2015-07-21 12:00:00 CEST
2015-07-21 12:00:06 CEST
REGULATED INFORMATION
Stora Enso Oyj - Interim report (Q1 and Q3)
Stora Enso Interim Review January–June 2015
Transformation continues with strong cash flow, despite some operational
challenges
Helsinki, Finland, 2015-07-21 12:00 CEST (GLOBE NEWSWIRE) -- STORA ENSO OYJ
INTERIM REVIEW 21 July 2015 at 13.00 EET
Q2/2015 (compared with Q2/2014)
-- Sales EUR 2 562 (EUR 2 579) million decreased by 0.7%; sales excluding the
structurally declining paper and divested businesses increased by 4.8%
mainly due to increase in Montes del Plata pulp mill volumes.
-- Operational EBIT EUR 207 (EUR 209) million, operational EBIT margin
remained unchanged at 8.1%, despite operational challenges amounting to EUR
12 million in the Consumer Board division.
-- EPS excluding non-recurring items EUR 0.18 (EUR 0.13).
-- Cash flow from operations EUR 489 (EUR 288) million, cash flow after
investing activities EUR 261 (EUR 29) million.
-- Net debt to operational EBITDA 2.7 (2.8), liquidity EUR 1.0 (EUR 1.6)
billion.
-- Operational ROCE 9.4% (9.8%).
Q2/2015 (compared with Q1/2015)
-- Sales increased by 2.9%, sales excluding the structurally declining paper
and divested businesses increased by 4.5%.
-- Operational EBIT decreased by 5.9% due to higher maintenance activity and
operational challenges in the Consumer Board division.
Q1-Q2/2015 (compared with Q1-Q2/2014)
-- Sales declined by 1.8%, sales excluding the structurally declining paper
and divested businesses increased by 3.8%.
-- Operational EBIT increased by 9.2% due to positive foreign exchange impacts
and lower variable costs, offset partly by lower average sales prices for
paper.
Stora Enso's CEO Karl-Henrik Sundström comments on the second quarter 2015
results: "In the second quarter, Stora Enso generated strong cash flow, and sales
increased by 4.8%, excluding structurally declining paper and divested
businesses, compared to the second quarter of 2014. This growth shows the
ability of our businesses to transform.
Operational EBIT margin remained unchanged at 8.1% compared to the second
quarter of a year ago, even though the Consumer Board division was negatively
affected by production challenges at the Imatra and Skoghall mills and lower
harvesting volumes in Guangxi, China, amounting to EUR 12 million. Moreover,
preparations ahead of the start-up of the Guangxi mill increased fixed costs by
EUR 10 million. Return on capital employed for the Group decreased to 9.4% from
9.8%.
During the quarter, we made additional progress in transforming into a
renewable materials growth company. The pulp mill in Montes del Plata, Uruguay,
is already an important driver of our topline as well as our profitability.
Construction at our Guangxi investment project is proceeding according to plan
and the main machinery is now being installed. The conversion of the Varkaus
mill fine paper machine in Finland is on track and the production of kraftliner
is expected to commence by the end of the year. Murow sawmill in Poland also
began operating during the quarter, increasing its capacity of classic sawn
products. We have also announced the closure of our corrugated packaging
converting unit in Chennai, India, due to unprofitability. The mill employs 350
people, who will receive compensation and support.
We are constantly developing our offering. I am especially happy that we and
NXP Semiconductors are cooperating on the development of intelligent packaging
solutions.
One of the achievements during the quarter was entering into a partnership with
the International Labour Organization (ILO). The agreement will among other
things ensure that our policies and practices are aligned with international
labour standards. Moreover, we launched human rights actions plans to address
the Danish Institute for Human Rights assessment findings published in
February. Together with Kemira, a global chemicals company, we have begun
construction to enhance the responsible use of local water in three villages in
Guangxi.
When it comes to outlook, sales in the third quarter of 2015 are estimated to
be similar to the amount of the EUR 2 562 million in the second quarter of
2015. Operational EBIT is expected to be in line with the EUR 207 million
recorded in the second quarter of 2015. During the third quarter, there will be
maintenance shutdowns at several mills.
As always, I would like to thank our employees for their commitment, our
customers for their business and our investors for their trust. We work hard to
keep on creating value, today and tomorrow."
Transformation
-- The construction of the Guangxi consumer board mill in China is proceeding
according to plan and the installation of the main machinery has begun. The
board machine is expected to be operational in mid-2016 as announced
earlier.
-- The conversion of the Varkaus mill's fine paper machine in Finland for
kraftliner is proceeding as planned and expected to start at the end of
2015.
Outlook
Q3/2015 sales are estimated to be similar to the amount of the EUR 2 562
million in Q2/2015. Operational EBIT is expected to be in line with the EUR 207
million recorded in Q2/2015. The negative maintenance impact is expected to be
EUR 15 million higher in Q3 than in Q2/2015.
KEY FIGURES
EUR Q2/15 Q2/14 Change Q1/15 Change Q1-Q2/ Q1-Q2/ Change 2014
millio % % 15 14 %
n Q2/15- Q2/15- Q1-Q2/1
Q2/14 Q1/15 5-Q1-Q2 /14
--------------------------------------------------------------------------------
Sales 2 562 2 579 -0.7% 2 491 2.9% 5 053 5 147 -1.8% 10 213
Operati 318 326 -2.5% 340 -6.5% 658 628 4.8% 1 269
onal
EBITDA
Operati 207 209 -1.0% 220 -5.9% 427 391 9.2% 810
onal
EBIT
Operati 214 85 151.8% 215 -0.5% 429 280 53.2% 400
ng
profit
(IFRS)
Profit 156 145 7.6% 154 1.3% 310 251 23.5% 399
before
tax
excl.
NRI
Profit 148 39 279.5% 162 -8.6% 310 169 83.4% 120
before
tax
123 1 n/m 129 -4.7% 252 101 149.5% 90
Net 3 479 3 336 4.3% 3 444 1.0% 3 479 3 336 4.3% 3 274
intere
st-bear
ing
liabil
ities
Operati 9.4% 9.8% 10.1% 9.9% 9.2% 9.5%
onal
ROCE
Earning 0.18 0.13 0.15 0.33 0.22 0.40
s per
share
(EPS),
excl.
NRI,
EUR
EPS 0.17 0.00 0.16 0.33 0.13 0.13
(basic
), EUR
Debt/eq 0.70 0.66 0.65 0.70 0.66 0.65
uity
ratio
Fixed 25.5% 24.8% 23.9% 24.7% 25.0% 25.1%
costs
to
sales
Average 27 173 29 704 -8.5% 26 781 1.5% 26 999 29 162 -7.4% 29 009
number
of
employ
ees
TRI 10.3 11.0 -6.4% 10.1 2.0% 10.3 12.4 -16.9% 12.5
rate
LTA 4.2 4.3 -2.3% 4.8 -12.5% 4.4 5.1 -13.7% 5.2
rate
--------------------------------------------------------------------------------
Operational EBIT comprises the operating profit excluding NRI and fair
valuations of the segments and Stora Enso's share of the operating profit
excluding NRI and fair valuations of its equity-accounted investments (EAI).
Fair valuations and non-operational items include equity incentive schemes,
synthetic options net of realised and open hedges, CO2 emission rights and
valuations of biological assets and the Group's share of tax and net financial
items of EAI.
NRI = Non-recurring items. These are exceptional transactions that are not
related to normal business operations. The most common non-recurring items are
capital gains, additional write-downs or reversals of write-downs, provisions
for planned restructuring and penalties. Non-recurring items are normally
disclosed individually if they exceed one cent per share.
TRI (Total recordable incidents) rate = number of incidents per one million
hours worked.
LTA (Lost-time accident) rate = number of lost-time accidents per one million
hours worked.
Webcast and conference call for analysts and investors
CEO Karl-Henrik Sundström, CFO Seppo Parvi, and SVP, Head of Investor Relations
Ulla Paajanen-Sainio will host a combined conference call and webcast today at
15:00 EET (14:00 CET, 13:00 UK time, 08:00 EDT)
The live webcast may be accessed at http://edge.media-server.com/m/p/qoaurq5j.
Analyst and investor conference call dial-in details:
UK +44(0)20 3427 1909
Finland +358 (0)9 6937 9590
Sweden +46 (0)8 5033 6539
US +1 212 444 0895
Confirmation Code: 2572679
The links to the webcasts are also available on the Stora Enso website:
www.storaenso.com/investors
For further information, please contact:
Seppo Parvi, CFO, tel.: +358 2046 21205
Ulla Paajanen-Sainio, SVP, Investor Relations, tel.: +358 2046 21242
Ulrika Lilja, EVP, Global Communications, tel.: +46 1046 71668
Stora Enso's third quarter 2015 results will be published on 23 October 2015.
Stora Enso is a leading provider of renewable solutions in packaging,
biomaterials, wood and paper on global markets. Our aim is to replace
non-renewable materials by innovating and developing new products and services
based on wood and other renewable materials. We employ some 27 000 people in
more than 35 countries, and our sales in 2014 were EUR 10,2 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. www.storaenso.com
STORA ENSO OYJ
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