Stora Enso Interim Review January ? March 2005
STORA ENSO OYJ Stock Exchange Release 27 April 2005 at 13.00
Stora Enso Interim Review January March 2005
Profits rose; further improvement measures initiated mainly in Europe
First Quarter Results (compared with previous quarter)
Stora Enso's earnings per share were EUR 0.07 (EUR 0.03 excluding
nonrecurring items). Operating profit was EUR 112.7 million
(EUR 41.4 million excluding non-recurring items), which is 3.6% of sales.
Profit before taxes and minority interests amounted to EUR 83.6
(EUR 23.2 excluding non-recurring items) million. There were no non-
recurring items in the first quarter.
Sales at EUR 3 144.9 million were 3.0% lower than the previous
quarter's EUR 3 241.9 million. Cash flow from ongoing operations was
EUR 159.4 (EUR 406.0) million and cash flow after investing
activities EUR -198.1 (EUR 86.7) million. Cash earnings per share
were EUR 0.41 (EUR 0.38 excluding non-recurring items). Net
financial items were EUR -43.1 (EUR -32.5) million. Market-related
production curtailments totalled 12 000 (80 000) tonnes.
EUR million 2003 2004 Q1/04 Q4/04 Q1/05
Sales 12 172.3 12 395.8 3 017.9 3 241.9 3 144.9
EBITDA 1)2) 1 707.7 1 510.9 392.7 331.2 388.8
Operating profit2) 522.9 338.9 102.1 41.4 112.7
Non-recurring items -54.4 369.7 115.7 179.9 -
Operating margin2), % 4.3 2.7 3.4 1.3 3.6
Operating profit 468.5 708.6 217.8 221.3 112.7
Profit before tax and
minority interests2) 316.3 271.8 79.5 23.2 83.6
Profit before tax and
minority interests 207.8 641.5 195.2 203.1 83.6
Net profit for the period 136.0 740.8 405.3 149.0 58.6
EPS2), Basic, EUR 0.24 0.26 0.06 0.03 0.07
EPS, Basic, EUR 0.16 0.89 0.49 0.18 0.07
CEPS2)3), EUR 1.63 1.67 0.41 0.38 0.41
ROCE2), % 4.6 3.0 3.7 1.5 4.1
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 demand for advertising-driven paper grades is expected to be
good. Publication paper prices were increased in the beginning of the
year and are expected to remain at that level. Coated and uncoated
fine paper demand is improving, but uncoated fine paper sheet prices
are under pressure due to overcapacity. Price increases have been
announced for some coated fine paper segments. Demand for packaging
boards is stable and some price increases are being implemented in
consumer boards, but corrugated board prices are under pressure.
Demand for wood products is improving slowly and prices are expected
to be stable."
In North America demand for advertising-driven papers remains good.
Prices for magazine paper and coated fine paper reels are expected
to increase again during the second quarter. The North American
Profit Enhancement Programme is proceeding as planned.
In Asia fine paper demand remains healthy and prices are increasing.
In April there have been unscheduled shutdowns of mills in Finland
related to ongoing labour negotiations, and this unsettled situation
continues.
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. +44 20 7016 3115
Kari Vainio, EVP, Corporate Communications, tel. +44 7799 348 197
Keith B Russell, SVP, Investor Relations, tel. +44 7775 788 659
Stora Enso Interim Review January March 2005
Summary of first quarter results (compared with previous quarter)
* Sales were EUR 3 144.9 million (EUR 3 241.9 million).
* Operating profit was EUR 112.7 million (EUR 41.4 million)
excluding non-recurring items.
* Profit before tax and minority items was EUR 83.6 million
(EUR 23.2 million) excluding non-recurring items.
* Earnings per share were EUR 0.07 (EUR 0.03) excluding non-
recurring items.
* Cash earnings per share were EUR 0.41 (EUR 0.38) excluding
non-recurring items.
Demand for Group products was relatively good in the first quarter,
with a modest improvement in demand for advertising-driven paper and
continuing strength in packaging board grades.
European mills increased sales of fine paper, but publication paper
sales volumes were lower than in the previous quarter partly due to
rebuilds (lost production 134 000 tonnes). Prices rose for all
publication paper grades, but were unchanged for coated fine paper
and packaging board, and slightly lower for uncoated fine paper.
Demand for wood products was stable, although oversupply pressure
persisted in Europe.
In North America demand for uncoated magazine paper and coated fine
paper increased, and demand for coated magazine paper was unchanged.
Sales prices increased moderately.
In addition to the production lost due to the rebuilds, market-
related production curtailments totalled 12 000 tonnes, all of it in
Europe, compared with the previous quarter's 73 000 tonnes in Europe
and 7 000 tonnes in North America.
Paper and board deliveries totalled 3 573 000 tonnes, which is
210 000 tonnes less than the previous quarter's 3 783 000 tonnes.
Production totalled 3 703 000 tonnes (3 655 000 tonnes). Deliveries
of wood products totalled 1 541 000 cubic metres, compared with the
previous quarter's 1 695 000 cubic metres.
EUR million 2003 2004 Q1/04 Q4/04 Q1/05
Sales 12 172.3 12 395.8 3 017.9 3 241.9 3 144.9
EBITDA1)2) 1 707.7 1 510.9 392.7 331.2 388.8
Operating profit 2) 522.9 338.9 102.1 41.4 112.7
Non-recurring items -54.4 369.7 115.7 179.9 -
Operating margin 2), % 4.3 2.7 3.4 1.3 3.6
Operating profit 468.5 708.6 217.8 221.3 112.7
Profit before tax and
minority interests 2) 316.3 271.8 79.5 23.2 83.6
Profit before tax and
minority interests 207.8 641.5 195.2 203.1 83.6
Net profit for the period 136.0 740.8 405.3 149.0 58.6
EPS 2), Basic, EUR 0.24 0.26 0.06 0.03 0.07
EPS, Basic, EUR 0.16 0.89 0.49 0.18 0.07
CEPS 2)3), EUR 1.63 1.67 0.41 0.38 0.41
ROCE 2), % 4.6 3.0 3.7 1.5 4.1
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
There were no non-recurring items in the first quarter of 2005 and, as a result
of a change in accounting rules (IFRS 3 Business Combinations), goodwill is no
longer amortised on a straight-line basis over the expected useful life.
On 1 January 2005 Stora Enso adopted IFRS 2 Share-Based Payment,
which affects personnel expenses; the comparative financial figures
for previous periods having been adjusted accordingly.
First Quarter Results (compared with previous quarter)
Sales at EUR 3 144.9 million were 3.0% lower than the previous
quarter's EUR 3 241.9 million, mainly because shutdowns for
rebuilding reduced Publication Paper deliveries. However, this was
partially offset by higher sales prices in Publication Paper and
higher deliveries in Fine Paper and Packaging Boards.
Operating profit was EUR 112.7 million (EUR 41.4 million excluding
nonrecurring items), which is 3.6% of sales. Operating profit
increased in Fine Paper and Packaging Boards. Operating loss
decreased in Wood Products.
A reduction in fixed costs, owing to higher production, especially
in Packaging Boards, improved operating profit. This was partially
offset by lost production as a consequence of the rebuilds in
Publication Paper (EUR -32 million).
Operating profit includes carbon dioxide (CO2) emission net expenses
of EUR 5.2 million as the European Union has issued emission rights,
which are accounted for according to IFRIC 3 Emission Rights. Value
changes at the Nordpool Exchange resulted in this non-cash
accounting charge.
In accordance with IFRS 2 Share-Based Payment, changes in the fair
values of options are recorded as personnel expenses. The non-cash
valuation impact on the operating profit was EUR -1.4 million.
Profit before taxes and minority interests amounted to EUR 83.6
(EUR 23.2 excluding non-recurring items) million.
Net financial items were EUR -43.1 (EUR -32.5) million. Net interest
expenses amounted to EUR 27.6 (EUR 32.6) million and net foreign
exchange gains were EUR 5.7 (EUR -2.8) million. Other financial
items totalled a negative EUR 21.2 (positive EUR 2.9) million,
mainly related to unrealised changes in fair values of financial
instruments.
The share of associated company results amounted to EUR 14.0 (EUR 14.3)
million with a positive effect of EUR 14.4 (EUR 11.3) million from
Bergvik Skog.
Net taxes totalled EUR -23.6 (EUR -53.7) million and the minority
interest in profits was EUR -1.4 (EUR -0.4) million, leaving a net
profit for the quarter of EUR 58.6 (EUR 149.0) million.
Earnings per share were EUR 0.07 (EUR 0.03 excluding non-recurring
items).
The return on capital employed was 4.1% (1.5% excluding non-
recurring items). Capital employed was EUR 11 118.9 million on
31 March 2005, a net rise of EUR 463.2 million. Higher inventories
increased working capital, and currency effects increased capital
employed by EUR 120.8 million.
Capital Structure
EUR million 31 Dec 2004 31 Mar 2004 31 Mar 2005
Fixed assets 10 848.2 11 059.5 11 104.7
Working capital 1 301.3 924.0 1 499.0
Operating Capital 12 149.5 11 983.5 12 603.7
Net tax liabilities -1 493.8 -1 422.5 -1 484.8
Capital Employed 10 655.7 10 561.0 11 118.9
Associated companies 568.1 498.1 588.9
Total 11 223.8 11 059.1 11 707.8
Shareholders equity 8 036.3 7 891.4 7 672.0
Minority interests 136.1 62.8 108.2
Interest-bearing net liabilities 3 051.4 3 104.9 3 927.6
Financing Total 11 223.8 11 059.1 11 707.8
Financing
Cash flow from ongoing operations was EUR 159.4 (EUR 406.0) million
and cash flow after investing activities EUR -198.1 (EUR 86.7) million.
Cash earnings per share were EUR 0.41 (EUR 0.38 excluding non-recurring items).
At the end of the period, interest-bearing net liabilities were
EUR 3 927.6 million, an increase of EUR 876.2 million caused partly by
the EUR 365.3 million dividend for 2004 being deducted from equity
and entered into current interest-bearing liabilities for payment on
8 April. Unutilised credit facilities and cash and cash-equivalent
reserves totalled EUR 2.3 billion.
Shareholders' equity amounted to EUR 7.7 billion or EUR 9.46 (EUR 9.80)
per share, compared with the market capitalisation on the Helsinki Stock
Exchange on 31 March 2005 of EUR 8.8 billion.
The debt/equity ratio at 31 March 2005 was 0.51 (0.38). The currency
effect on equity was a gain of EUR 15.2 million net of the hedging
of equity translation risks. Share buy-backs decreased equity by EUR 106.6
million in the first quarter.
Quarterly Change in Interest-bearing Net Liabilities
Transla-
Cash Flow Structural tion Balance
Ongoing Changes Diffe- Sheet
EUR million Operations and OCI* rence Impact
Operating profit 119.3 -6.6 112.7
Depreciation 276.1 276.1
Change in working capital -236.0 50.0 -11.7 -197.7
Cash Flow from Operations 159.4 43.4 -11.7 191.1
Capital expenditure -356.6 -356.6
Acquisitions -4.9 1.5 -7.5 -10.9
Other changes in fixed assets 4.0 -64.7 -115.3 -176.0
Operating cash flow -198.1 -19.8 -134.5 -352.4
Net financing items -43.1 -43.1
Taxes paid -51.8 17.1 6.2 -28.5
Dividends -365.3 -365.3
Repurchase of own shares -106.6 -106.6
Other change in shareholders equity and
minority interests -44.0 48.4 15.3 19.7
Change in Interest-bearing Net Liabilities -808.9 45.7 -113.0 -876.2
*OCI = Other Comprehensive Income
Capital Expenditure for the First Quarter
Capital expenditure for the first quarter totalled EUR 356.6 million.
The main projects during the quarter were the new paper machine 12 at
Kvarnsveden Mill (EUR 146.1 million), rebuilding paper machine 5 at
Corbehem Mill (EUR 32.9 million), rebuilding paper machine 2 at Summa Mill
(EUR 22.7 million), the Skoghall Energy 2005 project (EUR 18.2 million)
and rebuilding paper machine 26 at Biron Mill (EUR 11.0 million).
During the quarter it was decided to rebuild boiler 2 at the
newsprint mill at Hylte in Sweden. The project is scheduled to be
completed in February 2006 at an estimated cost of EUR 40 million.
Events in Associated Companies
During the first quarter Stora Enso invested a further EUR 4.5 million
in equity in Veracel, bringing the total amount invested by 31 March 2005
to EUR 277.5 million. Veracel Mill is expected to start up in May/June 2005.
First Quarter Results (compared with the same period in 2004)
Sales at EUR 3 144.9 million were 4.2% higher than in the first
quarter of 2004 as volumes rose. Publication paper and coated fine
paper prices increased.
Operating profit excluding non-recurring items increased by EUR 10.6 million.
The Group's former Swedish forests contributed to operating profit until
their transfer to the associated company Bergvik Skog AB at the end of the
first quarter of 2004. Wood Supply Europe therefore recorded a decline of
EUR 25 million in operating profit due to this structural change. Operating
profit was higher in the Paper segment, but lower in Packaging Boards and
Forest Products.
Profit before taxes and minority interests excluding non-recurring
items increased by EUR 4.1 million, and earnings per share excluding
non-recurring items by EUR 0.01.
Inspections by Competition Authorities
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.
First Quarter Events 2005
Syndicated Loan
In January Stora Enso signed a new EUR 1.75 billion syndicated
credit facility agreement with a group of 23 banks. The facility,
which has a maturity of five years, is for general corporate
purposes and replaced an existing EUR 2.5 billion syndicated
facility.
Acquisition of Minority Shareholding in Former Sylvester
In March Stora Enso Timber acquired the remaining 34% shareholding
in the Estonian Stora Enso Timber AS, formerly AS Sylvester, and
thus gained 100% ownership of the company. The purchase price was
EUR 41.8 million.
Acquisition of UPM's Minority Shareholding in Corenso
In March Stora Enso announced that it was to acquire UPM's 29%
minority shareholding in Corenso United Oy Ltd and thus gain 100%
ownership of the company. Stora Enso is purchasing the shares to
gain full control of the company and develop this strategic business
area independently. The transaction is subject to approval by
competition authorities and is expected to be closed by the end of
the second quarter.
Share Capital and Ownership
The Annual General Meeting (AGM) of Stora Enso Oyj on 22 March 2005
decided to lower the Company's share capital by EUR 41.2 million
through the cancellation of 16 300 A shares and 24 250 000 R shares.
These shares had been repurchased, at an amount of EUR 265.7 million,
under the authorisation of the 2004 AGM and the reduction in share
capital was registered in the Finnish Trade Register on 31 March 2005.
The 2005 AGM also 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 12 April
2005 the Company had repurchased a total of 19 000 A shares at an
average price of EUR 10.86 and 4 877 600 R shares at an average
price of EUR 10.86 under the new authorisation.
During the period a total of 1 878 A shares were converted into
R shares. The latest conversion during the quarter was recorded in the
Finnish Trade Register on 16 February 2005.
At the end of the quarter Stora Enso had 179 030 345 A shares and
633 946 754 R shares in issue, of which the Company held no A shares
and 1 920 624 R shares with a nominal value of EUR 3.3 million. The
holding represents 0.76% of the Company's share capital and 0.11% of
the voting rights.
Other Decisions of the Annual General Meeting on 22 March 2005
The proposed dividend of EUR 0.45 per share was approved.
Gunnar Brock, Birgitta Kantola and Matti Vuoria were elected as new
members of the Board of Directors.
The AGM also approved a proposal to appoint a Nomination Committee
to prepare proposals concerning (a) the number of members of the
Board of Directors, (b) members of the Board of Directors, (c) the
remuneration for Chairman, Vice Chairman and members of the Board of
Directors and (d) the remuneration for the Chairman and members of
the committees of the Board of Directors.
Decisions by Board of Directors
Claes Dahlbäck will continue as Chairman of the Board of Directors
and Ilkka Niemi was elected as Vice Chairman.
Jan Sjöqvist (chairman) and Ilkka Niemi will continue as members of
the Financial and Audit Committee. Lee A. Chaden, Claes Dahlbäck and
Birgitta Kantola were elected new members of this committee.
Claes Dahlbäck (chairman), Harald Einsmann and Ilkka Niemi will
continue as members of the Compensation Committee. Matti Vuoria was
elected a new member of this committee.
Changes in Organisational Structure
In March Stora Enso announced that it will change its organisational
structure. The new organisation will focus on broadening the
experience of a number of key managers, reducing the number of
management levels within Stora Enso, expanding in emerging markets
and developing global product divisions. The new organisation
structure will take effect from 1 May 2005.
Events after the Period
On 13 April Stora Enso announced that it had closed the previously
announced acquisition of the paper merchant Papeteries de France
(PdF) from International Paper.
On 25 April 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 completed during the third quarter of 2005, subject
to due diligence and approval by regulatory and competition
authorities, as well as other required approvals.
Programme for Profit Improvement
After completing major asset restructuring programmes at its
European units, Stora Enso is initiating a programme with the target
of an improvement in annual profit before tax of EUR 300 million,
mainly in Europe, to be achieved from mid 2007 onwards. Capital
expenditure will be kept at or below depreciation with a greater
emphasis on emerging markets.
In an environment of low industry profitability, tighter competition
and a weaker US dollar, Stora Enso is responding with enhanced cost
savings in addition to continuous improvement measures.
The programme will comprise efficiency improvements in production,
sales and logistics, working capital management, sourcing and
administration. There may also be closure or disposal of units with
especially high costs or low long-term earnings potential, and
redundancies may occur.
Outlook
In Europe demand for advertising-driven paper grades is expected to
be good. Publication paper prices were increased in the beginning of
the year and are expected to remain at that level. Coated and
uncoated fine paper demand is improving, but uncoated fine paper
sheet prices are under pressure due to overcapacity. Price increases
have been announced for some coated fine paper segments. Demand for
packaging boards is stable and some price increases are being
implemented in consumer boards, but corrugated board prices are
under pressure. Demand for wood products is improving slowly and
prices are expected to be stable.
In North America demand for advertising-driven papers remains good.
Prices for magazine paper and coated fine paper reels are expected
to increase again during the second quarter. The North American
Profit Enhancement Programme is proceeding as planned.
In Asia fine paper demand remains healthy and prices are increasing.
In April there have been unscheduled shutdowns of mills in Finland
related to ongoing labour negotiations, and this unsettled situation
continues.
This report is unaudited.
Helsinki, 27 April 2005
Stora Enso Oyj
Board of Directors
Segments (compared with the previous quarter)
PAPER
Publication Paper
Change
EUR million 2004 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q1/Q4%
Sales 4 343.3 1 019.2 1 069.6 1 090.6 1 163.9 1 049.5 -9.8
Operating profit* 91.3 8.7 -3.8 48.2 38.2 20.0 -47.6
% of sales 2.1 0.9 -0.4 4.4 3.3 1.9
ROOC, %** 2.3 0.9 -0.4 4.6 3.6 1.9
Deliveries, 1000 t 7 398 1 732 1 819 1 846 2 001 1 701 -15.0
Production, 1000 t 7 396 1 830 1 782 1 886 1 899 1 775 -6.5
* Excluding non-recurring items and goodwill amortisation
** ROOC = 100% x Operating profit/Operating capital
Publication paper sales were EUR 1 049.5 million, down 9.8% on the
previous quarter. Price increases were offset by lower sales volumes
during the first quarter. Operating profit was EUR 20.0 million,
down 47.6% on the previous quarter because deliveries were lower due
to seasonal effects and major asset rebuilds. In addition to the 134 000
tonnes of lost production due to the rebuilds, there were minimal market-
related production curtailments.
In Europe demand for publication paper was about the same as a year
ago. Overseas demand remained strong, particularly for coated
magazine paper. Operating rates were satisfactory at all mills and
prices for all publication paper grades rose.
Producer inventories have increased following seasonal patterns to
the levels of a year ago, though customers have apparently decreased
their inventories.
In North America demand was strong for magazine paper and weaker for
newsprint. Prices for all publication paper grades rose during the
quarter and producer inventories are normal.
There is evidence of a recovery in advertising in Europe this year,
so the outlook for advertising-driven paper demand for the rest of
the year is good. In North America, advertising spending is expected
to remain firm and further paper price increases are anticipated during
the second quarter.
Fine Paper
Change
EUR million 2004 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q1/Q4%
Sales 3 173.1 788.9 786.3 791.8 806.1 833.1 3.3
Operating profit* 64.3 18.1 4.6 27.9 13.7 47.8 N/M
% of sales 2.0 2.3 0.6 3.5 1.7 5.7
ROOC, %** 1.9 2.2 0.5 3.2 1.6 5.6
Deliveries, 1000 t 3 893 959 964 974 995 1 041 4.6
Production, 1000 t 4 033 984 999 1 041 1 010 1 030 2.0
* Excluding non-recurring items and goodwill amortisation
** ROOC = 100% x Operating profit/Operating capital
Fine paper sales were EUR 833.1 million, up 3.3% on the previous quarter
mainly due to higher deliveries. Operating profit was EUR 47.8 million,
up EUR 34.1 million on the previous quarter due to higher deliveries and
reduced fixed costs. There were minimal market-related production curtailments.
In Europe demand for uncoated fine paper was healthy. Price pressure
due to oversupply persists in certain uncoated fine paper grades.
Industry mill stocks are in balance and merchant inventories are
normal.
In Asia demand for uncoated fine paper strengthened during the first
quarter and prices increased.
In Europe demand for coated fine paper was good. Prices for coated
fine paper reels were stable, although prices for merchant stock
sheets were under pressure. Industry mill stocks were quite high,
but have recently declined slightly, though merchant stocks remained
low throughout the first quarter. Industry order books are expected
to remain healthy to the end of the second quarter.
In North America demand for coated fine paper was good.
In Asia demand for coated fine paper increased after the Chinese New
Year. Prices stabilised towards the end of the fourth quarter and
have increased slightly since then.
Coated fine paper prices are expected to rise in Europe and to
continue rising in North America and Asia during the second quarter.
Merchants
Sales were EUR 182.1 million, down 0.7% on the previous quarter mainly
due to lower average prices. Operating profit was EUR 2.7 million,
EUR 1.2 million down on the previous quarter due to reduced margins.
PACKAGING BOARDS
Change
EUR million 2004 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q1/Q4%
Sales 2 771.5 692.0 704.4 674.6 700.5 722.7 3.2
Operating profit* 277.6 82.1 67.7 84.8 43.0 73.7 71.4
% of sales 10.0 11.9 9.6 12.6 6.1 10.2
ROOC, %** 10.6 13.1 10.7 13.4 6.5 10.9
Deliveries, 1000 t 3 119 776 790 766 787 831 5.6
Production, 1000 t 3 090 771 775 798 747 898 20.2
* Excluding non-recurring items and goodwill amortisation
**ROOC = 100% x Operating profit/Operating capital
Packaging board sales were EUR 722.7 million, up 3.2% on the
previous quarter, partly because the Intercell acquisition increased
sales by EUR 40.4 million. Operating profit was EUR 73.7 million, up
71.4% on the previous quarter due to lower maintenance costs and
higher production. There were minimal market-related production
curtailments. Demand has been good and is expected to remain stable
in all businesses.
Some price increases have been implemented and others are expected
in consumer boards, though there is pressure on prices for corrugated
packaging.
FOREST PRODUCTS
Wood Products
Change
EUR million 2004 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q1/Q4%
Sales 1 566.8 373.1 419.2 388.5 386.0 366.9 -4.9
Operating profit* 34.7 11.4 21.3 10.9 -8.9 -4.0 55.1
% of sales 2.2 3.1 5.1 2.8 -2.3 -1.1
ROOC, %** 5.2 7.0 12.5 6.3 -5.2 -2.3
Deliveries, 1000 m3 6 664 1 597 1 777 1 595 1 695 1 541 -9.1
* Excluding non-recurring items and goodwill amortisation
**ROOC = 100% x Operating profit/Operating capital
Wood product sales were EUR 366.9 million, down 4.9% on the previous
quarter mainly due to lower production and invoicing volumes. There
was an operating loss of EUR 4.0 million due to lower volumes and an
investment shutdown at Zdirec Mill (EUR -3.5 million). Product
inventories increased significantly during the first quarter of
2005. In general, losses incurred in the Nordic countries were
compensated by profits in Central Europe.
Construction activity has remained firm despite slight increases in
mortgage interest rates in the USA and UK.
Softwood production has increased considerably in Europe. Some of
the additional volume has been absorbed by the strong US market, but
the European market remains oversupplied and production inventories
are high.
The peak spring season should improve the market balance and prices
are expected remain stable.
Wood Supply Europe
Sales were EUR 674.7 million, up 2.7% on the previous quarter mainly
for seasonal reasons. Operating profit was EUR 3.1 million, having
improved slightly as wood costs decreased.
Deliveries to Group mills in Finland, Sweden, the Baltic States,
Russia and Continental Europe totalled 10.9 million cubic metres
(solid wood under bark), 6.9% up on the previous quarter.
Storms at the beginning of the quarter in southern Sweden and the
Baltic States depressed coniferous pulpwood and sawlog prices in
these markets. An oversupply emerged in the Russian sawlog market
and prices decreased. There is strong demand for short-fibre wood
in the markets around the Baltic Sea.
Financials
Key Ratios Q1/04 Q2/04 Q3/04 Q4/04 2004 Q1/05
Earnings per share (basic), EUR 0.49 0.06 0.16 0.18 0.89 0.07
Earnings per share excl. non
recurring items, EUR 0.06 0.06 0.11 0.03 0.26 0.07
Cash earnings per share (CEPS),EUR 0.54 0.43 0.51 0.53 2.02 0.41
CEPS excl. non-recurring items,EUR 0.41 0.43 0.46 0.38 1.67 0.41
Return on capital employed (ROCE),% 7.9 2.1 7.9 8.2 6.4 4.1
ROCE excl. non-recurring items,% 3.7 2.1 5.1 1.5 3.0 4.1
Return on equity (ROE), % 20.5 2.6 6.9 7.4 9.3 3.0
Debt/equity ratio 0.39 0.43 0.42 0.38 0.38 0.51
Equity per share, EUR 9.46 9.53 9.70 9.80 9.80 9.46
Equity ratio, % 47.7 48.2 48.5 49.8 49.8 45.8
Operating profit, % of sales 7.2 1.8 7.0 6.8 5.7 3.6
Operating profit excl. non
recurring items, % of sales 3.4 1.8 4.6 1.3 2.7 3.6
Capital expenditure, EUR million 216.1 281.1 268.1 214.3 979.6 356.6
Capital expenditure, % of sales 7.2 9.1 8.8 6.6 7.9 11.3
Capital employed, EUR million 10 561 10 812 10 831 10 656 10 656 11 119
Interest-bearing net
liabilities, EUR million 3 105 3 356 3 343 3 052 3 052 3 928
Average number of employees 42 446 43 795 44 045 43 779 43 779 44 870
Average number of shares (million)
- periodic 835.3 831.8 826.3 822.0 828.8 816.3
- cumulative 835.3 833.6 831.1 828.8 828.8 816.3
- cumulative, diluted 836.0 834.4 831.9 829.4 829.4 816.9
Key Exchange Rates for the Euro
One Euro is Closing Rate Average Rate
31 Dec 2004 31 Mar 2005 31 Dec 2004 31 Mar 2005
SEK 9.0206 9.1430 9.1253 9.0773
USD 1.3621 1.2964 1.2440 1.3107
GBP 0.7051 0.6885 0.6786 0.6933
CAD 1.6416 1.5737 1.6166 1.6073
Condensed Consolidated Income Statement
EUR million 2004 Q1/2004 Q1/2005
Sales 12 395.8 3 017.9 3 144.9
Other operating income 153.8 140.2 19.6
Materials and services -6 534.6 -1 560.0 -1 674.0
Freight and sales commissions -1 367.8 -325.6 -347.4
Personnel expenses -1 934.8 -552.9 -556.6
Other operating expenses -831.8 -211.2 -197.7
Depreciation, amortisation and
impairment charges -1 172.0 -290.6 -276.1
Operating Profit 708.6 217.8 112.7
Share of results of associated
companies 38.9 -2.3 14.0
Net financial items -106.0 -20.3 -43.1
Profit before Tax and Minority
Interests 641.5 195.2 83.6
Income tax expense 107.4 214.3 -23.6
Profit after Tax 748.9 409.5 60.0
Minority interests -8.1 -4.2 -1.4
Net Profit for the Period 740.8 405.3 58.6
Key Ratios
Basic earnings per share, EUR 0.89 0.49 0.07
Diluted earnings per share, EUR 0.89 0.49 0.07
Condensed Consolidated Cash Flow Statement
EUR million 2004 Q1/2004 Q1/2005
Cash Flow from Operating Activities
Operating profit 708.6 217.8 112.7
Adjustments 1 039.1 166.2 284.9
Change in disability pension scheme -179.9 - -
Change in net working capital -367.7 -215.2 -236.0
Change in short-term interest-bearing
receivables 444.3 499.0 69.0
Cash Flow Generated by Operations 1 644.4 667.8 230.6
Net financial items -124.8 -14.1 -24.8
Income taxes paid -114.2 -79.9 -51.8
Net Cash Provided by Operating Activities 1 405.4 573.8 154.0
Cash Flow from Investing Activities
Acquisitions -426.8 -186.1 -48.8
Proceeds from sale of fixed assets and
shares 253.9 212.3 2.9
Capital expenditure -979.6 -216.1 -357.7
Proceeds from the long-term
receivables, net -182.5 -171.4 -0.2
Net Cash Used in Investing Activities -1 335.0 -361.3 -403.8
Cash Flow from Financing Activities
Change in long-term liabilities 1 261.2 -4.9 10.7
Change in short-term borrowings -697.5 144.4 363.0
Dividends paid -375.7 - -
Minority dividends -1.9 - -
Options exercised 1.6 4.0 -
Purchase of own shares -198.6 -42.7 -106.6
Net Cash Used in Financing Activities -10.9 100.8 267.1
Net Increase in Cash and Cash Equivalents 59.5 313.3 17.3
Cash and bank in acquired companies 45.9 0.0 0.0
Cash and bank in sold companies -29.5 -36.4 0.0
Translation differences on cash holdings -3.1 1.8 1.9
Cash and bank at the beginning of period 201.5 201.5 274.3
Cash and Cash Equivalents at Period End 274.3 480.2 293.5
Property, Plant and Equipment, Intangible Assets and Goodwill
EUR million 2004 Q1/2004 Q1/2005
Carrying value at 1 January 12 535.3 12 535.3 10 715.5
Acquisition of subsidiary companies 190.2 - 0.0
Additions 979.6 216.1 356.6
Emission rights 64.7
Disposals -1 635.3 -1 587.7 -2.7
Depreciation, amortisation and impairment -1 172.0 -290.6 -276.1
Translation difference and other -189.4 36.3 114.1
Balance Sheet Total 10 715.5 10 909.4 10 972.1
Acquisitions of Subsidiary Companies
Cash and cash equivalents 45.9 - -
Working capital 44.0 - -
Operating fixed assets 183.3 - -
Interest bearing assets 0.7 - -
Tax liabilities -19.2 - -
Interest bearing liabilities -11.4 - -
Non-cash share exchange -3.9 - -
Minority interests -69.9 - -43.9
Fair value of net assets 169.5 - -43.9
Goodwill 6.9 - -
Total Purchase Consideration 176.4 - -43.9
Borrowings
EUR million 2004 Q1/2004 Q1/2005
Non-current borrowings 3 328.1 3 425.5 3 167.2
Current borrowings 699.5 868.6 1 736.4
4 027.6 4 294.1 4 903.6
Carrying value at 1 January 5 174.2 5 174.2 4 027.6
Debt acquired with new subsidiaries 11.4 - -
Debt disposed with sold subsidiaries -1 518.8 -1 487.3 -
Proceeds from / -payments of borrowings (net) 552.5 145.3 763.7
Translation difference and other -191.7 461.9 112.3
Total Borrowings 4 027.6 4 294.1 4 903.6
Condensed Consolidated Balance Sheet
Assets
EUR million 31 Dec 2004 31 Mar 2004 31 Mar 2005
Fixed and Other Long-term Assets
Fixed assets O 10 715.5 10 909.4 10 972.1
Investment in associated companies 568.1 498.1 588.9
Listed securities I 220.1 220.4 236.5
Unlisted shares O 132.7 150.1 132.6
Non-current loan receivables I 233.1 216.5 230.6
Deferred tax assets T 11.4 10.9 19.2
Other non-current assets O 210.5 172.8 233.7
12 091.4 12 178.2 12 413.6
Current Assets
Inventories O 1 771.3 1 726.7 1 950.8
Tax receivables T 160.9 163.7 159.1
Operative receivables O 1 865.3 1 864.2 1 938.0
Interest-bearing receivables I 248.7 272.0 215.4
Cash and cash equivalents I 274.3 480.2 293.5
4 320.5 4 506.8 4 556.8
Total assets 16 411.9 16 685.0 16 970.4
Shareholders' Equity and Liabilities
EUR million 31 Dec 2004 31 Mar 2004 31 Mar 2005
Shareholders Equity 8 036.3 7 891.4 7 672.0
Minority Interests 136.1 62.8 108.2
Long-term Liabilities
Pension provisions O 637.8 927.1 658.5
Other provisions O 60.9 80.7 63.2
Deferred tax liabilities T 1 314.6 1 258.8 1 281.0
Long-term debt I 3 328.1 3 425.5 3 167.2
Long-term operative liabilities O 174.0 179.5 222.1
5 515.4 5 871.6 5 392.0
Current Liabilities
Current portion of long-term debt I 102.1 103.9 335.6
Interest-bearing liabilities I 597.4 764.6 1 400.8
Operative liabilities O 1 673.1 1 652.4 1 679.7
Tax liabilities T 351.5 338.3 382.1
2 724.1 2 859.2 3 798.2
Total Liabilities 8 239.5 8 730.8 9 190.2
Total Shareholders Equity and
Liabilities 16 411.9 16 685.0 16 970.4
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
OCI &
Share Share Treasury Revalua- Retained
EUR million Capital Premium Shares tion 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 - - - - - -130.9 -130.9
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 - - -106.6 - - - -106.6
Cancellation of Stora Enso Oyj
shares -41.2 -224.5 265.7 - - - 0
Dividend
(EUR 0.45 per share) - - - - - -365.3 -365.3
Options exercised - -0.1 - - - - -0.1
Minority buyout
of Stora Enso Timber - - - - - -14.5 -14.5
Revaluation
of Emission Rights - - - 15.0 - - 15.0
Net profit for the period - - - - - 58.6 58.6
OCI entries - - - 33.4 - - 33.4
Translation adjustment - - - - 15.2 - 15.2
Balance at 31 March 2005
1 382.1 784.6 -21.7 116.0 -203.7 5 614.7 7 672.0
CTA = Cumulative Translation Adjustment
OCI = Other Comprehensive Income
Commitments and Contingencies
EUR million 31 Dec 2004 31 Mar 2004 31 Mar 2005
On own Behalf
Pledges given 0.8 3.8 0.3
Mortgages 118.8 104.5 109.6
On Behalf of Associated Companies
Mortgages 0.8 0.8 0.8
Guarantees 209.3 48.5 235.3
On Behalf of Others
Pledges given 0.0 2.2 0.0
Mortgages 0.0 10.9 0.0
Guarantees 6.8 13.5 6.9
Other Commitments, Own
Leasing commitments, in next 12 months 32.6 36.1 31.9
Leasing commitments, after next 12 months 159.2 165.2 152.3
Pension liabilities 2.2 2.8 1.2
Other commitments 92.5 97.4 106.2
Total 623.0 485.7 644.5
Pledges given 0.8 6.0 0.3
Mortgages 119.6 116.2 110.4
Guarantees 216.1 62.0 242.2
Leasing commitments 191.8 201.3 184.2
Pension liabilities 2.2 2.8 1.2
Other commitments 92.5 97.4 106.2
Total 623.0 485.7 644.5
Net Fair Values of Derivative Financial Instruments
31 Dec 31 Mar 31 Mar
EUR million 2004 2004 2005
Net Net Positive Negative Net
Fair Fair Fair Fair Fair
Values Values Values Values Values
Interest rate swaps 151.3 150.8 130.9 -7.8 123.1
Interest rate options 1.0 1.2 0.5 -0.5 0.0
Cross-currency swaps -11.6 -10.9 1.1 -14.1 -13.0
Forward contracts 89.5 47.5 25.3 -35.1 -9.8
FX Options 1.8 0.2 1.7 -2.7 -1.0
Commodity contracts 23.6 83.1 76.3 -7.1 69.2
Equity swaps -11.4 -37.8 15.1 -41.2 -26.1
Total 244.2 234.1 250.9 -108.5 142.4
Nominal Values of Derivative Financial Instruments
EUR million 31 Dec 2004 31 Mar 2004 31 Mar 2005
Interest Rate Derivatives
Interest rate swaps
Maturity under 1 year 66.5 109.5 702.4
Maturity 25 years 953.4 759.0 393.2
Maturity 610 years 1 469.9 717.1 1 567.3
Maturity over 10 years 0.0 0.0 0.0
2 489.8 1 585.6 2 662.9
Interest rate futures 0.0 125.0 0.0
Interest rate options 198.4 597.2 148.4
Total 2 688.2 2 307.8 2 811.3
Foreign Exchange Derivatives
- Cross-currency swap
agreements 102.7 108.7 105.4
- Forward contracts 2 479.8 3 113.2 2 428.9
- FX Options 588.3 331.8 695.4
Total 3 170.8 3 553.7 3 229.7
Commodity derivatives
Commodity contracts 442.7 430.9 517.7
Total 442.7 430.9 517.7
Equity swaps
Equity swaps 359.5 359.5 397.4
Total 359.5 359.5 397.4
Sales by Product Area
EUR million 2003 Q1/04 Q2/04 Q3/04 Q4/04 2004 Q1/05
Publication Paper 4 295.7 1 019.2 1 069.6 1 090.6 1 163.9 4 343.3 1 049.5
Fine Paper 3 197.7 788.9 786.3 791.8 806.1 3 173.1 833.1
Merchants 627.6 160.3 148.5 145.7 183.4 637.9 182.1
Other -281.3 -70.4 -68.6 -72.3 -76.5 -287.8 -77.5
Paper 7 839.7 1 898.0 1 935.8 1 955.8 2 076.9 7 866.5 1 987.2
Packaging Boards 2 761.6 692.0 704.4 674.6 700.5 2 771.5 722.7
Wood Products 1 400.0 373.1 419.2 388.5 386.0 1 566.8 366.9
Wood Supply
Europe 2 074.3 634.9 621.4 568.3 657.0 2 481.6 674.7
Other -591.0 -229.8 -225.6 -207.1 -229.0 -891.5 -234.4
Forest Products 2 883.3 778.2 815.0 749.7 814.0 3 156.9 807.2
Other -1 312.3 -350.3 -352.3 -347.0 -349.5 -1 399.1 -372.2
Total 12 172.3 3 017.9 3 102.9 3 033.1 3 241.9 12 395.8 3 144.9
Restated Operating Profit by Product Area excluding Non-recurring
Items and Goodwill Amortisation
EUR million 2003 Q1/04 Q2/04 Q3/04 Q4/04 2004 Q1/05
Publication Paper 111.1 8.7 -3.8 48.2 38.2 91.3 20.0
Fine Paper 153.5 18.1 4.6 27.9 13.7 64.3 47.8
Merchants -6.7 3.3 2.4 1.6 3.9 11.2 2.7
Paper 257.9 30.1 3.2 77.7 55.8 166.8 70.5
Packaging Boards 292.4 82.1 67.7 84.8 43.0 277.6 73.7
Wood Products 26.5 11.4 21.3 10.9 -8.9 34.7 -4.0
Wood Supply Europe 116.5 31.3 3.3 3.1 -5.4 32.3 3.1
Forest Products 143.0 42.7 24.6 14.0 -14.3 67.0 -0.9
Other Areas -54.4 -30.1 -17.3 -15.7 -19.1 -82.2 -30.6
Operating Profit
excl. Goodwill
amortisation 638.9 124.8 78.2 160.8 65.4 429.2 112.7
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 -
Operating Profit
(IFRS) 468.5 217.8 56.3 213.2 221.3 708.6 112.7
Net financial items -237.7 -20.3 -26.2 -27.0 -32.5 -106.0 -43.1
Associated companies -23.0 -2.3 16.7 10.2 14.3 38.9 14.0
Profit before Tax and Minority
Interests 207.8 195.2 46.8 196.4 203.1 641.5 83.6
Income tax expense -66.0 214.3 5.6 -58.8 -53.7 107.4 -23.6
Profit after Tax 141.8 409.5 52.4 137.6 149.4 748.9 60.0
Minority interests -5.8 -4.2 -2.1 -1.4 -0.4 -8.1 -1.4
Net Profit 136.0 405.3 50.3 136.2 149.0 740.8 58.6
Non-recurring Items by Product Area
EUR million 2003 Q1/04 Q2/04 Q3/04 Q4/04 2004 Q1/05
Publication Paper -29.5 - - 30.8 45.6 76.4 -
Fine Paper -10.3 - - 41.5 37.0 78.5 -
Merchants - - - - 0.8 0.8 -
Paper -39.8 - - 72.3 83.4 155.7 -
Packaging Boards - - - - 67.0 67.0 -
Wood Products - - - - 16.4 16.4 -
Wood Supply
Europe - 115.7 - - 10.6 126.3 -
Forest Products - 115.7 - - 27.0 142.7 -
Other -14.6 - - 1.8 2.5 4.3 -
Total Non
recurring Items -54.4 115.7 - 74.1 179.9 369.7 -
Restated Operating Profit by Product Area
EUR million 2003 Q1/04 Q2/04 Q3/04 Q4/04 2004 Q1/05
Publication Paper 81.6 8.7 -3.8 79.0 83.8 167.7 20.0
Fine Paper 143.2 18.1 4.6 69.4 50.7 142.8 47.8
Merchants -6.7 3.3 2.4 1.6 4.7 12.0 2.7
Paper 218.1 30.1 3.2 150.0 139.2 322.5 70.5
Packaging Boards 292.4 82.1 67.7 84.8 110.0 344.6 73.7
Wood Products 26.5 11.4 21.3 10.9 7.5 51.1 -4.0
Wood Supply Europe 116.5 147.0 3.3 3.1 5.2 158.6 3.1
Forest Products 143.0 158.4 24.6 14.0 12.7 209.7 -0.9
Other -69.0 -30.1 -17.3 -13.9 -16.6 -77.9 -30.6
Operating Profit
excl. Goodwill
amortisation 584.5 240.5 78.2 234.9 245.3 798.9 112.7
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
Net financial items -237.7 -20.3 -26.2 -27.0 -32.5 -106.0 -43.1
Associated companies -23.0 -2.3 16.7 10.2 14.3 38.9 14.0
Profit before Tax and Minority
Interests 207.8 195.2 46.8 196.4 203.1 641.5 83.6
Income tax expense -66.0 214.3 5.6 -58.8 -53.7 107.4 -23.6
Profit after Tax 141.8 409.5 52.4 137.6 149.4 748.9 60.0
Minority interests -5.8 -4.2 -2.1 -1.4 -0.4 -8.1 -1.4
Net Profit 136.0 405.3 50.3 136.2 149.0 740.8 58.6
Pro-forma figures according to reorganised reporting structure
effective 1 May 2005
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
Publication Paper 121.5 12.1 4.3 46.4 40.7 103.5 21.1
Fine Paper 151.4 14.5 -0.4 29.7 14.6 58.4 48.4
Merchants -6.7 3.3 2.4 1.6 3.9 11.2 2.7
Packaging Boards 284.1 82.3 64.6 84.8 39.6 271.3 72.0
Wood Products 26.5 11.4 21.3 10.9 -8.9 34.7 -4.0
Wood Supply Europe 116.5 31.3 3.3 3.1 -5.4 32.3 3.1
Other Areas -54.4 -30.1 -17.3 -15.7 -19.1 -82.2 -30.6
Operating Profit
excl. Goodwill
amortisation 638.9 124.8 78.2 160.8 65.4 429.2 112.7
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 -
Operating Profit
(IFRS) 468.5 217.8 56.3 213.2 221.3 708.6 112.7
Net financial items -237.7 -20.3 -26.2 -27.0 -32.5 -106.0 -43.1
Associated companies- 23.0 - 2.3 16.7 10.2 14.3 38.9 14.0
Profit before Tax and
Minority Interests 207.8 195.2 46.8 196.4 203.1 641.5 83.6
Income tax expense -66.0 214.3 5.6 -58.8 -53.7 107.4 -23.6
Profit after Tax 141.8 409.5 52.4 137.6 149.4 748.9 60.0
Minority interests -5.8 -4.2 - 2.1 -1.4 -0.4 -8.1 -1.4
Net Profit 136.0 405.3 50.3 136.2 149.0 740.8 58.6
Non-recurring Items by Segment
EUR million 2003 Q1/04 Q2/04 Q3/04 Q4/04 2004 Q1/05
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 -
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 -
Operating Profit by Segment
EUR million 2003 Q1/04 Q2/04 Q3/04 Q4/04 2004 Q1/05
Publication Paper 92.0 12.1 4.3 77.2 86.3 179.9 21.1
Fine Paper 144.2 14.5 -0.4 59.6 51.6 125.3 48.4
Merchants -6.7 3.3 2.4 1.6 4.7 12.0 2.7
Packaging Boards 281.0 82.3 64.6 96.4 106.6 349.9 72.0
Wood Products 26.5 11.4 21.3 10.9 7.5 51.1 -4.0
Wood Supply Europe 116.5 147.0 3.3 3.1 5.2 158.6 3.1
Other -69.0 -30.1 -17.3 -13.9 -16.6 -77.9 -30.6
Operating Profit
excl. Goodwill
amortisation 584.5 240.5 78.2 234.9 245.3 798.9 112.7
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
Net financial items -237.7 -20.3 -26.2 -27.0 -32.5 -106.0 -43.1
Associated companies -23.0 -2.3 16.7 10.2 14.3 38.9 14.0
Profit before Tax and
Minority Interests 207.8 195.2 46.8 196.4 203.1 641.5 83.6
Income tax expense -66.0 214.3 5.6 -58.8 -53.7 107.4 -23.6
Profit after Tax 141.8 409.5 52.4 137.6 149.4 748.9 60.0
Minority interests -5.8 -4.2 -2.1 -1.4 -0.4 -8.1 -1.4
Net Profit 136.0 405.3 50.3 136.2 149.0 740.8 58.6
Stora Enso Shares
Closing Price Helsinki, EUR Stockholm, SEK New York, USD
Series A Series R Series A Series R ADRs
January 11.06 11.05 100.50 100.50 14.40
February 11.53 11.50 104.00 104.00 15.21
March 10.98 10.83 99.75 99.25 14.05
Trading Volume Helsinki Stockholm New York
Series A Series R Series A Series R ADRs
January 291 951 75 394 256 132 182 15 692 325 1 695 200
February 555 640 77 601 594 159 981 13 844 140 1 642 300
March 540 651 98 341 080 355 946 14 741 679 2 351 700
Total 1 388 242 251 336 930 648 109 44 278 144 5 689 200
Publication dates for financial information
Interim Review for January June 2005 27 July 2005 Interim
Review for January September 2005 27 October 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