Stora Enso CEO Jouko Karvinen comments on first quarter 2011 results announced today
STORA ENSO OYJ STOCK EXCHANGE RELEASE 20 April 2011 at 13.01 EET
“Three months ago we promised improved earnings through better pricing and an improved cost base – and that is what the team delivered. We are pleased to report first quarter results for 2011 showing significant profitability improvement driven by broad and strong year-on-year pricing improvement in every segment. It is also important that these improvements were not solely due to market recovery, which was actually quite limited, but they also reflect a conscious effort to improve pricing quality even when that has meant limiting volumes and capacity. They are also a result of our cost base reduction we started several years ago.
“The productivity and cost improvements will continue in Stora Enso through hundreds of local improvement efforts as we rethink the ways we do things – or whether we should be doing some things at all. As the operating environment during the past three months with increasing inflation pressure clearly shows, the race is never over. The increasing inflation is now our short-term focus and concern. Only three months ago we estimated inflation would be approximately 3% year on year. Now we have revised our forecast to 4%. The key reason for the increased estimate is the rising costs of recycled fibre and some chemicals. This development, which we will have to watch closely in the changing environment, means that our ongoing efforts to improve costs, productivity, and customer and product mix continue to be even more important.
“The strategic growth projects we have announced so far this year are proof points of our progress. We have launched the implementation of the Montes del Plata world-class pulp mill in Uruguay and announced the investment in a new containerboard machine at Ostrołęka in Poland to produce stronger material for making lighter packaging. We are expanding the production of pre-manufactured construction elements in Austria to provide a strong basis for further growth in building solutions, including wooden multi-storey buildings, and today we announced an improvement investment in our Skoghall liquid packaging board mill in Sweden. Four concrete steps to strengthen Stora Enso’s position in the high-return growth areas.
“We feel passionate about our improvement processes and the future. We also think it is time to tell the world about Rethink. We have been and will continue challenging ourselves in everything we do – from products and customer support to our corporate responsibility – and with a new corporate identity, as we explain in a separate press release. We will continue on our journey of improvement and to implement our strategy – and are aiming to increase our speed.”
For further information, please contact:
Jouko Karvinen, CEO, tel. +358 2046 21410
Lauri Peltola, Head of Communications and Global Responsibility, tel. +358 2046 21380
Ulla Paajanen-Sainio, Head of Investor Relations, tel. +358 2046 21242
Stora Enso is the global rethinker of the packaging, paper and wood products industry. We always rethink the old and expand to the new to offer our customers innovative solutions based on renewable materials. Stora Enso employs some 26 000 people worldwide, and our sales in 2010 amounted to EUR 10.3 billion. Stora Enso shares are listed on NASDAQ OMX Helsinki (STEAV, STERV) and Stockholm (STE A, STE R). In addition, the shares are traded in the USA as ADRs (SEOAY) in the International OTCQX over-the-counter market.
STORA ENSO OYJ