2008-02-14 14:00:00 CET
2008-02-14 14:00:01 CET
REGULATED INFORMATION
Stromsdal - Financial Statement Release
STROMSDAL CORPORATION'S FINANCIAL RESULTS FOR 2007
STROMSDAL CORPORATION STOCK EXCHANGE RELEASE 14 February 2008 at 3 pm. STROMSDAL CORPORATION'S FINANCIAL RESULTS FOR 2007 - January-December net sales were EUR 56.1 million (EUR 53.1 million) - January-December pre-tax loss was EUR -5.8 million (EUR -3.6 million) - The fourth quarter net sales were EUR 14.2 million (EUR 12.9 million) - The fourth quarter pre-tax loss EUR -1.5 million (EUR -1.7 million) Sales and Markets Competition remained fierce in the European paperboard market throughout 2007. The weak dollar improved the competitiveness of paperboard of non-European origin over its European counterparts. Demand for the company's products picked up in early 2007 and remained satisfactory throughout the year. The order backlock was on an average two weeks' production for most of the year, declining to roughly one week towards the end of 2007. Demand for Tecta food packaging paperboard picked up during 2007 thanks to ongoing product development, sales effort allocation and good customer satisfaction. Sales volume increased by more than 50 percent. Total sales also rose, yet by less than expected for the graphic and Tecta food packaging paperboards. The company's strategy was revised in early 2007 and sales efforts were focused more clearly on premium-quality graphic and speciality paperboards of high quality such as the Tecta food packaging paperboard. Customer service was enhanced in order to execute the sales strategy. Service centres were opened in Spain, UK and Netherlands to enable quick deliveries to customers. The company also invested more in customer service and sales resources. Financial Standing and Performance Stromsdal had net sales of EUR 56.1 million (2006: EUR 53.1 million, 2005: EUR 56.3 million), a year-on-year increase of 5.5 percent. Consolidated net result at EUR -4.3 million (2006: EUR -2.5 million, 2005: EUR -0.4 million), was weaker than in the previous year by EUR 1.8 million. EBITDA was positive in autumn 2007 but fell in the fourth quarter. Full-year EBITDA in 2007 came to EUR -0.8 million (2006: EUR 0.9 million, 2005: EUR 2.9 million). The climbing prices of raw materials and energy, a disadvantageous product portfolio and the unfavourable exchange rates of the US dollar and pound sterling against the euro remained the major reasons underlying weak performance. Strom packaging paperboard sales are mostly dollar-denominated, which has eroded sales price despite price hikes and currency forward contracts. In 2007, the company made major investments in improving production efficiency. The reduction in raw material consumption achieved in 207 helped to compensate for increases in the prices of raw materials. Actual total production rose by more than 10 percent from the previous year and totalled 64,070 tonnes (2006: 57,735 tonnes, 2005: 64,120 tonnes). Financing Cash flow from operations in 2007 came to EUR -4.9 million (EUR -2.9 million). Cash flow from investments stood at EUR -3.0 million (EUR -2.5 million). A first instalment of EUR 0.5 million of the investment subsidy of EUR 1.5 million granted to the company by the Ministry of Trade and Industry in June 2006 was drawn in March 2007. The second instalment of EUR 0.4 million was paid in January 2008 and the remaining EUR 0.6 million will become available in spring 2008, once the investments have been completed. The company experienced tight liquidity in summer 2007. Cash flow was eroded by the advance purchases of pulpwood and short-fibred pulp made to shore up inventories in order to secure access to raw materials. In summer 2007, the company implemented capital and financial arrangements aimed at completing the company's investment and rationalisation programme and strengthening the company's financial standing. A financing programme of EUR 8 million was agreed by the Board of Stromsdal plc with Atine Group Oy, Baltiska Handels AB, Svenska Handelsbanken AB (Publ), Finnvera plc and Managing Director of the company Mikael Åbacka. The programme consisted of a share issue valued at EUR 5 million, EUR 1 million in interest relief and credit facilities of EUR 2 million. This also qualified Stromsdal for the remaining EUR 1 million in investment subsidy earlier granted by the Ministry of Trade and Industry. As provided in an agreement with the company's main financiers made as part of the financial arrangements of 2006, the company made zero repayments on its debts in 2007. The financial arrangements of 2007 included an agreement with Svenska Handelsbanken AB (Publ) on lowering the interest rate on the company's current loans and those to be taken in the next three years by 1.5 percentage units for a period of three years. In addition, Svenska Handelsbanken AB granted a three-year moratorium on repayment of all company loans. Repayments will thus total no more than EUR 3 million per year. On 17 September 2007, pursuant to an authorisation granted by the Annual General Meeting of 29 March 2007, the Board decided to issue a convertible bond in the amount of EUR 3,591,600 for subscription by investors designated by the Board in deviation from shareholders' pre-emption rights. The investors, who subscribed for the bond in full, are not among the company's related parties. Fixed annual interest at 7.5 percent is paid on the capital of the convertible bond, which matures in three years. The bond may be converted for a maximum of 4,920,000 new shares in the company. Each note valued at EUR 73 may be converted to 100 new shares at an exchange rate of EUR 0.73 per share. The conversion period commences on 1 January 2008 and expires on 1 September 2010. Certain specific conditions relating to repayment also attach to the bond. At the end of the financial year, all notes remained outstanding. The company's equity ratio at the end of 2007 stood at 19.9 percent (2006: 22.9 percent, 2005: 6.9 percent). Interest-bearing debt amounted to EUR 25.5 million. The company's capital loans at the end of the financial year stood at EUR 0.1 million. Investments Stromsdal's gross investments in 2007 totalled EUR 3.5 million (2006: EUR 1.5 million, 2005: EUR 2.0 million). The investment programme launched in 2006 was continued in 2007. The biggest individual investment in 2007 was done in the groundwood mill at the turn of the year, which allowed the target brightness level of the paperboard to be reached. However, the washing capacity of the groundwood pulp proved to be insufficient to meet the needs of the changed product assortment, necessitating additional investment totalling EUR 2.0 million in the groundwood mill in 2007. The investments resulted in significant improvements in the pulp purity and runnability of the board machine, hence improving production efficiencies throughout the mill. The financial arrangement of 2007 allowed the investment programme to proceed as planned. Investments under the programme included enhanced water management, higher drying capacity on the coating machine and investments to increase the production capacity and improve the quality standard of Tecta food packaging paper board grades. Most of the planned investments will be completed in the first half of 2008. The company took part in a regional project to restore old historical buildings in the Juankoski industrial milieu mostly owned by the company. The project entailed an investment of EUR 701,402 prior to subsidies. Funding for the project was mainly obtained from the European Regional Development Fund, with the company contributing 9.2 percent of the total, i.e. EUR 64,712. The project was completed in late 2007. Research and Development In 2007, Stromsdal's product development expenditure amounted to 0.3 percent of net sales (2006: 0.3 percent, 2005: 0.3 percent) i.e. EUR 0.17 million (2006: EUR 0.18 million, 2005: EUR 0.17 million). The quality of graphic boards was enhanced by increasing brightness level in the first quarter, and systematic product development has also delivered more consistent quality. The printability properties of the board will be further enhanced in the future. A decision was taken in 2007 to allocate more substantially higher resources to product development. Work has already started on developing the properties of Tecta food packaging paperboard to suit new areas of use and new applications have been innovated together with new and existing customers. Employees The average number of employees in 2007 was 213 (2006: 207, 2005: 210). At year-end, the company employed 199 persons (2006: 210, 2005: 198). Permanently employed persons numbered 171 and temporary staff 28. Maintenance staff was insourced back to the company in August 2006, adding 27 employees to the company's payrolls. The average comparison figure for year 2006 does not include maintenance staff. Improved occupational safety has been an area of particular importance and the company has taken steps to enhance safety at work and improve housekeeping. There were 33 recorded accidents at the mill in 2007 (2006: 24, 2005: 22), fifteen of which resulted in absence of more than three days (2006: 11, 2005: 11). On 17 September 2007, the company decided on a new share incentive scheme for key employees. The scheme aims to bridge the goals of the shareholders and key employees in increasing the value of the company and to foster the commitment of key employees and offer them a competitive compensation system based on shareholding. In addition, the company decided on a bonus scheme for all employees which seeks to pool all personnel resources so that the company's ability to deliver results may be ensured. The company has agreed on outsourcing payroll administration to Silta Oy. One employee transferred from Stromsdal plc to Silta Oy at the beginning of October. Silta Oy's payroll computation system will be introduced early 2008. Wages and benefits including social security costs in 2007 totalled EUR 11.2 million (2006: EUR 10.1 million, 2005: EUR 10.1 million). Shareholder Meetings The Annual General Meeting was held on 29 March 2007 and it addressed matters relating to the financial statements, distribution of dividend, election of Board members and auditors, authorisations to the Board and amendments to the Articles of Association. An Extraordinary General Meeting was held on 21 August 2007 and it addressed matters relating to the directed share issue and changes in Board members. Board of Directors On 29 March 2007, the Annual General Meeting elected six Board members to a term expiring at the end of the Annual General Meeting in 2008. Elected to the Board were Juhani Mauri Erma, attorney at law; Pauli Olavi Hämäläinen, M.Sc. (Eng.); Kari Petri Juhani Kangasperko, city manager; Ossi Kokkonen, M.Sc. (Eng.); Pirjo Sirpa Helena Repo, M.Sc. (Bus.Admin.); and Markku Tapani Toivanen, managing director. The Board meeting convening after the Annual General Meeting elected Juhani Erma Chairman of the Board. The Board appointed the following to the Audit Committee: Juhani Erma (Chairman), Pirjo Repo and Markku Toivanen, and the following to the Nomination Committee: Petri Kangasperko (Chairman), Pauli Hämäläinen and Ossi Kokkonen The Extraordinary General Meeting of 21 August 2007 confirmed the number of Board members at five. Attorney at law Juhani Erma, city manager Petri Kangasperko ja project manager Pirjo Repo were re-elected to the Board and joined by managing directors Alexander Ehrnrooth and Harry Salonaho as new Board members. The Board meeting convening after the General Meeting elected Harry Salonaho Chairman of the Board. The Board appointed the following to the Audit Committee: Juhani Erma (Chairman), Harry Salonaho and Pirjo Repo, and the following to the Nomination Committee: Alexander Ehrnrooth (Chairman), Harry Salonaho and Juhani Erma. The Board held 21 meetings in 2007. The average attendance rate of Board members was 96.67 percent. The Audit Committee held three meetings and the Nomination Committee five meetings. Auditors Company auditor until the Annual General Meeting of 29 March 2007 was body of authorised accountants Deloitte & Touche Oy with APA Tapani Vuopala as principal auditor. The Annual General Meeting of 29 March 2007 elected body of authorised accountants Ernst & Young Oy with APA Eija Niemi Nikkola as principal auditor to serve as the company's new auditor for a term expiring at the end of the next Annual General Meeting. Shares The general meeting of shareholders convening on 21 August 2007 decided on the directe share issue, in deviation from shareholders' pre-emption rights, of a maximum of 11,222,221 new shares at an issue price of EUR 0.45/share with investors undertaking to subscribe and with the company's Managing Director, who subscribed for the issue in full as follows: Atine Group 7,407,406 shares, Baltiska Handels AB 3,703,704 shares and Managing Director Mikael Åbacka 111,111 shares. The Annual General Meeting of 29 March 2007 authorised the Board to decide by 29 March 2012 on a share issue and the issue of other instruments entitling to shares. A maximum of 5,000,000 shares may be issued pursuant to this authorisation, which also bestows on the Board the right to decide on a bonus issue to the company in which the number of shares to be issued to the company does not exceed one tenth of all company shares. Pursuant to this authorisation, the Board on 21 August 2007, in deviation from shareholders' pre-emption rights, offered a total of 80,000 new shares at a price of EUR 0.63 per share to new Chairman of the Board Harry Salonaho, who subscribed for the issue in full. The share issues executed increased the number of the company's shares from 16,213,178 to 27,515,399. The company's share capital remains unchanged at EUR 10,102,906.80, as the proceeds of the issues were recognised in the invested unrestricted equity fund. The company decided on 22 May 2002 on the issue of share options. The terms of these were modified on 29 June 2006. The share option scheme expired on 1 July 2007. No options were exercised. Pursuant to an authorisation granted to it by Annual General Meeting of 29 March 2007, the Board decided on the issue of 4,920,000 new shares in the company in accordance with the terms of the convertible bond issued by it on 17 September 2007. Stromsdal's market capitalisation at 31 December 2007 stood at EUR 12.7 million and the shares traded at EUR 0.46. Environment Responsibility for the environment is the foundation for all of Stromsdal's activities. The board products manufactured by the company are fully recyclable and compostable. The environmental impacts of the company's production processes are low and mainly concerns the consumption of raw materials, energy and water, emissions into the air, and waste and wastewater. The biological water treatment plant, where the board mill's wastewater is treated, was one of the first in Finland to install an online measurement for addition and control of necessary additives to the biological treatment process. The composition and amount of wastewater generated at the mill are constantly monitored. Stromsdal also monitors its energy consumption, airborne emissions and waste volume as well as the consumption and quality of chemicals and raw materials. Environmental concerns are always taken into account in choosing raw materials and chemicals. In its board manufacture, the company uses steam produced safely, cleanly and efficiently by Juankosken Biolämpö Oy from locally sourced biofuels. Electricity consumption in 2007 totalled 79,599 MWh (2006: 72,869 MWh, 2005: 80,130 MWh). Raw water consumption has increased, partly due to process changes in the groundwood plant. A project was launched in 2007 to curb water consumption. Raw water consumption in 2007 totalled 2,405,278 m3 (2006: 2,264,792 m3; 2005: 2,245,044 m3). Municipal water consumption also increased, standing at 46,065 m3 in 2007 (2006: 13,188 m3; 2005: 20,388 m3). The mill's CO2 emissions have fallen since Juankosken Biolämpö Oy brought its biofuel boiler plant online in 2006. The emissions rights granted for the trading period 2005-2007 proved sufficient and the company was even able to sell part of its rights in the current trading period. Carbon dioxide emissions in 2007 were 2,160 tons (CO2) (2006: 5,646 tons (CO2), 2005; 27,950 tons (CO2)). The company estimates that the emissions rights to be granted to it for the 2008-2012 trading period will be sufficient and may permit some trading as well. During 2007, the company reduced the amount of solid waste in the waste water stream from the board mill through process improvements. The company has also launched a development project seeking to reduce water consumption, which will have positive environmental impacts in the form of energy and materials savings, among others. The company has also introduced the international PEFC and FSC forest management and chain of custody certification systems to ensure that the origin of the wood used can be traced to sustainably managed forests. Risks and Uncertainty Factors The Group's risk management principles and treasury policy are adopted by Stromsdal's Board of Directors. The company conducts risk mapping and evaluation according to the company's risk management scheme. According to this necessary actions are determined. The company's business activities are subject to various kinds of business risks, risks of loss and financial risks. The company endeavours to manage and limit the effects of risk through its own actions. Other risks which impact on the company's financial performance have also been identified. These include the general economic outlook in Europe and elsewhere, paperboard production capacity in the marketplace, and product demand. The European board market in particular was fiercely competitive in 2007 and is expected to remain challenging also in future. A few major customers account for nearly half of the company's net sales and the loss of one or more key accounts would have an adverse impact on the company's operations, performance and financial standing. Nonetheless, on the whole Stromsdal has been able to develop and cultivate sustained customer relationships. Most of the company's sales are denominated in euro, yet a significant proportion of output is sold also in US dollars and pounds sterling. Any violent long-standing fluctuation in exchange rates affects substantially the company's business operations and profitability. The company uses forward contracts in respect of part of the planned trade receivables denominated in foreign currencies to hedge against exchange rate fluctuation. Crucial raw materials in the paperboard manufacturing process include pulp, pulpwood and chemicals of various kinds. Any increases in the prices of these rapidly erode the company's profitability. The company is also a major consumer of energy and transportation services and any changes in the prices of electricity, steam energy or transportation are thus quickly reflected in profitability. Forward electricity contracts have been used to a certain extent to hedge against increases in the cost of electricity. The company seeks to compensate for upward pressures in other manufacturing costs with investments and higher efficiency in the logistics, sales and production processes. Movements in market interest rates and interest margins may impact on the costs of the company's financing. During the financial restructuring of summer 2007, the company and main financial sponsor Svenska Handelsbanken AB (Publ) agreed i.e. on deferral of loan repayments and reduced interest rates. The company hedges against credit risk by taking out credit insurance on most of its sales. In the event of a typical credit loss event, credit insurancesecures 90 percent of the value of the trade receivable. Insurance policies have been taken out to cover property loss, business interruption, business liability and product liability as well as environmental liability, goods in transit and travel accident liability. The company engages the services of an insurance broker to assess its need for insurance coverage and to coordinate policies. Should the company's profitability and cash flow fail to improve in 2008, its financial standing and liquidity may deteriorate substantially and the investments which are planned to be implemented after spring 2008 may have to be postponed. Outlook for 2008 The company seeks to deliver positive EBITDA in 2008 and it anticipates financial result to improve from last year due to the investments and sales streamlining measures implemented. The continuing rise in the prices of raw materials erodes profitability, however, but the company seeks to reduce the impacts of these through the investments executed and the more efficient operating models introduced. The possible softening of the market and unfavourable exchange rate development, especially in respect of the dollar and pound sterling, will also erode the company's financial performance. In February 2008, the company will implement extensive investments valued at EUR 2.4 million and requiring a shutdown of approximately five days, which will temporarily decrease the company's net sales and profitability. However, the investments also enable increasing the production capacity of Tecta food packaging board. Board of Director's Proposal for the Distribution of Profits Consolidated shareholders' equity at 31 December 2007 stood at EUR 9,099,140.81, which includes the loss of EUR -5,755,806.62 for the period. Shareholders' equity in the parent company stood at EUR 9,207,462.82. The company has no distributable assets and the Board proposes that no dividend be paid for 2007. Annual General Meeting 2008 The company's Annual General Meeting will be held in Juankoski at 11 am on Wednesday, 26 March 2008. Figures from 10-12/2006 and 10-12/2007 have not been audited, figures from 2006 and 2007 have been audited. CONSOLIDATED INCOME STATEMENT (EUR 1000) -------------------------------------------------------------------------------- | | | IFRS | IFRS | IFRS | IFRS | -------------------------------------------------------------------------------- | | | 10-12/ | 10-12/ | 1-12/ | 1-12/ | | | | 2007 | 2006 | 2007 | 2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET SALES | | 14 225 | 12 865 | 56 073 | 53 142 | -------------------------------------------------------------------------------- | Changes in inventories of | 1 044 | -263 | 1 158 | -228 | | finished and unfinished goods | | | | | | +/- | | | | | -------------------------------------------------------------------------------- | Other operating income | | 66 | 100 | 309 | 760 | -------------------------------------------------------------------------------- | Materials and services | | -11 614 | -9 238 | -42 662 | -37 611 | -------------------------------------------------------------------------------- | Empolyee benefits expense | -2 715 | -2 638 | -11 219 | -10 088 | -------------------------------------------------------------------------------- | Depreciaton | | -823 | -847 | -3 458 | -3 367 | -------------------------------------------------------------------------------- | Other operating expenses | | -1 289 | -1 377 | -4 474 | -5 057 | -------------------------------------------------------------------------------- | OPERATING PROFIT/LOSS | | -1 107 | -1 399 | -4 273 | -2 450 | -------------------------------------------------------------------------------- | Share of associated companies´ | 27 | 2 | 27 | 2 | | profits/losses | | | | | -------------------------------------------------------------------------------- | Financial income and | | -433 | -322 | -1 516 | -1 187 | | expenses | | | | | | -------------------------------------------------------------------------------- | PROFIT/LOSS BEFORE TAXES | -1 513 | -1 719 | -5 762 | -3 635 | -------------------------------------------------------------------------------- | Income taxes | | 12 | 2 | 7 | -122 | -------------------------------------------------------------------------------- | PROFIT/LOSS FOR THE | | -1 502 | -1 717 | -5 756 | -3 757 | | FINANCIAL YEAR | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EARNINGS/SHARE, undiluted | | -0,05 | -0,06 | -0,28 | -0,18 | -------------------------------------------------------------------------------- | Diluted earnings per share is not been represented because it would be | | better than undiluted | -------------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEET (EUR 1000) -------------------------------------------------------------------------------- | | | IFRS | IFRS | -------------------------------------------------------------------------------- | ASSETS | | 31.12. | 31.12. | | | | 2007 | 2006 | -------------------------------------------------------------------------------- | NON-CURRENT ASSETS | | | | -------------------------------------------------------------------------------- | Other intangible assets | | 724 | 880 | -------------------------------------------------------------------------------- | Tangible assets | | 21 930 | 22 187 | -------------------------------------------------------------------------------- | Investments in associated companies | | 526 | 499 | -------------------------------------------------------------------------------- | Available-for-sale financial assets | | 44 | 44 | -------------------------------------------------------------------------------- | Receivables | | 602 | 637 | -------------------------------------------------------------------------------- | Deferred tax assets | | 74 | 69 | -------------------------------------------------------------------------------- | TOTAL NON-CURRENT ASSETS | | 23 900 | 24 316 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CURRENT ASSETS | | | | -------------------------------------------------------------------------------- | Inventories | | 7 210 | 5 865 | -------------------------------------------------------------------------------- | Trade and other receivables | | 12 436 | 10 127 | -------------------------------------------------------------------------------- | Cash and cash equivalents | | 2 112 | 718 | -------------------------------------------------------------------------------- | TOTAL CURRENT ASSETS | | 21 758 | 16 710 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL ASSETS | | 45 658 | 41 026 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | SHAREHOLDERS´ EQUITY AND LIABILITIES | | | | -------------------------------------------------------------------------------- | SHAREHOLDERS´ EQUITY | | | | -------------------------------------------------------------------------------- | Share capital | | 10 103 | 10 103 | -------------------------------------------------------------------------------- | Issue premium fund | | 1 862 | 1 862 | -------------------------------------------------------------------------------- | Reserve for invested non-restricted equity | | 5 465 | 0 | -------------------------------------------------------------------------------- | Other funds | | 2 026 | 2 026 | -------------------------------------------------------------------------------- | Exchange rate difference | | 0 | 76 | -------------------------------------------------------------------------------- | Retained earnings | | -4 600 | -906 | -------------------------------------------------------------------------------- | Profit/loss for the financial year | | -5 756 | -3 757 | -------------------------------------------------------------------------------- | TOTAL SHAREHOLDERS´ EQUITY | | 9 099 | 9 404 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NON-CURRENT LIABILITIES | | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | | 20 | 23 | -------------------------------------------------------------------------------- | Provisions | | 181 | 212 | -------------------------------------------------------------------------------- | Interest-bearing liabilities | | 15 341 | 12 819 | -------------------------------------------------------------------------------- | Other liabilities | | 115 | 115 | -------------------------------------------------------------------------------- | TOTAL NON-CURRENT LIABILITIES | | 15 657 | 13 169 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CURRENT LIABILITIES | | | | -------------------------------------------------------------------------------- | Accounts payable and other liabilities | | 10 695 | 10 051 | -------------------------------------------------------------------------------- | Provisions | | 91 | 46 | -------------------------------------------------------------------------------- | Interest-bearing liabilities | | 10 116 | 8 357 | -------------------------------------------------------------------------------- | TOTAL CURRENT LIABILITIES | | 20 902 | 18 454 | -------------------------------------------------------------------------------- | TOTAL LIABILITIES | | 36 559 | 16 710 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL SHAREHOLDERS´ EQUITY AND LIABILITIES | | 45 658 | 41 026 | -------------------------------------------------------------------------------- CONSOLIDATED CASH FLOW STATEMENT (EUR 1000) -------------------------------------------------------------------------------- | | | IFRS | IFRS | -------------------------------------------------------------------------------- | | | 1-12/07 | 1-12/06 | -------------------------------------------------------------------------------- | BUSINESS OPERATIONS | | | | -------------------------------------------------------------------------------- | Operating profit/loss | | -4 273 | -2 450 | -------------------------------------------------------------------------------- | ADJUSTMENTS TO OPERATING PROFIT/LOSS: | | | | -------------------------------------------------------------------------------- | Depreciation | | 3 458 | 3 367 | -------------------------------------------------------------------------------- | Non-cash transactions | | -1 | -444 | -------------------------------------------------------------------------------- | CHANGE IN NET WORKING CAPITAL: | | | | -------------------------------------------------------------------------------- | Increase/decrease in accounts and other | | -1 903 | 401 | | receivables | | | | -------------------------------------------------------------------------------- | Increase/decrease in inventories | | -1 345 | -1 179 | -------------------------------------------------------------------------------- | Increase/decrease in accounts and other | | 473 | -1 234 | | payables | | | | -------------------------------------------------------------------------------- | Interest paid | | -1 234 | -1 280 | -------------------------------------------------------------------------------- | Interest received | | 80 | 41 | -------------------------------------------------------------------------------- | Dividend received | | 4 | 6 | -------------------------------------------------------------------------------- | Other financial items paid | | -133 | -167 | -------------------------------------------------------------------------------- | Taxes paid | | -1 | -0 | -------------------------------------------------------------------------------- | NET CASH FLOW FROM BUSINESS OPERATIONS (A) | | - 4 874 | -2 940 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | INVESTMENTS | | | | -------------------------------------------------------------------------------- | Purchase of tangible assets | | -3 462 | -2 121 | -------------------------------------------------------------------------------- | Purchase of intanbible assets | | -91 | -117 | -------------------------------------------------------------------------------- | Investment aid | | 503 | 0 | -------------------------------------------------------------------------------- | Sale of tangible assets | | 0 | 21 | -------------------------------------------------------------------------------- | Increase/decrease of long-term receivables | | 35 | -315 | -------------------------------------------------------------------------------- | CASH FLOW FROM INVESTMENTS (B) | | -3 015 | -2 532 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | FINANCING | | | | -------------------------------------------------------------------------------- | Share issue | | 3 037 | 6 728 | -------------------------------------------------------------------------------- | Increase of long-term loans | | 5 334 | 1 197 | -------------------------------------------------------------------------------- | Instalments of long-term loans | | -406 | -1 157 | -------------------------------------------------------------------------------- | Increase/decrease in short-term loans | | 1 371 | -676 | -------------------------------------------------------------------------------- | Instalments of finance leasing | | -53 | -367 | -------------------------------------------------------------------------------- | NET CASH FLOW FROM FINANCING (C) | | 9 284 | 5 726 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | INCREASE/DECREASE OF LIQUID FUNDS (A+B+C) | | 1 394 | 254 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | LIQUID FUNDS ON 1 JANUARY | | 718 | 464 | -------------------------------------------------------------------------------- | LIQUID FUNDS ON 30 DECEMBER | | 2 112 | 718 | -------------------------------------------------------------------------------- BUSINESS SEGMENTATION Business segmentation is not presented, as Stromsdal Group only has one business segment. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (EUR 1000) A = Share capital B = Issue premium fund C = Reserve fund D = Reserve for invested non-restricted equity E = Other funds F = Exchange difference G = Retained eargings H = Total capital and reserves -------------------------------------------------------------------------------- | | A | B | C | D | E | F | G | H | -------------------------------------------------------------------------------- | SHARE-HOL | 10 103 | 1 862 | 0 | 0 | 2 026 | 76 | -4 663 | 9 404 | | DERS´ | | | | | | | | | | EQUITY | | | | | | | | | | 1.1.07 | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Share | - | - | - | 5 100 | - | - | - | 5 100 | | issue | | | | | | | | | -------------------------------------------------------------------------------- | Share | - | - | - | -64 | - | - | - | -64 | | issue | | | | | | | | | | expenses | | | | | | | | | | recognise | | | | | | | | | | d | | | | | | | | | | directly | | | | | | | | | | in equity | | | | | | | | | -------------------------------------------------------------------------------- | Convertib | - | - | - | 428 | - | - | - | 428 | | le bond | | | | | | | | | | loan | | | | | | | | | -------------------------------------------------------------------------------- | Exchange | - | - | - | - | - | -76 | - | 0 | | rate | | | | | | | | | | differenc | | | | | | | | | | e | | | | | | | | | -------------------------------------------------------------------------------- | Exchange | - | - | - | - | - | - | 63 | 63 | | rate of | | | | | | | | | | subsidiar | | | | | | | | | | y at | | | | | | | | | | occasion | | | | | | | | | | of | | | | | | | | | | cancellat | | | | | | | | | | ion | | | | | | | | | -------------------------------------------------------------------------------- | Net | - | - | - | - | - | - | -5 756 | -5 756 | | profit/ | | | | | | | | | | loss for | | | | | | | | | | the | | | | | | | | | | financial | | | | | | | | | | year | | | | | | | | | -------------------------------------------------------------------------------- | SHARE-HOL | 10 103 | 1 862 | 0 | 5 465 | 2 026 | 0 | -10 356| 9 099 | | DERS´ | | | | | | | | | | EQUITY | | | | | | | | | | 31.12.07 | | | | | | | | | | | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | A | B | C | D | E | F | G | H | -------------------------------------------------------------------------------- | SHARE-HOL | 5 197 | 425 | 589 | 0 | 2 224 | 76 | -5 674 | 2 837 | | DERS´ | | | | | | | | | | EQUITY | | | | | | | | | | 1.1.06 | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Loss | | -425 | -589 | - | -2224 | - | 3 238 | 0 | | covered | | | | | | | | | -------------------------------------------------------------------------------- | Reduction | -3 556 | - | - | - | 2 026 | - | 1 530 | 0 | | of share | | | | | | | | | | capital | | | | | | | | | -------------------------------------------------------------------------------- | Share | 6 962 | 2 286 | - | - | - | - | - | 9 248 | | issue | | | | | | | | | -------------------------------------------------------------------------------- | Using of | 1 500 | - | - | - | - | - | - | 1 500 | | share | | | | | | | | | | options | | | | | | | | | -------------------------------------------------------------------------------- | Exchange | - | - | - | - | - | 0 | 0 | 0 | | rate | | | | | | | | | | differenc | | | | | | | | | | e | | | | | | | | | -------------------------------------------------------------------------------- | Share | - | -424 | - | - | - | - | - | -424 | | issue | | | | | | | | | | expenses | | | | | | | | | | recognise | | | | | | | | | | d | | | | | | | | | | directly | | | | | | | | | | in equity | | | | | | | | | -------------------------------------------------------------------------------- | Net | - | - | - | - | - | - | -3 757 | -3 757 | | profit/ | | | | | | | | | | loss for | | | | | | | | | | the | | | | | | | | | | financial | | | | | | | | | | year | | | | | | | | | -------------------------------------------------------------------------------- | SHARE-HOL | 10 103 | 1 862 | 0 | 0 | 2 026 | 76 | -4 663 | 9 404 | | DERS´ | | | | | | | | | | EQUITY | | | | | | | | | | 31.12.06 | | | | | | | | | | | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 1. OPERATING LEASE ARRANGEMENTS (EUR 1000) | 31.12.07 | 31.12.06 | -------------------------------------------------------------------------------- | | | 107 | 48 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 2. CONTINGENT LIABILITIES AND PLEDGES GIVEN | 31.12.07 | 31.12.06 | -------------------------------------------------------------------------------- | FOR GROUP´S OWN DEBT (EUR 1000) | | | | -------------------------------------------------------------------------------- | Mortgages on buildings and leases | | 5 674 | 5 674 | -------------------------------------------------------------------------------- | Mortgages on company assets | | 7 737 | 7 737 | -------------------------------------------------------------------------------- | Pledges given | | 11 478 | 8 337 | -------------------------------------------------------------------------------- | Pledged shares | | 471 | 471 | -------------------------------------------------------------------------------- | TOTAL | | 25 360 | 22 219 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 3. OTHER PLEDGES GIVEN (EUR 1000) | | 31.12.07 | 31.12.06 | -------------------------------------------------------------------------------- | Pledged deposits | | 7 | 19 | -------------------------------------------------------------------------------- | TOTAL | | 7 | 19 | -------------------------------------------------------------------------------- Leases and buildings are also burdened by the ownership retention provision recorded by the equipment supplier. It targets equipment worth EUR 1.4 million and it will terminate in 22 April 2010. Valid bank quarantees to suppliers amount to EUR 810 thousand. -------------------------------------------------------------------------------- | 4. TANGIBLE ASSESTS (EUR 1000) | 1-12/07 | 1-12/06 | -------------------------------------------------------------------------------- | Increases | | 3 371 | 1 642 | -------------------------------------------------------------------------------- | Decreases | | -29 | -28 | -------------------------------------------------------------------------------- | TOTAL | | 3 342 | 1 614 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 5. RELATED PARTY TRANSACTIONS (EUR 1000) | 1-12/07 | 1-12/06 | -------------------------------------------------------------------------------- | Employee benefits | | | -------------------------------------------------------------------------------- | Board of Directors´remuneration | | 129 | 139 | -------------------------------------------------------------------------------- | Salaries and other short term empolyee | | 586 | 440 | | benefits of the management | | | | -------------------------------------------------------------------------------- | Other benefits due to notice of | | 32 | 24 | | employment | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | KEY FIGURES | | 31.12.07 | 31.12.06 | -------------------------------------------------------------------------------- | Earnings/share, euros | | -0,28 | -0,18 | -------------------------------------------------------------------------------- | Shareholders´ equity/share, euros | | 0,33 | 0,34 | -------------------------------------------------------------------------------- | Research and development costs, Me | | 0,17 | 0,18 | -------------------------------------------------------------------------------- | Gross investments, Me | | 3,5 | 1,5 | -------------------------------------------------------------------------------- | Group personnel average | | 213 | 207 | -------------------------------------------------------------------------------- | Equity ratio % | | 19,9 | 22,9 | -------------------------------------------------------------------------------- | Current ratio | | 1,0 | 0,9 | -------------------------------------------------------------------------------- | Interest-bearing liabilities, Me | | 25,5 | 21,2 | -------------------------------------------------------------------------------- | Number of issue-adjusted shares: | | | | -------------------------------------------------------------------------------- | weighted average of the period | | 20 331 522 | 20 331 522 | -------------------------------------------------------------------------------- | at period end | | 27 515 399 | 27 515 399 | -------------------------------------------------------------------------------- CALCULATION OF GROUP KEY FIGURES: Earnings/share (EPS): Profit/loss for the the financial year Share issue adjusted average number of shares Equity ratio: (Shareholders´ equity + minority interest)*100 Balance sheet total - payments received in advance Current ratio: Financial assets + inventories Current liabilities -------------------------------------------------------------------------------- | | MAJOR SHAREHOLDERS | Shares and | % | | | 31 December 2007 | Votes | of Shares | | | | | and Votes | -------------------------------------------------------------------------------- | 1 | ATINE GROUP OY | 7 407 406 | 26,92095 | -------------------------------------------------------------------------------- | 2 | BALTISKA HANDELS AB | 3 703 704 | 13,46048 | -------------------------------------------------------------------------------- | 3 | SUOMEN TEOLLISUUSSIJOITUS OY | 2 500 000 | 9,08582 | -------------------------------------------------------------------------------- | 4 | SVENSKA HANDELSBANKEN AB (PUBL) | 2 500 000 | 9,08582 | -------------------------------------------------------------------------------- | 5 | JUANKOSKEN KEHITYSMASUUNI OY | 1 891 694 | 6,87504 | -------------------------------------------------------------------------------- | 6 | FINNVERA OYJ | 1 875 000 | 6,81437 | -------------------------------------------------------------------------------- | 7 | ENTERPACK OY | 698 253 | 2,53768 | -------------------------------------------------------------------------------- | 8 | SAVON VOIMA OYJ | 371 600 | 1,35052 | -------------------------------------------------------------------------------- | 9 | SELIGSON CO OYJ/UNIT TRUST PHOENIX | 325 060 | 1,18138 | -------------------------------------------------------------------------------- | 10 | OKSANEN MARKKU | 211 837 | 0,76989 | -------------------------------------------------------------------------------- | 11 | YLITALO JUKKA | 202 605 | 0,73633 | -------------------------------------------------------------------------------- | 12 | FORCERA OY | 181 487 | 0,65958 | -------------------------------------------------------------------------------- | 13 | VIRALA OY AB | 115 042 | 0,41810 | -------------------------------------------------------------------------------- | 14 | KARGOL OY AB | 112 743 | 0,40975 | -------------------------------------------------------------------------------- | 15 | ÅBACKA MIKAEL LEIF ERIK | 111 111 | 0,40381 | -------------------------------------------------------------------------------- | 16 | PELTOKANGAS RAIMO | 109 000 | 0,39614 | -------------------------------------------------------------------------------- | 17 | SALMINEN URPO | 92 695 | 0,33688 | -------------------------------------------------------------------------------- | 18 | MOLIN LEO | 83 000 | 0,30165 | -------------------------------------------------------------------------------- | 19 | JYLHÄ TAPIO ILMARI | 80 000 | 0,29075 | -------------------------------------------------------------------------------- | 20 | SALONAHO LARS HARRY | 80 000 | 0,29075 | -------------------------------------------------------------------------------- | | Total | 22 652 237 | 82,32567 | -------------------------------------------------------------------------------- | | Shares issued total | 27 515 399 | | -------------------------------------------------------------------------------- The consolidated financial statements have been made in accordance with the International Financial Reporting Standards (IFRS), using the IAS and IFRS starndards and SIC and IFRIC interpretations valid on 31 December 2007. From 1 January 2007 the following new standards and interpretations have been applied by the Group: - IFRS 7 - IAS 1 - IFRIC 9 - IFRIC 10 STROMSDAL CORPORATION Board of Directors For further information, please contact: Mikael Åbacka Managing Director Tel. +358 400 737 452 Distribution Helsinki Stock Exchange Main Media www.stromsdal.com STROMSDAL is a forest based industry company and its board mill is located in Juankoski, Finland. Stromsdal's sales and customer service network covers more than 30 countries, mainly in Europe. For demanding printing jobs Stromsdal offers its customers premium-quality graphical boards - GraphiArt Duo and GraphiArt Pro - with excellent combination of printability, brightness and stiffness. For food-packaging Stromsdal offers its speciality environmentally friendly product - Tecta - a dispersion coated barrier board, which is 100 per cent plastic-free, bio degradable and fully recyclable. Stromsdal's shares are listed on the Small Cap segment of the Helsinki Stock Exchange (OMX Nordic Exchange Helsinki Oy) under the company code STM1V. STROMSDAL CORPORATION Juankoskentie 7 A, P.O.Box 33, FI-73501 Juankoski, Finland Tel. +358 17 688 641, Fax +358 17 612 008 www.stromsdal.com
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