Stora Enso Interim Review January?March 2006
STORA ENSO OYJ Stock Exchange Release 26 April 2006 at 13.00
Stora Enso Interim Review JanuaryMarch 2006
Profitability improved mainly due to higher prices
Stora Enso's first quarter 2006 results improved as average product
prices rose and demand remained good. Profitability was negatively
impacted as a consequence of the standstill at Port Hawkesbury Mill
in Canada and higher energy costs.
First Quarter Results (compared with previous quarter)
Stora Enso's earnings per share were EUR 0.20 (EUR 0.13) excluding
non-recurring items. Operating profit excluding non-recurring items
rose by 60.5% to EUR 194.1 (EUR 120.9) million, which is 5.4% of
sales. Profit before tax amounted to EUR 210.9 (EUR 96.4) million
excluding non-recurring items.
Sales at EUR 3 607.7 million were similar to the previous quarter's
EUR 3 636.1 million. Cash flow from operations was
EUR 288.6 (EUR 169.7) million and cash flow after investing activities
EUR 120.9 (EUR -109.7) million. Cash earnings per share were
EUR 0.54 (EUR 0.50) excluding non-recurring items.
Net financial items were EUR 115.2 (EUR -48.9) million, including a
non-recurring capital gain of EUR 130.0 million from the sale of the
shares in Sampo Oyj for EUR 155.4 million.
There were two non-recurring items with a net impact of EUR -23.2 million
on operating profit (based on pulp prices and exchange rates at the end of
March) related to the divestments of Grycksbo Mill and Linghed Sawmill in
Sweden as part of the previously announced Asset Performance Review.
Key figures
EUR million 2004 2005 Q1/05 Q4/05 Q1/06
Sales 12 395.8 13 187.5 3 144.9 3 636.1 3 607.7
EBITDA1)2) 1 508.4 1 487.4 388.8 411.6 463.3
Operating profit2)4) 426.7 357.5 112.7 120.9 194.1
Non-recurring items
(operational) 369.7 -451.4 - -439.4 -23.2
Non-recurring items
(financial) - - - - 130.0
Operating margin2)4), % 3.4 2.7 3.6 3.3 5.4
Operating profit4) 796.4 -93.9 112.7 -318.5 170.9
Profit before tax and
minority interests2)4) 359.6 273.1 83.6 96.4 210.9
Profit before tax and
minority interests4) 729.3 -178.3 83.6 -343.0 317.7
Net profit for the period4) 747.8 -126.3 60.0 -244.2 226.4
EPS2), Basic, EUR 0.25 0.28 0.07 0.13 0.20
EPS, Basic, EUR 0.89 -0.16 0.07 -0.31 0.29
CEPS2)3), EUR 1.67 1.70 0.41 0.50 0.54
ROCE2), % 3.0 3.1 4.1 4.1 6.5
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
4) The comparative figures exclude goodwill amortisation of EUR
90.3 million for 2004
First Quarter Results (compared with Q1/2005)
Sales at EUR 3 607.7 million were 14.7% higher than in the first
quarter of 2005, due to the impact of the Schneidersöhne
acquisition, increased prices in all segments and increased
deliveries in Fine Paper and Packaging Boards.
Operating profit excluding non-recurring items increased by
EUR 81.4 million and was higher in all segments, mainly because prices rose.
Profit before taxes and minority interests excluding non-recurring
items increased by EUR 127.3 million and earnings per share
excluding non-recurring items increased by EUR 0.13 to EUR 0.20. Earnings
per share including non-recurring items were EUR 0.29 (EUR 0.07).
Near-term Outlook
Commenting on the outlook, Stora Enso's CEO Jukka Härmälä said, "In
Europe the increase in advertising and direct marketing evidenced
early in the year should continue to stimulate demand for
advertising-driven paper grades. Demand for publication paper remains
good with prices stable. Fine paper demand during the second quarter
is expected to be somewhat weaker than in the first quarter due to
seasonal reasons. Some price increases for certain uncoated grades
have been announced. Demand for packaging boards is forecast to
remain good and some price increases for industrial packaging grades
have also been announced. The demand for wood products is generally
good, allowing for some price increases. Notwithstanding these
factors, it is anticipated that overall trading conditions in Europe
may not strengthen further from those experienced in the first
quarter."
In North America magazine paper prices are expected to remain stable
with seasonal improvement in demand towards the summer. In newsprint
the downward trend in demand is expected to continue, but prices
should remain stable. The demand and prices for coated fine paper
are anticipated to remain stable.
In Asia seasonal improvement in coated fine paper demand should keep
prices quite stable.
The Profit 2007 programme is proceeding on schedule. Further details
will be reported when the second quarter results are announced.
For further information, please contact:
Jukka Härmälä, Chief Executive Officer, tel. +358 2046 21404
Hannu Ryöppönen, 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
Ulla Paajanen-Sainio, Vice President, Investor Relations and
Financial Communications,tel. +358 2046 21242
Stora Enso Interim Review JanuaryMarch 2006
Summary of First Quarter Results (compared with Q4/2005)
* Sales were EUR 3 607.7 (EUR 3 636.1) million.
* Operating profit was EUR 194.1 (EUR 120.9) million excluding
nonrecurring items.
* Profit before tax was EUR 210.9 (EUR 96.4) million excluding
nonrecurring items.
* Earnings per share were EUR 0.20 (EUR 0.13) excluding non
recurring items.
* Cash earnings per share were EUR 0.54 (EUR 0.50) excluding
nonrecurring items.
In Europe an increase in advertising and direct marketing spending
stimulated demand for advertising-driven paper grades. Demand for
newsprint and uncoated magazine paper was stronger than a year ago,
whereas demand for coated magazine paper was largely unchanged.
However, demand in all publication paper grades was weaker than in
the previous quarter owing to seasonal factors. Following the year-
end contract negotiations, prices were higher than in the previous
quarter and a year ago, with newsprint prices increasing more than
magazine paper prices.
In Europe demand for fine paper was better than in the first and
last quarters of 2005. Uncoated fine paper prices increased
slightly, whereas coated fine paper prices were generally stable.
Demand for packaging boards was also strong and better than in either
comparative quarter. Some price increases were implemented, mainly
in industrial packaging and speciality paper grades. Demand for wood
products was good, enabling some price increases, primarily in
Europe.
North American demand for newsprint and magazine paper was weaker,
but newsprint prices were higher in both comparative quarters.
Magazine paper prices remained unchanged from the previous quarter,
but were higher than a year ago. Demand for coated fine paper was
stronger than in both comparative quarters, with prices unchanged on
the previous quarter but higher than a year ago.
Paper and board deliveries totalled 3 619 000 tonnes, which is
133 000 tonnes less than the previous quarter's 3 752 000 tonnes.
Production decreased by 75 000 tonnes from the previous quarter's
3 826 000 tonnes to 3 751 000 tonnes due to the standstill at Port
Hawkesbury Mill in Canada. Deliveries of wood products totalled
1 563 000 cubic metres, which was 143 000 cubic metres less than the
previous quarter's 1 706 000 cubic metres.
Key figures
EUR million 2004 2005 Q1/05 Q4/05 Q1/06
Sales 12 395.8 13 187.5 3 144.9 3 636.1 3 607.7
EBITDA1)2) 1 508.4 1 487.4 388.8 411.6 463.3
Operating profit2)4) 426.7 357.5 112.7 120.9 194.1
Non-recurring items
(operational) 369.7 -451.4 - -439.4 -23.2
Non-recurring items
(financial) - - - - 130.0
Operating margin2)4), % 3.4 2.7 3.6 3.3 5.4
Operating profit4) 796.4 -93.9 112.7 -318.5 170.9
Profit before tax and
minority interests2)4) 359.6 273.1 83.6 96.4 210.9
Profit before tax and
minority interests4) 729.3 -178.3 83.6 -343.0 317.7
Net profit for the period4) 747.8 -126.3 60.0 -244.2 226.4
EPS2), Basic, EUR 0.25 0.28 0.07 0.13 0.20
EPS, Basic, EUR 0.89 -0.16 0.07 -0.31 0.29
CEPS2)3), EUR 1.67 1.70 0.41 0.50 0.54
ROCE2), % 3.0 3.1 4.1 4.1 6.5
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
4) The comparative figures exclude goodwill amortisation of EUR
90.3 million for 2004
First Quarter Results (compared with Q1/2005)
Sales at EUR 3 607.7 million were 14.7% higher than in the first
quarter of 2005, due to the impact of the Schneidersöhne
acquisition, increased prices in all segments and increased
deliveries in Fine Paper and Packaging Boards.
Operating profit excluding non-recurring items increased by EUR
81.4 million and was higher in all segments, mainly because prices rose.
Profit before taxes and minority interests excluding non-recurring
items increased by EUR 127.3 million and earnings per share
excluding non-recurring items increased by EUR 0.13 to
EUR 0.20. Earnings per share including non-recurring items were
EUR 0.29 (EUR 0.07).
First Quarter Results (compared with Q4/2005)
Sales at EUR 3 607.7 million were similar to the previous quarter's
EUR 3 636.1 million. Deliveries increased in Fine Paper and
Packaging Boards, but decreased in Publication Paper, mainly due to
the ongoing labour dispute at Port Hawkesbury Mill and in Wood
Products due to seasonal weakness.
Operating profit excluding non-recurring items rose by 60.5% to
EUR 194.1 (EUR 120.9) million, which is 5.4% of sales. The main reason
for the increase in profitability was higher average sales prices.
These were partly offset by increased production costs, such as
energy and energy-related costs. Operating profit increased in all
product segments except Publication Paper, where operating profit
decreased by 2.8% as approximately EUR 15 million of potential
profit was lost as the Port Hawkesbury Mill has been at a standstill
from 24 December 2005 due to a labour dispute.
Operating profit includes a non-cash effect of EUR -17.6 million
from the fair valuation of share-based compensation. The negative
impact is mainly due to the increased share price and, in accordance
with IFRS standards, it must be recorded as personnel expenses.
However, the Group has hedged the fair value change and reports the
positive noncash amount of EUR 41.7 million in financial items
according to IFRS standards.
There were two non-recurring items with a net impact of
EUR -23.2 million on operating profit (based on pulp prices and exchange
rates at the end of March) related to the divestments of Grycksbo Mill and
Linghed Sawmill in Sweden as part of the previously announced Asset
Performance Review.
The share of associated company results amounted to
EUR 31.6 (EUR 24.4) million, primarily due to income from forest-holding
associates in Finland and Sweden, and Veracel.
Net financial items were EUR 115.2 (EUR -48.9) million, including a
non-recurring capital gain of EUR 130.0 million from the sale of the
shares in Sampo Oyj for EUR 155.4 million. Net interest decreased to
EUR -44.2 (EUR -53.4) million. Net foreign exchange losses were
EUR 7.0 (gains EUR 1.2) million. Other financial items totalled
EUR 36.4 (EUR 3.3) million, mainly related to unrealised changes in fair
values of financial instruments, including the hedges for the
employee option programmes.
Profit before tax amounted to EUR 210.9 (EUR 96.4) million excluding
non-recurring items.
Net taxes totalled EUR -91.3 (positive EUR 98.8) million, leaving a
net profit for the quarter of EUR 226.4 million (EUR 244.2 million
loss). The profit attributable to minority shareholders was
EUR 1.4 (EUR 0.6) million, leaving a profit of EUR 225.0 million
attributable to Company shareholders.
Earnings per share were EUR 0.20 (EUR 0.13) excluding non-recurring
items. Earnings per share including non-recurring items were
EUR 0.29 (EUR -0.31).
The return on capital employed was 6.5% (4.1%) excluding non-
recurring items. Capital employed was EUR 11 951.5 million on
31 March 2006, a net decrease of EUR 151.5 million. Capital employed
decreased mainly due to low capital expenditure and translation
differences. Working capital increased slightly during the quarter
mainly because sales receivables increased as sales prices rose.
Capital Structure
EUR million 31 Dec 05 31 Mar 05 31 Mar 06
Fixed assets 11 616.8 11 104.7 11 454.3
Working capital 1 761.1 1 499.0 1 832.9
Operating Capital 13 377.9 12 603.7 13 287.2
Net tax liabilities -1 274.8 -1 484.8 -1 335.7
Capital Employed 12 103.1 11 118.9 11 951.5
Associated companies 719.9 588.9 754.7
Total 12 823.0 11 707.8 12 706.2
Shareholders equity 7 645.3 7 672.0 7 497.6
Minority interests 93.6 108.2 93.0
Interest-bearing net liabilities 5 084.1 3 927.6 5 115.6
Financing Total 12 823.0 11 707.8 12 706.2
Financing
Cash flow from operations was EUR 288.6 (EUR 169.7) million and cash
flow after investing activities EUR 120.9 (EUR -109.7) million. The
improvement in cash flow was due to the improved profitability and
decreased capital expenditure. Cash earnings per share were
EUR 0.54 (EUR 0.50) excluding non-recurring items.
At the end of the period, interest-bearing net liabilities were
EUR 5 115.6 million, an increase of EUR 31.5 million caused by the
EUR 354.9 million dividend for 2005 being deducted from equity and
entered into current interest-bearing liabilities for payment on
5 April 2006. This increase was partly compensated by the improved
cash flow. Unutilised credit facilities and cash and cash-equivalent
reserves totalled EUR 2.1 billion.
Shareholders' equity amounted to EUR 7.5 billion or
EUR 9.51 (EUR 9.70) per share, compared with the market capitalisation
on the Helsinki Stock Exchange on 31 March 2006 of EUR 10.3 billion.
The debt/equity ratio at 31 March 2006 was 0.68 (0.66). The currency
effect on equity was EUR -11.4 million net of the hedging of equity
translation risks.
Cash Flow
EUR million 2005 Q1/05 Q4/05 Q1/06
Operating profit -93.9 112.7 -318.5 170.9
Adjustments 1 439.4 284.9 567.8 307.6
Change in working capital -288.5 -236.0 -79.6 -189.9
Cash Flow from Operations 1 057.0 161.6 169.7 288.6
Capital Expenditure -1 145.3 -357.7 -279.4 -167.7
Cash Flow after Investing
Activities -88.3 -196.1 -109.7 120.9
Capital Expenditure for the First Quarter
Capital expenditure for the first quarter totalled EUR 167.7 million.
The Group maintains its capital expenditure target for 2006 of EUR 800 million,
which would be less than depreciation for the year.
The main ongoing projects during the first quarter were the completion
of the new paper machine 12 at Kvarnsveden Mill (EUR 13.4 million),
the new boiler at Hylte Mill (EUR 12.4 million) and the Skoghall Energy
2005 project (EUR 12.1 million).
During the quarter Stora Enso decided to invest EUR 47 million in
rebuilding the woodhandling department at Varkaus Mill in Finland.
The project will start in May 2006 and is expected to be completed
in September 2007, subject to local acceptance of the Varkaus Mill
development plan.
First Quarter Events
January
Stora Enso announced that following the detailed due diligence
process, it had decided to withdraw from the consumer board joint
venture project in China first announced in August 2005.
February
Stora Enso signed an agreement to sell its Grycksbo Mill in Sweden
to Accent, a Stockholm-based private equity firm. The transaction,
which is part of Stora Enso's Asset Performance Review (APR), was
closed on 31 March 2006. The Group also signed an agreement to sell
its Linghed Sawmill in Sweden to Dalarna Lumber AB of Sweden. The
transfer took effect immediately after the announcement on 28 February
and included buildings, stocks and production assets.
March
Stora Enso decided to restart operations at Veitsiluoto Sawmill in
Northern Finland in spring 2006. The mill had been idle and the
personnel laid off temporarily since July 2005 owing to severe
profitability problems. The key consideration in the decision to
restart the mill was the wood flows in the region. The restart is
expected to result in satisfactory profitability of the mill at
lower production volume. The annual capacity in one-shift operation
is 100 000 m3 (former annual capacity was 300 000 m3).
Stora Enso launched an exchange offer for its 7.375% notes due
2011 and an issuance of new notes. The result of the exchange offer was
that USD 281 229 000 in principal amount of the old notes
(approximately 37.5%) were validly tendered. At settlement Stora
Enso delivered to participating holders the new 6.404% notes due 2016.
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.
Coincident with these investigations, Stora Enso has been named in a
number of class action lawsuits filed in the USA.
Following the 2004 inspections, on 5 April 2006 Stora Enso received
from the Finnish Competition Authority a request for a response
concerning alleged price collaboration and exchange of information
between forest companies in connection with the purchasing of timber
in Finland from 1997 to 2004. Stora Enso will investigate the matter
and intends to provide its response by 15 May 2006 as requested.
No provision has been made in Stora Enso's accounting for the above
mentioned investigations and lawsuits.
Changes in Executive Management Group (EMG)
Yngve Stade, Senior Executive Vice President, Corporate Support and
Country Manager Sweden, retired on 31 March 2006.
Changes in Organisational Structure
The following changes took effect from 1 February 2006.
Finance and Strategy
Strategy, Mergers & Acquisitions, Business Intelligence, Investments
and Corporate Affairs were merged with Finance, Accounting, Legal
and IR. The new staff function, Finance and Strategy, is headed by
Hannu Ryöppönen, CFO.
Latin America
The Latin America division, headed by Nils Grafström, Executive Vice
President, Latin America, reports to Jukka Härmälä, CEO.
The following changes took effect from 1 April 2006.
Corporate Technology and Asia Pacific
The new staff function Corporate Technology and Asia Pacific is
responsible for Energy Services, Corporate R&D, the Pulp Competence
Centre, Asia Pacific and Russia. It is headed by Markku Pentikäinen,
Executive Vice President, who reports to Jukka Härmälä, CEO.
Corporate Services
Corporate Services includes Corporate IT, HR, Business Excellence
and Procurement, and is headed by Christer Ågren, Senior Executive
Vice President and Country Manager Sweden.
Forest Products
Environment services report to Elisabet Salander Björklund, Senior
Executive Vice President, Stora Enso Forest Products.
Share Capital
The Annual General Meeting (AGM) of Stora Enso Oyj on 21 March
2006 decided to lower the Company's share capital by EUR 39.9 million
through the cancellation of 38 600 A shares and 23 400 000 R shares.
These shares had been repurchased at a cost of EUR 249.1 million,
and the reduction in share capital was registered in the Finnish
Trade Register on 31 March 2006.
The 2005 AGM also authorised the Board to repurchase and dispose of
not more than 17 700 000 A shares and 60 100 000 R shares in the
Company. There were no repurchases during the first quarter.
During the quarter a total of 460 A shares were converted into R shares.
The latest conversion was recorded in the Finnish Trade Register on
15 February 2006.
During the first quarter the Company allocated 10 858 of the
repurchased R shares under the terms of the Stora Enso North America
Option Plan.
On 31 March 2006 Stora Enso had 178 120 718 A shares and
611 417 781 R shares in issue, of which the Company held no
A shares and 962 594 R shares with a nominal value of
EUR 1.6 million. The holding represents 0.1% of the Company's share
capital and 0.04% of the voting rights.
Other Decisions of the Annual General Meeting on 21 March 2006
The proposed dividend of EUR 0.45 per share was approved.
Dominique Hériard Dubreuil was elected as a new member 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
At its meeting held after the AGM, the Stora Enso Board of Directors
elected from among its members Claes Dahlbäck as its Chairman and
Ilkka Niemi as Vice Chairman.
Jan Sjöqvist (chairman), Lee A. Chaden, Claes Dahlbäck, Birgitta
Kantola and Ilkka Niemi will continue as members of the Financial
and Audit Committee.
Claes Dahlbäck (chairman), Ilkka Niemi and Matti Vuoria will
continue as members of the Compensation Committee. Dominique Hériard
Dubreuil was elected a new member of this committee.
Events after the Period
On 3 April Corenso United Oy Ltd signed an agreement with Foshan
Huaxin Packaging Co., Ltd. to purchase the assets of its core
manufacturing plant in Nanhai, Foshan in Guangdong Province. The
transaction is expected to be completed during the second quarter of
2006. Corenso will relocate the production to a new core
manufacturing plant with an annual capacity of 20 000 tonnes in
Sanshui, Foshan, which will start production in 2007.
On 25 April Stora Enso signed an agreement with Shandong Huatai
Paper to form an equity joint-venture company in publication paper.
The total investment is estimated to be approximately
USD 100 million (EUR 83 million) of which Stora Enso's share is 60%.
The joint venture's paper machine, with a planned annual capacity of up
to 200 000 tonnes, in Dongying in Shandong province, is expected to
start up in late 2007, subject to the issuing of permits. Its output
will be suitable for the growing SC paper market in China.
In April Stora Enso offered to sell additional notes due 2016 for
cash, which are fungible with the notes offered in the Exchange
Offer launched in March 2006. The Group also offered to sell for
cash 30-year notes in a separate tranche. The maturity of the
USD 207 938 000 additional 10-year notes is 15 April 2016 and fully
fungible with the new notes from the Exchange Offer in March. As a result,
the additional notes and the new notes have an aggregate principal
amount of USD 507 928 000. The issue pays a coupon of 6.404%. The
30-year issue was upsized from USD 250 000 000 to USD 300 000 000 due
to strong demand, and the maturity of these notes is 15 April 2036.
The issue pays a coupon of 7.250%.
Near-term Outlook
In Europe the increase in advertising and direct marketing evidenced
early in the year should continue to stimulate demand for
advertisingdriven paper grades. Demand for publication paper remains
good with prices stable. Fine paper demand during the second quarter
is expected to be somewhat weaker than in the first quarter due to
seasonal reasons. Some price increases for certain uncoated grades
have been announced. Demand for packaging boards is forecast to
remain good and some price increases for industrial packaging grades
have also been announced. The demand for wood products is generally
good, allowing for some price increases. Notwithstanding these
factors, it is anticipated that overall trading conditions in Europe
may not strengthen further from those experienced in the first
quarter.
In North America magazine paper prices are expected to remain stable
with seasonal improvement in demand towards the summer. In newsprint
the downward trend in demand is expected to continue, but prices
should remain stable. The demand and prices for coated fine paper
are anticipated to remain stable.
In Asia seasonal improvement in coated fine paper demand should keep
prices quite stable.
The Profit 2007 programme is proceeding on schedule. Further details
will be reported when the second quarter results are announced.
This report is unaudited.
Helsinki, 26 April 2006
Stora Enso Oyj
Board of Directors
Segments
Publication Paper
Change%
EUR million 2005 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q1/Q4
Sales 4 675.9 1 104.4 1 125.3 1 166.0 1 280.2 1 171.0 -8.5
Operating profit* 193.3 21.6 31.5 67.9 72.3 70.3 -2.8
% of sales 4.1 2.0 2.8 5.8 5.6 6.0
ROOC, %** 4.4 2.0 2.8 5.9 6.4 6.3
Deliveries,
1 000 t 7 008 1 685 1 708 1 734 1 881 1 666 -11.4
Production,
1 000 t 7 087 1 759 1 587 1 849 1 892 1 717 -9.2
* Excluding non-recurring items and goodwill amortisation
** ROOC = 100% x Operating profit/Operating capital
Publication paper sales were EUR 1 171.0 million, down 9% on the
previous quarter mainly due to seasonally weak sales at the
beginning of the year and the labour dispute at Port Hawkesbury
Mill. However, operating profit at EUR 70.3 million was almost
unchanged on the previous quarter as higher sales prices offset
higher energy costs and production lost at Port Hawkesbury Mill.
In Europe demand for newsprint and uncoated magazine paper was
considerably stronger than a year ago, whereas demand for coated
magazine paper was almost unchanged, although demand was seasonally
weaker than in the previous quarter in all product segments.
Producer inventories increased but customer inventories were stable.
Prices were higher than in the previous quarter and a year ago in
all grades, especially newsprint.
In North America demand was weaker than a year ago in all grades and
seasonally weaker than in the previous quarter. The market remained
healthy in newsprint and quite good in coated magazine paper.
Inventories decreased. Newsprint prices were higher than in the
previous quarter and a year ago, whereas magazine paper prices
remained unchanged from the previous quarter, but were higher than a
year ago.
Fine Paper
Change%
EUR million 2005 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q1/Q4
Sales 2 690.3 708.7 618.3 625.4 737.9 776.3 5.2
Operating profit* 62.2 48.1 -13.6 -1.2 28.9 52.7 82.4
% of sales 2.3 6.8 -2.2 -0.2 3.9 6.8
ROOC, %** 2.2 6.8 -1.9 -0.2 4.2 7.6
Deliveries,
1 000 t 3 521 960 808 811 942 994 5.5
Production,
1 000 t 3 554 943 715 914 982 1 029 4.8
* Excluding non-recurring items and goodwill amortisation
** ROOC = 100% x Operating profit/Operating capital
Fine paper sales were EUR 776.3 million, up 5% on the previous
quarter mainly due to increased sales volume. Operating profit was
EUR 52.7 million, up EUR 23.8 million on the previous quarter due to
improved volume, prices and cost efficiency.
In Europe demand for fine paper was strong in the first quarter and
better than in the previous quarter and a year ago. Prices increased
slightly in uncoated fine paper and were stable in coated fine
paper. Inventories were normal at the end of the quarter.
In North America demand for coated fine paper was stronger than in
the previous quarter and a year ago. Coated fine paper prices were
stable, but higher than a year ago. The Group's inventories have
somewhat increased due to improved productivity.
In Asia coated fine paper demand and prices were generally stable
during the quarter.
Merchants
Sales were EUR 496.3 million, up 4% on the previous quarter mainly
due to increased volumes. Operating profit was EUR 9.6 million,
compared with a loss of EUR 1.9 million in the previous quarter,
which was significantly affected by the fair value accounting of
acquired inventories. Integration of the recent acquisitions is
proceeding according to plan and expected synergy benefits are being
achieved.
Packaging Boards
Change%
EUR million 2005 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q1/Q4
Sales 3 190.2 794.5 768.2 788.7 838.8 869.0 3.6
Operating profit* 220.0 72.0 11.9 73.5 62.6 99.5 58.9
% of sales 6.9 9.1 1.5 9.3 7.5 11.4
ROOC, %** 7.3 9.3 1.5 9.6 8.3 13.4
Deliveries,
1 000 t 3 621 929 873 890 929 959 3.2
Production,
1 000 t 3 678 1 002 715 1 009 952 1 005 5.6
* Excluding non-recurring items and goodwill amortisation
** ROOC = 100% x Operating profit/Operating capital
Packaging board sales were EUR 869.0 million, up 4% on the previous
quarter mainly due to higher sales volumes. Operating profit was
EUR 99.5 million, up EUR 36.9 million on the previous quarter mainly due
to higher volumes, somewhat higher prices and lower maintenance
costs.
Demand was good and deliveries higher than in the previous quarter
and a year ago. Prices were stable in consumer boards and rose in
industrial packaging boards and speciality papers.
Demand is generally forecast to remain good and some price increases
have been announced for industrial packaging grades.
Wood Products
Change%
EUR million 2005 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q1/Q4
Sales 1 588.3 366.9 433.7 398.0 389.7 377.1 -3.2
Operating profit* -3.1 -4.0 9.9 -1.8 -7.2 3.8 n/a
% of sales -0.2 -1.1 2.3 -0.5 -1.8 1.0
ROOC, %** -0.5 -2.3 5.5 -1.0 -4.2 2.3
Deliveries,
1 000 m3 6 741 1 541 1 855 1 639 1 706 1 563 -8.4
* Excluding non-recurring items and goodwill amortisation
**ROOC = 100% x Operating profit/Operating capital
Wood product sales were EUR 377.1 million, down 3% on the previous
quarter due to seasonal weakness in production and invoicing
volumes. However, operating profit was up EUR 11.0 million on the
previous quarter, mainly because prices increased while production
and fixed costs decreased, partially offsetting the persistent
pressure from increasing raw material costs.
Good demand for wood products allowed some price increases. However,
trading conditions remained challenging and profitability continued
at a low level.
The outlook for the European construction market remains firm with
prices rising in all major markets. The US construction market is
relatively stable, although prices declined slightly in the first
quarter. In Japan demand remained strong in all product segments,
but price rises were offset by currency weakness.
The joinery industries and retail business remain stable in Europe
and overseas markets.
Wood Supply
Deliveries to the Group's mills in Finland, Sweden, the Baltic
States, Russia and Continental Europe totalled 10.8 million cubic
metres, up 3% on the previous quarter.
The supply of short-fibre pulpwood was stable and stocks of
coniferous pulpwood are still high in the Nordic region. The supply
of sawlogs in the Baltic States is becoming tighter as the effects
of the storm in Sweden in 2005 dissipate. Deliveries of pulpwood and
sawlogs to some mills in Continental Europe were below target.
Financials
Key Ratios
Q1/05 Q2/05 Q3/05 Q4/05 2005 Q1/06
Earnings per share (basic),
EUR 0.07 -0.01 0.08 -0.31 -0.16 0.29
Earnings per share excl. non
recurring items, EUR 0.07 0.00 0.08 0.13 0.28 0.20
Cash earnings per share
(CEPS), EUR 0.41 0.35 0.44 0.42 1.62 0.63
CEPS excl. non-
recurring items, EUR 0.41 0.35 0.44 0.50 1.70 0.54
Return on capital employed
(ROCE), % 4.1 0.2 3.7 -10.7 -0.8 5.7
ROCE excl. non-
recurring items, % 4.1 0.6 3.7 4.1 3.1 6.5
Return on equity (ROE), % 3.0 -0.4 3.5 -12.6 -1.6 11.8
Debt/equity ratio 0.51 0.58 0.62 0.66 0.66 0.68
Equity per share, EUR 9.46 9.46 9.67 9.70 9.70 9.51
Equity ratio, % 45.8 45.0 43.2 42.8 42.8 42.0
Operating profit, % of sales 3.6 0.2 3.3 -8.8 -0.7 4.7
Operating profit excl. non-
recurring items, % of sales 3.6 0.6 3.3 3.3 2.7 5.4
Capital expenditure, EUR
million 356.6 253.0 256.3 279.4 1 145.3 167.7
Capital expenditure, % of
sales 11.3 7.9 8.0 7.7 8.7 4.6
Capital employed,
EUR million 11 119 11 273 11 740 12 103 12 103 11 952
Interest-bearing net
liabilities, EUR million 3 928 4 340 4 699 5 084 5 084 5 116
Average number of employees 44 870 45 670 46 418 46 166 46 166 46 056
Average number of shares
(million)
periodic 816.3 800.0 790.5 788.6 798.7 788.6
cumulative 816.3 808.1 802.1 798.7 798.7 788.6
cumulative, diluted 816.9 808.7 802.6 799.2 799.2 789.1
Key Exchange Rates for the Euro
One Euro is Closing Rate Average Rate
31 Dec 05 31 Mar 06 31 Dec 05 31 Mar 06
SEK 9.3885 9.4315 9.2824 9.3487
USD 1.1797 1.2104 1.2446 1.2031
GBP 0.6853 0.6964 0.6839 0.6863
CAD 1.3725 1.4084 1.5087 1.3887
Condensed Consolidated Income Statement
EUR million 2005 Q1/2005 Q1/2006
Sales 13 187.5 3 144.9 3 607.7
Other operating income 80.1 19.6 50.2
Materials and services -7 232.3 -1 674.0 -1 987.7
Freight and sales commissions -1 493.0 -347.4 -392.7
Personnel expenses -2 216.6 -556.6 -597.3
Other operating expenses -991.9 -197.7 -240.1
Depreciation and impairment -1 427.7 -276.1 -269.2
Operating Profit -93.9 112.7 170.9
Share of results of associated companies 67.2 14.0 31.6
Net financial items -151.6 -43.1 115.2
Profit before Tax -178.3 83.6 317.7
Income tax 52.0 -23.6 -91.3
Net Profit for the Period -126.3 60.0 226.4
Attributable to:
Company shareholders -130.0 58.6 225.0
Minority interests 3.7 1.4 1.4
-126.3 60.0 226.4
Key Ratios
Basic earnings per share, EUR -0.16 0.07 0.29
Diluted earnings per share, EUR -0.16 0.07 0.29
Condensed Consolidated Cash Flow Statement
EUR million 2005 Q1/2005 Q1/2006
Cash Flow from Operating Activities
Operating profit -93.9 112.7 170.9
Adjustments 1 439.4 284.9 307.6
Change in net working capital -288.5 -236.0 -189.9
Change in short-term interest-bearing
receivables 9.8 69.0 32.2
Cash Flow Generated by Operations 1 066.8 230.6 320.8
Net financial items -117.5 -24.8 7.8
Income taxes paid -209.0 -51.8 -10.3
Net Cash Provided by Operating Activities 740.3 154.0 318.3
Cash Flow from Investing Activities
Acquisitions of Group companies -323.9 -48.8 -7.4
Acquisitions of associated companies -55.7 0.0 0.0
Proceeds from sale of fixed assets and
shares 104.9 2.9 206.3
Capital expenditure -1 145.3 -357.7 -167.7
Proceeds from the long-term receivables, net 98.3 -0.2 -14.6
Net Cash Used in Investing Activities -1 321.7 -403.8 16.6
Cash Flow from Financing Activities
Change in long-term liabilities 671.3 10.7 97.8
Change in short-term borrowings 674.9 363.0 -425.7
Dividends paid -365.3 0.0 0.0
Minority dividends -0.3 0.0 -0.5
Options exercised 0.0 0.0 -1.3
Purchase of own shares -344.6 -106.6 0.0
Net Cash Used in Financing Activities 636.0 267.1 -329.7
Net Increase in Cash and Cash Equivalents 54.6 17.3 5.2
Cash and bank in acquired companies 10.3 0.0 0.7
Cash and bank in sold companies 0.0 0.0 -0.6
Translation differences on cash holdings 12.2 1.9 -3.8
Cash and bank at the beginning of period 274.3 274.3 351.4
Cash and Cash Equivalents at Period End 351.4 293.5 352.9
Condensed Consolidated Balance Sheet
EUR million 31 Dec 05 31 Mar 05 31 Mar 06
Assets
Fixed and Other Long-term Assets
Fixed assets O 11 092.7 10 843.4 10 850.0
Biological assets O 76.8 64.0 77.5
Emission rights O 43.7 64.7 123.9
Investment in associated companies 719.9 588.9 754.7
Listed securities I 211.6 236.5 83.5
Unlisted shares O 403.6 132.6 402.9
Non-current loan receivables I 127.6 230.6 141.8
Deferred tax assets T 72.2 19.2 65.2
Other non-current assets O 269.4 233.7 257.2
13 017.5 12 413.6 12 756.7
Current Assets
Inventories O 2 150.5 1 950.8 2 210.6
Tax receivables T 108.5 159.1 112.6
Operative receivables O 2 157.9 1 938.0 2 260.8
Interest-bearing receivables I 309.2 215.4 365.8
Cash and cash equivalents I 351.4 293.5 352.9
5 077.5 4 556.8 5 302.7
Total Assets 18 095.0 16 970.4 18 059.4
Shareholders' Equity and Liabilities
Shareholders Equity 7 645.3 7 672.0 7 497.6
Minority Interests 93.6 108.2 93.0
Total Equity 7 738.9 7 780.2 7 590.6
Long-term Liabilities
Pension provisions O 494.0 658.5 492.3
Other provisions O 142.6 63.2 138.0
Deferred tax liabilities T 1 076.2 1 281.0 1 129.6
Long-term debt I 4 353.9 3 167.2 4 392.1
Long-term operative liabilities O 204.7 222.1 303.6
6 271.4 5 392.0 6 455.6
Current Liabilities
Current portion of long-term debt I 385.0 335.6 159.5
Interest-bearing liabilities I 1 345.0 1 400.8 1 508.0
Operative liabilities O 1 975.4 1 679.7 1 961.8
Tax liabilities T 379.3 382.1 383.9
4 084.7 3 798.2 4 013.2
Total Liabilities 10 356.1 9 190.2 10 468.8
Total Shareholders Equity and
Liabilities 18 095.0 16 970.4 18 059.4
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
Trea-
Share Share sury Retained
EUR million Capital Premium Shares OCI CTA Earnings Total
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 - - -344.7 - - - -344.7
Cancellation of
Stora Enso Oyj
shares -41.2 -224.4 265.6 - - - 0.0
Dividend (EUR 0.45
per share) - - - - - -365.3 -365.3
Buy-out of minority
interests - - - - - -43.2 -43.2
Net profit for the
period - - - - 0.2 -130.0 -129.8
OCI entries - - - 400.4 - - 400.4
Translation
adjustment - - - - 91.6 - 91.6
Balance at 31
December 2005 1 382.1 784.8 -259.9 468.0 -127.1 5 397.4 7 645.3
Cancellation of
Stora Enso Oyj
shares -39.9 -209.2 249.1 - - - 0.0
Dividend (EUR 0.45
per share) - - - - - -354.9 -354.9
Options exercised - -1.3 0.1 - - - -1.2
Net profit for the
period - - - - 4.2 225.0 229.2
OCI entries - - - -9.4 - - -9.4
Translation
adjustment - - - - -11.4 - -11.4
Balance at 31 March
2006 1 342.2 574.3 -10.7 458.6 -134.3 5 267.5 7 497.6
CTA = Cumulative Translation Adjustment
OCI = Other Comprehensive Income
Property, Plant and Equipment, Intangible Assets and Goodwill
EUR million 2005 Q1/2005 Q1/2006
Carrying value at 1 January 10 715.5 10 715.5 11 213.2
Acquisition of subsidiary companies 388.3 0.0 8.4
Additions 1 129.6 356.6 165.1
Additions in biological assets, IAS 41 15.7 1.1 2.6
Change in emission rights 43.7 64.7 80.2
Disposals -12.5 -2.7 -61.0
Depreciation, amortisation and impairment -1 427.7 -276.1 -269.2
Translation difference and other 360.6 113.0 -87.9
Balance Sheet Total 11 213.2 10 972.1 11 051.4
Acquisitions of Subsidiary Companies
Cash and cash equivalents 10.3 0.0 0.7
Working capital 171.4 0.0 -1.2
Operating fixed assets 274.3 0.0 1.8
Interest-bearing assets 0.0 0.0 0.0
Tax liabilities -59.8 0.0 0.3
Interest-bearing liabilities -274.6 0.0 -0.6
Non-cash share exchange -5.0 -5.0 0.0
Minority interests 93.3 -43.8 -0.2
Fair value of net assets 209.9 -48.8 0.8
Goodwill 114.0 0.0 6.6
Total Purchase Consideration 323.9 -48.8 7.4
Borrowings
EUR million 2005 Q1/2005 Q1/2006
Non-current borrowings 4 353.9 3 167.2 4 392.1
Current borrowings 1 730.0 1 736.4 1 667.5
6 083.9 4 903.6 6 059.6
Carrying value at 1 January 4 027.6 4 027.6 6 083.9
Debt acquired with new subsidiaries 274.6 0.0 0.6
Debt disposed with sold
subsidiaries 0.0 0.0 -4.3
Proceeds from / payments of
borrowings (net) 1 346.2 373.7 -327.9
Translation difference and other* 435.5 502.3 307.3
Total Borrowings 6 083.9 4 903.6 6 059.6
*) Includes dividend liability of EUR 365.3 million in Q1/2005 and
EUR 354.9 million in Q1/2006.
Commitments and Contingencies
EUR million 31 Dec 05 31 Mar 05 31 Mar 06
On Own Behalf
Pledges given 1.1 0.3 1.1
Mortgages 212.8 109.6 211.9
On Behalf of Associated Companies
Mortgages 0.8 0.8 0.8
Guarantees 359.3 235.3 369.0
On Behalf of Others
Pledges given 0.0 0.0 0.0
Mortgages 0.0 0.0 0.0
Guarantees 13.7 6.9 11.7
Other Commitments, Own
Leasing commitments, in next 12
months 34.3 31.9 33.0
Leasing commitments, after next 12
months 148.0 152.3 143.0
Pension liabilities 0.7 1.2 0.5
Other commitments 97.6 106.2 90.7
Total 868.3 644.5 861.7
Pledges given 1.1 0.3 1.1
Mortgages 213.6 110.4 212.7
Guarantees 373.0 242.2 380.7
Leasing commitments 182.3 184.2 176.0
Pension liabilities 0.7 1.2 0.5
Other commitments 97.6 106.2 90.7
Total 868.3 644.5 861.7
Net Fair Values of Derivative Financial Instruments
EUR million 31 Dec 05 31 Mar 05 31 Mar 06
Positive Negative
Net Fair Net Fair Fair Fair Net Fair
Values Values Values Values Values
Interest rate swaps 88.1 123.1 78.0 -34.1 43.9
Interest rate options -1.9 0.0 0.5 -8.1 -7.6
Cross-currency swaps -6.5 -13.0 0.0 -5.9 -5.9
Forward contracts -30.5 -9.8 10.0 -7.5 2.5
FX options -5.7 -1.0 4.7 -3.1 1.6
Commodity contracts 129.6 69.2 213.9 -3.1 210.8
Equity swaps -1.8 -26.1 55.6 -15.9 39.7
Total 171.3 142.4 362.7 -77.7 285.0
Nominal Values of Derivative Financial Instruments
EUR million 31 Dec 05 31 Mar 05 31 Mar 06
Interest Rate Derivatives
Interest rate swaps
Maturity under 1 year 620.1 702.4 0.0
Maturity 25 years 1 000.6 393.2 1 038.6
Maturity 610 years 1 738.3 1 567.3 1 788.4
3 359.0 2 662.9 2 827.0
Interest rate options 673.8 148.4 1 753.6
Total 4 032.8 2 811.3 4 580.6
Foreign Exchange Derivatives
Cross-currency swap agreements 72.3 105.4 70.7
Forward contracts 2 442.1 2 428.9 2 129.0
FX Options 1 071.3 695.4 833.2
Total 3 585.7 3 229.7 3 032.9
Commodity Derivatives
Commodity contracts 391.0 517.7 414.9
Total 391.0 517.7 414.9
Equity swaps
Equity swaps 408.5 397.4 400.9
Total 408.5 397.4 400.9
Sales by Segment
EUR million Q1/05 Q2/05 Q3/05 Q4/05 2005 Q1/06
Publication Paper 1 104.4 1 125.3 1 166.0 1 280.2 4 675.9 1 171.0
Fine Paper 708.7 618.3 625.4 737.9 2 690.3 776.3
Merchants 182.1 217.4 295.2 478.5 1 173.2 496.3
Packaging Boards 794.5 768.2 788.7 838.8 3 190.2 869.0
Wood Products 366.9 433.7 398.0 389.7 1 588.3 377.1
Wood Supply 674.7 563.2 612.4 651.6 2 501.9 674.8
Other -686.4 -538.8 -666.5 -740.6 -2 632.3 -756.8
Total Sales 3 144.9 3 187.3 3 219.2 3 636.1 13 187.5 3 607.7
Operating Profit by Segment excluding Non-recurring items and
Goodwill Amortisation
EUR million Q1/05 Q2/05 Q3/05 Q4/05 2005 Q1/06
Publication Paper 21.6 31.5 67.9 72.3 193.3 70.3
Fine Paper 48.1 -13.6 -1.2 28.9 62.2 52.7
Merchants 2.7 1.6 0.9 -1.9 3.3 9.6
Packaging Boards 72.0 11.9 73.5 62.6 220.0 99.5
Wood Products -4.0 9.9 -1.8 -7.2 -3.1 3.8
Wood Supply 3.1 -10.9 -0.3 -3.7 -11.8 8.9
Other -30.8 -12.7 -32.8 -30.1 -106.4 -50.7
Operating Profit
excl. Goodwill
Amortisation 112.7 17.7 106.2 120.9 357.5 194.1
Goodwill
amortisation - - - - - -
Non-recurring items - -12.0 - -439.4 -451.4 -23.2
Operating Profit
(IFRS) 112.7 5.7 106.2 -318.5 -93.9 170.9
Net financial items -43.1 -34.6 -25.0 -48.9 -151.6 115.2
Associated companies 14.0 17.0 11.8 24.4 67.2 31.6
Profit before Tax
and Minority
Interests 83.6 -11.9 93.0 -343.0 -178.3 317.7
Income tax expense -23.6 3.3 -26.5 98.8 52.0 -91.3
Net Profit 60.0 -8.6 66.5 -244.2 -126.3 226.4
Non-recurring Items by Segment
EUR million Q1/05 Q2/05 Q3/05 Q4/05 2005 Q1/06
Publication Paper - - - -201.6 -201.6 -2.9
Fine Paper - - - -40.8 -40.8 -22.0
Merchants - - - -7.9 -7.9
Packaging Boards - - - -144.4 -144.4
Wood Products - -12.0 - -41.2 -53.2 1.7
Wood Supply - - - -3.5 -3.5
Other - - - - -
Total Non-recurring
Items - -12.0 - -439.4 -451.4 -23.2
Operating Profit by Segment
EUR million Q1/05 Q2/05 Q3/05 Q4/05 2005 Q1/06
Publication Paper 21.6 31.5 67.9 -129.3 -8.3 67.4
Fine Paper 48.1 -13.6 -1.2 -11.9 21.4 30.7
Merchants 2.7 1.6 0.9 -9.8 -4.6 9.6
Packaging Boards 72.0 11.9 73.5 -81.8 75.6 99.5
Wood Products -4.0 -2.1 -1.8 -48.4 -56.3 5.5
Wood Supply 3.1 -10.9 -0.3 -7.2 -15.3 8.9
Other -30.8 -12.7 -32.8 -30.1 -106.4 -50.7
Operating Profit
excl. Goodwill
Amortisation 112.7 5.7 106.2 -318.5 -93.9 170.9
Goodwill
amortisation - - - - - -
Operating Profit 112.7 5.7 106.2 -318.5 -93.9 170.9
Net financial items -43.1 -34.6 -25.0 -48.9 -151.6 115.2
Associated companies 14.0 17.0 11.8 24.4 67.2 31.6
Profit before Tax
and Minority
Interests 83.6 -11.9 93.0 -343.0 -178.3 317.7
Income tax expense -23.6 3.3 -26.5 98.8 52.0 -91.3
Net Profit 60.0 -8.6 66.5 -244.2 -126.3 226.4
Stora Enso Shares
Closing Price Helsinki, EUR Stockholm, SEK New York, USD
A share R share A share R share ADRs
January 11.50 11.41 106.00 106.00 13.84
February 12.06 11.98 114.00 112.50 14.20
March 12.77 12.70 120.50 119.00 15.35
Trading Volume Helsinki Stockholm New York
A share R share A share R share ADRs
January 64 765 67 360 829 263 598 17 189 147 2 236 700
February 120 779 114 837 376 237 462 33 463 124 2 905 600
March 97 309 148 080 385 391 375 33 838 358 3 993 500
Total 282 853 330 278 590 892 435 84 490 629 9 135 800
www.storaenso.com
www.storaenso.com/investors
Publication dates for financial information
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
