Stora Enso Oyj - Company Announcement

Stora Enso CEO Jouko Karvinen comments on second quarter 2013 results announced today

“Serious challenges to be addressed in European paper, further transformation
steps launched” 

Helsinki, Finland, 2013-07-19 12:01 CEST (GLOBE NEWSWIRE) -- STORA ENSO OYJ
STOCK EXCHANGE RELEASE 19 July 2013 at 13.01 EET 

“The second quarter was a demonstration of the mixed reality we have in Stora
Enso. Whereas the overall performance was according to our second quarter
outlook, including solid cash flow, the picture is very different in the
different businesses. On the positive side, Renewable Packaging maintained a
solid earnings performance in a healthy market. Biomaterials improved on
operational EBITDA level year-on-year whilst entering the final stages of the
Montes del Plata pulp mill project. Building and Living swung back to decent
profitability after several quarters of poor earnings, supported by a cyclical
recovery, but in addition this business began streamlining efforts already in
the fourth quarter of 2012, much earlier than the other businesses. The
disappointment for yet another quarter was the performance of Printing and
Reading, which is now loss-making and experiencing a decline in demand that was
in many grades substantially worse than the long-term structural decline. 

“It would be wrong to expect the operating environment to get any easier in the
foreseeable future. The streamlining plans launched in April, which are
progressing on schedule to achieve EUR 200 million net fixed costs reduction,
are therefore critical to securing our future. Given the reality of Printing
and Reading, it is intended that this business will have the majority of the
reductions, although all businesses and Group functions will contribute.
Separately, the three newsprint machine closures announced in the past seven
months have been completed on time. Although the impact of these on the supply
and demand balance should be apparent in the second half, the impact in
improving profits will be only limited before 2014. 

“On our transformation we have two concrete new steps to report. The
long-awaited integrated pulp and board project in China has received final
approval from the National Development and Reform Commission of China. In
parallel with this good news, we have agreed with our Chinese partner to launch
the implementation now in a revised two-phase sequence, starting with the board
machine and related industrial investments in the first phase using imported
chemical pulp, and building the pulp mill in the second phase. The investment
according to revised plan will achieve the same attractive returns as the
original, enable delivery of locally produced world-class consumer boards up to
a year earlier than anticipated and cut the mid-term three-year capital
expenditure requirements by half. Finally, the revised plan gives us and our
local partner more time to build up our fibre base and sustainable forest
operations in harmony with the local communities and with the support of all
stakeholders, as the fibre demand will not immediately be driven by pulp mill
volume requirements. 

“The news of the biorefinery investment is good news for the great team at
Sunila, offering new markets and improved profitability, as well as a
significant reduction in the CO2 footprint of the mill. Strategically, for
Stora Enso entry into lignin-based specialty chemical raw material markets is
even more important. The scalability of the concept offers us an opportunity to
replicate the high-value-added and high-margin business in our global chemical
pulp business. 

“In summary, the operating environment is not easy, but it really never was.
Our journey continues, step by step, staying on our selected strategy path.” 


For further information, please contact:
Jouko Karvinen, CEO, tel. +358 2046 21410


www.storaenso.com
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. 

STORA ENSO OYJ