2013-04-23 12:00:00 CEST
2013-04-23 12:00:21 CEST
REGULATED INFORMATION
Stora Enso Oyj - Interim report (Q1 and Q3)
Stora Enso Interim Review January–March 2013
First quarter performance as expected in structurally declining European paper
market
Helsinki, Finland, 2013-04-23 12:00 CEST (GLOBE NEWSWIRE) -- STORA ENSO OYJ
INTERIM REVIEW 23 April 2013 at 13.00 EET
Q1 2013 (compared with Q1 2012)
-- Operational EBITDA EUR 240 (EUR 265) million.
-- Operational EBIT EUR 118 (EUR 150) million due to lower performance in
Printing and Reading. Improvement in Biomaterials, Renewable Packaging and
wood supply.
-- EPS excluding NRI EUR 0.07 (0.10) and EPS EUR -0.02 (0.09).
-- Cash flow from operations EUR 101 (EUR 223) million affected by working
capital increase. Strong liquidity at EUR 1.7 (EUR 1.25) billion.
Q1 2013 (compared with Q4 2012)
-- Operational EBITDA EUR 240 (EUR 276) million.
-- Operational EBIT EUR 118 (EUR 158) million due to lower performance in
Printing and Reading. Improvement in Renewable Packaging and wood supply.
-- Ratio of net debt to the last twelve months' operational EBITDA 2.7 (2.5).
Actions and outlook
-- Final approvals to build plantation-based integrated board and pulp mills
at Beihai city in Guangxi, China still pending.
-- Ostrołęka containerboard machine PM 5 started up in January.
-- Montes del Plata Pulp Mill has initiated the commissioning of the main
equipment and expects to begin the mill start-up process during Q3/2013.
-- Earlier announced restructuring plans progressing as planned in Printing
and Reading. New plans announced to simplify and streamline Group and
business structures aiming at reducing annual costs by EUR 200 million,
including the earlier announced EUR 30 million in Building and Living.
-- Q2 2013 sales expected to be slightly higher and operational EBIT in line
with or slightly higher than Q1 2013.
Summary of First Quarter Results*
Q1/13 Q4/12 Q1/12
-------------------------------------------------------------
Sales EUR million 2 667 2 727 2 673
Operational EBITDA EUR million 240 276 265
Operational EBIT** EUR million 118 158 150
Operating profit (IFRS) EUR million 20 254 127
Profit before tax excl. NRI EUR million 55 83 101
Loss/profit before tax EUR million -36 204 90
Net profit excl. NRI EUR million 56 89 80
Net loss/profit EUR million -16 266 74
EPS excl. NRI EUR 0.07 0.11 0.10
EPS EUR -0.02 0.33 0.09
CEPS excl. NRI EUR 0.25 0.30 0.28
Operational ROCE % 5.4 7.3 6.9
-------------------------------------------------------------
* Data for the comparative periods have been restated following adoption of the
amended IAS 19 Employee Benefits standard. Data for the comparative periods
have been restated in all tables affected by IAS 19. For further details,
please see Basis of Preparation on page 12.
** 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 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 EAI.
Stora Enso Deliveries and Production
Q1/13 Q4/12 Q1/12 2012 Change % Change %
Q1/13-Q1/12 Q1/13-Q4/12
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Paper and board 2 496 2 569 2 549 10 268 -2.1 -2.8
deliveries (1 000
tonnes)
Paper and board 2 519 2 561 2 576 10 357 -2.2 -1.6
production (1 000
tonnes)
Wood products 1 147 1 175 1 154 4 750 -0.6 -2.4
deliveries (1 000 m3)
Market pulp deliveries 288 284 261 1 058 10.3 1.4
(1 000 tonnes)*
Corrugated packaging 260 279 261 1 097 -0.4 -6.8
deliveries (million
m2)
--------------------------------------------------------
* Stora Enso's net market pulp position is expected to be about 1.2 million
tonnes for 2013.
Key Figures
EUR million Q1/13 Q4/12 Q1/12 2012 Change % Change %
Q1/13-Q1/12 Q1/13-Q4/12
--------------------------------------------------------------------------------
Sales 2 667 2 727 2 673 10 815 -0.2 -2.2
Operational EBITDA 240 276 265 1 094 -9.4 -13.0
Operational EBITDA 9.0 10.1 9.9 10.1 -9.1 -10.9
margin, %
Operational EBIT 118 158 150 630 -21.3 -25.3
Operational EBIT 4.4 5.8 5.6 5.8 -21.4 -24.1
margin, %
Operating profit 20 254 127 701 -84.3 -92.1
(IFRS)
Operating margin 0.7 9.3 4.8 6.5 -85.4 -92.5
(IFRS), %
Profit before tax 55 83 101 317 -45.5 -33.7
excl. NRI
Loss/profit before tax -36 204 90 481 -140.0 -117.6
Net profit for the 56 89 80 263 -30.0 -37.1
period excl. NRI
Net loss/profit for -16 266 74 490 -121.6 -106.0
the period
Capital expenditure 61 209 62 556 -1.6 -70.8
Depreciation and 146 150 143 583 2.1 -2.7
impairment charges
excl. NRI
Operational ROCE, % 5.4 7.3 6.9 7.3 -21.7 -26.0
Earnings per share 0.07 0.11 0.10 0.33 -30.0 -36.4
(EPS) excl. NRI, EUR
EPS (basic), EUR -0.02 0.33 0.09 0.61 -122.2 -106.1
Cash earnings per 0.25 0.30 0.28 1.07 -10.7 -16.7
share (CEPS) excl.
NRI, EUR
CEPS, EUR 0.21 0.45 0.28 1.28 -25.0 -53.3
Return on equity -1.1 18.2 5.0 8.3 -122.0 -106.0
(ROE), %
Debt/equity ratio 0.50 0.48 0.46 0.48 8.7 4.2
Net debt/last twelve 2.7 2.5 2.3 2.5 17.4 8.0
months' operational
EBITDA
Equity per share, EUR 7.32 7.32 7.49 7.32 -2.3 -
Equity ratio, % 42.4 42.8 45.6 42.8 -7.0 -0.9
Average number of 28 220 28 331 29 041 28 777 -2.8 -0.4
employees
Average number of
shares (million)
periodic 788.6 788.6 788.6 788.6
cumulative 788.6 788.6 788.6 788.6
cumulative, diluted 788.6 788.6 788.6 788.6
---------------------------------------------------------
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 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 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
specified individually if they exceed one cent per share.
Reconciliation of Operational Profitability
EUR million Q1/13 Q4/12 Q1/12 2012 Change % Change %
Q1/13-Q1/12 Q1/13-Q4/12
--------------------------------------------------------------------------------
Operational EBITDA 240 276 265 1 094 -9.4 -13.0
Equity accounted 24 32 28 119 -14.3 -25.0
investments (EAI),
operational*
Depreciation and -146 -150 -143 -583 -2.1 2.7
impairment excl. NRI
Operational EBIT 118 158 150 630 -21.3 -25.3
Fair valuations and -7 -14 2 -59 n/m 50.0
non-operational items**
Non-recurring items -91 110 -25 130 -264.0 -182.7
-----------------------------------------------------
Operating Profit (IFRS) 20 254 127 701 -84.3 -92.1
-----------------------------------------------------
* Group's share of operational EBIT of 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 related to forest assets in equity accounted
investments (EAI) and Group's share of tax and net financial items of EAI.
Q1/2013 Results (compared with Q1/2012)
Breakdown of Sales Change Q1/2012 to Q1/2013
Sales
-----------------------------------------
Q1/12, EUR million 2 673
-----------------------------------------
Price and mix, % -2
Currency, % -
Volume, % -
Other sales*, % 1
-----------------------------------------
Total before structural changes, % -1
Structural change**, % 1
Total, % -
-----------------------------------------
Q1/13, EUR million 2 667
=========================================
* Wood, energy, paper for recycling, by-products etc.
** Asset closures, major investments, divestments and acquisitions
Operational EBIT at EUR 118 million was EUR 32 million lower than a year ago.
This represents an operational EBIT margin of 4.4% (5.6%).
Lower prices in local currencies, mainly in Printing and Reading, decreased
operational EBIT by EUR 46 million. Higher Renewable Packaging deliveries
compensated for lower Printing and Reading deliveries. Harvesting conditions in
the first quarter of 2013 were favourable in the Nordic countries, so Wood
Supply operations reported in the segment Other performed well. Paper and board
production was curtailed by 8% (7%) and sawnwood production by 6% (10%).
Lower variable costs in local currencies increased operating profit by EUR 13
million as higher logistics costs were more than offset by lower other variable
costs, mainly for fibre.
Fixed costs were similar to the first quarter of 2012.
The average number of employees in the first quarter of 2013 was 800 lower than
a year earlier at 28 200 as the number of employees decreased in all
geographical areas, except for an increase in Stora Enso's strategic investment
in China.
The Group recorded non-recurring items (NRI) with a negative impact of
approximately EUR 91 million on operating profit and a positive impact of
approximately EUR 19 million on income tax in its first quarter 2013 results.
The non-recurring items relate to restructuring plans in the Printing and
Reading and Building and Living Business Areas.
Net financial expenses were EUR 19 million higher than a year ago, mainly due
to foreign exchange losses and increased net interest expenses owing to higher
gross debt.
Breakdown of Capital Employed Change Q1/2012 to Q1/2013
Capital Employed
------------------------------------------------------------------------------
Q1/12, EUR million 8 702
------------------------------------------------------------------------------
Capital expenditure less depreciation -41
Available-for-sale: operative (mainly PVO) -165
Equity accounted investments 109
Net liabilities in defined benefit plans -137
Operative working capital and other interest-free items, net 29
Net tax liabilities 138
Translation difference 142
Other changes -42
------------------------------------------------------------------------------
Q1/13, EUR million 8 735
==============================================================================
The operational return on capital employed was 5.4% (6.9%), excluding the
ongoing strategic investments in Biomaterials and Renewable Packaging it would
have been 6.2% (7.8%).
Q1/2013 Results (compared with Q4/2012)
Sales were similar to the previous quarter at EUR 2 667 million. Operational
EBIT was EUR 40 million lower at EUR 118 million. Lower sales prices in local
currencies decreased operational EBIT by EUR 13 million, mainly in Printing and
Reading. Higher energy and logistic costs increased variable costs by EUR 31
million. Seasonally lower fixed costs and actions to improve fixed costs
increased operational EBIT by EUR 24 million. The operational EBIT from the
equity accounted investments decreased by EUR 11 million mainly due to lower
capital gains in the Nordic forest equity accounted investments.
Net financial items were EUR 6 million more negative than in the previous
quarter, mainly due to foreign exchange losses and increased net interest
expenses owing to slightly higher net debt.
Capital Structure
EUR million 31 Mar 13 31 Dec 12 31 Mar 12
----------------------------------------------------------------------------
Operative fixed assets* 5 904 6 022 6 032
Equity accounted investments 2 058 1 965 1 926
Operative working capital, net 1 570 1 460 1 530
Non-current interest-free items, net -601 -611 -472
--------------------------------
Operating Capital Total 8 931 8 836 9 016
Net tax liabilities -196 -217 -314
--------------------------------
Capital Employed 8 735 8 619 8 702
================================
Equity attributable to owners of the Parent 5 772 5 770 5 903
Non-controlling interests 89 92 87
Net interest-bearing liabilities 2 874 2 757 2 712
--------------------------------
Financing Total 8 735 8 619 8 702
================================
* Operative fixed assets include property, plant and equipment, goodwill,
biological assets, emission rights, available-for-sale operative shares and
other intangible assets.
Financing Q1/2013 (compared with Q4/2012)
Total unutilised committed credit facilities were unchanged at EUR 700 million,
and cash and cash equivalents net of overdrafts remained strong at EUR 1 742
million, which is EUR 103 million less than for the previous quarter. In
addition, Stora Enso has access to various long-term sources of funding up to
EUR 600 million.
The ratio of net debt to the last twelve months' operational EBITDA was 2.7
(2.5). The weak cash flow in the first quarter of 2013 resulted in a EUR 117
million increase in net interest-bearing liabilities.
Cash Flow
EUR million Q1/13 Q4/12 Q1/12 2012 Change % Change %
Q1/13-Q1/12 Q1/13-Q4/12
--------------------------------------------------------------------------------
Operational EBITDA 240 276 265 1 094 -9.4 -13.0
NRI on Operational EBITDA -51 -13 -23 18 -121.7 -292.3
Dividends received from 11 93 1 102 n/m -88.2
equity accounted
investments
Other adjustments -14 -24 -8 -34 -75.0 41.7
Change in working capital -85 141 -12 74 n/m -160.3
-----------------------------------------------------
Cash Flow from Operations 101 473 223 1 254 -54.7 -78.6
Cash spent on fixed and -88 -184 -94 -561 6.4 52.2
biological assets
Acquisitions of equity -10 -16 -18 -115 44.4 37.5
accounted investments
-----------------------------------------------------
Cash Flow after Investing 3 273 111 578 -97.3 -98.9
Activities
-----------------------------------------------------
Q1 2013 cash flow
First quarter 2013 cash flow from operations was low at EUR 101 million, mainly
because working capital increased during the quarter as receivables were EUR
100 million higher due to higher sales activity at the end of the first quarter
of 2013 and inventories increased by EUR 80 million, mainly in Nordic wood
inventories. The working capital increase was partly offset by a EUR 60 million
increase in payables and EUR 30 million increase in restructuring provisions.
Capital Expenditure for January-March 2013
Additions to fixed and biological assets in the first quarter of 2013 totalled
EUR 61 million, which is 42% of depreciation in the same period. The equity
injection into Montes del Plata, a joint venture in Uruguay, was EUR 10 million
in the first quarter of 2013.
Investments in fixed assets and biological assets had a cash outflow impact of
EUR 88 million in the first quarter of 2013.
The main projects ongoing during the first quarter of 2013 were Montes del
Plata and the Ostrołęka containerboard machine investment.
Capital Expenditure, Equity Injections and Depreciation Forecast 2013
EUR million Forecast 2013
-----------------------------------
Capital expenditure* 350-400
Equity injections 110-130
--------------
Total 460-530
Depreciation 600-620
--------------
* Excluding the capital expenditure in 2013 for the board and pulp mills
project in Guangxi, China.
Capital expenditure in 2013 for the board and pulp mills project in Guangxi,
China will be confirmed when the project approvals have been given and the
construction and production schedule has been updated.
Near-term Outlook
In the second quarter of 2013 Group sales are expected to be slightly higher
and operational EBIT in line with or slightly higher than the first quarter of
2013.
Ostrołęka Mill PM 5 is not expected to have a material impact on sales in 2013
due to sales being mainly internal, but the EBITDA margin of PM 5 from the
second half of 2013 is expected to be approximately 20%.
Montes del Plata Pulp Mill is expected to have limited impact on the Group's
sales and slightly negative impact on operational EBIT in 2013. In 2014 the
Group's sales are expected to be affected by 650 000 tonnes of Montes del Plata
pulp with full positive EBITDA impact in the latter part of the year 2014
provided that the current market conditions prevail.
Segments Q1/13 compared with Q1/12
Printing and Reading
Printing and Reading is a world-class responsible supplier of paper from
renewable sources for print media and office use. Its wide offering serves
publishers, retailers, printing houses, merchants, converters and office
suppliers, among others. Printing and Reading produces newsprint, book paper,
SC paper, coated paper and office paper.
EUR million Q1/13 Q4/12 Q1/12 2012 Change % Change %
Q1/13-Q1/12 Q1/13-Q4/12
--------------------------------------------------------------------------------
Sales 1 123 1 194 1 227 4 839 -8.5 -5.9
Operational EBITDA 72 129 135 493 -46.7 -44.2
Operational EBIT 2 59 68 223 -97.1 -96.6
% of sales 0.2 4.9 5.5 4.6 -96.4 -95.9
Operational ROOC, 0.3 7.9 9.0 7.4 -96.7 -96.2
%*
Paper deliveries, 1 684 1 791 1 783 7 130 -5.6 -6.0
1 000 t
Paper production, 1 683 1 809 1 809 7 210 -7.0 -7.0
1 000 t
-------------------------------------------------------------
* Operational ROOC = 100% x Operational EBIT/Average operating capital
-- Slightly lower
sales prices in local currencies than a year ago were the main reason for
low profitability. Lower fixed costs partially mitigated the impact.
-- Volumes were lower, especially for coated paper and newsprint, as European
paper demand remained subdued.
-- The previously announced restructuring plans are proceeding according to
plan, and it is planned to shut down Hylte Mill PM 2 and Kvarnsveden Mill
PM 11 in Sweden permanently during the second quarter of 2013.
Markets
Produc Market Demand Q1/13 Demand Q1/13 Price Q1/13 Price Q1/13
t compared with compared with compared with compared with
Q1/12 Q4/12 Q1/12 Q4/12
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Paper Europe Weaker Weaker Slightly lower Slightly lower
Biomaterials
Biomaterials offers a variety of pulp grades to meet the demands of paper,
board and tissue producers. Pulp made from renewable resources in a sustainable
manner is an excellent raw material with many different end uses. Biomaterials
comprises mainly tree plantations, the Group's joint-venture Veracel and Montes
del Plata pulp mills, and Nordic stand-alone pulp mills.
EUR million Q1/13 Q4/12 Q1/12 2012 Change % Change % Q1/13-Q1/12 Q1/13-Q4/12
--------------------------------------------------------------------------------
Sales 257 256 242 1 012 6.2 0.4
Operational EBITDA 28 33 15 99 86.7 -15.2
Operational EBIT 22 28 7 82 214.3 -21.4
% of sales 8.6 10.9 2.9 8.1 196.6 -21.1
Operational ROOC, 6.0 7.8 1.9 5.7 215.8 -23.1
%*
Pulp deliveries, 1 475 471 459 1 836 3.5 0.8
000 t
-------------------------------------------------------------
* Operational ROOC = 100% x Operational EBIT/Average operating capital
-- Market pulp prices were higher than a year ago, especially for hardwood
pulp.
-- The first quarter 2013 results included capital gains on land disposals of
EUR 7 million at Montes del Plata and EUR 3 million in Thailand.
-- Montes del Plata Pulp Mill has initiated the commissioning of the main
equipment and expects to begin the mill start-up process during the third
quarter of 2013.
-- Skutskär Mill in Sweden will take its annual maintenance stoppage during
the second quarter of 2013.
Markets
Produc Market Demand Q1/13 Demand Q1/13 Price Q1/13 Price Q1/13
t compared with compared with compared with compared with
Q1/12 Q4/12 Q1/12 Q4/12
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Softwo Europe Stronger Stable Stable Slightly
od higher
pulp
Building and Living
Building and Living provides wood-based innovations and solutions for everyday
living and housing needs. The product range covers all areas of urban
construction, from supporting structures to interior design and environmental
construction. Further-processed products include massive wood elements and
housing modules, wood components and pellets, in addition to a variety of sawn
timber goods.
EUR million Q1/13 Q4/12 Q1/12 2012 Change % Change %
Q1/13-Q1/12 Q1/13-Q4/12
--------------------------------------------------------------------------------
Sales 441 456 381 1 684 15.7 -3.3
Operational 13 17 11 59 18.2 -23.5
EBITDA
Operational EBIT 4 7 10 29 -60.0 -42.9
% of sales 0.9 1.5 2.6 1.7 -65.4 -40.0
Operational 2.8 4.8 7.0 5.2 -60.0 -41.7
ROOC, %*
Deliveries, 1 1 113 1 132 1 109 4 592 0.4 -1.7
000 m3
---------------------------------------------------------------
* Operational ROOC = 100% x Operational EBIT/Average operating capital
-- Sales prices in local currencies and sales volumes especially in the
overseas markets were higher.
-- The raw material situation remains challenging in Central Europe, where
most of the production curtailments were taken.
-- As stated a year ago, a one-time gain of EUR 8 million from consolidation
of the equity accounted investment Mena Wood Oy (formerly RETS Timber Oy)
was included in the first quarter 2012 results.
-- The previously announced plans to reduce costs and increase productivity
throughout the Business Area, with targeted annual cost savings of EUR 30
million, are proceeding as planned.
Markets
Produc Market Demand Q1/13 Demand Q1/13 Price Q1/13 Price Q1/13
t compared with compared with compared with compared with
Q1/12 Q4/12 Q1/12 Q4/12
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Wood Europe Weaker Stable Stable Slightly
produ higher
cts
Renewable Packaging
Renewable Packaging offers fibre-based packaging materials and innovative
packaging solutions for consumer goods and industrial applications. Renewable
Packaging operates throughout the value chain, from pulp production to
production of materials and packaging, and recycling. The Business Area
comprises three business units: Consumer Board, Packaging Solutions and
Packaging Asia.
EUR million Q1/13 Q4/12 Q1/12 2012 Change % Change %
Q1/13-Q1/12 Q1/13-Q4/12
--------------------------------------------------------------------------------
Sales 820 798 779 3 216 5.3 2.8
Operational EBITDA 119 106 113 476 5.3 12.3
Operational EBIT 68 55 62 273 9.7 23.6
% of sales 8.3 6.9 8.0 8.5 3.8 20.3
Operational ROOC, %* 11.4 9.3 11.4 12.1 - 22.6
Paper and board 812 778 766 3 138 6.0 4.4
deliveries, 1 000 t
Paper and board 836 752 767 3 147 9.0 11.2
production, 1 000 t
Corrugated packaging 260 279 261 1 097 -0.4 -6.8
deliveries, million m2
Corrugated packaging 258 275 257 1 076 0.4 -6.2
production, million m2
-------------------------------------------------------
* Operational ROOC = 100% x Operational EBIT/Average operating capital
-- Clearly higher volumes, mainly in Consumer Board, were partly offset by
higher costs due to increased activity related to growth initiatives in
Asia and ramp-up of the
Ostrołęka
new containerboard machine.
-- Ostrołęka
containerboard machine PM 5 started up in January.
-- Establishment of the joint venture Bulleh Shah Packaging (Private) Limited
with Packages Ltd. of Pakistan is expected to be completed during the
second quarter of 2013.
-- The final approvals to build integrated plantation-based board and pulp
mills at Beihai city in Guangxi in China are still pending. The
construction and production schedule will be updated when the final
approvals are given and detailed plans are in place.
Markets
Product Market Demand Q1/13 Demand Q1/13 Price Q1/13 Price Q1/13
compared with compared with compared compared with
Q1/12 Q4/12 with Q1/12 Q4/12
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Consumer Europe Stronger Stronger Slightly Stable
board lower
Corrugate Europe Stable Slightly Stable Slightly
d weaker higher
packagin
g
Other
The segment Other includes the Nordic forest equity accounted investments,
Stora Enso's shareholding in Pohjolan Voima, operations supplying wood to the
Nordic mills and Group shared services and administration.
EUR million Q1/13 Q4/12 Q1/12 2012 Change % Change %
Q1/13-Q1/12 Q1/13-Q4/12
--------------------------------------------------------------------------------
Sales 721 673 703 2 684 2.6 7.1
Operational 8 -9 -9 -33 188.9 188.9
EBITDA
Operational 22 9 3 23 n/m 144.4
EBIT
% of sales 3.1 1.3 0.4 0.9 n/m 138.5
----------------------------------------------------------------
-- Operational EBIT was clearly higher than a year ago in Nordic wood sourcing
operations due to favourable harvesting conditions during the quarter.
-- Costs were lower in Group functions and services.
Short-term Risks and Uncertainties
The main short-term risks and uncertainties continue to relate to the potential
impact on the Group's products from the economic situation in Europe and the
structural decline in paper demand.
Energy sensitivity analysis: the direct effect of a 10% increase in
electricity, heat, oil and other fossil fuel market prices would have a
negative impact of approximately EUR 20 million on operational EBIT for the
next twelve months, after the effect of hedges.
Wood sensitivity analysis: the direct effect of a 10% increase in wood prices
would have a negative impact of approximately EUR 204 million on operational
EBIT for the next twelve months.
Chemicals and fillers sensitivity: the direct effect of a 10% increase in
chemical and filler prices would have a negative impact of approximately EUR 53
million on operational EBIT for the next twelve months.
A decrease in energy, wood or chemical and filler prices would have the
opposite impact.
Foreign exchange rates sensitivity analysis for the next twelve months: the
direct effect on operational EBIT of a 10% strengthening in the value of the US
dollar, Swedish krona and British pound against the euro would be about
positive EUR 111 million, negative EUR 91 million and positive EUR 54 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.
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 7 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
Oyj (SEO) and Stora Enso North America (SENA) were 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 district court granted a motion for summary
judgement that Stora Enso had filed on behalf of both SEO and SENA seeking
dismissal of the direct purchaser class action claims. Following appeal, a
federal court of appeals on 6 August 2012 upheld the district court's ruling as
to SEO, which means that the direct purchaser class action claims against SEO
have been found to be without legal foundation, but reversed the district
court's ruling as to SENA and referred that part of the case back to the
district court for a jury trial to determine whether SENA's conduct did violate
the federal antitrust laws. The appeal court's decision is procedural and does
not constitute a legal finding that SENA has violated antitrust laws. The case
against SENA will now proceed to trial in the district court. Furthermore, most
of the indirect purchaser actions have been dismissed by a consent judgement,
subject, however, to being reinstated if the plaintiffs in the direct cases are
ultimately successful in obtaining a final judgement that SENA violated
antitrust laws. Since Stora Enso disposed of SENA in 2007, Stora Enso's
liability, if any, will be determined by the provisions in the SENA Sales and
Purchasing Agreement. No provisions have been made in Stora Enso's accounts for
these lawsuits.
Legal Proceedings 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. The total claim against all
the defendants amounts to approximately EUR 160 million and the secondary claim
against Stora Enso to approximately EUR 85 million.
In addition, Finnish municipalities and private forest owners have initiated
similar legal proceedings. The total amount claimed from all the defendants
amounts to approximately EUR 75 million and the secondary claims and claims
solely against Stora Enso to approximately EUR 25 million.
Stora Enso denies that Metsähallitus and other plaintiffs have suffered any
damages whatsoever and will forcefully defend itself. No provisions have been
made in Stora Enso's accounts for these lawsuits.
Share Capital
During the quarter 1 000 A shares were converted into R shares. The shares were
recorded in the Finnish trade register on 15 February 2013.
On 31 March 2013 Stora Enso had 177 146 772 A shares and 612 391 727 R shares
in issue of which the Company held no A shares and 918 512 R shares with an
accountable par of EUR 1.6 million. The holding represents 0.12% of the
Company's share capital and 0.04% of the voting rights.
Events after the Period
On 23 April 2013 Stora Enso announced that it plans to simplify and streamline
Group and business structures with the aim of reducing annual costs by EUR 200
million including the earlier announced EUR 30 million in Building and Living.
This report is unaudited.
Helsinki, 23 April 2013
Stora Enso Oyj
Board of Directors
Financials
Basis of Preparation
This unaudited interim financial report has been prepared in accordance with
the accounting policies set out in International Accounting Standard 34 on
Interim Financial Reporting and in the Group's Annual Report for 2012.
The Group has for the first time applied the following amendment effective from
1 January 2013 that requires restatement of previous financial statements:
-- IAS 19 Employee Benefits (amendment) eliminates the ‘corridor method',
streamlines the presentation of changes in assets and liabilities arising
from defined benefit plans and enhances the disclosure requirements arising
from the standard. The Group has not applied the ‘corridor method'. The
effects of this amendment on the Group financial statements are not
material. The effects on Condensed Consolidated Income Statement are the
following:
--------------------------------------------------------------------------------
Effects of Changes to IAS 19 Employee As published Adjustment Restated
Benefits
EUR million 2012 2012 2012
--------------------------------------------------------------------------------
Operational EBIT 618 12 630
Operating Profit (IFRS) 689 12 701
Net financial items -207 -13 -220
Profit before Tax 482 -1 481
Income Tax 9 - 9
Net Profit for the Period 491 -1 490
Attributable to:
Owners of the Parent 481 -1 480
non-controlling interests 10 - 10
-----------------------------------
491 -1 490
Total Equity 5 876 -14 5 862
Post-employment benefit provisions 462 18 480
Deferred tax liabilities 344 -4 340
-----------------------------------
The following standards have also been applicable for the first time effective
from 1 January 2013:
-- IAS 1 Presentation of Financial Statements (amendment) introduces changes
to the presentation of items of other comprehensive income. Items that
could be reclassified to profit or loss at a future point in time now have
to be presented separately from items that will never be reclassified. The
amendment affected presentation only and had no impact on the Group's
financial position or performance.
-- IFRS 7 Financial Instruments: Enhanced disclosure requirements related to
offsetting of financial assets and financial liabilities. The amendment
might have some effect on presentation in the financial statements but had
no impact on the Group's financial position or performance.
-- IFRS 13 Fair Value Measurement establishes the definition of fair value and
introduces a single IFRS framework for measuring fair value while seeking
to increase consistency and comparability by requiring disclosures about
fair value measurements applied in the financial statements of an entity.
The application of IFRS 13 has not materially affected the fair value
measurements carried out by the Group. The new standard also requires
specific disclosures on fair values, some of which replace existing
disclosure requirements in other standards. Some of these disclosures are
specifically required for financial instruments, thereby affecting the
interim financial statement. The additional disclosures are included in
this Interim Review.
-- IAS 12 Income Taxes (amendment) provides additional regulation on deferred
tax in the case of recovery of underlying assets. The amendment is not
relevant to the Group.
-- IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine
introduces accounting treatment for stripping costs arising in the mining
industry. The interpretation is not relevant to the Group.
All figures in this Interim Review have been rounded to the nearest million,
unless otherwise stated.
Condensed Consolidated Income Statement
EUR million Q1/13 Q4/12 Q1/12 2012 Change % Change %
Q1/13-Q1/1 Q1/13-Q4/1
2 2
--------------------------------------------------------------------------------
Sales 2 667 2 727 2 673 10 815 -0.2 -2.2
Other operating income 33 48 44 219 -25.0 -31.3
Materials and services -1 724 -1 782 -1 730 -6 974 0.3 3.3
Freight and sales -258 -260 -242 -1 008 -6.6 0.8
commissions
Personnel expenses -353 -311 -339 -1 349 -4.1 -13.5
Other operating expenses -185 -162 -149 -578 -24.2 -14.2
Share of results of 26 91 15 108 73.3 -71.4
equity accounted
investments
Depreciation and -186 -97 -145 -532 -28.3 -91.8
impairment
-------------------------------------------------------
Operating Profit 20 254 127 701 -84.3 -92.1
Net financial items -56 -50 -37 -220 -51.4 -12.0
-------------------------------------------------------
Loss/Profit before Tax -36 204 90 481 -140.0 -117.6
Income tax 20 62 -16 9 225.0 -67.7
-------------------------------------------------------
Net Loss/Profit for the -16 266 74 490 -121.6 -106.0
Period
Attributable to:
Owners of the Parent -17 262 73 480 -123.3 -106.5
Non-controlling 1 4 1 10 - -75.0
interests
-------------------------------------------------------
-16 266 74 490 -121.6 -106.0
=======================================================
Earnings per Share
Basic earnings per -0.02 0.33 0.09 0.61 -122.2 -106.1
share, EUR
Diluted earnings per -0.02 0.33 0.09 0.61 -122.2 -106.1
share, EUR
-------------------------------------------------------
Consolidated Statement of Comprehensive Income
EUR million Q1/13 Q4/12 Q1/12 2012
--------------------------------------------------------------------------------
Net loss/profit for the period -16 266 74 490
Other Comprehensive Income
Items that will not be Reclassified to Profit and
Loss
Actuarial losses on defined benefit plans - -168 -4 -184
Share of other comprehensive income of equity -1 - -5 -5
accounted investments that will not be reclassified
Income tax relating to items that will not be - 30 1 35
reclassified
--------------------------
-1 -138 -8 -154
Items that may be Reclassified Subsequently to Profit
and Loss
Share of other comprehensive income of equity 3 12 3 1
accounted investments that may be reclassified
Currency translation movements on equity net 77 -49 17 -29
investments (CTA)
Currency translation movements on non-controlling 3 -1 -1 -3
interests
Net investment hedges -13 8 -6 -17
Currency and commodity hedges -11 -8 24 34
Available-for-sale financial assets -41 -44 -69 -178
Income tax relating to items that may be reclassified 4 2 -4 -3
--------------------------
22 -80 -36 -195
--------------------------
--------------------------
Total Comprehensive Income 5 48 30 141
--------------------------
--------------------------
Total Comprehensive Income Attributable to:
Owners of the Parent 1 45 30 134
Non-controlling interests 4 3 - 7
--------------------------
5 48 30 141
==========================
Condensed Consolidated Statement of Cash Flows
EUR million Q1/13 Q1/12
--------------------------------------------------------------------------------
Cash Flow from Operating Activities
Operating profit 20 127
Hedging result from OCI -11 21
Adjustments for non-cash items 166 108
Change in net working capital -91 -8
-------------
Cash Flow Generated by Operations 84 248
Net financial items paid -85 -69
Income taxes paid, net -3 -55
-------------
Net Cash Used in/Provided by Operating Activities -4 124
-------------
-------------
Cash Flow from Investing Activities
Acquisitions of subsidiaries, net of acquired cash - -3
Acquisitions of equity accounted investments -10 -18
Proceeds from sale of fixed assets and shares, net of disposed 5 2
cash
Capital expenditure -88 -94
Payments/proceeds of non-current receivables, net - -2
-------------
Net Cash Used in Investing Activities -93 -115
-------------
-------------
Cash Flow from Financing Activities
Proceeds from issue of new long-term debt - 658
Long-term debt, payments -25 -397
Change in short-term borrowings 25 -153
Dividend to non-controlling interests -7 -
-------------
Net Cash Used in/Provided by Financing Activities -7 108
-------------
-------------
Net Decrease/Increase in Cash and Cash Equivalents -104 117
Translation adjustment 1 -
Net cash and cash equivalents at the beginning of period 1 845 1 134
-------------
Net Cash and Cash Equivalents at Period End 1 742 1 251
-------------
Cash and Cash Equivalents at Period End 1 743 1 251
Bank Overdrafts at Period End -1 -
-------------
Net Cash and Cash Equivalents at Period End 1 742 1 251
-------------
Acquisitions
Cash and cash equivalents, net of bank overdraft - 1
Fixed assets, working capital and net tax assets - -1
-------------
Total Purchase Consideration - -
Less cash and cash equivalents in acquired companies - -1
-------------
Net Purchase Consideration - -1
-------------
Cash part of the consideration, net of acquired cash - 3
Payment concerning unfinished 2011 acquisition - -4
-------------
Net Purchase Consideration - -1
-------------
Property, Plant and Equipment, Intangible Assets, Goodwill and Biological Assets
EUR million Q1/13 Q1/12 2012
----------------------------------------------------------------
Carrying value at 1 January 5 541 5 437 5 437
Acquisition of subsidiary companies - - 6
Additions in tangible and intangible assets 57 59 536
Additions in biological assets 4 3 20
Disposals -2 -1 -2
Depreciation and impairment -186 -145 -532
Translation difference and other 48 32 76
--------------------
Statement of Financial Position Total 5 462 5 385 5 541
====================
Borrowings
EUR million 31 Mar 13 31 Dec 12 31 Mar 12
----------------------------------------------------------------------
Non-current borrowings 4 374 4 341 3 598
Current borrowings 775 793 863
--------------------------------
5 149 5 134 4 461
================================
--------------------------------
Q1/13 2012 Q1/12
--------------------------------
Carrying value at 1 January 5 134 4 373 4 373
Proceeds of borrowings (net) - 712 79
Translation difference and other 15 49 9
--------------------------------
Statement of Financial Position Total 5 149 5 134 4 461
================================
Condensed Consolidated Statement of Financial Position
EUR million 31 Mar 13 31 Dec 12 31 Mar 12
------------------------------------------------------------------------------
Assets
Non-current Assets
PPE*, goodwill and other intangible assets O 5 231 5 319 5 175
Biological assets O 231 222 210
Emission rights O 35 30 75
Equity accounted investments O 2 058 1 965 1 926
Available-for-sale: Interest-bearing I 100 96 84
Available-for-sale: Operative O 407 451 572
Non-current loan receivables I 137 134 127
Deferred tax assets T 169 143 130
Other non-current assets O 19 23 32
--------------------------------
8 387 8 383 8 331
--------------------------------
--------------------------------
Current Assets
Inventories O 1 555 1 458 1 541
Tax receivables T 18 19 14
Operative receivables O 1 819 1 687 1 709
Interest-bearing receivables I 295 297 287
Cash and cash equivalents I 1 743 1 850 1 251
5 430 5 311 4 802
--------------------------------
--------------------------------
--------------------------------
Total Assets 13 817 13 694 13 133
================================
Equity and Liabilities
Owners of the Parent 5 772 5 770 5 903
Non-controlling Interests 89 92 87
--------------------------------
Total Equity 5 861 5 862 5 990
================================
Non-current Liabilities
Post-employment benefit provisions O 470 480 337
Other provisions O 142 142 141
Deferred tax liabilities T 343 340 415
Non-current debt I 4 374 4 341 3 598
Other non-current operative liabilities O 8 12 26
--------------------------------
5 337 5 315 4 517
--------------------------------
--------------------------------
Current Liabilities
Current portion of non-current debt I 179 181 245
Interest-bearing liabilities I 596 612 618
Operative liabilities O 1 804 1 685 1 720
Tax liabilities T 40 39 43
-----------
----------- ----------
2 619 2 517 2 626
--------------------------------
Total Liabilities 7 956 7 832 7 143
================================
Total Equity and Liabilities 13 817 13 694 13 133
================================
* PPE = Property, Plant and Equipment
Items designated with “O” comprise Operating Capital
Items designated with “I” comprise Interest-bearing Net Liabilities
Items designated with “T” comprise Net Tax Liabilities
Statement of Changes in Equity
EUR Share Share Invest Treasu Step Availa Curren OCI of CTA
Retain Attrib Non-co Total
milli Capita Premiu ed ry Acquis ble cy and Equity and
ed -utabl ntroll
on l m and Non-Re Shares ition for Commod Accoun Net
Earnin e to ing
Reserv strict Revalu Sale ity ted Invest
gs Owners Intere
e fund ed ation Financ Hedges Invest ment
of the sts
Equity Surplu ial ments Hedges
Parent
Fund s Assets
--------------------------------------------------------------------------------
-----------------------------
Balanc 1 342 77 633 -10 4 541 -17 -29 32
3 300 5 873 87 5 960
e at
31
Decem
ber
2011
--------------------------------------------------------------------------------
----------------------
--------------------------------------------------------------------------------
----------------------
Profit - - - - - - - - -
73 73 1 74
for
the
perio
d
OCI - - - - - -69 24 -2 11
-4 -40 -1 -41
befor
e tax
Income - - - - - - -6 - 2
1 -3 - -3
tax
relat
ing to
compo
nents
of
OCI
--------------------------------------------------------------------------------
----------------------
Total - - - - - -69 18 -2 13
70 30 - 30
Compr
ehensi
ve
Incom
e
--------------------------------------------------------------------------------
----------------------
Balanc 1 342 77 633 -10 4 472 1 -31 45
3 370 5 903 87 5 990
e at
31
Mar
2012
--------------------------------------------------------------------------------
----------------------
--------------------------------------------------------------------------------
----------------------
Profit - - - - - - - - -
407 407 9 416
for
the
perio
d
OCI - - - - - -109 10 -2 -57
-180 -338 -2 -340
befor
e tax
Income - - - - - -1 - - 2
34 35 - 35
tax
relat
ing to
compo
nents
of
OCI
--------------------------------------------------------------------------------
----------------------
Total - - - - - -110 10 -2 -55
261 104 7 111
Compr
ehensi
ve
Incom
e
--------------------------------------------------------------------------------
----------------------
Divide - - - - - - - - -
-237 -237 -2 -239
nd
--------------------------------------------------------------------------------
----------------------
Balanc 1 342 77 633 -10 4 362 11 -33 -10
3 394 5 770 92 5 862
e at
31
Dec
2012
--------------------------------------------------------------------------------
----------------------
--------------------------------------------------------------------------------
----------------------
Profit - - - - - - - - -
-17 -17 1 -16
for
the
perio
d
OCI - - - - - -41 -11 2 64
- 14 3 17
befor
e tax
Income - - - - - -1 2 - 3
- 4 - 4
tax
relat
ing to
compo
nents
of
OCI
--------------------------------------------------------------------------------
----------------------
Total - - - - - -42 -9 2 67
-17 1 4 5
Compr
ehensi
ve
Incom
e
--------------------------------------------------------------------------------
----------------------
--------------------------------------------------------------------------------
----------------------
Divide - - - - - - - - -
- - -7 -7
nd
Share- - - - - - - - - -
1 1 - 1
based
payme
nts
--------------------------------------------------------------------------------
----------------------
Balanc 1 342 77 633 -10 4 320 2 -31 57
3 378 5 772 89 5 861
e at
31
Mar
2013
--------------------------------------------------------------------------------
----------------------
CTA = Cumulative Translation Adjustment
OCI = Other Comprehensive Income
Commitments and Contingencies
EUR million 31 Mar 13 31 Dec 12 31 Mar 12
--------------------------------------------------------------------------
On Own Behalf
Pledges - 1 1
Mortgages 6 6 10
On Behalf of Equity Accounted Investments
Guarantees 560 653 461
On Behalf of Others
Guarantees 5 5 5
Other Commitments, Own
Operating leases, in next 12 months 98 92 65
Operating leases, after next 12 months 507 497 552
Other commitments 6 5 5
--------------------------------
Total 1 182 1 259 1 099
================================
Pledges - 1 1
Mortgages 6 6 10
Guarantees 565 658 466
Operating leases 605 589 617
Other commitments 6 5 5
--------------------------------
Total 1 182 1 259 1 099
================================
Capital commitments
The Group's direct capital expenditure contracts, excluding acquisitions,
amounted to EUR 67 million (compared with EUR 199 million at 31 March 2012 and
EUR 72 million at 31 December 2012).
The Group's share of capital expenditure contracts in equity accounted
investments, excluding acquisitions, amounted to EUR 177 million (compared with
EUR 393 million at 31 March 2012 and EUR 213 million at 31 December 2012) of
which Stora Enso has guaranteed EUR 95 million (compared with EUR 189 million
at 31 March 2012 and EUR 189 million at 31 December 2012).
Sales by Segment
EUR million Q1/13 2012 Q4/12 Q3/12 Q2/12 Q1/12
---------------------------------------------------------------
Printing and Reading 1 123 4 839 1 194 1 227 1 191 1 227
Biomaterials 257 1 012 256 268 246 242
Building and Living 441 1 684 456 403 444 381
Renewable Packaging 820 3 216 798 812 827 779
Other 721 2 684 673 645 663 703
Inter-segment sales -695 -2 620 -650 -661 -650 -659
------------------------------------------
Total 2 667 10 815 2 727 2 694 2 721 2 673
==========================================
Operational EBIT by Segment
EUR million Q1/13 2012 Q4/12 Q3/12 Q2/12 Q1/12
--------------------------------------------------------------------------------
Printing and Reading 2 223 59 53 43 68
Biomaterials 22 82 28 32 15 7
Building and Living 4 29 7 1 11 10
Renewable Packaging 68 273 55 83 73 62
Other 22 23 9 9 2 3
----------------------------------------
Operational EBIT 118 630 158 178 144 150
Fair valuations and non-operational -7 -59 -14 -13 -34 2
items*
Non-recurring Items -91 130 110 - 45 -25
----------------------------------------
Operating Profit (IFRS) 20 701 254 165 155 127
Net financial items -56 -220 -50 -63 -70 -37
Loss/Profit before Tax -36 481 204 102 85 90
Income tax expense 20 9 62 -21 -16 -16
----------------------------------------
Net Loss/Profit -16 490 266 81 69 74
========================================
*Fair valuations and non-operational items include equity incentive schemes,
synthetic options net of realised and open hedges, CO2 emission rights,
valuations of biological assets related to forest assets in EAI and Group's
share of tax and net financial items of EAI.
NRI by Segment
EUR million Q1/13 2012 Q4/12 Q3/12 Q2/12 Q1/12
--------------------------------------------------------------------------
Printing and Reading -84 70 67 - 13 -10
Biomaterials - -7 -7 - - -
Building and Living -7 - - - - -
Renewable Packaging - -53 -38 - - -15
Other - 120 88 - 32 -
----------------------------------------
NRI on Operating Profit -91 130 110 - 45 -25
NRI on Financial items - 34 11 - 9 14
NRI on tax 19 63 56 - 2 5
----------------------------------------
NRI on Net Profit -72 227 177 - 56 -6
========================================
NRI on Net Profit attributable to
Owners of the Parent -72 221 175 - 52 -6Non-controlling interests - 6 2 - 4 -
----------------------------------------
-72 227 177 - 56 -6
----------------------------------------
Fair Valuations and Non-operational Items* by Segment
EUR million Q1/13 2012 Q4/12 Q3/12 Q2/12 Q1/12
--------------------------------------------------------------------------------
Printing and Reading - -1 - - - -1
Biomaterials -3 -29 6 -7 -24 -4
Building and Living - -3 -1 - - -2
Renewable Packaging - -1 - - - -1
Other -4 -25 -19 -6 -10 10
----------------------------------------
Fair Valuations and Non-operational -7 -59 -14 -13 -34 2
Items on Operating Profit
========================================
*Fair valuations and non-operational items include equity incentive schemes,
synthetic options net of realised and open hedges, CO2 emission rights,
valuations of biological assets related to forest assets in EAI and Group's
share of tax and net financial items of EAI.
Operating Profit/Loss by Segment
EUR million Q1/13 2012 Q4/12 Q3/12 Q2/12 Q1/12
----------------------------------------------------------------
Printing and Reading -82 292 126 53 56 57
Biomaterials 19 46 27 25 -9 3
Building and Living -3 26 6 1 11 8
Renewable Packaging 68 219 17 83 73 46
Other 18 118 78 3 24 13
----------------------------------------
Operating Profit (IFRS) 20 701 254 165 155 127
Net financial items -56 -220 -50 -63 -70 -37
----------------------------------------
Loss/Profit before Tax -36 481 204 102 85 90
Income tax expense 20 9 62 -21 -16 -16
----------------------------------------
Net Loss/Profit -16 490 266 81 69 74
========================================
Key Exchange Rates for the Euro
One Euro is Closing Rate Average Rate
-------------------------------------------------------
31 Mar 13 31 Dec 12 31 Mar 13 31 Dec 12
-------------------------------------------
SEK 8.3553 8.5820 8.4923 8.7067
USD 1.2805 1.3194 1.3204 1.2856
GBP 0.8456 0.8161 0.8517 0.8111
-------------------------------------------
Transaction Risk and Hedges in Main Currencies as at 31 March 2013
EUR million USD SEK GBP
------------------------------------------------------------------------------
------------------------------------------------------------
Estimated annual net operating cash flow exposure 1 110 -910 540
Transaction hedges as at 31 Mar 2013 -550 420 -280
------------------
Hedging percentage as at 31 Mar 2013 for the next 12 months 50% 46% 52%
------------------
Additional GBP hedges for 13-15 months increase the hedging percentages by 2%.
Changes in Exchange Rates on Operational EBIT
Operational EBIT: Currency strengthening of + 10% EUR million
--------------------------------------------------------------
--------------------------------------------------
USD 111
SEK -91
GBP 54
------------
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.
Fair Values of Financial Instruments
The Group uses the following hierarchy for determining and disclosing the fair
value of financial instruments by valuation technique:
• Level 1: quoted (unadjusted) prices in active markets for identical assets or
liabilities;
• Level 2: other techniques for which all inputs which have a significant
effect on the recorded fair value are observable, either directly or
indirectly;
• Level 3: techniques which use inputs which have a significant effect on the
recorded fair values that are not based on observable market data.
The valuation techniques are described in more detail in the Financial
Statements.
Carrying Amounts of Financial Assets and Liabilities by Measurement and Fair
Value Categories: Q1 2013
EUR million Loans Financial Hedging Availab Carryin Fair
and Items Derivati le- g Value
Receivab at Fair ves for-Sal Amounts
les Value e by
through Financi Balance
Income al Sheet
Statement Assets Item
--------------------------------------------------------------------------------
Financial Assets
Available-for-sale - - - 507 507 507
Non-current loan 137 - - - 137 153
receivables
Trade and other 1 476 - - - 1 476 1 476
operative receivables
Interest-bearing 124 125 46 - 295 295
receivables
Current investments 1 743 - - - 1 743 1 743
and cash
---------------------------------------------------------
Carrying Amount by 3 480 125 46 507 4 158 4 174
Category
---------------------------------------------------------
EUR million Financial Hedging Measure Carryin Fair
Items Derivati d at g Value
at Fair ves Amortis Amounts
Value ed by
through Cost Balance
Income Sheet
Statement Item
--------------------------------------------------------------------------------
Financial Liabilities
Non-current debt - 3 4 371 4 374 4 641
Current portion of - - 179 179 179
non-current debt
Interest-bearing 145 33 417 595 595
liabilities
Trade and other - - 1 333 1 333 1 333
operative payables
Bank overdrafts - - 1 1 1
---------------------------------------------------------
Carrying Amount by 145 36 6 301 6 482 6 749
Category
---------------------------------------------------------
EUR million Level 1 Level 2 Level 3 Total
--------------------------------------------------------------------------------
Derivative Financial - 171 - 171
Assets
Available-for-sale 8 - 499 507
Financial Assets
Derivative Financial - 181 - 181
Liabilities
Reconciliation of Level 3 Fair Value Measurement of Financial Assets: Q1 2013
EUR million Unlisted Unlisted Interest-bearing Total
Shares Securities
--------------------------------------------------------------------------------
Opening balance at 1 January 2013 451 90 541
Losses recognised in other -44 - -44
comprehensive income
Interest capitalised - 2 2
----------------------------------------------
Closing Balance at 31 March 2013 407 92 499
----------------------------------------------
Unlisted shares
The unlisted shares comprise mainly PVO shares for which the valuation method
is described in more detail in the Annual Report. The valuation is most
sensitive to changes in electricity prices and discount rates. The discount
rate of 4.08% used in the valuation model is determined using the weighted
average cost of capital method. A +/- 5% change in the electricity price used
in the DCF would change the valuation by +/- EUR 85 million and a +/- 1% change
in the discount rate would change the valuation by -/+ EUR 140 million.
Stora Enso Shares Helsinki Stockholm
Trading volume
------------------------------------------
A share R share A share R share
------------------------------------------------------------
January 165 688 62 625 368 273 860 27 181 361
February 62 182 88 492 344 234 915 40 217 214
March 31 456 68 121 895 76 728 27 513 224
------------------------------------------
Total 259 326 219 239 607 585 503 94 911 799
------------------------------------------
Closing Price Helsinki, EUR Stockholm, SEK
------------------------------------------
A share R share A share R share
------------------------------------------------------------
January 6.80 5.26 57.45 45.40
February 6.75 5.15 57.55 43.54
March 6.53 5.04 54.75 42.17
Calculation of Key Figures
Operational return on capital employed, operational ROCE 100 x Operational
(%) EBIT
Capital
employed 1)
2)
Operational return on operating capital, operational 100 x Operational
ROOC (%) EBIT
Operating
capital 1) 2)
Return on equity, 100 x Profit before
ROE (%) tax and
non-controlli
ng items -
taxes
Total equity
2)
Equity ratio (%) 100 x Total equity
Total assets
Interest-bearing net liabilities Interest-beari
ng liabilities
- interest-bear
ing assets
Debt/equity ratio Interest-beari
ng net
liabilities
Equity 3)
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
Operational EBIT Operating
profit/loss
excluding NRI
and fair
valuations of
the
segments and
Stora Enso's
share of
operating
profit/loss
excluding NRI
and fair
valuations of
its equity
accounted
investments
(EAI)
Operational EBITDA Operating
profit/loss
excluding
fixed asset
depreciation
and
impairment,
share of
results of
equity
accounted investments,
NRI and fair
valuations
Net debt to operational EBITDA ratio Interest-beari
ng net
liabilities
Operational
EBITDA
Last twelve months (LTM) Twelve months
preceding the
reporting
date
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
Karl-Henrik Sundström, CFO, tel. +46 1046 71660
Ulla Paajanen-Sainio, SVP, Investor Relations, tel. +358 2046 21242
Sanna Lahti, SVP, Global Communications, tel. +358 2046 21251
Stora Enso's second quarter 2013 results will be published on 19 July 2013 at
13.00 EET.
PRESS CONFERENCE IN HELSINKI
Time: 13.15 local time today
Location: Marina Congress Center, Helsinki
Address: Katajanokanlaituri 6
Presentations: Jouko Karvinen, CEO (Finnish)
Karl-Henrik Sundström, CFO (English)
Questions can be addressed to Jouko Karvinen and Karl-Henrik Sundström after
the presentation.
ANALYST CONFERENCE CALL
CEO Jouko Karvinen, CFO Karl-Henrik Sundström and SVP Investor Relations Ulla
Paajanen-Sainio 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 3450 9571
Finland +358(0)9 2310 1618
Sweden +46(0)8 5593 6763
USA +1646 254 3368
Access code: 2276674
The live webcast may be accessed at www.storaenso.com/investors
Stora Enso is the global rethinker of the paper, biomaterials, wood products
and packaging 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 28 000 people worldwide, and our sales in 2012 amounted to
EUR 10.8 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.
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