Stora Enso Interim Review January - June 2005
STORA ENSO OYJ Stock Exchange Release 27 July 2005 at 13.00
Stora Enso Interim Review January - June 2005
Profitability negatively impacted by Finnish labour dispute
Second Quarter Results (compared with previous quarter)
Stora Enso's earnings per share were EUR 0.00 (EUR 0.07) excluding non-recurring
items. Operating profit excluding non-recurring items was EUR 17.7
(EUR 112.7) million. Profit before tax amounted to EUR 0.1 (EUR 83.6) million
excluding non-recurring items. There was a non-recurring item of EUR -12.0 million
due to impairment of fixed assets at Veitsiluoto Sawmill in Finland.
Sales at EUR 3 187.3 million were 1.3% higher than the previous quarter's
EUR 3 144.9 million. Cash flow from ongoing operations was EUR 387.9
(EUR 159.4) million and cash flow after investing activities EUR 130.6
(EUR -198.1) million. Cash earnings per share were EUR 0.35 (EUR 0.41)
excluding non-recurring items. Net financial items were EUR -34.6
(EUR -43.1) million.
EUR million 2003 2004 H1/04 H1/05 Q2/04 Q1/05 Q2/05
Sales 12 172.3 12 395.8 6 120.8 6 332.2 3 102.9 3 144.9 3 187.3
EBITDA 1) 2) 1 707.7 1 510.9 753.9 687.2 361.2 388.8 298.4
Operating
profit 2) 522.9 338.9 158.4 130.4 56.3 112.7 17.7
Non-recurring
items -54.4 369.7 115.7 -12.0 - - -12.0
Operating
margin 2), % 4.3 2.7 2.6 2.1 1.8 3.6 0.6
Operating
profit 468.5 708.6 274.1 118.4 56.3 112.7 5.7
Profit before
tax and
minority
interests 2) 316.3 271.8 126.3 83.7 46.8 83.6 0.1
Profit before
tax and
minority
interests 207.8 641.5 242.0 71.7 46.8 83.6 -11.9
Net profit for
the period 136.0 740.8 455.6 48.5 50.3 58.6 -10.1
EPS 2), Basic,
EUR 0.24 0.26 0.12 0.07 0.06 0.07 0.00
EPS, Basic, EUR 0.16 0.89 0.55 0.06 0.06 0.07 -0.01
CEPS 2) 3), EUR 1.63 1.67 0.83 0.76 0.43 0.41 0.35
ROCE 2), % 4.5 3.0 2.8 2.4 2.1 4.1 0.6
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
Short-term Outlook
Commenting on the outlook, Stora Enso's CEO Jukka Härmälä said, "The Finnish
labour dispute ended on 1 July 2005. The new labour agreement, with its
significant changes in labour practices such as production continuing during
the Midsummer and Christmas holidays and increased flexibility in outsourcing,
will contribute to the long-term competitiveness of the Finnish forest products
industry.
The estimated effects of the labour dispute in the third quarter of 2005, with
production restarting in early July, will be about EUR -40 million on operating
profit and some 100 000 tonnes of lost paper and board production."
In Europe demand for advertising-driven paper grades is expected to remain rather
good. Firm demand for publication papers is forecast, because the Finnish labour
dispute has decreased inventories in the value chain and demand normally picks
up in the catalogue season. Fine paper demand is expected to improve and prices
should be rather stable. Packaging board demand and prices are anticipated to be
stable. The market balance in wood products is expected to remain good, thus
improving the price outlook.
In North America seasonal factors will improve demand for magazine paper. The
tighter supply of magazine paper caused by the Finnish and Canadian labour
disputes should improve the supply and demand balance, and prices are forecast to
rise mainly for non-contractual business. Newsprint demand continues to decline,
but prices are expected to rise because of the favourable supply and demand
balance. There should be a seasonal pick-up in demand for coated fine paper and
prices should remain stable.
In Asia fine paper demand has been growing steadily, but prices are under some
pressure due to new capacity.
For further information, please contact:
Jukka Härmälä, Chief Executive Officer, tel. +358 2046 21404
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 2005
Summary of Second Quarter Results (compared with previous quarter)
* Sales were EUR 3 187.3 (EUR 3 144.9) million.
* Operating profit was EUR 17.7 (EUR 112.7) million excluding non-recurring
items, burdened by the approximately EUR 150 million effect of the Finnish labour
dispute.
* Profit before tax was EUR 0.1 (EUR 83.6) million excluding non-recurring items.
* Earnings per share were EUR 0.00 (EUR 0.07) excluding non-recurring items.
* Cash earnings per share were EUR 0.35 (EUR 0.41) excluding non-recurring items.
Demand for the Group's products remained relatively good in the second quarter,
with a modest increase in demand for newsprint and uncoated fine paper, and a
slight decrease in coated fine paper orders. Markets were stable in packaging
boards and seasonally firmer in wood products.
In Europe the Finnish labour dispute tightened the supply situation, especially
in magazine paper and coated fine paper. Export volumes from Europe were lower
because of the labour dispute. Prices were stable and downward pressure on
uncoated fine paper prices eased. Packaging board markets were generally stable.
Seasonal demand for wood products increased deliveries but prices were largely
unchanged.
In North America publication paper deliveries remained strong overall and the
supply and demand balance benefited from the labour disputes in Finland and
Canada. Demand for coated fine paper was rather weak.
Paper and board deliveries totalled 3 389 000 tonnes, which is 184 000 tonnes
less than the previous quarter's 3 573 000 tonnes. Production decreased by
685 000 tonnes from the previous quarter's 3 703 000 tonnes to 3 018 000 tonnes.
The Finnish labour dispute had a negative impact of 850 000 tonnes on production.
Deliveries of wood products totalled 1 855 000 cubic metres, which was
314 000 cubic metres more than the previous quarter's 1 541 000 cubic metres.
EUR million 2003 2004 H1/04 H1/05 Q2/04 Q1/05 Q2/05
Sales 12 172.3 12 395.8 6 120.8 6 332.2 3 102.9 3 144.9 3 187.3
EBITDA 1) 2) 1 707.7 1 510.9 753.9 687.2 361.2 388.8 298.4
Operating
profit 2) 522.9 338.9 158.4 130.4 56.3 112.7 17.7
Non-recurring
items -54.4 369.7 115.7 -12.0 - - -12.0
Operating
margin 2), % 4.3 2.7 2.6 2.1 1.8 3.6 0.6
Operating
profit 468.5 708.6 274.1 118.4 56.3 112.7 5.7
Profit before
tax and
minority
interests 2) 316.3 271.8 126.3 83.7 46.8 83.6 0.1
Profit before
tax and
minority
interests 207.8 641.5 242.0 71.7 46.8 83.6 -11.9
Net profit for
the period 136.0 740.8 455.6 48.5 50.3 58.6 -10.1
EPS 2), Basic,
EUR 0.24 0.26 0.12 0.07 0.06 0.07 0.00
EPS, Basic, EUR 0.16 0.89 0.55 0.06 0.06 0.07 -0.01
CEPS 2) 3), EUR 1.63 1.67 0.83 0.76 0.43 0.41 0.35
ROCE 2), % 4.5 3.0 2.8 2.4 2.1 4.1 0.6
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 3 187.3 million were 1.3% higher than the previous quarter's
EUR 3 144.9 million due to the effect of the Papeteries de France acquisition on
Merchants, strengthening of the US dollar and increased volumes in Wood Products,
offset by lower deliveries in Fine Paper and Packaging Boards.
Operating profit excluding non-recurring items was EUR 17.7 (EUR 112.7) million
and declined in all segments except Publication Paper and Wood Products.
The main reason for the decline in profitability was the labour dispute at the
Finnish mills, which reduced the operating profit by approximately
EUR 150 million. This was partly compensated by the strengthening of the US dollar
(EUR 32 million) and resumption of production by the publication paper machines
rebuilt during the first quarter, which had reduced first quarter operating profit
by EUR 32 million. The higher proportion of sales in European rather than overseas
markets increased the profitability of the European mills outside Finland.
Operating profit includes a positive non-cash effect of EUR 5.2 million due to
reversal of the carbon dioxide (CO2) emission charge entered in the first quarter
following retraction of the related accounting interpretation by the International
Accounting Standard Board (IASB). In respect of another accounting change
introduced by the IASB this year, the non-cash valuation impact of share-based
compensation on operating profit was a positive EUR 4.0 million.
There was a non-recurring item of EUR -12.0 million due to impairment of fixed
assets at Veitsiluoto Sawmill in Finland.
Profit before tax amounted to EUR 0.1 (EUR 83.6) million excluding non-recurring
items.
Net financial items were EUR -34.6 (EUR -43.1) million. Net interest amounted to
EUR -40.2 (EUR -27.6) million and net foreign exchange gains were EUR 11.2
(EUR 5.7) million. Other financial items totalled EUR -5.6 (EUR -21.2) million,
mainly related to unrealised changes in fair values of financial instruments.
The share of associated company results amounted to EUR 17.0 (EUR 14.0) million,
including EUR 10.7 (EUR 14.4) million from Bergvik Skog, and EUR 11.7 million
from Veracel, mainly due to the strengthening of the Brazilian real and change in
forest valuation.
Net taxes totalled EUR 3.3 (EUR -23.6) million, leaving a net loss for the quarter
of EUR -8.6 million (EUR 60.0 million profit). The profit attributable to minority
shareholders was EUR 1.5 (EUR 1.4) million, leaving a loss of EUR 10.1 million
attributable to Company shareholders.
Earnings per share were EUR 0.00 (EUR 0.07) excluding non-recurring items.
The return on capital employed was 0.6% (4.1%) excluding non-recurring items.
Capital employed was EUR 11 273.0 million on 30 June 2005, a net increase of
EUR 154.1 million.
Capital Structure
EUR million 31 Dec 2004 30 Jun 2004 31 Mar 2005 30 Jun 2005
Fixed assets 10 848.2 11 080.8 11 104.7 11 146.3
Working capital 1 301.3 1 147.6 1 499.0 1 497.3
Operating Capital 12 149.5 12 228.4 12 603.7 12 643.6
Net tax liabilities -1 493.8 -1 416.8 -1 484.8 -1 370.6
Capital Employed 10 655.7 10 811.6 11 118.9 11 273.0
Associated companies 568.1 508.4 588.9 644.1
Total 11 223.8 11 320.0 11 707.8 11 917.1
Shareholders equity 8 036.3 7 897.1 7 672.0 7 483.3
Minority interests 136.1 66.5 108.2 94.1
Interest-bearing net
liabilities 3 051.4 3 356.4 3 927.6 4 339.7
Financing Total 11 223.8 11 320.0 11 707.8 11 917.1
Financing
Cash flow from ongoing operations was EUR 387.9 (EUR 159.4) million and cash flow
after investing activities EUR 130.6 (EUR -198.1) million. Cash earnings per
share were EUR 0.35 (EUR 0.41) excluding non-recurring items.
At the end of the period, interest-bearing net liabilities were
EUR 4 339.7 million, an increase of EUR 412.1 million mainly resulting from the
share buy-backs and translation differences. Unutilised credit facilities and
cash and cash-equivalent reserves totalled EUR 2.4 billion.
Shareholders' equity amounted to EUR 7.5 billion or EUR 9.46 (EUR 9.46) per share,
compared with the market capitalisation on the Helsinki Stock Exchange on 30 June
2005 of EUR 8.6 billion.
The debt/equity ratio at 30 June 2005 was 0.58 (0.51). The currency effect on
equity was EUR 36.0 million net of the hedging of equity translation risks.
Share buy-backs decreased equity by EUR 209.0 million in the second quarter.
Quarterly Change in Interest-bearing Net Liabilities
Cash Flow, OCI* and Trans-
Ongoing Other lation Balance
Ope- Acqui- Non-Cash Diffe- Sheet
EUR million rations sitions Items rence Impact
Operating profit -0.6 6.3 5.7
Depreciation 292.7 292.7
Change in working capital 95.8 -13.3 -65.9 -14.9 1.7
Cash Flow from Operations 387.9 -13.3 -59.6 -14.9 300.1
Investments -253.0 -18.9 -44.6 -316.5
Other changes in fixed assets -4.3 75.1 -142.6 -71.8
Operating cash flow 130.6 -32.2 15.5 -202.1 -88.2
Net financing items -23.9 -23.9
Taxes paid -118.6 -1.6 10.6 3.8 -105.8
Repurchase of own shares -209.0 -209.0
Other change in shareholders
equity and minority interests -1.6 -23.0 2.4 37.0 14.8
Change in Interest-bearing
Net Liabilities -222.5 -56.8 28.5 -161.3 -412.1
*OCI = Other Comprehensive Income
Capital Expenditure
Capital expenditure for the second quarter totalled EUR 253.0 million, giving a
total for the first six months of EUR 609.6 million.
The main on-going projects during the first six months were the new paper machine
12 at Kvarnsveden Mill (EUR 230.7 million), the Skoghall Energy 2005 project
(EUR 37.3 million), rebuilding paper machine 5 at Corbehem Mill
(EUR 36.4 million), rebuilding paper machine 2 at Summa Mill (EUR 27.6 million)
and rebuilding paper machine 26 at Biron Mill (EUR 12.7 million).
Capital expenditure in 2005 is expected to be in line with depreciation.
Events in Associated Companies
Veracel Mill started production in May, two months ahead of schedule, producing
low-cost eucalyptus pulp. Pulp shipments to Stora Enso mills in China and Europe
commenced in July. During the second quarter Stora Enso invested a further
EUR 15.8 million in equity in Veracel, bringing the total amount invested by
30 June 2005 to EUR 293.3 million.
January - June 2005 Results (compared with the same period in 2004) Sales at
EUR 6 332.2 million were 3.5% higher than in the first half of 2004 as higher
prices were partially offset by lower volumes.
Operating profit excluding non-recurring items decreased by EUR 28.0 million.
The labour dispute in Finland disturbed the comparability of the periods.
Profit before tax excluding non-recurring items decreased by EUR 42.6 million to
EUR 83.7 million, and earnings per share excluding non-recurring items by
EUR 0.05 to EUR 0.07.
Non-recurring items totalled EUR -12.0 million in the first six months of 2005
and EUR 115.7 million in the same period last year.
Stora Enso North America's operating loss was USD 33 (EUR 26) million in the first
half of 2005, compared with USD 130 (EUR 101) million in the first half of 2004.
The results were affected by increased prices in all paper grades and higher
volumes, offset by higher raw material, energy and transport costs. Rebuilding of
paper machine 26 at Biron Mill, the division's largest lightweight-coated magazine
paper machine, accounted for USD 15 (EUR 12) million of the loss. Capital
expenditure totalled USD 73 (EUR 57) million, compared with USD 120
(EUR 93) million in the first half of 2004. Operating cash flow after investing
activities was USD 33 (EUR 26) million, compared with a negative USD 100
(EUR 78) million in the first half of 2004. The North American operations
are expected to break even during the third quarter of 2005.
Inspections by Competition Authorities
There have been no new material developments concerning the inspections. In
May 2004 Stora Enso was the subject of inspections carried out by the European
Commission and the Finnish Competition Authority at locations in Europe and
received subpoenas issued by the US Department of Justice as part of preliminary
anti-trust investigations into the paper industry in Europe and the USA. 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 2005
Papeteries de France Acquisition Closed
The previously announced acquisition of Papeteries de France ("PdF") was closed.
PdF became part of Papyrus, the Stora Enso Merchants division.
Acquisition of Schneidersöhne
Stora Enso announced that it had signed a memorandum of understanding to acquire
100% of the shares in the German paper merchant Schneidersöhne Group. The
enterprise value of the company is estimated to be EUR 450 million. The all-cash
acquisition is expected to be closed during the third quarter of 2005, subject to
due diligence and approval by regulatory and competition authorities.
Lay-offs at Veitsiluoto Sawmill
Stora Enso Timber held negotiations with its personnel at Veitsiluoto Sawmill in
Finland concerning their temporary lay-off as operations at the mill are
unprofitable. The conclusion of the negotiations was that there was no reasonable
option for continuing operations on a profitable basis for the time being.
All 92 employees were therefore to be laid off until at least the end of the year.
Swedish Krona and Euro Bond Offers
In May Stora Enso completed a three-year SEK 2.0 billion bond offer as part of the
Company's Swedish Medium Term Note (MTN) programme.
In June Stora Enso completed a five-year EUR 500 million bond issue as part of the
Company's Euro Medium Term Note (EMTN) programme.
Share Capital and Ownership
During the period a total of 411 549 A shares were converted into R shares.
The latest conversion during the quarter was recorded in the Finnish Trade
Register on 15 June 2005.
On 30 June 2005 Stora Enso had 178 618 796 A shares and 634 358 303 R shares in
issue, of which the Company held 33 700 A shares and 21 710 480 R shares with a
nominal value of EUR 37.0 million. The holding represents 2.7% of the Company's
share capital and 0.9% of the voting rights.
The Annual General Meeting (AGM) of Stora Enso Oyj on 22 March 2005 authorised
the Board to repurchase and dispose of not more than 17 900 000 A shares and
62 150 000 R shares in the Company. The repurchases started on 30 March 2005 and
by the end of the quarter the Company had repurchased a total of 33 700 A shares
at an average price of EUR 10.75 and 20 497 100 R shares at an average price of
EUR 10.55 under the authorisation.
Since the beginning of 2005, the Company has invested EUR 315.6 million in buying
back 37 700 A shares and 29 165 549 R shares at an average price per share of
EUR 10.85 for A shares and EUR 10.81 for R shares.
Changes in Executive Management Group (EMG)
Björn Hägglund, Deputy CEO, retired on 1 June 2005.
Hannu Ryöppönen, currently Chief Financial Officer (CFO) of Royal Ahold B.V., was
appointed CFO and Senior Executive Vice President, Finance, Accounting, Legal
Affairs and Investor Relations as from 1 September 2005. He will succeed Esko
Mäkeläinen, who is retiring at the end of the year. The CFO will now act as
deputy to the CEO.
Elisabet Salander Björklund, previously head of Stora Enso Wood Supply Europe,
was appointed Senior Executive Vice President, Stora Enso Forest Products
as of 1 May 2005.
Christer Ågren, previously head of Corporate Human Resources and TQM, was
appointed Senior Executive Vice President, IT, HR and Business Excellence
as of 1 May 2005.
Profit Improvement Programmes
The European Profit Improvement Programme, Profit 2007, was announced at the end
of April. The target of the programme is to improve annual profit before tax by
EUR 300 million, mainly in Europe, to be achieved from mid 2007 onwards.
The programme will comprise efficiency improvements in production, sales and
logistics, working capital management, sourcing and administration. There may
also be closures or disposal of units with especially high costs or low
long-term earnings potential, and redundancies may occur. It is planned to
announce more information with the third quarter 2005 results.
Stora Enso North America's Profit Enhancement Programme is proceeding and the
anticipated annual financial benefits of USD 145 million are expected to be
reached during the second half of 2005. The labour negotiations are not totally
completed. The number of personnel is currently about 5 200.
Short-term Outlook
The Finnish labour dispute ended on 1 July 2005. The new labour agreement, with
its significant changes in labour practices such as production continuing during
the Midsummer and Christmas holidays and increased flexibility in outsourcing,
will contribute to the long-term competitiveness of the Finnish forest products
industry.
The estimated effects of the labour dispute in the third quarter of 2005, with
production restarting in early July, will be about EUR -40 million on operating
profit and some 100 000 tonnes of lost paper and board production.
In Europe demand for advertising-driven paper grades is expected to remain rather
good. Firm demand for publication papers is forecast, because the Finnish labour
dispute has decreased inventories in the value chain and demand normally picks up
in the catalogue season. Fine paper demand is expected to improve and prices
should be rather stable. Packaging board demand and prices are anticipated to be
stable. The market balance in wood products is expected to remain good, thus
improving the price outlook.
In North America seasonal factors will improve demand for magazine paper. The
tighter supply of magazine paper caused by the Finnish and Canadian labour
disputes should improve the supply and demand balance, and prices are forecast
to rise mainly for non-contractual business. Newsprint demand continues to
decline, but prices are expected to rise because of the favourable supply and
demand balance. There should be a seasonal pick-up in demand for coated fine
paper and prices should remain stable.
In Asia fine paper demand has been growing steadily, but prices are under some
pressure due to new capacity.
This report is unaudited.
Helsinki, 27 July 2005
Stora Enso Oyj
Board of Directors
Segments (compared with the previous quarter)
Publication Paper
EUR Change
million 2004 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 Q2/Q 1%
Sales 4 588.9 1 081.8 1 131.8 1 144.1 1 231.2 1 111.3 1 133.1 2.0
Operating
profit* 103.5 12.1 4.3 46.4 40.7 21.1 31.1 47.4
% of sales 2.3 1.1 0.4 4.1 3.3 1.9 2.7
ROOC, %** 2.4 1.1 0.4 4.2 3.7 1.9 2.7
Deliveries,
1 000 t 7 398 1 732 1 819 1 846 2 001 1 701 1 719 1.1
Production,
1 000 t 7 396 1 830 1 782 1 886 1 899 1 775 1 599 -9.9
* Excluding non-recurring items and goodwill amortisation
** ROOC = 100% x Operating profit/Operating capital
Publication paper sales were EUR 1 133.1 million, up 2% on the previous quarter
mainly due to the stronger US dollar and somewhat higher prices outside Europe.
Operating profit was EUR 31.1 million, up 47% on the previous quarter due to the
higher prices and resumption of production by machines rebuilt during the first
quarter, partially offset by the effect of the Finnish labour dispute.
In Europe demand for newsprint and coated magazine paper was similar to a year
ago, but demand for uncoated magazine paper was weaker. All mills outside Finland
operated at nearly full capacity. Prices were stable at increased levels. Producer
and customer inventories at the end of the quarter were at all-time lows.
In North America demand increased moderately in coated magazine paper and strongly
in uncoated magazine paper. Demand for newsprint decreased, but the supply and
demand balance remained healthy. Prices rose in all publication paper grades.
In Europe order books are good and indicate that there will be no significant
seasonal decline in demand during the summer. A further pick-up in demand for
advertising-driven paper is anticipated in the autumn.
In North America publication paper prices are expected to rise during the third
quarter. Seasonal effects should keep demand for magazine paper healthy.
Fine Paper
Change
EUR million 2004 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 Q2/Q 1%
Sales 2 645.4 656.8 647.1 669.5 672.0 697.2 610.6 -12.4
Operating
profit* 58.4 14.5 -0.4 29.7 14.6 48.4 -14.1 N/M
% of sales 2.2 2.2 -0.1 4.4 2.2 6.9 -2.3
ROOC, %** 2.1 2.1 -0.1 4.1 2.1 6.9 -2.0
Deliveries,
1 000 t 3 514 862 869 881 902 943 797 -15.5
Production,
1 000 t 3 648 890 900 938 920 926 704 -24.0
* Excluding non-recurring items and goodwill amortisation
** ROOC = 100% x Operating profit/Operating capital
Fine paper sales were EUR 610.6 million, down 12% on the previous quarter. Sales
were affected by the labour dispute in Finland, partially offset by deliveries
from stocks. The consequent operating loss of EUR 14.1 million represents a
decline of EUR 62.5 million on the previous quarter.
In Europe demand for uncoated fine paper was good, but deliveries decreased
because of the Finnish labour dispute. Exports from Europe declined. Price
pressure was eased by the tighter supply. The Group's deliveries of coated fine
paper decreased slightly but prices were fairly stable. Combined merchant and
producer inventories were below the long-term average.
In North America the coated fine paper market weakened during the second quarter.
Coated fine paper reel prices were higher and sheet prices were stable. Producer
inventories were high.
In Asia fine paper demand has been growing steadily in China and this trend is
expected to continue.
In Europe there should be a seasonal upturn in demand for uncoated fine paper
after the summer holidays and price pressure will ease. Demand for coated fine
paper should be healthy following the normal seasonal pattern and prices are
expected to remain fairly stable.
In North America demand is forecast to recover seasonally.
Merchants
Sales were EUR 217.4 million, up 19% on the previous quarter mainly due to the
acquisition of Papeteries de France effective from 1 April 2005. Operating profit
was EUR 1.6 million, down 41% on the previous quarter mainly due to integration
costs related to the recent acquisitions.
Packaging Boards
Change
EUR million 2004 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 Q2/Q1%
Sales 3 053.4 764.7 777.9 742.6 768.2 794.5 768.2 -3.3
Operating
profit* 271.3 82.3 64.6 84.8 39.6 72.0 11.9 -83.5
% of sales 8.9 10.8 8.3 11.4 5.2 9.1 1.5
ROOC, %** 9.1 11.5 9.0 11.7 5.3 9.3 1.5
Deliveries,
1 000 t 3 499 874 886 859 880 929 873 -6.0
Production,
1 000 t 3 475 864 874 901 837 1 002 715 -28.6
* Excluding non-recurring items and goodwill amortisation
**ROOC = 100% x Operating profit/Operating capital
Packaging board sales were EUR 768.2 million, down 3% on the previous quarter due
to the Finnish labour dispute. Operating profit was EUR 11.9 million, down 84% on
the previous quarter. The impact of the Finnish production stoppage was marginally
offset by increased deliveries from other mills and the stronger US dollar.
Demand was firm and prices for consumer board and speciality paper rose. Demand
for most products is expected to remain stable, which should enable some further
price increases.
Order books are generally healthy following the long production stoppage in
Finland, but markets for cartonboard and containerboard have been generally weak.
Wood Products
Change
EUR million 2004 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 Q2/Q1%
Sales 1 566.8 373.1 419.2 388.5 386.0 366.9 433.7 18.2
Operating
profit* 34.7 11.4 21.3 10.9 -8.9 -4.0 9.9 N/M
% of sales 2.2 3.1 5.1 2.8 -2.3 -1.1 2.3
ROOC, %** 5.2 7.0 12.5 6.3 -5.2 -2.3 5.5
Deliveries,
1 000 m3 6 664 1 597 1 777 1 595 1 695 1 541 1 855 20.4
* Excluding non-recurring items and goodwill amortisation
**ROOC = 100% x Operating profit/Operating capital
Wood product sales were EUR 433.7 million, up 18% on the previous quarter mainly
due to higher production and sales volumes. Operating profit was EUR 9.9 million,
an improvement of EUR 13.9 million on the previous quarter. Lower production than
in the previous quarter in Finland due to the labour dispute held back the
operating profit. The segment had one non-recurring item of EUR -12 million
related to fixed asset impairment at Veitsiluoto Sawmill.
Global consumption of wood products remained high. Strong seasonal demand and
decreased supply from Finland supported prices in the short term, especially in
European and North African redwood markets. High production in southern Sweden put
pressure on European whitewood markets. Overseas markets were firm and weakening
of the euro supported price increases.
The outlook for European housing markets is good in the short term.
Demand remains firm in North American construction markets and stable in Japan.
Prospects in North Africa and the Middle East are good. Freight costs will
continue to be affected by oil price increases.
Wood Supply Europe
Sales were EUR 563.2 million, down 16.5% on the previous quarter mainly due to the
Finnish labour dispute, and consequently there was an operating loss of
EUR 10.9 million (EUR 3.1 million profit).
Deliveries to Group mills in Finland, Sweden, the Baltic States, Russia and
Continental Europe totalled 8.8 million cubic metres, down 19% on the previous
quarter.
Decreased production in the paper industry due to the Finnish labour dispute
increased the oversupply of long-fibre pulpwood but stabilised the short-fibre
market.
Financials
Key Ratios Q1/04 Q2/04 Q3/04 Q4/04 2004 Q1/05 Q2/05
Earnings per share
(basic), EUR 0.49 0.06 0.16 0.18 0.89 0.07 -0.01
Earnings per share
excl. non-recurring
items, EUR 0.06 0.06 0.11 0.03 0.26 0.07 0.00
Cash earnings per share
(CEPS), EUR 0.54 0.43 0.51 0.53 2.02 0.41 0.35
CEPS excl. non
recurring items, EUR 0.41 0.43 0.46 0.38 1.67 0.41 0.35
Return on capital
employed (ROCE), % 7.9 2.1 7.9 8.2 6.4 4.1 0.2
ROCE excl. non
recurring items, % 3.7 2.1 5.1 1.5 3.0 4.1 0.6
Return on equity
(ROE), % 20.5 2.6 6.9 7.4 9.3 3.0 -0.4
Debt/equity ratio 0.39 0.43 0.42 0.38 0.38 0.51 0.58
Equity per share, EUR 9.46 9.53 9.70 9.80 9.80 9.46 9.46
Equity ratio, % 47.7 48.2 48.5 49.8 49.8 45.8 45.0
Operating profit,
% of sales 7.2 1.8 7.0 6.8 5.7 3.6 0.2
Operating profit excl.
non-recurring items.
% of sales 3.4 1.8 4.6 1.3 2.7 3.6 0.6
Capital expenditure,
EUR million 216.1 281.1 268.1 214.3 979.6 356.6 253.0
Capital expenditure,
% of sales 7.2 9.1 8.8 6.6 7.9 11.3 7.9
Capital employed,
EUR million 10 561 10 812 10 831 10 656 10 656 11 119 11 273
Interest-bearing net
liabilities, EUR million 3 105 3 356 3 343 3 052 3 052 3 928 4 340
Average number of
employees 42 446 43 795 44 045 43 779 43 779 44 870 45 670
Average number of
shares (million)
- periodic 835.3 831.8 826.3 822.0 828.8 816.3 800.0
- cumulative 835.3 833.6 831.1 828.8 828.8 816.3 808.1
- cumulative, diluted 836.0 834.4 831.9 829.4 829.4 816.9 808.7
Key Exchange Rates for the Euro
One Euro is Closing Rate Average Rate
31 Dec 2004 30 Jun 2005 31 Dec 2004 30 Jun 2005
SEK 9.0206 9.4259 9.1253 9.1437
USD 1.3621 1.2092 1.2440 1.2850
GBP 0.7051 0.6742 0.6786 0.6858
CAD 1.6416 1.4900 1.6166 1.5869
Condensed Consolidated Income Statement
EUR million 2004 H1/2004 H1/2005
Sales 12 395.8 6 120.8 6 332.2
Other operating income 153.8 165.4 32.5
Materials and services -6 534.6 -3 181.7 -3 484.3
Freight and sales commissions -1 367.8 -678.4 -714.1
Personnel expenses -1 934.8 -1 139.1 -1 074.0
Other operating expenses -831.8 -417.4 -405.1
Depreciation and impairment -1 172.0 -595.5 -568.8
Operating Profit 708.6 274.1 118.4
Share of results of associated
companies 38.9 14.4 31.0
Net financial items -106.0 -46.5 -77.7
Profit before Tax 641.5 242.0 71.7
Income tax 107.4 219.9 -20.3
Net Profit for the Period 748.9 461.9 51.4
Attributable to:
Company shareholders 740.8 455.6 48.5
Minority Interests 8.1 6.3 2.9
748.9 461.9 51.4
Key Ratios
Basic earnings per share, EUR 0.89 0.55 0.06
Diluted earnings per share, EUR 0.89 0.55 0.06
Condensed Consolidated Cash Flow Statement
EUR million 2004 H1/2004 H1/2005
Cash Flow from Operating Activities
Operating profit 708.6 274.1 118.4
Adjustments 1 039.1 478.4 572.5
Change in disability pension scheme -179.9 - -
Change in net working capital -367.7 -441.9 -153.5
Change in short-term interest-bearing
receivables 444.3 588.3 82.2
Cash Flow Generated by Operations 1 644.4 898.9 619.6
Net financial items -124.8 -80.3 -71.8
Income taxes paid -114.2 -89.1 -173.6
Net Cash Provided by Operating
Activities 1 405.4 729.5 374.2
Cash Flow from Investing Activities
Acquisitions -426.8 -217.7 -105.2
Proceeds from sale of fixed assets and
shares 253.9 206.8 17.1
Capital expenditure -979.6 -497.2 -609.6
Proceeds from the long-term
receivables. net -182.5 -166.5 -0.6
Net Cash Used in Investing Activities -1 335.0 -674.6 -698.3
Cash Flow from Financing Activities
Change in long-term liabilities 1 261.2 -60.9 792.5
Change in short-term borrowings -697.5 562.8 201.2
Dividends paid -375.7 -375.7 -365.3
Minority dividends -1.9 - -1.7
Options exercised 1.6 4.4 0.0
Purchase of own shares -198.6 -112.7 -315.6
Net Cash Used in Financing Activities -10.9 17.9 311.1
Net Increase in Cash and Cash
Equivalents 59.5 72.8 -13.0
Cash and bank in acquired companies 45.9 - 4.6
Cash and bank in sold companies -29.5 -68.2
Translation differences on cash
holdings -3.1 2.0 5.1
Cash and bank at the beginning of
period 201.5 201.5 274.3
Cash and Cash Equivalents at Period End 274.3 208.1 271.0
Property, Plant and Equipment, Intangible Assets and Goodwill
EUR million 2004 H1/2004 H1/2005
Carrying value at 1 January 12 535.3 12 535.3 10 715.5
Acquisition of subsidiary companies 190.2 21.9 2.6
Additions 979.6 497.2 609.6
Disposals -1 635.3 -1 587.5 -5.1
Depreciation, amortisation and
impairment -1 172.0 -595.5 -568.8
Translation difference and other -182.3 62.7 257.9
Balance Sheet Total 10 715.5 10 934.1 11 011.7
Acquisitions of Subsidiary Companies
Cash and cash equivalents 45.9 - 4.6
Working capital 44.0 -1.7 13.3
Operating fixed assets 183.3 21.9 2.6
Interest bearing assets 0.7 - 0.0
Tax liabilities -19.2 - 1.6
Interest bearing liabilities -11.4 -10.4 -9.3
Non-cash share exchange -3.9 - 0.0
Minority interests -69.9 - 66.9
Fair value of net assets 169.5 9.8 79.7
Goodwill 6.9 - 0.0
Total Purchase Consideration 176.4 9.8 79.7
Borrowings
EUR million 2004 H1/2004 H1/2005
Non-current borrowings 3 328.1 3 358.2 4 010.7
Current borrowings 699.5 860.4 1 285.4
4 027.6 4 218.6 5 296.1
Carrying value at 1 January 5 174.2 5 174.2 4 027.6
Debt acquired with new subsidiaries 11.4 10.4 9.3
Debt disposed with sold subsidiaries -1 518.8 -1 487.2 0.0
Proceeds from / -payments of
borrowings (net) 552.5 481.5 973.2
Translation difference and other -191.7 39.7 286.0
Total Borrowings 4 027.6 4 218.6 5 296.1
Condensed Consolidated Balance Sheet
Assets
EUR million 31 Dec 2004 30 Jun 2004 30 Jun 2005
Fixed and Other Long-term Assets
Fixed assets O 10 715.5 10 934.1 11 011.7
Investment in associated companies 568.1 508.4 644.1
Listed securities I 220.1 202.9 237.5
Unlisted shares O 132.7 146.7 134.6
Non-current loan receivables I 233.1 221.4 229.8
Deferred tax assets T 11.4 17.5 23.0
Other non-current assets O 210.5 239.6 243.2
12 091.4 12 270.6 12 523.9
Current Assets
Inventories O 1 771.3 1 775.5 1 816.0
Tax receivables T 160.9 162.3 167.8
Operative receivables O 1 865.3 1 889.4 1 834.8
Interest-bearing receivables I 248.7 229.8 218.1
Cash and cash equivalents I 274.3 208.1 271.0
4 320.5 4 265.1 4 307.7
Total Assets 16 411.9 16 535.7 16 831.6
Shareholders' Equity and Liabilities
EUR million 31 Dec 2004 30 Jun 2004 30 Jun 2005
Shareholders Equity 8 036.3 7 897.1 7 483.3
Minority Interests 136.1 66.5 94.1
Total Equity 8 172.4 7 963.6 7 577.4
Long-term Liabilities
Pension provisions O 637.8 895.7 665.1
Other provisions O 60.9 78.1 59.9
Deferred tax liabilities T 1 314.6 1 222.3 1 135.0
Long-term debt I 3 328.1 3 358.2 4 010.7
Long-term operative liabilities O 174.0 180.7 172.1
5 515.4 5 735.0 6 042.8
Current Liabilities
Current portion of long-term debt I 102.1 104.5 369.3
Interest-bearing liabilities I 597.4 755.9 916.1
Operative liabilities O 1 673.1 1 602.4 1 499.6
Tax liabilities T 351.5 374.3 426.4
2 724.1 2 837.1 3 211.4
Total Liabilities 8 239.5 8 572.1 9 254.2
Total Shareholders Equity and
Liabilities 16 411.9 16 535.7 16 831.6
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 Company Shareholders' Equity
Trea- OCI &
Share Share sury Reval- Retained
EUR million Capital Premium Shares uation CTA Earnings Total
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 - - -198.6 - - - -198.6
Cancellation of
Stora Enso Oyj
shares -47.3 -228.5 275.8 - - - 0.0
Dividend (EUR 0.45
per share) - - - - - -375.7 -375.7
Options exercised 1.3 0.3 - - - - 1.6
Net profit for the
period - - - - -11.7 739.7 728.0
OCI entries - - - -47.0 - - -47.0
Translation
adjustment - - - - -10.1 - -10.1
Balance at 31
December 2004 1 423.3 1 009.2 -180.8 67.6 -218.9 5 950.7 8 051.1
Restatement of
opening balance
Effect of adopting
IFRS 2 - - - - - -14.8 -14.8
Balance at
1 January 2005
(restated) 1 423.3 1 009.2 -180.8 67.6 -218.9 5 935.9 8 036.3
Repurchase of Stora
Enso Oyj shares - - -315.6 - - - -315.6
Cancellation of
Stora Enso Oyj
shares -41.2 -224.5 265.7 - - - -
Dividend (EUR 0.45
per share) - - - - - -365.3 -365.3
Options exercised - 0.2 - - - - 0.2
Buy-out of Minority
Interests - - - - - -22.6 -22.6
Net profit for the
period - - - - - 48.5 48.5
OCI entries - - - 50.6 - - 50.6
Translation
adjustment - - - - 51.2 - 51.2
Balance at
30 June 2005 1 382.1 784.9 -230.7 118.2 -167.7 5 596.5 7 483.3
CTA = Cumulative Translation Adjustment
OCI = Other Comprehensive Income
Commitments and Contingencies
EUR million 31 Dec 2004 30 Jun 2004 30 Jun 2005
On Own Behalf
Pledges given 0.8 0.8 1.2
Mortgages 118.8 105.8 142.9
On Behalf of Associated
Companies
Mortgages 0.8 0.8 0.8
Guarantees 209.3 127.2 309.6
On Behalf of Others
Pledges given 0.0 2.2 0.0
Mortgages 0.0 10.9 0.0
Guarantees 6.8 10.3 8.3
Other Commitments. Own
Leasing commitments, in next
12 months 32.6 34.9 31.6
Leasing commitments, after
next 12 months 159.2 162.9 152.2
Pension liabilities 2.2 2.8 1.5
Other commitments 92.5 101.7 97.0
Total 623.0 560.3 745.1
Pledges given 0.8 3.0 1.2
Mortgages 119.6 117.5 143.7
Guarantees 216.1 137.5 317.9
Leasing commitments 191.8 197.8 183.8
Pension liabilities 2.2 2.8 1.5
Other commitments 92.5 101.7 97.0
Total 623.0 560.3 745.1
Net Fair Values of Derivative Financial Instruments
EUR million 31 Dec 2004 30 Jun 2004 30 Jun 2005
Net Net Positive Negative Net
Fair Fair Fair Fair Fair
Values Values Values Values Values
Interest rate swaps 151.3 85.7 147.9 -18.0 129.9
Interest rate options 1.0 2.2 1.5 -2.1 -0.6
Cross-currency swaps -11.6 -12.2 0.0 -15.1 -15.1
Forward contracts 89.5 34.6 5.1 -90.4 -85.3
FX Options 1.8 0.0 4.8 -21.8 -17.0
Commodity contracts 23.6 106.4 134.2 -7.3 126.9
Equity swaps -11.4 -13.4 11.8 -44.1 -32.3
Total 244.2 203.3 305.3 -198.8 106.5
Nominal Values of Derivative Financial Instruments
EUR million 31 Dec 2004 30 Jun 2004 30 Jun 2005
Interest Rate Derivatives
Interest rate swaps
Maturity under 1 year 66.5 173.4 617.7
Maturity 25 years 953.4 824.1 327.7
Maturity 610 years 1 469.9 1 237.8 1 525.8
2 489.8 2 235.3 2 471.2
Interest rate options 198.4 1 174.4 257.7
Total 2 688.2 3 409.7 2 728.9
Foreign Exchange Derivatives
- Cross-currency swap agreements 102.7 109.0 109.3
- Forward contracts 2 479.8 2 840.6 2 304.0
- FX Options 588.3 53.5 1 001.1
Total 3 170.8 3 003.1 3 414.4
Commodity Derivatives
Commodity contracts 442.7 388.1 448.7
Total 442.7 388.1 448.7
Equity swaps
Equity swaps 359.5 359.5 407.4
Total 359.5 359.5 407.4
Sales by Segment
EUR
million 2003 Q1/04 Q2/04 Q3/04 Q4/04 2004 Q1/05 Q2/05
Publi-
cation
Paper 4 537.4 1 081.8 1 131.8 1 144.1 1 231.2 4 588.9 1 111.3 1 133.1
Fine
Paper 2 678.4 656.8 647.1 669.5 672.0 2 645.4 697.2 610.6
Merchants 627.6 160.3 148.5 145.7 183.4 637.9 182.1 217.4
Packaging
Boards 2 982.9 764.7 777.9 742.6 768.2 3 053.4 794.5 768.2
Wood
Products 1 400.0 373.1 419.2 388.5 386.0 1 566.8 366.9 433.7
Wood
Supply
Europe 2 074.3 634.9 621.4 568.3 657.0 2 481.6 674.7 563.2
Other -2 128.3 -653.7 -643.0 -625.6 -655.9 -2 578.2 -681.8 -538.9
Total
Sales 12 172.3 3 017.9 3 102.9 3 033.1 3 241.9 12 395.8 3 144.9 3 187.3
Operating Profit by Segment excluding Non-recurring items and Goodwill
Amortisation
EUR million 2003 Q1/04 Q2/04 Q3/04 Q4/04 2004 Q1/05 Q2/05
Publication
Paper 121.5 12.1 4.3 46.4 40.7 103.5 21.1 31.1
Fine Paper 151.4 14.5 -0.4 29.7 14.6 58.4 48.4 -14.1
Merchants -6.7 3.3 2.4 1.6 3.9 11.2 2.7 1.6
Packaging Boards 284.1 82.3 64.6 84.8 39.6 271.3 72.0 11.9
Wood Products 26.5 11.4 21.3 10.9 -8.9 34.7 -4.0 9.9
Wood Supply
Europe 116.5 31.3 3.3 3.1 -5.4 32.3 3.1 -10.9
Other Areas -54.4 -30.1 -17.3 -15.7 -19.1 -82.2 -30.6 -11.8
Operating
Profit excl.
Goodwill
Amortisation 638.9 124.8 78.2 160.8 65.4 429.2 112.7 17.7
Goodwill
amortisation -116.0 -22.7 -21.9 -21.7 -24.0 -90.3 - -
Non-recurring
items -54.4 115.7 - 74.1 179.9 369.7 - -12.0
Operating
Profit (IFRS) 468.5 217.8 56.3 213.2 221.3 708.6 112.7 5.7
Net financial
items -237.7 -20.3 -26.2 -27.0 -32.5 -106.0 -43.1 -34.6
Associated
companies -23.0 -2.3 16.7 10.2 14.3 38.9 14.0 17.0
Profit before
Tax and Minority
Interests 207.8 195.2 46.8 196.4 203.1 641.5 83.6 -11.9
Income tax
expense -66.0 214.3 5.6 -58.8 -53.7 107.4 -23.6 3.3
Profit after Tax 141.8 409.5 52.4 137.6 149.4 748.9 60.0 -8.6
Minority
interests -5.8 -4.2 -2.1 -1.4 -0.4 -8.1 -1.4 -1.5
Net Profit 136.0 405.3 50.3 136.2 149.0 740.8 58.6 -10.1
Non-recurring Items by Segment
EUR million 2003 Q1/04 Q2/04 Q3/04 Q4/04 2004 Q1/05 Q2/05
Publication
Paper -29.5 - - 30.8 45.6 76.4 - -
Fine Paper -7.2 - - 29.9 37.0 66.9 - -
Merchants - - - - 0.8 0.8 - -
Packaging Boards -3.1 - - 11.6 67.0 78.6 - -
Wood Products - - - - 16.4 16.4 - -12.0
Wood Supply
Europe - 115.7 - - 10.6 126.3 - -
Other -14.6 - - 1.8 2.5 4.3 - -
Total Non
recurring Items -54.4 115.7 - 74.1 179.9 369.7 - -12.0
Operating Profit by Segment
EUR million 2003 Q1/04 Q2/04 Q3/04 Q4/04 2004 Q1/05 Q2/05
Publication
Paper 92.0 12.1 4.3 77.2 86.3 179.9 21.1 31.1
Fine Paper 144.2 14.5 -0.4 59.6 51.6 125.3 48.4 -14.1
Merchants -6.7 3.3 2.4 1.6 4.7 12.0 2.7 1.6
Packaging Boards 281.0 82.3 64.6 96.4 106.6 349.9 72.0 11.9
Wood Products 26.5 11.4 21.3 10.9 7.5 51.1 -4.0 -2.1
Wood Supply
Europe 116.5 147.0 3.3 3.1 5.2 158.6 3.1 -10.9
Other -69.0 -30.1 -17.3 -13.9 -16.6 -77.9 -30.6 -11.8
Operating
Profit excl.
Goodwill
Amortisation 584.5 240.5 78.2 234.9 245.3 798.9 112.7 5.7
Goodwill
amortisation -116.0 -22.7 -21.9 -21.7 -24.0 -90.3 - -
Operating Profit 468.5 217.8 56.3 213.2 221.3 708.6 112.7 5.7
Net financial
items -237.7 -20.3 -26.2 -27.0 -32.5 -106.0 -43.1 -34.6
Associated
companies -23.0 -2.3 16.7 10.2 14.3 38.9 14.0 17.0
Profit before
Tax and Minority
Interests 207.8 195.2 46.8 196.4 203.1 641.5 83.6 -11.9
Income tax
expense -66.0 214.3 5.6 -58.8 -53.7 107.4 -23.6 3.3
Profit after Tax 141.8 409.5 52.4 137.6 149.4 748.9 60.0 -8.6
Minority
interests -5.8 -4.2 -2.1 -1.4 -0.4 -8.1 -1.4 -1.5
Net Profit 136.0 405.3 50.3 136.2 149.0 740.8 58.6 -10.1
Stora Enso Shares
Closing Price Helsinki, EUR Stockholm, SEK New York, USD
Series A Series R Series A Series R ADRs
April 10.28 10.27 95.00 95.00 13.29
May 10.70 10.70 98.25 98.00 13.22
June 10.55 10.58 99.75 99.50 12.71
Trading Volume Helsinki Stockholm New York
Series A Series R Series A Series R ADRs
April 896 811 99 776 120 191 444 16 946 614 2 251 600
May 147 264 64 579 051 108 390 6 806 404 1 920 100
June 135 142 70 162 146 132 852 11 559 103 2 629 400
Total 1 179 217 234 517 317 432 686 35 312 121 6 801 100
www.storaenso.com
www.storaenso.com/investors
Publication dates for financial information
Interim Review for January - September 2005 27 October 2005
Results for 2005 2 February 2006
Interim Review for January - March 2006 26 April 2006
Interim Review for January - June 2006 26 July 2006
Interim Review for January - September 2006 26 October 2006
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
