Stora Enso Interim Review January ? June
STORA ENSO OYJ Stock Exchange Release 28 July 2004 at 13.00
Stora Enso Interim Review January June 2004
Bottom of the cycle seems to have been reached; outlook improving
Second Quarter Results (compared with previous quarter)
Stora Enso's earnings per share were EUR 0.06 (EUR 0.06 excluding non
recurring items). Operating profit was EUR 58.5 (EUR 103.4 excluding
non-recurring items) million, which is EUR 44.9 million less than in the
previous quarter and 1.9% of sales. Profit before taxes and minority
interests amounted to EUR 49.0 (EUR 80.8 excluding nonrecurring items)
million. There were no non-recurring items in the second quarter
Sales at EUR 3 102.9 million were up 2.8% on the previous quarter's
EUR 3 017.9 million due to higher deliveries. Cash flow from ongoing
operations was EUR 138.5 (EUR 173.2) million and cash flow after
investing activities EUR -186.7 (EUR -54.2) million. Cash earnings per
share were EUR 0.43 (EUR 0.41). Net financial items were
EUR -26.2 (EUR -20.3) million, or -0.02 per share. Market-related
production curtailments totalled 98 000 (125 000) tonnes.
EUR million 2002 2003 H1/03 H1/04 Q2/03 Q1/04 Q2/04
Sales 12 782.6 12 172.3 6 156.1 6 120.8 3 057.0 3 017.9 3 102.9
EBITDA1)
2) 2 145.9 1 710.6 894.1 757.4 396.6 394.0 363.4
Operating
profit2) 900.4 525.8 311.6 161.9 103.6 103.4 58.5
Non
recurring
items -1 078.1 -108.4 - 115.7 - 115.7 -
Operating
margin2), % 7.0 4.3 5.1 2.6 3.4 3.4 1.9
Operating
profit -177.7 471.4 311.6 277.6 103.6 219.1 58.5
Profit
before
tax and
minority
interests2) 708.8 319.2 210.0 129.8 83.8 80.8 49.0
Profit
before
tax and
minority
interests -369.3 210.8 210.0 245.5 83.8 196.5 49.0
Net profit
for the
period -240.7 137.9 137.2 458.8 54.1 406.9 51.9
EPS2),Basic,
EUR 0.55 0.24 0.16 0.12 0.06 0.06 0.06
EPS,Basic,
EUR -0.27 0.16 0.16 0.55 0.06 0.49 0.06
CEPS2)3),
EUR 1.95 1.63 0.84 0.84 0.41 0.41 0.43
ROCE2),% 7.0 4.5 5.3 2.9 3.5 3.7 2.2
1) EBITDA = Earnings before Interest, Taxes, Depreciation and
Amortisation
2) Excluding net non-recurring items. Exceptional transactions that
are not related to normal business operations are accounted for
as non-recurring items. The most common non-recurring items are
capital gains, additional write-downs, restructuring provisions
and penalties. Non-recurring items are normally specified
individually if they exceed one cent per share.
3) CEPS = (Net profit for the period + depreciation and
amortisation)/average number of shares
Outlook
Commenting on the outlook, Stora Enso's CEO Jukka Härmälä said, "In
Europe the economic outlook is more positive than in the first quarter.
The economic recovery is still moderate; nevertheless, paper demand,
especially in fine paper grades, is improving. Price increases are
expected in fine paper grades during the second half of the year. In
magazine paper grades demand is improving, but in coated magazine paper
the imbalance between supply and demand will keep the pricing environment
competitive. Packaging board demand and prices are expected to remain
stable. In wood products whitewood supply and demand are expected to stay
in balance, but the redwood market will remain oversupplied."
In North America print advertising expenditure continues to improve and
competing paper imports have moderated. Previously announced price
increases in coated and uncoated magazine paper and coated fine paper are
being implemented. Speciality paper demand continues to strengthen and
price rises have been achieved. Operating rates are expected to remain
strong. Stora Enso North America's financial performance is forecast to
improve significantly during the second half of the year as a result of
the Profit Enhancement Programme and more favourable market conditions.
In Asia the markets for fine paper are seasonally slowing down. Prices
are stabilising, having increased in the second quarter.
For further information, please contact:
Jukka Härmälä, Chief Executive Officer, tel. +358 2046 21404
Björn Hägglund, Deputy Chief Executive Officer, tel. +46 70 528 2785
Esko Mäkeläinen, CFO, tel. +358 2046 21450
Kari Vainio, EVP, Corporate Communications, tel. +44 7799 348 197
Keith B Russell, SVP, Investor Relations, tel. +44 7775 788 659
www.storaenso.com
www.storaenso.com/investors
Stora Enso Interim Review January June 2004
Summary of Second Quarter Results*
* Sales were EUR 3 102.9 million; previous quarter
EUR 3 017.9 million.
* Operating profit was EUR 58.5 million; previous quarter
EUR 103.4 million excluding non-recurring items.
* Profit before tax and minority items was EUR 49.0 million;
previous quarter EUR 80.8 million excluding non-recurring items.
* Earnings per share were EUR 0.06; previous quarter EUR 0.06
excluding non-recurring items.
* Cash earnings per share were EUR 0.43; previous quarter EUR 0.41
excluding non-recurring items.
*) There were no non-recurring items in the second quarter of 2004.
Paper markets continued to recover during the second quarter. Demand
for advertising-driven paper grades and packaging boards improved.
European deliveries were higher in publication paper and fine paper.
Prices of all paper grades stabilised at their lowest levels during this
cycle in Europe and some increases were announced in markets outside
Europe to come into effect mainly after the quarter. Demand for packaging
board improved and prices were stable in Europe. Demand for wood products
rose, but strong supply prevented any clear improvement in the market
balance for redwood.
In North America demand for magazine and coated fine paper strengthened.
Prices were low, but price increases were implemented by the end of the
quarter.
Market-related production curtailments totalled 98 000 tonnes in Europe
and none in North America, compared with the previous quarter's total of
125 000 tonnes, which was all in Europe.
Paper and board deliveries totalled 3 573 000 tonnes, which is
106 000 tonnes more than the previous quarter's 3 467 000 tonnes.
Production totalled 3 556 000 tonnes (3 585 000 tonnes). Deliveries of
wood products totalled 1 777 000 cubic metres, compared with the previous
quarter's 1 597 000 cubic metres.
EUR million 2002 2003 H1/03 H1/04 Q2/03 Q1/04 Q2/04
Sales 12 782.6 12 172.3 6 156.1 6 120.8 3 057.0 3 017.9 3 102.9
EBITDA1)
2) 2 145.9 1 710.6 894.1 757.4 396.6 394.0 363.4
Operating
profit2) 900.4 525.8 311.6 161.9 103.6 103.4 58.5
Non
recurring
items -1 078.1 -108.4 - 115.7 - 115.7 -
Operating
margin2),% 7.0 4.3 5.1 2.6 3.4 3.4 1.9
Operating
profit -177.7 471.4 311.6 277.6 103.6 219.1 58.5
Profit
before
tax and
minority
interests2) 708.8 319.2 210.0 129.8 83.8 80.8 49.0
Profit
before
tax and
minority
interests -369.3 210.8 210.0 245.5 83.8 196.5 49.0
Net profit
for the
period -240.7 137.9 137.2 458.8 54.1 406.9 51.9
EPS2),
Basic,EUR 0.55 0.24 0.16 0.12 0.06 0.06 0.06
EPS,
Basic,
EUR -0.27 0.16 0.16 0.55 0.06 0.49 0.06
CEPS2)3),
EUR 1.95 1.63 0.84 0.84 0.41 0.41 0.43
ROCE2),% 7.0 4.5 5.3 2.9 3.5 3.7 2.2
1) EBITDA = Earnings before Interest, Taxes, Depreciation and
Amortisation
2) Excluding net non-recurring items. Exceptional transactions that
are not related to normal business operations are accounted for
as non-recurring items. The most common non-recurring items are
capital gains, additional write-downs, restructuring provisions
and penalties. Non-recurring items are normally specified
individually if they exceed one cent per share.
3) CEPS = (Net profit for the period + depreciation and
amortisation)/average number of shares
Second Quarter Results (compared with previous quarter)
Sales at EUR 3 102.9 million were up 2.8% on the previous quarter's
EUR 3 017.9 million due to higher deliveries.
Operating profit was EUR 58.5 (EUR 103.4 excluding non-recurring items)
million, which is EUR 44.9 million less than in the previous quarter and
1.9% of sales. Operating profit declined in all product segments except
Wood Products. There were no non-recurring items in the second quarter,
whereas there was a EUR 115.7 million capital gain in the previous
quarter.
Operating profit was lower largely because production volumes decreased
and maintenance costs increased during the annual Midsummer shutdowns.
The rebuilding of fine paper machine 97 at Kimberly Mill reduced the
operating profit by approximately USD 15 (EUR 12) million, of which
roughly one-third was related to lost volumes. The strike at Imatra,
Finland reduced the operating profit by EUR 3 million. Wood Supply
Europe's operating profit decreased following the transfer of the Swedish
forests to Bergvik Skog AB, which is 43.3% owned by Stora Enso and is
reported as an associated company. Released cash flow hedging contracts,
especially for the US dollar and British pound, had an impact of
EUR -0.1 (EUR 9.4) million on operating profit.
Net financial items were EUR -26.2 (EUR -20.3) million, or -0.02 per
share. Net interest expenses amounted to EUR -34.9 (EUR -42.0) million
and net foreign exchange losses were EUR -1.6 (EUR 4.8) million. Other
financial items totalled EUR 10.3 (EUR 16.9) million, mostly due to
unrealised changes in fair values of financial instruments.
The share of associated company results amounted to
EUR 16.7 (EUR -2.3) million, including EUR 6.4 million from Bergvik Skog,
EUR 5.3 million from Tornator and EUR 1.1 million from Sunila.
Profit before taxes and minority interests amounted to
EUR 49.0 (EUR 80.8 excluding non-recurring items) million.
Net taxes totalled a positive EUR 5.0 (EUR 214.6) million, including the
effect of the new tax laws in Finland of EUR 20.0 million, which had an
impact of EUR 0.02 on EPS. In the previous quarter there was a release of
EUR 240.8 million from the deferred tax liability relating to the
restructuring of forestland ownership in Sweden. The average six-month
tax rate excluding one-time adjustments was 31.3% (31.9%).
The minority interest in profits was EUR -2.1 (EUR -4.2) million and the
net profit for the period was EUR 51.9 (EUR 406.9) million. Earnings per
share were EUR 0.06 (EUR 0.06 excluding non-recurring items).
The return on capital employed was 2.2% (3.7% excluding non-recurring
items). Capital employed was EUR 10 830.7 million at the end of the
period, a net increase of EUR 257.8 million. The currency effect on
capital employed was EUR -8.2 million.
Capital Structure
EUR million 31.12.2003 30.6.2003 31.3.2004 30.6.2004
Fixed assets 12 676.1 12 866.7 11 059.5 11 080.8
Working capital 872.1 1 066.3 948.6 1 174.4
Operating Capital 13 548.2 13 933.0 12 008.1 12 255.2
Net tax liabilities -1 935.1 -2 013.3 -1 435.2 -1 424.5
Capital Employed 11 613.1 11 919.7 10 572.9 10 830.7
Associated companies 319.0 209.4 498.1 508.4
Total 11 932.1 12 129.1 11 071.0 11 339.1
Shareholders equity 7 952.9 8 008.9 7 903.3 7 916.2
Minority interests 60.3 48.9 62.8 66.5
Interest-bearing net
liabilities 3 918.9 4 071.3 3 104.9 3 356.4
Financing Total 11 932.1 12 129.1 11 071.0 11 339.1
Financing
Cash flow from ongoing operations was EUR 138.5 (EUR 173.2) million and
cash flow after investing activities EUR -186.7 (EUR -54.2) million. Cash
earnings per share were EUR 0.43 (EUR 0.41).
At the end of June, interest-bearing net liabilities were
EUR 3 356.5 million, up EUR 251.5 million on the end of the previous
quarter. Currency effects decreased interest-bearing net liabilities by
EUR 17.1 million. Unutilised credit facilities and cash and
cash-equivalent reserves totalled EUR 2.7 billion.
In June Stora Enso created a new benchmark bond by the offer to exchange
its EUR 850 million 2007 bond to a 10-year maturity. In the transaction,
which extended the average maturity of the Company's debt portfolio by
one year, EUR 475 million of the notes were exchanged, corresponding to
55.9 per cent of the total outstanding amount.
Shareholders' equity amounted to EUR 7.9 billion or EUR 9.56 (EUR 9.47)
per share, compared with a market capitalisation on the Helsinki
Exchanges on 30 June 2004 of EUR 9.3 billion.
The debt/equity ratio at 30 June 2004 was 0.42 (0.39). The currency
effect on equity was EUR 25.3 million, net of the hedging of equity
translation risks. Share buy-backs decreased equity by EUR 70.0 million
in the second quarter.
Change in Interest-bearing Net Liabilities
Struct Transl
Cash Flow, ural ation Balance
Ongoing Changes Differ Sheet
EUR million Operations and OCI* ence Impact
Operating profit 58.5 58.5
Adjustments 304.9 304.9
Change in working capital -224.9 -0.9 -225.8
Cash Flow from Operations 138.5 -0.9 137.6
Capital expenditure -281.1 -281.1
Acquisitions -47.0 -47.0
Disposals 3.1 3.1
Other changes in fixed assets -0.2 -21.7 -21.9
Operating cash flow -186.7 -22.6 -209.3
Net financing items
(incl.associated companies) -9.5 12.5 3.0
Taxes paid -17.3 -2.6 14.4 -5.5
Share issue 0.0 0.0
Dividends 0.0 0.0
Repurchase of own shares -70.0 -70.0
Other change in shareholders equity
and minority interests 2.4 2.6 25.3 30.3
Change in Interest-bearing Net
Liabilities -281.1 12.5 17.1 -251.5
*OCI = Other Comprehensive Income
Capital Expenditure for the Second Quarter and for January June
Capital expenditure for the second quarter totalled EUR 281.1 million,
giving a total for the first six months of EUR 497.2 million.
The main projects were the new paper machine 12 at Kvarnsveden Mill
(EUR 49.7 million), the Skoghall Energy 2005 project (EUR 30.8 million),
rebuilding paper machine 16 at Wisconsin Rapids Mill
(USD 31.5 (EUR 25.9) million), rebuilding paper machine 3 and a new
cut-size line at Veitsiluoto Mill (EUR 18.5 million) and the new boiler
at Kvarnsveden Mill (EUR 17.8 million).
Capital expenditure in 2004 is expected to be close to depreciation at
approximately EUR 1.1 billion.
Events in associated companies
During the second quarter Stora Enso invested EUR 24.7 million in
construction of the Veracel pulp mill in Brazil, bringing the total
amount invested during the first half of the year to EUR 36.6 million.
January June Results (compared with the same period in 2003)
Sales were EUR 6 120.8 million, similar to the same period last year.
Operating profit excluding non-recurring items decreased by
EUR 149.7 million, or 48%, to EUR 161.9 million due to lower sales
prices partly offset by higher deliveries. Profits were lower than in
the first six months last year in all segments except Wood Products.
Matured hedging contracts, especially for the US dollar and British
pound, had a positive impact of EUR 9.3 (EUR 61.5) million on operating
profit.
Profit before taxes and minority interests excluding non-recurring items
decreased by EUR 80.2 million to EUR 129.8 million.
Excluding non-recurring items, earnings per share were EUR 0.12
(EUR 0.16) and the return on capital employed was 2.9% (5.3%).
Non-recurring items totalled EUR 115.7 million in the first six months
this year and zero in the same period last year.
Stora Enso North America (January June)
The North American economies continued to strengthen in the first six
months of 2004 and demand for advertising-driven paper improved. There
was no market-related downtime during the period, compared with
30 000 tonnes and 49 000 tonnes in the first and second halves of 2003
respectively.
Two fine paper machine rebuilds were completed during the first six
months of 2004 as part of the ongoing Profit Enhancement Programme. Paper
machine 16 at Wisconsin Rapids Mill was rebuilt in early 2004 and paper
machine 97 at Kimberly Mill was rebuilt towards the end of the first half
of the year. As a result, 60 000 tonnes of production was lost. Sales
volume decreased compared with the previous six-month period. Market
prices were on average similar to the second half of 2003, but the
rebuilds depressed Stora Enso North America's sales prices for fine paper
because of the need to sell lower-priced start-up quality paper. Both
rebuilt machines are now successfully in production.
Stora Enso North America made an operating loss of
USD 130 (EUR 106) million before goodwill amortisation and non-recurring
items in the period JanuaryJune; this compares with a
USD 86 (EUR 70) million loss in the second half of 2003 and a
USD 98 (EUR 80) million loss in the first half of 2003. It is estimated
that the rebuilds had a negative impact of USD 40 million on the results
for the period. Other negative factors were higher purchased pulp prices
and the escalating costs of employee and retiree health care benefits.
Operating cash flow after investing activities was a negative
USD 100 (EUR 81) million, compared with a negative USD 50 (EUR 41) million
in the second half of 2003 and a negative USD 71 (EUR 58) million in the
first half of last year. Capital expenditure in the first half of 2004
totalled USD 120 (EUR 98) million, focused on the North America Profit
Enhancement Programme. Since the Programme was first announced in
August 2002 and expanded in August 2003, USD 200 (EUR 163) million of
the planned USD 250 (EUR 204) million of capital expenditure has been
invested, including USD 86 (EUR 70) million during the first half of 2004.
The Profit Enhancement Programme, which is focused on cost reductions,
asset improvements and product-mix enhancements, is proceeding as
planned. Owing to the nature of the Programme, a significant positive
impact on the division's profitability will first be evident during the
second half of 2004; the previously announced annual earnings improvement
of USD 145 (EUR 118) million is on target to be achieved from mid-2005
onwards.
Since the Profit Enhancement Programme was first announced in August 2002,
the workforce has been reduced by 15% (900 employees), three older
under-performing paper machines with a combined annual capacity of
185 000 tonnes have been permanently shut down and five paper machine
lines have been modified to improve productivity and quality. By mid 2005
the workforce is expected to have been further reduced by about
300 employees to some 5 000 employees, compared with 7 500 in 1999.
Inspections by Competition Authorities
Stora Enso has been the subject of inspections carried out by the
European Commission at locations in Europe and has received subpoenas
issued by the US Department of Justice as part of preliminary antitrust
investigations into the paper industry in Europe and the USA.
Representatives of the Finnish Competition Authority also inspected Stora
Enso's wood procurement offices in Finland. The investigations
relate to fine paper in Europe, publication paper in Europe, magazine
paper in the USA, the purchase of recovered paper in Germany and the
purchase of wood in Finland. The investigations by the authorities in
both Europe and the USA are at a fact-finding stage only and no formal
allegations have been made against the Group or any of its employees.
Coincident with these investigations, Stora Enso has been named in a
number of class action lawsuits filed in the USA. No provision has been
made.
Second Quarter Events 2004
Nebolchi Sawmill
In April Stora Enso Timber inaugurated its second sawmill in Russia at
the village of Nebolchi in the Novgorod Region. The total investment was
EUR 10.3 million and the full annual production capacity of 100 000 m3
will be reached by the end of 2005.
Arzamas Mill
In June Stora Enso's Russian subsidiary Stora Enso Packaging VR
inaugurated its second Russian corrugated packaging mill at Arzamas in
the Nizhny Novgorod Region, some 400 kilometres east of Moscow. The mill,
completed at a total cost of EUR 33 million, has about a hundred locally
recruited employees and an annual production capacity of 75 million m2 of
corrugated packaging products.
Share Capital and Ownership
During the period a total of 1 094 157 A shares were converted into
R shares. Converted shares are recorded monthly in the Finnish Trade
Register. The latest conversion recorded in the Finnish Trade Register
was on 15 June 2004.
On 30 June 2004 Stora Enso had 180 070 576 A shares and 657 172 823 R
shares in issue, of which the Company held 9 700 A shares and 8 946 688 R
shares with a nominal value of EUR 15.2 million; these represented 1.1%
of the share capital and 0.4% of the voting rights. On 30 June 2004 the
registered share capital of the Company was EUR 1 423.3 million.
Events after the Period
In July Stora Enso signed an agreement to acquire the Dutch paper
merchant Scaldia Papier B.V. from International Paper to become part of
the Stora Enso Merchants division (Papyrus). Stora Enso is acquiring
Scaldia Papier to strengthen its presence in the rapidly changing
European paper merchant market and to achieve synergies with its Papyrus
merchant operations. The debt free transaction value is EUR 30 million.
The acquisition is expected to be closed at the end August 2004, subject
to approval by regulatory authorities.
Outlook
In Europe the economic outlook is more positive than in the first
quarter. The economic recovery is still moderate; nevertheless, paper
demand, especially in fine paper grades, is improving. Price increases
are expected in fine paper grades during the second half of the year. In
magazine paper grades demand is improving, but in coated magazine paper
the imbalance between supply and demand will keep the pricing environment
competitive. Packaging board demand and prices are expected to remain
stable. In wood products whitewood supply and demand are expected to stay
in balance, but the redwood market will remain oversupplied.
In North America print advertising expenditure continues to improve and
competing paper imports have moderated. Previously announced price
increases in coated and uncoated magazine paper and coated fine paper
are being implemented. Speciality paper demand continues to strengthen
and price rises have been achieved. Operating rates are expected to
remain strong. Stora Enso North America's financial performance is
forecast to improve significantly during the second half of the year as a
result of the Profit Enhancement Programme and more favourable market
conditions.
In Asia the markets for fine paper are seasonally slowing down. Prices
are stabilising, having increased in the second quarter.
This report is unaudited.
Helsinki, 28 July 2004
Stora Enso Oyj
Board of Directors
Segments (compared with the previous quarter)
PAPER
Publication Paper
Change
EUR Q2/Q1
million 2003 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 %
Sales 4 295.7 1 058.3 1 042.8 1 086.3 1 108.3 1 019.2 1 069.6 4.9
Operating
profit 111.1 35.6 -6.0 39.2 42.3 8.7 -3.8
% of
sales 2.6 3.4 -0.6 3.6 3.8 0.9 -0.4
ROOC, %* 2.8 3.6 -0.6 3.9 4.2 0.9 -0.4
Deliveries,
1 000 t 6 954 1 654 1 678 1 763 1 859 1 732 1 819 5.0
Production,
1 000 t 7 011 1 739 1 663 1 812 1 797 1 830 1 782 -2.6
* ROOC = 100% x Operating profit/Operating capital
Publication paper sales were EUR 1 069.6 million, up 4.9% on the previous
quarter mainly due to increased deliveries to overseas markets. Operating
result was EUR -3.8 million, down on the previous quarter due to the
lower margins on overseas sales, the Midsummer holiday shutdowns and
related maintenance costs. Market-related production curtailments
totalled 74 000 (93 000) tonnes in Europe and none (none) in North
America.
In Europe demand for newsprint increased, and demand for uncoated and
coated magazine paper was stronger than a year ago. Overseas shipments
remained high. Prices declined in all publication paper grades in Western
Europe in the beginning of the year and have remained low. Price
increases have been announced in overseas markets. An imbalance in the
coated magazine paper market makes for a challenging pricing environment
in Europe.
Producer inventories decreased for seasonal reasons but are still higher
than a year ago. Customer inventories did not change significantly. Order
books are improving. The favourable trends in key economic data should
stimulate demand for advertising-driven paper.
In North America demand for coated magazine and high-quality super
calendered (SC) paper increased during the quarter. Demand for newsprint
is weaker than a year ago, but stronger than in the previous quarter.
Publication paper price increases have been implemented recently.
Fine Paper
Change
Q2/Q1
EUR million 2003 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 %
Sales 3 197.7 852.3 793.9 788.5 763.0 788.9 786.3 -0.3
Operating
profit 153.5 80.7 40.3 23.1 9.4 18.1 4.6 -74.6
% of sales 4.8 9.5 5.1 2.9 1.2 2.3 0.6
ROOC, %* 4.4 8.8 4.5 2.7 1.1 2.2 0.5
Deliveries,
1 000 t 3 591 885 895 894 917 959 964 0.5
Production,
1 000 t 3 624 894 889 922 919 984 999 1.5
* ROOC = 100% x Operating profit/Operating capital
Fine paper sales were EUR 786.3 million, similar to the previous quarter.
Operating profit was EUR 4.6 million, down EUR 13.5 million on the
previous quarter due to higher maintenance costs in Europe and lower-
priced start-up grades in North America. The rebuilding of fine paper
machine 97 at Kimberly Mill reduced the operating profit by approximately
USD 15 (EUR 12) million, of which roughly one-third was related to lost
volumes. Market-related production curtailments totalled
8 000 (12 000) tonnes in Europe and none (none) in North America.
European demand for uncoated fine paper was stronger than in the previous
quarter, mainly for seasonal reasons. Prices for uncoated fine paper
stabilised towards the end of the quarter.
Producer and merchant inventories are both low. The order inflow has
stayed healthy despite the seasonally quiet summer period.
In Europe demand for coated fine paper continued to improve during the
second quarter and prices increases announced for the second quarter were
partially implemented. Producer inventories were above the longterm
average, but merchant inventories were low. The order inflow remained
good.
In Europe the demand for fine paper is expected to improve after the
seasonally low summer period. Prices are forecast to increase over the
remainder of the year.
In North America demand for coated fine paper was stronger than a year
ago but weaker than in the previous quarter for seasonal reasons. Imports
into the USA declined and prices were stable. Producer inventories are
decreasing but remain rather high; customer inventories are reported to
be high but stable. Recently announced price increases are being
implemented and order books are strong.
In Europe demand and prices for speciality papers were similar to the
previous quarter and order books are healthy. In North America demand for
speciality papers was stronger than in the previous quarter and sales
prices were steady. Order books are strong and price increases have been
implemented in some grades.
Merchants
Sales were EUR 148.5 million, down 7.4% on the previous quarter mainly
due to seasonally lower volumes. Operating profit was EUR 2.4 million,
down 27.3% on the previous quarter for the same reason, but an
improvement on last year's EUR -1.2 million. Sales prices were stable and
operating costs unchanged on the previous quarter.
Demand has started to recover slowly, and a seasonal and cyclical
recovery is expected in the autumn. Prices have generally stabilised and
increased slightly in coated woodfree paper in some European markets.
Improvements are expected in the second half of the year.
PACKAGING BOARDS
Change
Q2/Q1
EUR million 2003 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 %
Sales 2 761.6 699.0 711.4 691.1 660.1 692.0 704.4 1.8
Operating
profit 292.4 89.4 65.5 87.4 50.1 82.1 67.7 -17.5
% of sales 10.6 12.8 9.2 12.6 7.6 11.9 9.6
ROOC, %* 11.6 14.1 10.3 13.7 7.9 13.1 10.7
Deliveries,
1 000 t 3 006 756 781 755 714 776 790 1.8
Production,
1 000 t 3 050 788 763 767 732 771 775 0.5
* ROOC = 100% x Operating profit/Operating capital
Packaging board sales were EUR 704.4 million, up 1.8% on the previous
quarter due to higher deliveries. Operating profit was EUR 67.7 million,
down 17.5% on previous quarter due to seasonally higher personnel and
maintenance costs related the Midsummer shutdowns and the strike at
Imatra, Finland. Market-related production curtailments totalled
16 000 (20 000) tonnes in consumer packaging boards.
Demand was good, but the value of sales to the Americas and Asia were
still depressed as the US dollar was weaker than a year ago.
Demand is generally expected to remain firm in Europe. Moderate price
increases are expected in food service boards and some other grades. The
price increases are driven by good demand and improved local prices in
the US-dollar-dominated markets.
FOREST PRODUCTS
Wood Products
Change
Q2/Q1
EUR million 2003 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 %
Sales 1 400.0 316.5 385.6 335.5 362.4 373.1 419.2 12.4
Operating
profit 26.5 7.0 14.9 -4.7 9.3 11.4 21.3 86.8
% of sales 1.9 2.2 3.9 -1.4 2.6 3.1 5.1
ROOC, %* 5.1 6.1 11.0 -3.0 5.7 7.0 12.5
Deliveries,
1 000 m3 5 822 1 283 1 644 1 337 1 558 1 597 1 777 11.3
Production,
1 000 m3 6 168 1 406 1 648 1 440 1 674 1 708 1 853 8.5
* ROOC = 100% x Operating profit/Operating capital
Wood product sales were EUR 419.2 million, up 12.4% on the previous
quarter mainly because of higher deliveries due to the strong US market
and new investments in Finland and the Baltic States. Operating profit
was EUR 21.3 million, up 86.8% on the previous quarter for the same
reason.
During the first half of 2004 the increasing supply of whitewood was
absorbed by overseas markets, especially in the USA. The redwood market
continued to be oversupplied, mainly due to Nordic and Russian
production.
The market outlook for the second half of the year is stable in Japan,
but the strong demand in the USA seems to be softening and there
whitewood prices will be lower than in the second quarter. In Europe high
consumption will keep the whitewood balance fairly reasonable. The
redwood market will remain oversupplied in Europe at least until the
fourth quarter of the year, which is putting pressure on redwood prices.
Wood Supply Europe
Sales were EUR 621.4 million, down 2.1% on the previous quarter.
Operating profit was EUR 3.3 million, down 89.5% on the previous quarter
mainly due to the restructuring of ownership of the Swedish forestland.
Deliveries to the Group's mills in Finland, Sweden, the Baltic States,
Russia and Continental Europe totalled 10.6 million cubic metres, down 3%
on the previous quarter mainly for seasonal reasons.
The wood market was stable in Finland and prices rose slightly in Sweden.
In the Baltic States and nearby Russian regions, wood prices rose,
especially for sawlogs. In Continental Europe the price trend was
downwards.
Financials
Key Ratios Q1/03 Q2/03 Q3/03 Q4/03 2003 Q1/04 Q2/04
Earnings per
share
(basic), EUR 0.10 0.06 0.05 -0.05 0.16 0.49 0.06
Earnings per
share excl.
non-recurring
items, EUR 0.10 0.06 0.08 0.00 0.24 0.06 0.06
Cash earnings
per share
(CEPS), EUR 0.43 0.41 0.41 0.32 1.57 0.55 0.43
CEPS excl.
non-recurring
items, EUR 0.43 0.41 0.44 0.35 1.63 0.41 0.43
Return on
capital
employed
(ROCE), % 7.0 3.5 3.2 2.1 4.0 7.9 2.2
ROCE excl.
non-recurring
items, % 7.0 3.5 4.6 2.6 4.5 3.7 2.2
Return on
equity
(ROE), % 4.1 2.8 2.1 -2.1 1.7 20.6 2.7
Debt/equity
ratio 0.49 0.51 0.51 0.49 0.49 0.39 0.42
Equity per
share, EUR 9.39 9.48 9.60 9.49 9.49 9.47 9.56
Equity
ratio, % 43.2 43.8 44.2 44.7 44.7 47.8 48.2
Operating
profit, % of
sales 6.7 3.4 3.2 2.1 3.9 7.3 1.9
Operating
profit excl.
non-recurring
items, % of
sales 6.7 3.4 4.6 2.6 4.3 3.4 1.9
Capital
expenditure,
EUR million 235.8 324.1 303.1 385.2 1 248.2 216.1 281.1
Capital
expenditure,
% of sales 7.6 10.6 10.1 12.7 10.3 7.2 9.0
Capital
employed,
EUR million 11 871 11 925 12 029 11 613 11 613 10 579 10 831
Interest
bearing net
liabilities,
EUR million 3 968 4 071 4 104 3 919 3 919 3 105 3 356
Average
number of
employees 43 386 44 506 44 737 44 264 44 264 42 446 43 795
Average
number of
shares
(million)
- periodic 866.2 852.9 844.5 841.3 851.1 836.4 831.8
- cumulative 866.2 859.5 854.4 851.1 851.1 836.4 834.7
- cumulative,
diluted 866.4 860.5 855.6 852.4 852.4 837.1 835.6
Key Exchange Rates for the Euro
One Euro is Closing Rate Average Rate
31 Dec 2003 30 Jun 2004 31 Dec 2003 30 Jun 2004
SEK 9.0800 9.1451 9.1245 9.1655
USD 1.2630 1.2155 1.1320 1.2280
GBP 0.7048 0.6707 0.6921 0.6733
CAD 1.6234 1.6343 1.5822 1.6429
Condensed Consolidated Income Statement
EUR million 2003 H1/2003 H1/2004
Sales 12 172.3 6 156.1 6 120.8
Other operating income 41.2 56.4 165.4
Materials & services -6 129.3 -2 965.1 -3 181.7
Freight & sales commissions -1 286.8 -799.9 -678.4
Personnel expenses -2 297.6 -1 144.4 -1 135.6
Other operating expenses -828.0 -409.0 -417.4
Depreciation, amortisation and
impairment charges -1 200.4 -582.5 -595.5
Operating Profit 471.4 311.6 277.6
Share of results of associated companies -23.0 -9.0 14.4
Net financial items -237.7 -92.6 -46.5
Profit before Tax and Minority Interests 210.7 210.0 245.5
Income tax expense -67.0 -67.4 219.6
Profit after Tax 143.7 142.6 465.1
Minority interests -5.8 -5.4 -6.3
Net Profit for the Period 137.9 137.2 458.8
Key Ratios
Basic earnings per share, EUR 0.16 0.16 0.55
Diluted earnings per share, EUR 0.16 0.16 0.55
Condensed Consolidated Cash Flow Statement
EUR million 2003 H1/2003 H1/2004
Cash Flow from Operating
Activities
Operating profit 471.4 311.6 277.6
Adjustments 1 178.3 563.6 478.4
Change in net working capital 157.9 -27.1 -445.4
Change in short-term interest
bearing receivables 313.1 645.9 588.3
Cash Flow Generated by Operations 2 120.7 1 494.0 898.9
Net financial items -198.1 -75.6 -80.3
Income taxes paid -233.8 -177.3 -89.1
Net Cash Provided by Operating
Activities 1 688.8 1 241.1 729.5
Acquisitions -241.3 -159.2 -217.7
Proceeds from sale of fixed
assets and shares 60.2 8.7 206.8
Capital expenditure -1 226.7 -559.9 -497.2
Proceeds from the long-term
receivables, net 336.2 0.4 -166.5
Net Cash Used in Investing
Activities -1 071.6 -710.0 -674.6
Cash Flow from Financing Activities
Change in long-term liabilities -962.5 -542.5 -60.9
Change in short-term borrowings 1 097.1 775.2 562.8
Dividends paid -387.7 -387.7 -375.7
Proceeds from issuance of share capital 2.3 - 4.4
Purchase of own shares -319.2 -245.9 -112.7
Net Cash Used in Financing Activities -570.0 -400.9 17.9
Net Increase in Cash and Cash
Equivalents 47.2 130.2 72.8
Cash and bank in acquired companies 3.0 4.2 -
Cash and bank in sold companies - -68.2
Translation differences on cash
holdings -17.2 -4.3 2.0
Cash and bank at the beginning of
period 168.5 168.5 201.5
Cash and Cash Equivalents at Period End 201.5 298.6 208.1
Property, Plant and Equipment, Intangible Assets and Goodwill
EUR million 2003 H1/2003 H1/2004
Carrying value at 1 January 12 796.7 * 12 796.7 * 12 535.3
Acquisition of subsidiary companies 206.4 202.8 21.9
Additions 1 248.2 559.9 497.2
Disposals -54.0 -3.6 -1 587.5
Depreciation, amortisation and
impairment -1 200.4 -582.5 -595.5
Translation difference and other -461.6 -254.9 62.7
Balance Sheet Total 12 535.3 12 718.4 10 934.1
Acquisitions of Subsidiary Companies
Property, plant and equipment 132.6 104.7 21.9
Borrowings -94.1 -94.9 -10.4
Other assets, less liabilities 12.9 22.3 -1.7
Fair value of net assets 51.4 32.1 9.8
Goodwill 73.8 98.1 0.0
Total Purchase Consideration 125.2 130.2 9.8
* Includes the initial IAS 41 valuation of forest of EUR 855.8 million
Borrowings
EUR million 2003 H1/2003 H1/2004
Non-current borrowings 3 404.6 4 168.9 3 358.2
Current borrowings 1 769.6 1 240.2 860.4
5 174.2 5 409.1 4 218.6
Carrying value at 1 January 5 175.6 5 175.6 5 174.2
Debt acquired with new subsidiaries 94.1 94.9 10.4
Debt disposed with sold subsidiaries - - -1 487.2
Proceeds from / -payments of
borrowings (net) 421.5 354.6 481.5
Translation difference and other -517.0 -216.0 39.7
Total Borrowings 5 174.2 5 409.1 4 218.6
Condensed Consolidated Balance Sheet
Assets
EUR million 31 Dec 2003 30 Jun 2003 30 Jun 2004
Fixed and Other Long-term Assets
Fixed assets O 12 535.3 12 718.4 10 934.1
Investment in
associated companies 319.0 209.4 508.4
Listed securities I 227.7 162.9 202.9
Unlisted shares O 140.8 148.3 146.7
Non-current loan
receivables I 44.3 485.7 221.4
Deferred tax assets T 12.1 52.9 17.5
Other non-current assets O 170.3 202.0 239.6
13 449.5 13 979.6 12 270.6
Current Assets
Inventories O 1 623.5 1 658.6 1 775.5
Tax receivables T 182.5 254.6 162.3
Operative receivables O 1 703.3 1821.4 1 889.4
Interest-bearing
receivables I 781.8 390.6 229.8
Cash and cash
equivalents I 201.5 298.6 208.1
4 492.6 4 423.8 4 265.1
Total assets 17 942.1 18 403.4 16 535.7
Shareholders' Equity and Liabilities
EUR million 31 Dec 2003 30 Jun 2003 30 Jun 2004
Shareholders Equity 7 952.9 8 008.9 7 916.2
Minority Interests 60.3 48.9 66.5
Long-term Liabilities
Pension provisions O 911.9 915.1 895.7
Other provisions O 97.1 174.7 78.1
Deferred tax liabilities T 1 777.3 1 807.5 1 230.0
Long-term debt I 3 404.6 4 168.9 3 358.2
Long-term operative
liabilities O 77.7 26.7 153.9
6 268.6 7 092.9 5 715.9
Current Liabilities
Current portion of
long-term debt I 359.5 276.2 104.5
Interest-bearing
liabilities I 1 410.1 969.3 755.9
Operative liabilities O 1 538.3 1 494.0 1 602.4
Tax liabilities T 352.4 513.3 374.3
3 660.3 3 252.7 2 837.1
Total Liabilities 9 928.9 10 345.6 8 553.0
Total Shareholders
Equity and Liabilities 17 942.1 18 403.4 16 535.7
Items designated with "O" are included in operating capital.
Items designated with "I" are included in interest-bearing net
liabilities.
Items designated with "T" are included in the tax liability.
Statement of Changes in Shareholders' Equity
Treasu
Share Share ry Retained
EUR million Capital Premium Shares OCI CTA Earnings Total
Balance at
31 December
2002 1 529.6 1 554.0 -314.9 233.4 -144.4 5 299.2 8 156.9
Effect of
adopting
IAS 41
Subsidiary
companies - - - - - 615.4 615.4
Associated
companies - - - - - 44.0 44.0
Balance at
1 January
2003
(restated) 1 529.6 1 554.0 -314.9 233.4 -144.4 5 958.6 8 816.3
Repurchase
of
Stora Enso Oyj
shares - - -319.1 - - - -319.1
Cancellation
of
Stora Enso Oyj
shares -60.5 -315.5 376.0 - - - 0.0
Dividend
(EUR 0.45
per share) - - - - - -387.7 -387.7
Options
exercised 0.2 -1.1 - - - - -0.9
Net profit
for the period - - - - - 146.6 146.6
OCI entries - - - -118.8 - - -118.8
Translation
adjustment - - - - -52.7 - -52.7
Balance at
31 December
2003 1 469.3 1 237.4 -258.0 114.6 -197.1 5 717.5 8 083.7
Restatement
of opening balance
Finnish Statutory
Pension Scheme - - - - - -130.8 -130.8
Balance at
1 January 2004
(restated) 1 469.3 1 237.4 -258.0 114.6 -197.1 5 586.7 7 952.9
Repurchase
of
Stora Enso Oyj
shares - - -112.7 - - - -112.7
Cancellation
of
Stora Enso Oyj
shares -47.3 -228.5 275.8 - - - -
Dividend
(EUR 0.45
per share) - - - - - -375.7 -375.7
Options
exercised 1.3 2.3 - - - - 3.6
Net profit
for the period - - - - -6.9 458.8 451.9
OCI entries - - - -5.5 - - -5.5
Translation
adjustment - - - - 1.7 - 1.7
Balance at
30 June
2004 1 423.3 1 011.2 -94.9 109.1 -202.3 5 669.8 7 916.2
CTA = Cumulative Translation Adjustment
OCI = Other Comprehensive Income
Commitments and Contingencies
EUR million 31 Dec 2003 30 Jun 2003 30 Jun 2004
On own Behalf
Pledges given 3.8 0.8 0.8
Mortgages 103.5 105.3 105.8
On Behalf of Associated Companies
Mortgages 0.8 1.0 0.8
Guarantees 48.4 52.2 127.2
On Behalf of Others
Pledges given 2.2 2.6 2.2
Mortgages 10.9 4.8 10.9
Guarantees 13.1 16.9 10.3
Other Commitments, Own
Leasing commitments, in next
12 months 34.3 37.5 34.9
Leasing commitments, after
next 12 months 171.2 213.5 162.9
Pension liabilities 3.0 3.0 2.8
Other commitments 95.9 72.0 101.7
Total 487.1 509.6 560.3
Pledges given 6.0 3.4 3.0
Mortgages 115.2 111.1 117.5
Guarantees 61.5 69.1 137.5
Leasing commitments 205.5 251.0 197.8
Pension liabilities 3.0 3.0 2.8
Other commitments 95.9 72.0 101.7
Total 487.1 509.6 560.3
Net Fair Values of Derivative Financial Instruments
31 Dec 30 Jun
EUR million 2003 2003 30 Jun 2004
Posit Negati
ive ve
Net Fair Net Fair Fair Fair Net Fair
Values Values Values Values Values
Interest rate swaps 106.8 161.4 88.8 -3.1 85.7
Interest rate options 0.5 0.0 3.2 -1.0 2.2
Cross-currency swaps -11.0 -14.1 0.2 -12.4 -12.2
Forward contracts 172.8 44.5 47.8 -13.2 34.6
FX Options 0.7 -2.8 0.1 -0.1 0.0
Commodity contracts 71.5 95.6 107.0 -0.6 106.4
Equity swaps -36.0 -60.7 21.1 -34.5 -13.4
Total 305.3 223.9 268.2 -64.9 203.3
Nominal Values of Derivative Financial Instruments
EUR million 31 Dec 2003 30 Jun 2003 30 Jun 2004
Interest Rate Derivatives
Interest rate swaps
Maturity under 1 year 113.7 49.4 173.4
Maturity 25 years 1 080.4 755.8 824.1
Maturity 610 years 1 439.2 795.5 1 237.8
Maturity over 10 years - - -
2 633.3 1 600.7 2 235.3
Interest rate futures - - -
Interest rate options 23.8 - 1 174.4
Total 2 657.1 1 600.7 3 409.7
Foreign Exchange Derivatives
- Cross-currency swap
agreements 129.5 166.1 109.0
- Forward contracts 3 112.5 3 935.2 2 840.6
- FX Options 208.1 487.9 53.5
Total 3 450.1 4 589.2 3 003.1
Commodity derivatives
Commodity contracts 477.0 586.9 388.1
Total 477.0 586.9 388.1
Equity swaps
Equity swaps 308.4 311.9 359.5
Total 308.4 311.9 359.5
Sales by Product Area
EUR
million 2002 Q1/03 Q2/03 Q3/03 Q4/03 2003 Q1/04 Q2/04
Publication
Paper 4 715.6 1 058.3 1 042.8 1 086.3 1 108.3 4 295.7 1 019.2 1 069.6
Fine
Paper 3 427.4 852.3 793.9 788.5 763.0 3 197.7 788.9 786.3
Merchants 720.6 176.1 155.4 139.5 156.6 627.6 160.3 148.5
Other -289.5 -72.0 -69.0 -70.4 -69.9 -281.3 -70.4 -68.6
Paper 8 574.1 2 014.7 1 923.1 1 943.9 1 958.0 7 839.7 1 898.0 1 935.8
Packaging
Boards 2 720.2 699.0 711.4 691.1 660.1 2 761.6 692.0 704.4
Wood
Products 1 235.2 316.5 385.6 335.5 362.4 1 400.0 373.1 419.2
Wood Supply
Europe 1 958.7 534.2 526.7 475.0 538.4 2 074.3 634.9 621.4
Other -531.3 -143.5 -149.9 -131.7 -165.9 -591.0 -229.8 -225.6
Forest
Products 2 662.6 707.2 762.4 678.8 734.9 2 883.3 778.2 815.0
Other -1 174.3 -321.8 -339.9 -326.4 -324.2 -1 312.3 -350.3 -352.3
Total 12 782.6 3 099.1 3 057.0 2 987.4 3 028.8 12 172.3 3 017.9 3 102.9
Restated Operating Profit by Product Area excluding Non-recurring Items
and Goodwill
EUR million 2002 Q1/03 Q2/03 Q3/03 Q4/03 2003 Q1/04 Q2/04
Publication
Paper 313.6 35.6 -6.0 39.2 42.3 111.1 8.7 -3.8
Fine Paper 298.3 80.7 40.3 23.1 9.4 153.5 18.1 4.6
Merchants 5.4 1.5 -1.2 -1.5 -5.5 -6.7 3.3 2.4
Paper 617.3 117.8 33.1 60.8 46.2 257.9 30.1 3.2
Packaging
Boards 345.3 89.4 65.5 87.4 50.1 292.4 82.1 67.7
Wood Products 44.5 7.0 14.9 -4.7 9.3 26.5 11.4 21.3
Wood Supply
Europe 94.6 34.5 33.8 23.0 25.2 116.5 31.3 3.3
Forest
Products 139.1 41.5 48.7 18.3 34.5 143.0 42.7 24.6
Other Areas -52.5 -8.6 -15.7 -6.2 -21.0 -51.5 -28.8 -15.1
Goodwill
amortisation -148.8 -32.1 -28.0 -23.5 -32.4 -116.0 -22.7 -21.9
Operating
Profit
excl. Non-
recurring
Items 900.4 208.0 103.6 136.8 77.4 525.8 103.4 58.5
Non-recurring
items -1 078.1 - - -39.9 -14.5 -54.4 115.7 -
Operating
Profit(IAS) -177.7 208.0 103.6 96.9 62.9 471.4 219.1 58.5
Net financial
items -206.2 -81.3 -11.3 -23.4 -121.7 -237.7 -20.3 -26.2
Associated
companies 14.6 -0.5 -8.5 -9.0 -5.0 -23.0 -2.3 16.7
Profit Before
Tax and
Minority
Interests -369.3 126.2 83.8 64.5 -63.8 210.7 196.5 49.0
Income tax
expense 128.5 -39.9 -27.4 -21.1 21.4 -67.0 214.6 5.0
Profit
after Tax -240.8 86.3 56.4 43.4 -42.4 143.7 411.1 54.0
Minority
interests 0.1 -3.2 -2.3 1.7 -2.0 -5.8 -4.2 -2.1
Net Profit -240.7 83.1 54.1 45.1 -44.4 137.9 406.9 51.9
Goodwill Amortisation by Product Area
EUR million 2002 Q1/03 Q2/03 Q3/03 Q4/03 2003 Q1/04 Q2/04
Publication
Paper -56.7 -7.9 -8.2 -8.1 -10.2 -34.4 -5.7 -5.6
Fine Paper -53.7 -10.9 -10.6 -10.6 -11.0 -43.1 -10.2 -9.5
Merchants -5.2 -0.6 -0.5 -0.6 -0.5 -2.2 -0.4 -0.5
Paper -115.6 -19.4 -19.3 -19.3 -21.7 -79.7 -16.3 -15.6
Packaging
Boards -13.0 -6.5 -1.5 -1.9 -2.0 -11.9 -1.2 -1.0
Wood Products -14.4 -4.0 -6.1 -1.2 -8.7 -20.0 -5.2 -5.3
Wood Supply
Europe 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Forest
Products -14.4 -4.0 -6.1 -1.2 -8.7 -20.0 -5.2 -5.3
Other -5.8 -2.2 -1.1 -1.1 0.0 -4.4 0.0 0.0
Operating
Profit -148.8 -32.1 -28.0 -23.5 -32.4 -116.0 -22.7 -21.9
Restated Operating Profit by Product Area
EUR million 2002 Q1/03 Q2/03 Q3/03 Q4/03 2003 Q1/04 Q2/04
Publication
Paper -762.7 27.7 -14.2 1.6 32.1 47.2 3.0 -9.4
Fine Paper 67.9 69.8 29.7 2.2 -1.6 100.1 7.9 -4.9
Merchants -24.7 0.9 -1.7 -2.1 -6.0 -8.9 2.9 1.9
Paper -719.5 98.4 13.8 1.7 24.5 138.4 13.8 -12.4
Packaging
Boards 332.3 82.9 64.0 85.5 48.1 280.5 80.9 66.7
Wood Products 30.1 3.0 8.8 -5.9 0.6 6.5 6.2 16.0
Wood Supply
Europe 120.5 34.5 33.8 23.0 25.2 116.5 147.0 3.3
Forest
Products 150.6 37.5 42.6 17.1 25.8 123.0 153.2 19.3
Other 58.9 -10.8 -16.8 -7.4 -35.5 -70.5 -28.8 -15.1
Operating
Profit -177.7 208.0 103.6 96.9 62.9 471.4 219.1 58.5
Net financial
items -206.2 -81.3 -11.3 -23.4 -121.7 -237.7 -20.3 -26.2
Associated
companies 14.6 -0.5 -8.5 -9.0 -5.0 -23.0 -2.3 16.7
Profit
Before Tax
and Minority
Interests -369.3 126.2 83.8 64.5 -63.8 210.7 196.5 49.0
Income tax
expense 128.5 -39.9 -27.4 -21.1 21.4 -67.0 214.6 5.0
Profit
after Tax -240.8 86.3 56.4 43.4 -42.4 143.7 411.1 54.0
Minority
interests 0.1 -3.2 -2.3 1.7 -2.0 -5.8 -4.2 -2.1
Net Profit -240.7 83.1 54.1 45.1 -44.4 137.9 406.9 51.9
Stora Enso Shares
Closing
Price Helsinki, EUR Stockholm, SEK New York, USD
Series A Series R Series A Series R ADRs
April 11.15 11.25 102.50 102.00 13.35
May 10.30 10.50 96.50 96.00 12.92
June 11.05 11.15 103.00 102.00 13.58
Trading
Volume Helsinki Stockholm New York
Series
Series A Series R A Series R ADRs
April 155 729 84 060 074 174 591 22 025 178 1 785 800
May 49 259 57 473 577 117 795 13 787 572 1 270 100
June 42 983 46 318 772 151 007 16 251 098 1 353 800
Total 247 971 187 852 423 443 393 52 063 848 4 409 700
www.storaenso.com
www.storaenso.com/investors
Publication dates for financial information
Interim Review for January September 2004 27 October 2004
Results for 2004 3 February 2005
Interim Review for January March 2005 27 April 2005
Interim Review for January June 2005 27 July 2005
Interim Review for January September 2005 27 October 2005
Annual General Meeting 22 March 2005
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.
STORA ENSO OYJ
p.p. Jussi Siitonen Jukka Marttila
