricity, heat, oil and other fossil fuel market
prices would be about negative EUR 22 million annual impact, after the effect
of hedges.
Wood sensitivity analysis for 2011: the direct effect on 2011 operating profit
of a 10% increase in wood prices would be about negative EUR 230 million annual
impact.
Pulp sensitivity analysis for 2011: the direct effect on 2011 operating profit
of a 10% increase in yearly average pulp prices would be about positive EUR 54
million annual impact.
A decrease of energy, wood or pulp prices would have the opposite impact.
Foreign exchange rates sensitivity analysis for the next twelve months: the
direct effect on operating profit of a 10% strengthening in the value of the US
dollar, Swedish krona and British pound against the euro would be approximately
positive EUR 104 million, negative EUR 79 million and positive EUR 57 million
annual impact, respectively. Weakening of the currencies would have the
opposite impact. These numbers are before the effect of hedges and assuming no
changes occur other than a single currency exchange rate movement.
Third Quarter Events
On 30 September 2011 Stora Enso announced that the Montes del Plata pulp mill
project, a joint venture with Arauco, was proceeding and the external financing
for the project had been finalised. Montes del Plata has signed the loan
agreements and as part of the financing arrangements, Stora Enso has signed an
agreement to guarantee 50% of USD 1 354 million of loans raised by Montes del
Plata. Stora Enso's 50% share of the total guarantee will be a maximum of USD
677 million (EUR 498 million).
Veracel
On 11 July 2008 Stora Enso announced that a federal judge in Brazil had issued
a decision claiming that the permits issued by the State of Bahia for the
operations of Stora Enso's equity accounted investment Veracel were not valid.
The judge also ordered Veracel to take certain actions, including reforestation
with native trees on part of Veracel's plantations and a possible BRL 20
million (EUR 9 million) fine. Veracel disputes the decision and has filed an
appeal against it. Veracel operates in full compliance with all Brazilian laws
and has obtained all the necessary environmental and operating licences for its
industrial and forestry activities from the competent authorities. In November
2008 a Federal Court suspended the effects of the decision. Veracel has not
recorded any provision for the reforestation or the possible fine.
On 30 September 2009 a judge in the State of Bahia issued an interim decision
ordering the State Government of Bahia not to grant Veracel further plantation
licences in the municipality of Eunápolis in response to claims by a state
prosecutor that Veracel's plantations exceeded the legal limits, which Veracel
disputes. Veracel's position is supported by documentation issued by the State
environmental authority.
Class Action Lawsuits in USA
In the context of magazine paper sales in the USA in 2002 and 2003, Stora Enso
was sued in a number of class action (and other civil) lawsuits filed in the
USA by various magazine paper purchasers that claimed damages for alleged
antitrust violations. On 14 December 2010 a US federal court granted a motion
for summary judgement that Stora Enso had filed seeking dismissal of the direct
purchaser class action claims. The ruling, which the plaintiffs have appealed,
means that the court has ruled in favour of Stora Enso and found the direct
purchaser class action claims to be without legal foundation. Further, most of
the indirect purchaser actions have been dismissed by a consent judgement,
subject, however, to being reinstated if the plaintiffs' appeal in the direct
cases is successful. The ruling, if it stands on appeal, will also provide a
strong legal basis for final dismissal of all remaining civil cases. No
provisions have been made in Stora Enso's accounts for these lawsuits.
Legal Proceeding in Finland
On 3 December 2009 the Finnish Market Court fined Stora Enso for competition
law infringements in the market for roundwood in Finland from 1997 to 2004.
Stora Enso did not appeal against the ruling.
On 31 March 2011 Metsähallitus of Finland initiated legal proceedings against
Stora Enso, UPM and Metsäliitto claiming compensation for damages allegedly
suffered due to the competition law infringements amounting altogether to EUR
283 million. In addition some Finnish municipalities have recently, and after
the period, initiated similar legal proceedings.
Stora Enso denies that Metsähallitus, and other plaintiffs, suffered any
damages whatsoever and will forcefully defend itself. No provisions have been
made in Stora Enso's accounts for this lawsuit.
Share Capital
During the quarter no A shares were converted into R shares.
On 30 September 2011 Stora Enso had 177 149 022 A shares and 612 389 477 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.
This report is unaudited.
Helsinki, 21 October 2011
Stora Enso Oyj
Board of Directors
Financials
Basis of Preparation
Except as described below, this unaudited interim financial report has been
prepared in accordance with the accounting policies set out in International
Accounting Standard 34 on Interim Financial Reporting and in the Group's Annual
Report for 2010.
The following amendments to standards and interpretations were adopted from 1
January 2011 but had no impact on the Group financial statements:
-- IAS 24 Related Party Disclosure - Revised definition of related parties
-- IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments
requires the extinguishment of a financial liability by the issue of equity
instruments to be measured at fair value with the difference between the
fair value of the instrument issued and the carrying value of the liability
extinguished being recognised in profit or loss.
-- Amendments to IFRS
- Through the annual improvements process, the minor and non-urgent
changes are collected into one ensemble and implemented at the beginning of
the year. In addition, the IASB has published a few other small amendments
which have also been implemented at the beginning of the year. These
changes and amendments effective from 1 January 2011 relate to nine
standards and interpretations. They did not have a significant effect on
the Group financial statements.
Inpac acquisition
Stora Enso acquired 51% of Inpac International on 28 July 2011. Inpac is a
Chinese packaging company with production operations in China and India, and
service operations in Korea. The company specialises in manufacturing consumer
packaging, especially for global manufacturers of mobile phones and other
consumer goods.
The preliminary consideration amounted to EUR 42 million. The acquisition has
been financed from the Stora Enso Group's own cash assets. The initial
acquisition accounting of the integration of the company has been only
provisionally determined at the end of third quarter of 2011. The necessary
fair valuations and other calculations have not been finalised and they are
based on management's best estimate.
Condensed Consolidated Income Statement
EUR Q3/11 Q2/11 Q3/10 Q1-Q3/11 Q1-Q3/10 2010 Change
Change Change
milli %
% %
on Q3/11-
Q3/11- Q1-Q3/
Q3/10
Q2/11 11-Q1-
Q3/10
--------------------------------------------------------------------------------
----------
Sales 2 739.3 2 817.1 2 623.6 8 283.3 7 611.7 10 296.9 4.4
-2.8 8.8
Other 41.7 57.1 38.6 155.8 104.8 159.1 8.0
-27.0 48.7
opera
ting
incom
e
Materi -1 750.3 -1 757.2 -1 574.2 -5 175.7 -4 643.5 -6 391.4 -11.2
0.4 -11.5
als
and
servi
ces
Freigh -255.8 -262.5 -267.3 -775.4 -756.4 -1 010.1 4.3
2.6 -2.5
t and
sales
commi
ssions
Person -352.3 -370.5 -309.7 -1 066.0 -1 000.5 -1 375.3 -13.8
4.9 -6.5
nel
expen
ses
Other -118.0 -165.6 -119.8 -426.9 -380.1 -482.2 1.5
28.7 -12.3
opera
ting
expen
ses
Share 9.9 6.4 24.4 36.3 58.4 112.5 -59.4
54.7 -37.8
of
resul
ts of
equit
y
accou
nted
inves
tments
Deprec -138.4 -140.1 -138.7 -433.4 -378.5 -282.7 0.2
1.2 -14.5
iation
and
impai
rment
--------------------------------------------------------------------------------
---
Operat 176.1 184.7 276.9 598.0 615.9 1 026.8 -36.4
-4.7 -2.9
ing
Profi
t
Net -193.4 -34.6 -51.1 -279.2 -79.2 -100.9 -278.5
-459.0 -252.5
finan
cial
items
--------------------------------------------------------------------------------
---
Loss/P -17.3 150.1 225.8 318.8 536.7 925.9 -107.7
-111.5 -40.6
rofit
befor
e Tax
Income -32.6 -14.1 -31.5 -76.8 -80.4 -156.6 -3.5
-131.2 4.5
tax
--------------------------------------------------------------------------------
---
Net -49.9 136.0 194.3 242.0 456.3 769.3 -125.7
-136.7 -47.0
Loss/
Profit
for
the
Perio
d
Attrib
utable
to:
Owners -50.3 135.7 193.2 241.0 453.8 766.0 -126.0
-137.1 -46.9
of
the
Paren
t
Non-co 0.4 0.3 1.1 1.0 2.5 3.3 -63.6
33.3 -60.0
ntroll
ing
inter
ests
--------------------------------------------------------------------------------
---
-49.9 136.0 194.3 242.0 456.3 769.3 -125.7
-136.7 -47.0
================================================================================
===
Earnin
gs per
Share
Basic -0.06 0.17 0.25 0.31 0.58 0.97 -124.0
-135.3 -46.6
earni
ngs
per
share
, EUR
Dilute -0.06 0.17 0.25 0.31 0.58 0.97 -124.0
-135.3 -46.6
d
earni
ngs
per
share
, EUR
Consolidated Statement of Comprehensive Income
EUR million Q3/11 Q2/11 Q3/10 Q1-Q3/ Q1-Q3/ 2010
11 10
--------------------------------------------------------------------------------
Net loss/profit for the period -49.9 136.0 194.3 242.0 456.3 769.3
Other Comprehensive Income
Actuarial losses on defined - - -2.4 - -2.4 -32.5
benefit pension plans
Available for sale financial -92.4 29.5 46.2 -54.8 1.1 95.9
assets
Currency and commodity hedges -55.8 -60.1 84.0 -119.0 103.1 107.7
Share of other comprehensive -17.7 - 1.8 -14.7 0.4 9.2
income of equity accounted
investments
Currency translation movements on -99.4 -21.0 -22.9 -172.6 234.2 305.6
equity net investments (CTA)
Currency translation movements on -0.7 0.3 -2.6 -2.3 3.5 5.1
non-controlling interests
Net investment hedges 5.2 11.2 -6.6 19.9 -7.8 -9.8
Income tax relating to components 14.9 13.0 -19.8 28.2 -24.5 -13.4
of other comprehensive income
----------------------------------------------
Other Comprehensive Income, net -245.9 -27.1 77.7 -315.3 307.6 467.8
of tax
----------------------------------------------
----------------------------------------------
Total Comprehensive Income -295.8 108.9 272.0 -73.3 763.9 1 237.1 ----------------------------------------------
Total Comprehensive Income
Attributable to:
Owners of the Parent -295.5 108.3 273.6 -72.0 758.0 1 228.7
Non-controlling interests -0.3 0.6 -1.6 -1.3 5.9 8.4
----------------------------------------------
-295.8 108.9 272.0 -73.3 763.9 1 237.1
----------------------------------------------
Condensed Consolidated Statement of Cash Flows
EUR million Q1-Q3/11 Q1-Q3/10
----------------------------------------------------------------------------
Cash Flow from Operating Activities
Operating profit 598.0 615.9
Hedging result from OCI -116.9 92.0
Adjustments for non-cash items 432.8 302.7
Change in net working capital -293.3 -253.7
Cash Flow Generated by Operations 620.6 756.9
-------------------
Net financials items paid -61.8 -114.2
Income taxes paid, net -94.0 -35.4
-------------------
Net Cash Provided by Operating Activities 464.8 607.3
-------------------
Cash Flow from Investing Activities
Acquisitions of subsidiaries, net of acquired cash -24.5 -5.9
Acquisitions of equity accounted investments -87.1 -13.8
Proceeds from sale of fixed assets and shares 18.9 24.1
Capital expenditure -222.6 -261.6
Payments/proceeds of non-current receivables, net -3.4 41.1
-------------------
Net Cash Used in Investing Activities -318.7 -216.1
-------------------
Cash Flow from Financing Activities
Proceeds from issue of new long-term debt 50.0 599.2
Long-term debt, payments -64.0 -774.5
Change in short-term borrowings 149.5 184.7
Dividends and capital repayments paid -197.2 -157.7
Dividend to non-controlling interests -1.8 -1.2
-------------------
Net Cash Used in Financing Activities -63.5 -149.5
-------------------
Net Increase in Cash and Cash Equivalents 82.6 241.7
Cash and bank in disposed companies - -0.3
Translation adjustment -5.1 2.2
Net cash and cash equivalents at the beginning of period 1 103.1 877.0
-------------------
Net Cash and Cash Equivalents at Period End 1 180.6 1 120.6
===================
Cash and Cash Equivalents at Period End 1 183.3 1 121.2
Bank Overdrafts at Period End -2.7 -0.6
-------------------
Net Cash and Cash Equivalents at Period End 1 180.6 1 120.6
===================
Acquisitions of Subsidiary Companies
Cash and cash equivalents, net of bank overdraft 14.7 -
Fixed assets 49.6 -
Working capital 12.6 -
Tax liabilities -4.4 -
Interest-bearing liabilities and receivables -5.1 -
-------------------
Fair Value of Net Assets Acquired 67.4 -
Non-controlling interests (as proportionate share) -35.5 5.9
Provisional goodwill 10.7 -
Total Purchase Consideration 42.6 5.9
Less cash and cash equivalents in acquired companies -14.7 -
-------------------
Net Purchase Consideration 27.9 5.9
Cash part of the consideration, net of acquired cash 24.5 5.9
Non-cash part of the consideration 3.4 -
-------------------
Net Purchase Consideration 27.9 5.9
Disposal of Subsidiary Companies
Cash and cash equivalents - 0.3
Fixed assets - 0.5
Working capital - 6.2
Interest-bearing liabilities - -5.5
Tax liabilities - -0.7
-------------------
Net assets in Divested Companies - 0.8
Income Statement capital gain/loss - -
-------------------
Total Disposal Consideration Received in Cash and Kind - 0.8
-------------------
Property, Plant and Equipment, Intangible Assets and Goodwill
EUR million Q1-Q3/11 2010 Q1-Q3/10
------------------------------------------------------------------
Carrying value at 1 January 5 565.8 5 157.7 5 157.7
Acquisition of subsidiary companies 60.3 7.8 -
Capital expenditure 210.5 377.0 247.3
Additions in biological assets 12.1 23.4 14.3
Change in emission rights 15.7 15.7 25.4
Disposals -12.5 -25.1 -23.2
Disposals of subsidiary companies - -0.8 -0.5
Depreciation and impairment -433.4 -282.7 -378.5
Translation difference and other -96.2 292.8 240.7
Statement of Financial Position Total 5 322.3 5 565.8 5 283.2
----------------------------
Borrowings
EUR million 30 Sep 11 31 Dec 10 30 Sep 10
----------------------------------------------------------------------
Non-current borrowings 3 328.7 3 259.2 3 123.9
Current borrowings 1 016.8 752.0 933.8
--------------------------------
4 345.5 4 011.2 4 057.7
================================
--------------------------------
Q1-Q3/11 2010 Q1-Q3/10
--------------------------------
Carrying value at 1 January 4 011.2 3 936.7 3 936.7
Debt acquired with new subsidiaries 13.5 0.8 -
Debt disposed with sold subsidiaries - -5.6 -7.5
Proceeds/payments of borrowings (net) 357.6 -111.2 -23.8
Translation difference and other -36.8 190.5 152.3
--------------------------------
Statement of Financial Position Total 4 345.5 4 011.2 4 057.7
================================
Condensed Consolidated Statement of Financial Position
EUR million 30 Sep 11 31 Dec 10 30 Sep 10
--------------------------------------------------------------------------------
Assets
Fixed Assets and Other Non-current
Investments
Fixed assets O 5 066.4 5 334.3 5 055.9
Biological assets O 199.2 190.5 176.6
Emission rights O 56.7 41.0 50.7
Equity accounted investments O 1 726.8 1 744.0 1 656.7
Available-for-sale: Interest-bearing I 75.7 78.7 75.7
Available-for-sale: Operative O 832.8 879.4 782.5
Non-current loan receivables I 130.6 126.5 126.9
Deferred tax assets T 107.9 111.0 170.1
Other non-current assets O 48.5 37.2 53.1
--------------------------------
8 244.6 8 542.6 8 148.2
--------------------------------
Current Assets
Inventories O 1 571.5 1 474.6 1 422.3
Tax receivables T 7.3 1.7 6.8
Operative receivables O 1 633.2 1 621.8 1 638.2
Interest-bearing receivables I 308.4 285.1 289.1
Cash and cash equivalents I 1 183.3 1 110.9 1 121.2
--------------------------------
4 703.7 4 494.1 4 477.6
--------------------------------
Total Assets 12 948.3 13 036.7 12 625.8
================================
Equity and Liabilities
Owners of the Parent 5 934.5 6 202.9 5 731.4
Non-controlling Interests 83.4 51.8 50.2
--------------------------------
Total Equity 6 017.9 6 254.7 5 781.6
================================
Non-current Liabilities
Post-employment benefit provisions O 312.2 320.5 331.9
Other provisions O 138.8 148.6 162.7
Deferred tax liabilities T 381.0 422.6 434.8
Non-current debt I 3 328.7 3 259.2 3 123.9
Other non-current operative liabilities O 33.1 62.0 32.8
--------------------------------
4 193.8 4 212.9 4 086.1
--------------------------------
Current Liabilities
Current portion of non-current debt I 217.9 303.5 603.9
Interest-bearing liabilities I 798.9 448.5 329.9
Operative liabilities O 1 618.2 1 697.1 1 671.0
Tax liabilities T 101.6 120.0 153.3
--------------------------------
2 736.6 2 569.1 2 758.1
--------------------------------
Total Liabilities 6 930.4 6 782.0 6 844.2
================================
Total Equity and Liabilities 12 948.3 13 036.7 12 625.8
================================
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 million Share Share Invested Treasu
Step Availa Curren Curren CTA Retaine Attribu Non-co Total
Capital Premiu Non-Rest ry
Acquis ble cy and cy and and d table ntroll
m and ricted Shares
ition for Commod Commod Net Earning to ing
Reserv Equity
Revalu Sale ity ity Invest s Owners Intere
e fund Fund
ation Financ Hedges Hedges -ment of the sts
Surplu ial of Hedges Parent
s Assets Equity
Accoun
ted
Invest
ments
--------------------------------------------------------------------------------
----------------------------------------------------------------------
Balance at 31 December 2009 1 342.2 76.6 2 042.1 -10.2
3.9 684.2 -0.8 -19.0 -194.6 1 199.9 5 124.3 58.2 5 182.5
--------------------------------------------------------------------------------
-----------------------------
Profit for the period - - - -
- - - - - 453.9 453.9 2.4 456.3
OCI before tax - - - -
- 1.1 103.1 0.4 226.4 -2.4 328.6 3.5 332.1
Income tax relating to components of OCI - - - -
- 0.3 -27.6 - 2.0 0.8 -24.5 - -24.5
--------------------------------------------------------------------------------
-----------------------------
Total Comprehensive Income - - - -
- 1.4 75.5 0.4 228.4 452.3 758.0 5.9 763.9
--------------------------------------------------------------------------------
-----------------------------
Distribution relating to 2009 - - - -
- - - - - - - -1.2 -1.2
Acquisitions and disposals - - - -
- - - - - - - -5.9 -5.9
Buy-out of non-controlling interest - - - -
- - - - - 6.8 6.8 -6.8 -
Return of capital - - -157.7 -
- - - - - - -157.7 - -157.7
Transfer to retained earnings - - -1 251.3 -
- - - - - 1 251.3 - - -
--------------------------------------------------------------------------------
-----------------------------
Balance at 30 Sep 2010 1 342.2 76.6 633.1 -10.2
3.9 685.6 74.7 -18.6 33.8 2 910.3 5 731.4 50.2 5 781.6
--------------------------------------------------------------------------------
-----------------------------
Profit for the period - - - -
- - - - - 312.1 312.1 0.9 313.0
OCI before tax - - - -
- 94.8 4.6 8.8 69.4 -30.1 147.5 1.6 149.1
Income tax relating to components of OCI - - - -
- -0.4 -1.4 - 0.5 12.4 11.1 - 11.1
--------------------------------------------------------------------------------
-----------------------------
Total Comprehensive Income - - - -
- 94.4 3.2 8.8 69.9 294.4 470.7 2.5 473.2
--------------------------------------------------------------------------------
-----------------------------
Acquisitions and disposals - - - -
- - - - - - - -0.1 -0.1
Buy-out of non-controlling interest - - - -
- - - - - 0.8 0.8 -0.8 -
--------------------------------------------------------------------------------
-----------------------------
Balance at 31 December 2010 1 342.2 76.6 633.1 -10.2
3.9 780.0 77.9 -9.8 103.7 3 205.5 6 202.9 51.8 6 254.7
--------------------------------------------------------------------------------
-----------------------------
Profit for the period - - - -
- - - - - 241.0 241.0 1.0 242.0
OCI before tax - - - -
- -54.8 -119.0 -14.7 -152.7 - -341.2 -2.3 -343.5
Income tax relating to components of OCI - - - -
- 2.1 31.3 - -5.2 - 28.2 - 28.2
--------------------------------------------------------------------------------
-----------------------------
Total Comprehensive Income - - - -
- -52.7 -87.7 -14.7 -157.9 241.0 -72.0 -1.3 -73.3
--------------------------------------------------------------------------------
-----------------------------
Dividend - - - -
- - - - - -197.2 -197.2 -1.8 -199.0
Acquisitions - - - -
- - - - - - - 35.5 35.5
Buy-out of non-controlling interest - - - -
- - - - - 0.8 0.8 -0.8 -
--------------------------------------------------------------------------------
-----------------------------
Balance at 30 Sep 2011 1 342.2 76.6 633.1 -10.2
3.9 727.3 -9.8 -24.5 -54.2 3 250.1 5 934.5 83.4 6 017.9
--------------------------------------------------------------------------------
-----------------------------
CTA = Cumulative Translation Adjustment
OCI = Other Comprehensive Income
Commitments and Contingencies
EUR million 30 Sep 11 31 Dec 10 30 Sep 10
--------------------------------------------------------------------------
On Own Behalf
Mortgages 16.1 5.2 11.2
On Behalf of Equity Accounted Investments
Guarantees 298.1 154.6 160.0
On Behalf of Others
Guarantees 7.3 108.3 109.1
Other Commitments, Own
Operating leases, in next 12 months 43.1 32.3 27.1
Operating leases, after next 12 months 123.3 88.3 79.7
Pension liabilities 0.4 0.4 0.1
Other commitments 9.4 94.8 49.0
--------------------------------
Total 497.7 483.9 436.2
================================
Mortgages 16.1 5.2 11.2
Guarantees 305.4 262.9 269.1
Operating leases 166.4 120.6 106.8
Pension liabilities 0.4 0.4 0.1
Other commitments 9.4 94.8 49.0
--------------------------------
Total 497.7 483.9 436.2
================================
Purchase Agreement Commitments
EUR million Scheduled Contract Payments
--------------------------------------------------------------------------------
-
Type of Supply Contract Total Q4/2011 2012-2013 2014-2015
2016+
Fibre 1 484.7 70.6 477.5 437.0
499.6
Energy 1 894.1 108.4 545.7 398.5
841.5
Logistics 351.5 14.6 91.7 73.1
172.1
Other production costs 709.2 31.0 105.1 44.3
528.8
-------------------------------------------------------
Capital Expenditure 238.4 63.3 171.3 3.8
0.0
Total Contractual 4 677.9 287.9 1 391.3 956.7 2
042.0
Commitments at 30 Sep
2011
-------------------------------------------------------
Fair Values of Derivative Financial Instruments
EUR million 30 Sep 11 31 Dec 10 30 Sep 10
--------------------------------------------------------------------------------
Positive Negative Net Fair Net Net
Fair Fair Values Fair Fair
Values Values Values Values
Interest rate 133.1 -32.4 100.7 135.4 160.4
swaps
Interest rate - -54.7 -54.7 -35.3 -47.4
options
Forward contracts 48.2 -13.5 34.7 47.6 3.4
Currency options 27.7 -44.2 -16.5 22.1 28.9
Commodity 15.7 -10.0 5.7 11.6 -6.6
contracts
Equity swaps - -27.1 -27.1 13.8 18.4
("TRS")
-------------------------------------------------------------
Total 224.7 -181.9 42.8 195.2 157.1
-------------------------------------------------------------
Nominal Values of Derivative Financial Instruments
EUR million 30 Sep 11 31 Dec 10 30 Sep 10
-------------------------------------------------------------
Interest Rate Derivatives
Interest rate swaps
Maturity under 1 year 26.8 827.5 831.5
Maturity 2-5 years 1 888.6 2 569.8 1 710.4
Maturity 6-10 years 300.0 804.7 913.5
--------------------------------
2 215.4 4 202.0 3 455.4
Interest rate options 908.3 601.0 504.7
--------------------------------
Total 3 123.7 4 803.0 3 960.1
--------------------------------
Foreign Exchange Derivatives
Forward contracts 2 027.6 2 333.1 1 395.0
Currency options 2 895.9 2 683.4 2 344.4
--------------------------------
Total 4 923.5 5 016.5 3 739.4
--------------------------------
Commodity Derivatives
Commodity contracts 195.2 297.6 256.4
--------------------------------
Total 195.2 297.6 256.4
--------------------------------
Total Return (Equity) Swaps
Equity swaps ("TRS") 75.6 83.1 112.7
Total 75.6 83.1 112.7
--------------------------------
Sales by Segment
EUR Q3/11 Q2/11 Q1/11 2010 Q4/10 Q3/10 Q2/10 Q1/10
millio
n
--------------------------------------------------------------------------------
Consume 626.2 662.2 647.0 2 314.7 611.5 593.8 586.3 523.1
r Board
Industr 253.8 240.0 243.4 949.5 241.7 225.4 259.2 223.2
ial
Packag
ing
Newspri 330.7 334.6 314.5 1 261.6 326.2 322.9 325.1 287.4
nt and
Book
Paper
Magazin 562.0 517.2 482.0 2 054.2 547.5 541.0 530.2 435.5
e Paper
Fine 529.6 532.2 563.3 2 125.7 533.5 563.3 554.4 474.5
Paper
Wood 414.0 465.4 409.7 1 588.7 410.3 424.1 422.7 331.6
Produc
ts
Other 642.1 703.6 723.3 2 524.6 627.3 623.4 648.6 625.3
Inter-s -619.1 -638.1 -656.3 -2 522.1 -612.8 -670.3 -634.3 -604.7
egment
sales
------------------------------------------------------------------------
Total 2 739.3 2 817.1 2 726.9 10 296.9 2 685.2 2 623.6 2 692.2 2 295.9
========================================================================
Operating Profit/Loss by Segment excluding NRI and Fair Valuations
EUR million Q3/11 Q2/11 Q1/11 2010 Q4/10 Q3/10 Q2/10 Q1/10
--------------------------------------------------------------------------------
Consumer Board 64.4 84.5 95.8 277.1 52.1 77.6 76.9 70.5
Industrial Packaging 20.1 19.5 19.4 65.5 22.0 18.7 17.1 7.7
Newsprint and Book 33.6 27.5 26.0 -10.8 -2.7 0.1 -6.6 -1.6
Paper
Magazine Paper 48.3 33.9 28.2 90.9 19.5 45.5 22.0 3.9
Fine Paper 37.8 48.7 79.9 259.4 67.6 70.9 79.4 41.5
Wood Products 9.8 35.2 11.8 70.9 10.2 25.2 30.1 5.4
Other -13.2 -31.8 -28.2 -65.9 -22.3 -4.9 -16.5 -22.2
----------------------------------------------------------
Operating Profit 200.8 217.5 232.9 687.1 146.4 233.1 202.4 105.2
excl. NRI and Fair
Valuations by
Segment
Share of results of 3.4 10.8 15.1 67.0 20.4 21.9 10.5 14.2
equity accounted
investments excl.
fair valuations
----------------------------------------------------------
Operating Profit 204.2 228.3 248.0 754.1 166.8 255.0 212.9 119.4
excl. NRI and Fair
Valuations*
Fair valuations* -28.1 -11.9 16.4 92.5 41.9 16.5 11.2 22.9
----------------------------------------------------------
Operating Profit 176.1 216.4 264.4 846.6 208.7 271.5 224.1 142.3
excl. NRI
NRI on operating - -31.7 -27.2 180.2 202.2 5.4 -8.5 -18.9
profit
----------------------------------------------------------
Operating Profit 176.1 184.7 237.2 1 026.8 410.9 276.9 215.6 123.4
(IFRS)
Net financial items -193.4 -34.6 -51.2 -100.9 -21.7 -51.1 -22.6 -5.5
----------------------------------------------------------
Loss/Profit before -17.3 150.1 186.0 925.9 389.2 225.8 193.0 117.9
Tax and
Non-controlling
Interests
Income tax expense -32.6 -14.1 -30.1 -156.6 -76.2 -31.5 -33.1 -15.8
----------------------------------------------------------
Net Loss/Profit -49.9 136.0 155.9 769.3 313.0 194.3 159.9 102.1
==========================================================
* Fair valuations include equity incentive schemes, synthetic options net of
realised and open hedges, CO2 emission rights, and valuations of biological
assets related to forest assets in equity accounted investments.
NRI by Segment
EUR million Q3/11 Q2/11 Q1/11 2010 Q4/10 Q3/10 Q2/10 Q1/10
--------------------------------------------------------------------------------Consumer Board - -2.2 - 217.4 167.6 49.8 - -
Industrial Packaging - -0.1 - -21.5 -5.0 - -3.3 -13.2
Newsprint and Book - -6.2 -1.7 -58.5 -1.1 -44.4 -13.0 -
Paper
Magazine Paper - -2.8 3.4 2.4 -1.1 - 9.2 -5.7
Fine Paper - -20.4 - 68.9 60.4 - 8.5 -
Wood Products - - -28.9 4.0 1.9 - 0.5 1.6
Other - - - -17.2 -5.2 - -10.4 -1.6
Equity accounted - - - -15.3 -15.3 - - -
investments
--------------------------------------------------------
NRI on Operating Profit - -31.7 -27.2 180.2 202.2 5.4 -8.5 -18.9
NRI on financial items -128.2 - - - - - - -
NRI on tax - 3.6 7.8 -37.9 -37.9 - - -
NRI on Net Profit -128.2 -28.1 -19.4 142.3 164.3 5.4 -8.5 -18.9
========================================================
Fair Valuations* by Segment
EUR million Q3/11 Q2/11 Q1/11 2010 Q4/10 Q3/10 Q2/10 Q1/10
--------------------------------------------------------------------------------
Consumer Board - -4.6 - - - - - -
Industrial Packaging - -2.0 - - - - - -
Newsprint and Book Paper - -2.9 - - - - - -
Magazine Paper - -3.5 - - - - - -
Fine Paper - -2.9 - - - - - -
Wood Products - -1.8 - - - - - -
Other -34.6 10.2 11.5 31.7 -7.1 14.0 6.8 18.0
Equity accounted 6.5 -4.4 4.9 60.8 49.0 2.5 4.4 4.9
investments
------------------------------------------------------
Fair Valuations on -28.1 -11.9 16.4 92.5 41.9 16.5 11.2 22.9
Operating Profit
======================================================
* Fair valuations include equity incentive schemes, synthetic options net of
realised and open hedges, CO2 emission rights, and valuations of biological
assets related to forest assets in equity accounted investments.
Operating Profit/Loss by Segment
EUR million Q3/11 Q2/11 Q1/11 2010 Q4/10 Q3/10 Q2/10 Q1/10
--------------------------------------------------------------------------------
Consumer Board 64.4 77.7 95.8 494.5 219.7 127.4 76.9 70.5
Industrial Packaging 20.1 17.4 19.4 44.0 17.0 18.7 13.8 -5.5
Newsprint and Book 33.6 18.4 24.3 -69.3 -3.8 -44.3 -19.6 -1.6
Paper
Magazine Paper 48.3 27.6 31.6 93.3 18.4 45.5 31.2 -1.8
Fine Paper 37.8 25.4 79.9 328.3 128.0 70.9 87.9 41.5
Wood Products 9.8 33.4 -17.1 74.9 12.1 25.2 30.6 7.0
Other -47.8 -21.6 -16.7 -51.4 -34.6 9.1 -20.1 -5.8
Share of results of 9.9 6.4 20.0 112.5 54.1 24.4 14.9 19.1
equity accounted
investments
----------------------------------------------------------
Operating Profit 176.1 184.7 237.2 1 026.8 410.9 276.9 215.6 123.4
(IFRS)
Net financial items -193.4 -34.6 -51.2 -100.9 -21.7 -51.1 -22.6 -5.5
----------------------------------------------------------
Loss/Profit before -17.3 150.1 186.0 925.9 389.2 225.8 193.0 117.9
Tax and
Non-controlling
Interests
Income tax expense -32.6 -14.1 -30.1 -156.6 -76.2 -31.5 -33.1 -15.8
----------------------------------------------------------
Net Loss/Profit -49.9 136.0 155.9 769.3 313.0 194.3 159.9 102.1
==========================================================
Equity Accounted Investments in the Income Statement
EUR million Q3/11 Q2/11 Q1/11 2010 Q4/10 Q3/10 Q2/10 Q1/10
--------------------------------------------------------------------------------
Share of results in 3.4 10.8 15.1 67.0 20.4 21.9 10.5 14.2
equity accounted
investments excl. fair
valuations and NRI
Fair valuations in 6.5 -4.4 4.9 60.8 49.0 2.5 4.4 4.9
equity accounted
investments
NRI related to equity - - - -15.3 -15.3 - - -
accounted investments
-------------------------------------------------------
Equity Accounted 9.9 6.4 20.0 112.5 54.1 24.4 14.9 19.1
Investments in
Operating Profit
Equity accounted 2.5 -4.2 -6.5 -40.6 -25.1 -5.6 -5.7 -4.2
investments share of
taxes
Equity Accounted 12.4 2.2 13.5 71.9 29.0 18.8 9.2 14.9
Investments in Net
Profit
=======================================================
Key Exchange Rates for the Euro
One Euro is Closing Rate Average Rate
-------------------------------------------------------
30 Sep 11 31 Dec 10 30 Sep 11 31 Dec 10
-------------------------------------------
SEK 9.2580 8.9655 9.0112 9.5464
USD 1.3503 1.3362 1.4071 1.3272
GBP 0.8667 0.8608 0.8714 0.8583
-------------------------------------------
Transaction Risk and Hedges in Main Currencies as at 30 September 2011
EUR million USD GBP SEK
------------------------------------------------------------------------------
Estimated annual net operating cash flow exposure 1 040 570 -790
Transaction hedges as at 30 Sep 2011 -560 -250 470
------------------
Hedging percentage as at 30 Sep 2011 for the next 12 months 54% 44% 59%
------------------
Additional USD, GBP and SEK hedges for 13-16 months increase the hedging
percentages by 8%, 4% and 7% respectively.
Changes in Exchange Rates on Operating Profit
Operating Profit: Currency strengthening of + 10% EUR million
--------------------------------------------------------------
USD 104
SEK -79
GBP 57
--------------------------------------------------------------
The sensitivity is based on estimated next 12 months 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. Weakening
would have the opposite impact.
Stora Enso Shares
Trading volume Helsinki Stockholm
------------------------------------------
A share R share A share R share
---------------------------------------------------------
July 113 479 102 551 172 121 789 14 909 132
August 183 514 133 662 422 184 427 33 382 428
September 49 135 106 281 676 57 353 21 324 023
------------------------------------------
Total 346 128 342 495 270 363 569 69 615 583
------------------------------------------
Closing Price Helsinki, EUR Stockholm, SEK
------------------------------------------
A share R share A share R share
---------------------------------------------------------
July 6.60 6.01 60.10 54.40
August 6.50 5.09 61.75 46.32
September 6.60 4.42 55.00 40.80
Calculation of Key Figures
Return on capital employed,
ROCE (%) 100 x
Operating profit
Capital employed 1) 2)
Return on operating capital, 100 x
Operating profit
ROOC (%)
Operating capital 1) 2)
Return on equity, 100 x
Profit before tax and non-controlling items - taxes
ROE (%)
Total equity 2)
Equity ratio (%) 100 x
Total equity
Total assets
Interest-bearing net liabilities
Interest-bearing liabilities - interest-bearing assets
Debt/equity ratio
Interest-bearing net liabilities
Equity
Fixed asset
CEPS
Net profit/loss for the period 3) - depreciation and impairment
Average number of shares
EPS
Net profit/loss for the period 3)
Average number of shares
1) Capital employed = Operating capital - Net tax liabilities
2) Average for the financial period
3) Attributable to owners of the Parent
For further information, please contact:
Jouko Karvinen, CEO, tel. +358 2046 21410
Markus Rauramo, CFO, tel. +358 2046 21121
Ulla Paajanen-Sainio, Head of Investor Relations, tel. +358 2046 21242
Lauri Peltola, Head of Communications and Global Responsibility, tel. +358 2046
21380
Stora Enso's full year 2011 results will be published on 8 February 2012.
ANALYST CONFERENCE CALL
CEO Jouko Karvinen and CFO Markus Rauramo will be hosting a combined conference
call and webcast today at 14.30 Finnish time (13.30 CET, 12.30 UK time, 07.30
US Eastern time).
If you wish to participate, please dial:
Continental Europe and the UK +44 (0)20 3364 5381
Finland +358 (0)9 2310 1620
Sweden +46 (0)8 5593 6764
USA +1 646 254 3361
Access code: 5348972#
The live webcast may be accessed at www.storaenso.com/investors
Stora Enso is the global rethinker of the packaging, paper and wood products
industry. We always rethink the old and expand to the new to offer our
customers innovative solutions based on renewable materials. Stora Enso employs
some 30 000 people worldwide, and our sales in 2010 amounted to EUR 10.3
billion. Stora Enso shares are listed on NASDAQ OMX Helsinki (STEAV, STERV) and
Stockholm (STE A, STE R). In addition, the shares are traded in the USA as ADRs
(SEOAY) in the International OTCQX over-the-counter market.
It should be noted that certain statements herein which are not historical
facts, including, without limitation those regarding expectations for market
growth and developments; expectations for growth and profitability; and
statements preceded by “believes”, “expects”, “anticipates”, “foresees”, or
similar expressions, are forward-looking statements within the meaning of the
United States Private Securities Litigation Reform Act of 1995. Since these
statements are based on current plans, estimates and projections, they involve
risks and uncertainties, which may cause actual results to materially differ
from those expressed in such forward-looking statements. Such factors include,
but are not limited to: (1) operating factors such as continued success of
manufacturing activities and the achievement of efficiencies therein, continued
success of product development, acceptance of new products or services by the
Group's targeted customers, success of the existing and future collaboration
arrangements, changes in business strategy or development plans or targets,
changes in the degree of protection created by the Group's patents and other
intellectual property rights, the availability of capital on acceptable terms;
(2) industry conditions, such as strength of product demand, intensity of
competition, prevailing and future global market prices for the Group's
products and the pricing pressures thereto, price fluctuations in raw
materials, financial condition of the customers and the competitors of the
Group, the potential introduction of competing products and technologies by
competitors; and (3) general economic conditions, such as rates of economic
growth in the Group's principal geographic markets or fluctuations in exchange
and interest rates.
www.storaenso.com
www.storaenso.com/investors
STORA ENSO OYJ
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