Stora Enso Interim Review January-March 2010
Strong earnings recovery due to lower costs and slowly improving markets
STORA ENSO OYJ INTERIM REVIEW 22 April 2010 at 06.00 GMT
- Operating profit excluding NRI and fair valuations EUR 119 million, up
year-on-year by EUR 116 million driven by volume recovery, active cost
management and pulp price increase;
- Cash flow from operations EUR 119 million despite increase in working
capital;
- Cash position remains very strong;
- Group's market pulp net capacity is about 900 000 tonnes for 2010;
- Group continues with active capacity and cost management, planned closure of
two
newsprint machines at Varkaus in Finland
Summary of First Quarter Results
--------------------------------------------------------------------------------
| | | Q1/10 | Q4/09 | Q1/09 |
--------------------------------------------------------------------------------
| Sales | EUR | 2 295.9 | 2 398.8 | 2 130.5 |
| | million | | | |
--------------------------------------------------------------------------------
| EBITDA excl. NRI and fair | EUR | 232.1 | 227.21 | 134.3 |
| valuations | million | | | |
--------------------------------------------------------------------------------
| Operating Profit excl. NRI | EUR | 119.4 | 137.5 | 3.0 |
| and Fair Valuations | million | | | |
--------------------------------------------------------------------------------
| Operating profit/loss (IFRS) | EUR | 123.4 | 105.3 | -0.9 |
| | million | | | |
--------------------------------------------------------------------------------
| Profit/loss before tax excl. | EUR | 136.8 | 122.7 | -82.1 |
| NRI | million | | | |
--------------------------------------------------------------------------------
| Profit/loss before tax | EUR | 117.9 | 80.6 | -48.1 |
| | million | | | |
--------------------------------------------------------------------------------
| Net profit/loss excl. NRI | EUR | 121.0 | 76.0 | -60.2 |
| | million | | | |
--------------------------------------------------------------------------------
| Net profit/loss | EUR | 102.1 | 45.9 | -36.1 |
| | million | | | |
--------------------------------------------------------------------------------
| EPS excl. NRI | EUR | 0.15 | 0.09 | -0.08 |
--------------------------------------------------------------------------------
| EPS | EUR | 0.13 | 0.05 | -0.05 |
--------------------------------------------------------------------------------
| CEPS excl. NRI | EUR | 0.31 | 0.29 | 0.10 |
--------------------------------------------------------------------------------
| ROCE excl. NRI | % | 7.2 | 7.5 | -1.6 |
--------------------------------------------------------------------------------
| ROCE excl. NRI and fair | % | 6.0 | 7.0 | 0.1 |
| valuations | | | | |
--------------------------------------------------------------------------------
1) see Key Figures table
Fair valuations include synthetic options net of realised and open hedges, CO2
emission rights, and valuations of biological assets related to forest assets in
equity accounted investments.
NRI = Non-recurring items. These are exceptional transactions that are not
related to normal business operations. The most common non-recurring items are
capital gains, additional write-downs, provisions for planned restructuring and
penalties. Non-recurring items are normally specified individually if they
exceed one cent per share.
Markets
Compared with Q1/2009
In Europe market demand was slightly stronger than a year earlier for newsprint
and magazine paper. Market demand was also stronger for fine paper and packaging
products, especially consumer board, but unchanged for wood products as
construction markets remained weak. Despite some progress, overall demand for
all products remained materially less than pre-crisis levels two years ago.
In Europe market prices in local currencies were significantly lower than a year
earlier for newsprint and magazine paper due to structural imbalance in supply
and demand. Prices were also lower for fine paper and some consumer board and
industrial packaging grades. Corrugated packaging prices were largely unchanged,
whereas prices for RCP-based containerboard and wood products were substantially
higher than a year ago.
Industry inventories were lower in newsprint, magazine paper, fine paper and
wood products.
In Latin America market demand for coated magazine paper recovered significantly
to pre-recession levels, but market prices were lower than a year ago. In China
demand for uncoated magazine paper also recovered and prices remained unchanged,
whereas market demand for coated fine paper improved and prices were
substantially higher than a year ago.
Compared with Q4/2009
In Europe market demand was seasonally weaker than in the previous quarter for
newsprint and magazine paper, slightly weaker for coated fine paper, better for
uncoated fine paper and slightly improved for consumer board. Market demand was
seasonally somewhat weaker for corrugated packaging and largely unchanged for
other industrial packaging products. Market demand for wood products remained
weak and unchanged, but market activity started to improve towards the end of
the quarter.
In Europe market prices in local currencies decreased significantly for
newsprint and magazine paper and were also slightly lower than in the previous
quarter for coated fine paper. Uncoated fine paper prices remained unchanged,
and consumer board prices were largely unchanged but started increasing during
the quarter. Prices rose for industrial packaging and wood products.
Industry inventories generally remained low and were unchanged in newsprint and
coated magazine paper, dropped even lower in coated fine paper, but were
slightly up from very low levels in uncoated fine paper and wood products.
In Latin America market demand for coated magazine paper weakened somewhat due
to the holiday season, but prices rose slightly. In China market demand and
prices improved to some extent in uncoated magazine paper, whereas market demand
was unchanged and prices continued to rise in coated fine paper.
Stora Enso Deliveries and Production
--------------------------------------------------------------------------------
| | Q1/10 | Q4/09 | Q1/09 | Change % | Change % |
| | | | | Q1/10-Q1/ | Q1/10-Q4/ |
| | | | | 09 | 09 |
--------------------------------------------------------------------------------
| Paper and board | 2 519 | 2 744 | 2 343 | 7.5 | -8.2 |
| deliveries (1 000 | | | | | |
| tonnes) | | | | | |
--------------------------------------------------------------------------------
| Paper and board | 2 675 | 2 587 | 2 363 | 13.2 | 3.4 |
| production (1 000 | | | | | |
| tonnes) | | | | | |
--------------------------------------------------------------------------------
| Wood products deliveries | 1 149 | 1 298 | 1 113 | 3.2 | -11.5 |
| (1 000 m3) | | | | | |
--------------------------------------------------------------------------------
| Corrugated packaging | 250 | 255 | 228 | 9.6 | -2.0 |
| deliveries (million m2) | | | | | |
--------------------------------------------------------------------------------
Q1/2010 Results (compared with Q1/2009)
Sales at EUR 2 295.9 million were EUR 165.4 million higher than in the first
quarter of 2009. Deliveries were higher in all segments. Sales prices in local
currencies were clearly higher in Wood Products and significantly lower in
Newsprint and Magazine Paper.
Key Figures
--------------------------------------------------------------------------------
| EUR million | Q1/10 | Q4/0 | Q1/09 | 2009 | Change | Change |
| | | 9 | | | % | % |
| | | | | | Q1/10-Q | Q1/10-Q |
| | | | | | 1/09 | 4/09 |
--------------------------------------------------------------------------------
| Sales | 2 | 2 | 2 | 8 | 7.8 | -4.3 |
| | 295.9 | 398. | 130.5 | 945.1 | | |
| | | 8 | | | | |
--------------------------------------------------------------------------------
| EBITDA excl. NRI and | 232.1 | 227. | 134.3 | 807.81 | 72.8 | 2.2 |
| fair valuations | | 21 | | | | |
--------------------------------------------------------------------------------
| Operating profit excl. | 119.4 | 137. | 3.0 | 320.5 | n/m | -13.2 |
| NRI and fair valuations | | 5 | | | | |
--------------------------------------------------------------------------------
| Operating profit/loss | 142.3 | 147. | -34.9 | 324.9 | n/m | -3.5 |
| excl. NRI | | 4 | | | | |
--------------------------------------------------------------------------------
| Operating margin excl. | 6.2 | 6.1 | -1.6 | 3.6 | n/m | 1.6 |
| NRI, % | | | | | | |
--------------------------------------------------------------------------------
| Operating profit/loss | 123.4 | 105. | -0.9 | -607.6 | n/m | 17.2 |
| (IFRS) | | 3 | | | | |
--------------------------------------------------------------------------------
| Operating profit/loss, | 5.4 | 4.4 | 0.0 | -6.8 | n/m | 22.7 |
| % of sales | | | | | | |
--------------------------------------------------------------------------------
| Profit/loss before tax | 136.8 | 122. | -82.1 | 194.2 | 266.6 | 11.5 |
| and non-controlling | | 7 | | | | |
| interests excl. NRI | | | | | | |
--------------------------------------------------------------------------------
| Profit/loss before tax | 117.9 | 80.6 | -48.1 | -886.8 | n/m | 46.3 |
| and non-controlling | | | | | | |
| interests | | | | | | |
--------------------------------------------------------------------------------
| Net profit/loss for the | 121.0 | 76.0 | -60.2 | 153.2 | n/m | 59.2 |
| period excl. NRI | | | | | | |
--------------------------------------------------------------------------------
| Net profit/loss for the | 102.1 | 45.9 | -36.1 | -878.2 | n/m | 122.4 |
| period | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital expenditure | 112.8 | 101. | 104.2 | 423.7 | 8.3 | 10.7 |
| | | 9 | | | | |
--------------------------------------------------------------------------------
| Depreciation and | 126.8 | 129. | 144.2 | 548.7 | -12.1 | -1.9 |
| impairment charges | | 3 | | | | |
| excl. NRI | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ROCE excl. NRI and fair | 6.0 | 7.0 | 0.1 | 3.9 | n/m | -14.3 |
| valuations, % | | | | | | |
--------------------------------------------------------------------------------
| ROCE excl. NRI, % | 7.2 | 7.5 | -1.6 | 3.9 | n/m | -4.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share | 0.15 | 0.09 | -0.08 | 0.19 | 287.5 | 66.7 |
| (EPS) excl. NRI, EUR | | | | | | |
--------------------------------------------------------------------------------
| EPS (basic), EUR | 0.13 | 0.05 | -0.05 | -1.12 | n/m | 160.0 |
--------------------------------------------------------------------------------
| Cash earnings per share | 0.31 | 0.29 | 0.10 | 0.92 | 210.0 | 6.9 |
| (CEPS) excl. NRI, EUR | | | | | | |
--------------------------------------------------------------------------------
| CEPS, EUR | 0.30 | 0.28 | 0.12 | 0.35 | 150.0 | 7.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on equity (ROE), | 7.8 | 3.6 | -2.6 | -16.2 | n/m | 116.7 |
| % | | | | | | |
--------------------------------------------------------------------------------
| Debt/equity ratio | 0.54 | 0.51 | 0.55 | 0.51 | -1.8 | 5.9 |
--------------------------------------------------------------------------------
| Equity per share, EUR | 6.60 | 6.50 | 6.82 | 6.50 | -3.2 | 1.5 |
--------------------------------------------------------------------------------
| Equity ratio, % | 43.6 | 44.7 | 45.1 | 44.7 | -3.3 | -2.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average number of | 27 | 27 | 29 695 | 28 696 | -8.3 | -1.3 |
| employees | 245 | 612 | | | | |
--------------------------------------------------------------------------------
| Average number of | | | | | | |
| shares (million) | | | | | | |
--------------------------------------------------------------------------------
| periodic | 788.6 | 788. | 788.6 | 788.6 | 0.0 | 0.0 |
| | | 6 | | | | |
--------------------------------------------------------------------------------
| cumulative | 788.6 | 788. | 788.6 | 788.6 | 0.0 | 0.0 |
| | | 6 | | | | |
--------------------------------------------------------------------------------
| cumulative, diluted | 788.6 | 788. | 788.6 | 788.6 | 0.0 | 0.0 |
| | | 6 | | | | |
--------------------------------------------------------------------------------
1) Restated (decreased EUR 14.9 million), no impact on other reported profit
figures
NRI = Non-recurring items. These are exceptional transactions that are not
related to normal business operations. The most common non-recurring items are
capital gains, additional write-downs, provisions for planned restructuring and
penalties. Non-recurring items are normally specified individually if they
exceed one cent per share.
Fair valuations include synthetic options net of realised and open hedges, CO2
emission rights, and valuations of biological assets related to forest assets in
equity accounted investments.
Reconciliation of Operating Profit
--------------------------------------------------------------------------------
| EUR million | Q1/10 | Q4/09 | Q1/09 | 2009 | Change % | Change % |
| | | | | | Q1/10-Q1 | Q1/10-Q4 |
| | | | | | /09 | /09 |
--------------------------------------------------------------------------------
| Profit/loss from | 105.2 | 101.7 | -10.3 | 259.1 | n/m | 3.4 |
| operations, excl. NRI | | | | | | |
--------------------------------------------------------------------------------
| Equity accounted | 14.2 | 35.8 | 13.3 | 61.4 | 6.8 | -60.3 |
| investments, | | | | | | |
| operational, | | | | | | |
| excl. | | | | | | |
| fair valuations | | | | | | |
--------------------------------------------------------------------------------
| Operating Profit | 119.4 | 137.5 | 3.0 | 320.5 | n/m | -13.2 |
| excl. NRI and | | | | | | |
| Fair | | | | | | |
| Valuations | | | | | | |
--------------------------------------------------------------------------------
| Fair valuations | 22.9 | 9.9 | -37.9 | 4.4 | 160.4 | 131.3 |
--------------------------------------------------------------------------------
| Operating | 142.3 | 147.4 | -34.9 | 324.9 | n/m | -3.5 |
| Profit/Loss, excl. | | | | | | |
| NRI | | | | | | |
--------------------------------------------------------------------------------
| NRI | -18.9 | -42.1 | 34.0 | -932.5 | -155.6 | 55.1 |
--------------------------------------------------------------------------------
| Operating Profit/Loss | 123.4 | 105.3 | -0.9 | -607.6 | n/m | 17.2 |
| (IFRS) | | | | | | |
--------------------------------------------------------------------------------
Q1/2010 Results (compared with Q1/2009) (continued)
Operating profit at EUR 119.4 million excluding non-recurring items and fair
valuations was EUR 116.4 million higher than a year ago. Operating profit
improved by EUR 55 million in Consumer Board, by EUR 47 million in Fine Paper
and by EUR 29 million in Wood Products, slightly improved in Magazine Paper and
Industrial Packaging, but deteriorated by EUR 23 million to an operating loss of
EUR 1.6 million in Newsprint. In the segment Other there was an operating loss
excluding non-recurring items and fair valuations of EUR 22.2 (EUR 21.3)
million. The direct impact of stevedores' strike in Finland was approximately
EUR 12 million on operating profit in the first quarter of 2010.
In the first quarter of 2010, the Group curtailed paper and board production by
12% and sawnwood production by 6% of capacity. Pulp production was not
curtailed.
Lower sales prices in local currencies decreased the operating profit of Paper
and Board segments by EUR 84 million. Higher sales prices in local currencies in
Wood Products increased operating profit by EUR 29 million. Higher sales volumes
increased operating profit by EUR 99 million. The positive impact of exchange
rate trends on the sales prices of some EUR 34 million was partly offset by the
negative impact of exchange rate trends on costs.
Higher fibre costs decreased Group operating profit by EUR 7 million. Lower
other variable costs, including energy and chemicals, increased Group operating
profit by EUR 48 million. There was an increase (EUR 17 million) in fixed costs.
Lower depreciation improved operating profit by EUR 14 million. Deliveries of
wood to the Group's mills were 22% more than a year earlier at 9.0 million cubic
metres.
The share of the operational results of equity accounted investments, excluding
non-recurring items and fair valuations, amounted to EUR 14.2 (EUR 13.3)
million, with the largest contribution from Bergvik Skog and Tornator. Operating
profit includes a net effect of EUR 22.9 (EUR -37.9) million for fair valuations
related to the accounting of share-based compensation, Total Return Swaps (TRS),
CO2 emission rights and IAS 41 forest valuations in equity accounted
investments.
Stora Enso has recorded EUR 19 million of non-recurring items in the first
quarter of 2010, including a write-down of approximately EUR 23 million on the
fixed assets and working capital of its Kotka Mills related to their divestment
to OpenGate Capital and approximately EUR 4 million of profit on divestment of
the Tolkkinen mill site. The closing sales consideration for Kotka Mills is
subject to fair value changes and therefore the final outcome of the transaction
is subject to change. The divestment of Kotka Mills is expected to be finalised
by the end of the second quarter of 2010. The NRIs had no material impact on
tax.
Net financial items were EUR -5.5 (EUR -47.2) million. Net interest expenses
decreased from EUR 32.0 million to EUR 16.5 million, mainly due to lower
interest rates. The Group has an interest rate risk policy of synchronising
interest costs with earnings over the business cycle by swapping long-term fixed
interest rates to short-term floating interest rates. Net foreign exchange gains
on borrowings, currency derivatives and bank accounts amounted to EUR 11.1 (loss
EUR 23.6) million. The net loss from other financial items amounted to EUR 0.1
(gain EUR 8.4) million, comprising income of EUR 1.4 million from
payment-in-kind notes, fair valuation losses of EUR 0.7 million on interest rate
swaps, fair valuation gains of EUR 0.1 million on long-term debt and other
expenses of EUR 0.9 million.
Group capital employed was EUR 8 062.3 million on 31 March 2010, a net decrease
of EUR 329.9 million due to fixed asset impairments, restructuring costs and
decrease in working capital. Equity accounted investments increased.
Q1/2010 Results (compared with Q4/2009)
Sales at EUR 2 295.9 million were EUR 102.9 million lower than the previous
quarter's EUR 2 398.8 million due to lower sales prices in local currencies in
Newsprint and Magazine Paper and slightly lower sales volumes in all segments
except Consumer Board and Industrial Packaging. Sales prices increased in
Industrial Packaging and Wood Products, and the impact of foreign exchange rate
movements on sales prices was positive for all segments. Operating profit
excluding non-recurring items and fair valuations was EUR 18.1 million lower
than the previous quarter at EUR 119.4 million. Group capital employed was EUR
8 062.3 million on 31 March 2010, a net increase of EUR 286.0 million mainly due
to increased working capital and the effect of foreign exchange movements on
assets.
Operating profit excluding NRI improved by EUR 28 million in Consumer Board and
by EUR 19 million in Fine Paper, but deteriorated by EUR 43 million in
Newsprint. Operating profit decreased by EUR 10 million in Wood Products and
increased by EUR 5 million in Industrial Packaging.
Lower sales prices in local currencies decreased operating profit by EUR 50
million. Changes in deliveries did not have any material impact on operating
profit. The positive impact of exchange rate trends on the sales prices of some
EUR 44 million was partly offset by the negative impact of exchange rate trends
on costs. Higher fibre costs decreased operating profit by EUR 24 million and
higher other variable costs, including energy, chemicals and logistics,
decreased operating profit by EUR 13 million. Lower fixed costs improved
operating profit by EUR 48 million as maintenance stoppages and costs related to
catching up on maintenance had a material impact on fixed costs in the fourth
quarter of 2009.
Capital Structure
--------------------------------------------------------------------------------
| EUR million | 31 Mar 10 | 31 Dec 09 | 31 Mar 09 |
--------------------------------------------------------------------------------
| Operative fixed assets | 6 084.6 | 5 936.2 | 6 648.8 |
--------------------------------------------------------------------------------
| Equity accounted investments | 1 572.0 | 1 481.3 | 1 063.5 |
--------------------------------------------------------------------------------
| Operative working capital | 1 256.2 | 1 171.2 | 1 435.4 |
--------------------------------------------------------------------------------
| Non-current interest-free items, | -499.6 | -498.1 | -491.1 |
| net | | | |
--------------------------------------------------------------------------------
| Operating Capital Total | 8 413.2 | 8 090.6 | 8 656.6 |
--------------------------------------------------------------------------------
| Net tax liabilities | -350.9 | -314.3 | -264.4 |
--------------------------------------------------------------------------------
| Capital Employed | 8 062.3 | 7 776.3 | 8 392.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity attributable to Company | 5 206.6 | 5 124.3 | 5 382.3 |
| shareholders | | | |
--------------------------------------------------------------------------------
| Non-controlling interests | 58.8 | 58.2 | 57.3 |
--------------------------------------------------------------------------------
| Net interest-bearing liabilities | 2 811.9 | 2 593.8 | 2 952.6 |
--------------------------------------------------------------------------------
| Net assets held for sale | -15.0 | - | - |
--------------------------------------------------------------------------------
| Financing Total | 8 062.3 | 7 776.3 | 8 392.2 |
--------------------------------------------------------------------------------
Financing Q1/2010 (compared with Q4/2009)
Cash flow from operations was EUR 119.2 (EUR 495.5) million and cash flow after
investing activities EUR 6.4 (EUR 393.6) million. Capital expenditure was EUR
112.8 million in the first quarter and recovery in volumes resulted in increased
working capital. At the end of the period, interest-bearing net liabilities of
the Group were EUR 2 811.9 million, an increase of EUR 218.1 million.
Total unutilised committed credit facilities remained unchanged at EUR 1 400
million, and cash and cash equivalents net of overdrafts remained strong at EUR
864.3 million, which is EUR 12.7 million less than for the previous quarter. In
addition, Stora Enso has access to various long-term sources of funding up to
EUR 700 million.
The debt/equity ratio at 31 March 2010 was 0.54 (0.51). The currency effect on
owners' equity was positive EUR 138.3 million net of the hedging of equity
translation risks. The fair valuations of operative securities, mainly related
to the unlisted Finnish power supply company Pohjolan Voima, included within
available-for-sale assets decreased equity by EUR 17.2 million.
Financing Q1/2010 (compared with Q1/2009)
At the end of the first quarter of 2010 Stora Enso had current borrowings of EUR
1 133.8 million compared with EUR 1 103.0 million at the end of the first
quarter of 2009. Cash and cash equivalents net of overdrafts at the end of the
first quarter of 2010 amounted to EUR 864.3 million, compared with EUR 488.5
million at the end of the first quarter of 2009.
Cash Flow
--------------------------------------------------------------------------------
| EUR million | Q1/10 | Q4/09 | Q1/09 | 2009 | Change % | Change % |
| | | | | | Q1/10-Q1 | Q1/10-Q4 |
| | | | | | /09 | /09 |
--------------------------------------------------------------------------------
| Continuing | | | | | | |
| Operations | | | | | | |
--------------------------------------------------------------------------------
| Operating | 123.4 | 105.3 | -0.9 | -607.6 | n/m | 17.2 |
| profit/loss | | | | | | |
--------------------------------------------------------------------------------
| Depreciation and | 101.2 | 101.1 | 100.9 | 1 | 0.3 | 0.1 |
| other non-cash | | | | 262.0 | | |
| items | | | | | | |
--------------------------------------------------------------------------------
| Change in working | -105.4 | 289.1 | 163.6 | 606.5 | -164.4 | -136.5 |
| capital | | | | | | |
--------------------------------------------------------------------------------
| Cash Flow from | 119.2 | 495.5 | 263.6 | 1 | -54.8 | -75.9 |
| Operations | | | | 260.9 | | |
--------------------------------------------------------------------------------
| Capital expenditure | -112.8 | -101.9 | -104. | -423.7 | -8.3 | -10.7 |
| | | | 2 | | | |
--------------------------------------------------------------------------------
| Cash Flow after | 6.4 | 393.6 | 159.4 | 837.2 | -96.0 | -98.4 |
| Investing | | | | | | |
| Activities | | | | | | |
--------------------------------------------------------------------------------
Capital Expenditure for January-March 2010
Capital expenditure for the first quarter of 2010 totalled EUR 112.8 million,
which is 89% of depreciation in the first quarter. Stora Enso's annual
depreciation will be about EUR 500 million in 2010. The target capital
expenditure for the Group for the full year 2010 is approximately EUR 400
million.
The main projects during the first quarter of 2010 were power plants and
energy-related projects at existing mills (EUR 63 million) and development of
existing production (EUR 24 million).
Short-term Risks and Uncertainties
The main short-term risks and uncertainties are related to the effects of
possible increases in raw material, oil and energy costs.
Energy sensitivity analysis for 2010: the direct effect on 2010 operating profit
of a 10% change in electricity, oil and other fossil fuels market prices would
be about EUR 28 million annual impact, after the effect of hedges.
Wood sensitivity analysis for 2010: the direct effect on 2010 operating profit
of a 10% change in wood prices would be about EUR 213 million annual impact,
after the effect of hedges.
Near-term Outlook
The economic environment is gradually improving, facilitating growth in demand
for the Group's products. However, demand is forecast to remain materially
weaker than two years ago, before the market downturn. Structural supply and
demand imbalance persists in most paper products in Europe.
The strengthening in demand for graphic papers apparent early this year is
expected to be sustained through the second quarter. In Europe demand slightly
better than in the very poor second quarter of 2009 is anticipated in newsprint
and magazine paper. Demand is forecast to improve more rapidly in coated than
uncoated magazine paper. Prospects are also better than a year earlier for fine
paper, consumer board and industrial packaging. Demand for wood products is
predicted to be better than a year ago, although still weak and well below
pre-crisis levels.
In Europe annual contracts indicate that market prices for newsprint are likely
to remain flat, whereas prices in overseas markets are forecast to continue
rising. Price increases in magazine paper have been announced for
non-contractual and new business in the second quarter. Prices are expected to
increase in fine paper and gradually in consumer board, where the major part of
the business is based on longer-term contracts, and to continue improving in
industrial packaging and wood products.
In the Newsprint and Book Paper segment, sales prices in local currencies will
be on average 16 % lower in 2010 than 2009. In the Magazine Paper segment, sales
prices in local currencies will be on average 7-8 % lower in the first half of
2010 than in 2009 as a whole.
In China stronger demand for uncoated magazine paper than a year ago is
anticipated, boosted by Expo 2010 Shanghai, and demand for coated fine paper is
also expected to improve. Market prices are forecast to increase for both
grades.
In Latin America stronger demand for coated magazine paper than a year ago is
predicted due to solid economic growth, especially in Brazil. Prices are
expected rise.
The Group's market pulp net capacity is about 900 000 tonnes for 2010. The Group
expects its cost inflation excluding internal actions to be 1% for 2010 as raw
material costs are forecast to increase.
The Packaging Business Area continues to perform strongly. The situation for
paper products is mixed. Stora Enso will prioritise pricing quality over volume,
and manage capacity, costs and cash flow.
Production at Consumer Board's Skoghall Mill was halted on 16 April by the paper
workers' strike in Sweden. The Swedish Paper Workers Union has also announced
further actions, including a strike at Fors Mill beginning on 26 April 2010. The
Swedish employers association Svenskt Näringsliv has decided to compensate Stora
Enso fully for its financial losses due to the strike.
First Quarter Events
February
On 4 February 2010 Stora Enso announced that Stora Enso's and Arauco's
joint-venture company in Uruguay, Montes del Plata, had decided to initiate a
feasibility study on Punta Pereira as the site for a possible future pulp mill.
On 10 February 2010 Stora Enso announced that it had signed an agreement with
the European Investment Bank (EIB) for a EUR 65 million loan to be used for the
Ostroleka power plant construction project in Poland.
On 10 February 2010 Stora Enso also announced that its search for new partners
and new businesses for the site of the former Tolkkinen sawmill at Porvoo in
Finland had progressed according to plan, and the first letters of intent for
the Augustinranta business park had been signed.
On 18 February 2010 Stora Enso announced that it had signed a research and
development co-operation agreement with Metso and Domtar to establish a
consortium to develop a pulp mill biorefinery. The project, based on the latest
pulping technology, aims to develop a pulp production process with enhanced
sustainability and cost efficiency, as well as lower investment costs.
On 19 February 2010 Stora Enso announced that it planned to centralise the use
of recovered fibre-based packaging in Finland at the Corenso Pori coreboard
mill. The plans include permanent closure of the recycling plant at Varkaus and
the core plant at Pori by the end of the third quarter of 2010. In addition,
Stora Enso announced that it planned to curtail newsprint production on Varkaus
paper machine (PM) 2 with temporary lay-offs until further notice due to weak
market conditions.
March
On 4 March 2010 Stora Enso announced that it expected to begin temporarily
shutting down its Finnish mills in the near future due to the strike by the
stevedores at Finnish ports.
On 23 March 2010 Stora Enso announced how the distribution of EUR 0.20 per share
from the parent company's invested unrestricted equity fund that Stora Enso's
Board of Directors would propose to the Annual General Meeting of the Company to
be held on 31 March 2010 would be treated for tax purposes. The advance ruling
only concerns Stora Enso's tax withholding obligations as a distributor of
funds. According to the ruling, EUR 0.035 per share would be treated taxwise as
dividend and EUR 0.165 per share would be treated taxwise as repayment of
invested equity at the point of payment. Stora Enso is liable to withhold due
taxes on the part treated as dividend.
On 23 March 2010 Stora Enso also announced that it had been recognised by the
Ethisphere Institute as one of the World's Most Ethical Companies for 2010. The
Group was recognised for its commitment to ethical leadership, compliance
practices and corporate social responsibility. Out of a record number of
nominations for the award, Stora Enso secured its spot on the list for the third
time.
On 26 March 2010 Stora Enso announced that Stora Enso Wood Products was
continuing to develop its business operations and investing over EUR 5 million
in further developing the value-added product range in its mills at Uimaharju in
Finland, Bad St. Leonhard in Austria and Ala in Sweden.
Restructuring Actions
On 23 April 2009 Stora Enso announced that it was reorganising its operations
with the aim of reducing annual fixed costs by EUR 250 million, mainly through
savings in administration. The majority of the cost reductions were achieved in
2009. Implementation of the administrative fixed cost saving plans continued in
the first quarter of 2010 according to plan and on schedule. Co-determination
procedures are underway in various functions and units. The full impact will be
apparent in the Group's operating profit from 2011 onwards.
Veracel
On 11 July 2008 Stora Enso announced that a federal judge in Brazil had issued a
decision claiming that the permits issued by the State of Bahia for the
operations of Stora Enso's equity accounted investment Veracel were not valid.
The judge also ordered Veracel to take certain actions, including reforestation
with native trees on part of Veracel's plantations and a possible BRL 20 million
(EUR 8 million) fine. Veracel disputes the decision and has filed an appeal
against it. Veracel operates in full compliance with all Brazilian laws and has
obtained all the necessary environmental and operating licences for its
industrial and forestry activities from the competent authorities. In November
2008 a Federal Court suspended the effects of the decision as an interim
measure. Veracel has not recorded any provision for the reforestation or the
possible fine.
On 30 September 2009 a judge in the State of Bahia issued an interim decision
ordering the State Government of Bahia not to grant Veracel further plantation
licences in the municipality of Eunápolis in response to claims by a state
prosecutor that Veracel's plantations exceeded the legal limits, which Veracel
disputes.
Inspections by Competition Authorities
In 2007, following US Federal District Court trial, Stora Enso was found not
guilty of charges by the US Department of Justice relating to practices in the
sale of coated magazine paper in the USA in 2002 and 2003. Coincident with this
case, Stora Enso has been named in a number of class action lawsuits filed in
the USA which still are pending. No provisions have been made in Stora Enso's
accounts for these lawsuits.
Share Capital
No conversions were recorded during the quarter.
On 31 March 2010 Stora Enso had 177 150 084 A shares and 612 388 415 R shares in
issue of which the Company held no A shares and 918 512 R shares with a nominal
value of EUR 1.6 million. The holding represents 0.12% of the Company's share
capital and 0.04% of the voting rights.
Decisions of the Annual General Meeting on 31 March 2010
The AGM approved a proposal by the Board of Directors that the parent company's
loss for the accounting period last ended and the losses from previous periods
evidenced in the parent company's balance sheet, in aggregate approximately EUR
1 251.3 million, be covered through decreasing the parent company's fund for
invested unrestricted equity by the same amount.
The AGM approved a proposal by the Board of Directors that EUR 0.20 per share, a
maximum aggregate of EUR 158 million, be distributed to the shareholders from
the parent company's fund for invested unrestricted equity.
The AGM approved a proposal that the Board of Directors shall have eight members
and that of the current members of the Board of Directors, Gunnar Brock,
Birgitta Kantola, Juha Rantanen, Hans Stråberg, Matti Vuoria and Marcus
Wallenberg be re-elected members of the Board of Directors until the end of the
following AGM and that Carla Grasso and Mikael Mäkinen be elected new members of
the Board of Directors for the same term of office. Claes Dahlbäck, Dominique
Hériard Dubreuil and Ilkka Niemi were not seeking re-election.
The AGM approved a proposal that the current auditor, Authorised Public
Accountants Deloitte & Touche Oy, be re-elected auditor of the Company until the
end of the following AGM. The AGM approved a proposal that remuneration for the
auditor be paid according to invoice.
The AGM approved a proposal to appoint a Nomination Committee to prepare
proposals concerning (a) the number of members of the Board of Directors, (b)
the members of the Board of Directors, (c) the remuneration for the 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.
The AGM approved a proposal by the Board of Directors that Section 10 of the
Articles of Association of the Company be amended so that the notice to a
General Meeting shall be issued not later than three weeks before the date of
the General Meeting, however, at least nine days before the record date of the
General Meeting.
Decisions by Board of Directors
As its meeting held after the AGM, the Stora Enso Board of Directors elected
from among its members Gunnar Brock as its Chairman and Juha Rantanen as Vice
Chairman.
Birgitta Kantola will continue as chairwoman of the Financial and Audit
Committee. Gunnar Brock and Juha Rantanen were elected new members of this
committee.
Matti Vuoria will continue as a member of the Remuneration Committee. Gunnar
Brock and Hans Stråberg were elected new members of this committee. Gunnar Brock
was appointed to chair the Remuneration Committee.
Events after the Period
On 22 April 2010 Stora Enso announced that it had signed an agreement to sell
its integrated mills at Kotka in Finland and its laminating paper operations in
Malaysia to private equity firm OpenGate Capital.
On 22 April 2010 Stora Enso also announced that it will continue pulp, fine
paper and sawnwood production but plans to close down newsprint production
permanently at Varkaus in Finland.
This report is unaudited.
Helsinki, 22 April 2010
Stora Enso Oyj
Board of Directors
Segments Q1/10 compared with Q1/09
Newsprint and Book Paper
--------------------------------------------------------------------------------
| EUR million | Q1/10 | Q4/09 | Q1/09 | Change % | Change % |
| | | | | Q1/10-Q1/ | Q1/10-Q4 |
| | | | | 09 | /09 |
--------------------------------------------------------------------------------
| Sales | 287.4 | 359.6 | 308.7 | -6.9 | -20.1 |
--------------------------------------------------------------------------------
| EBITDA* | 20.3 | 63.3 | 48.4 | -58.1 | -67.9 |
--------------------------------------------------------------------------------
| Operating profit/loss* | -1.6 | 41.3 | 21.5 | -107.4 | -103.9 |
--------------------------------------------------------------------------------
| % of sales | -0.6 | 11.5 | 7.0 | -108.6 | -105.2 |
--------------------------------------------------------------------------------
| ROOC, %** | -0.6 | 15.9 | 7.6 | -107.9 | -103.8 |
--------------------------------------------------------------------------------
| Deliveries, 1 000 t | 593 | 675 | 546 | 8.6 | -12.1 |
--------------------------------------------------------------------------------
| Production, 1 000 t | 634 | 651 | 573 | 10.6 | -2.6 |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Newsprint and book paper sales were EUR 287 million, down 7% on the first
quarter of 2009 mainly due to lower sales prices. There was an operating loss of
EUR 2 million, compared with an operating profit of EUR 22 million a year
earlier, as higher sales volumes, early initiated cost-saving measures and lower
energy costs partially compensated for significant sales price declines and
higher costs for fibre, particularly RCP.
The new power plant at Langerbrugge Mill in Belgium is expected to start up
towards the end of the second quarter of 2010, further improving the efficiency
of the mill.
Markets
Compared with Q1/2009
In Western Europe some improvement from the very weak demand a year earlier
offset slight declines in Eastern Europe. Newspapers printed more pages in
Germany and Italy, but fewer and fewer in many other Western European countries.
Prices were significantly lower, especially in some parts of Europe, mainly due
to oversupply, and prices in euros and local currencies were also lower in
overseas markets. Producer inventories ended the quarter lower than a year
earlier.
Compared with Q4/2009
Demand weakened seasonally in Western Europe, but was steady in Eastern Europe.
Prices in Europe decreased significantly in annual contract negotiations. Prices
in overseas markets started moving up from the very low levels reached at the
end of 2009. Producer inventories were unchanged.
Magazine Paper
--------------------------------------------------------------------------------
| EUR million | Q1/10 | Q4/09 | Q1/09 | Change % | Change % |
| | | | | Q1/10-Q1/ | Q1/10-Q4 |
| | | | | 09 | /09 |
--------------------------------------------------------------------------------
| Sales | 435.5 | 430.2 | 380.8 | 14.4 | 1.2 |
--------------------------------------------------------------------------------
| EBITDA* | 27.3 | 28.8 | 27.3 | 0.0 | -5.2 |
--------------------------------------------------------------------------------
| Operating profit/loss* | 3.9 | 4.1 | -0.1 | n/m | -4.9 |
--------------------------------------------------------------------------------
| % of sales | 0.9 | 1.0 | 0.0 | n/m | -10.0 |
--------------------------------------------------------------------------------
| ROOC, %** | 1.3 | 1.3 | 0.0 | n/m | 0.0 |
--------------------------------------------------------------------------------
| Deliveries, 1 000 t*** | 526 | 586 | 487 | 8.0 | -10.2 |
--------------------------------------------------------------------------------
| Production, 1 000 t*** | 550 | 551 | 501 | 9.8 | -0.2 |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital *** Excluding pulp
Magazine paper sales were EUR 436 million, up 14% on the first quarter of 2009
mainly due to higher market pulp sales volumes and prices. The operating profit
of EUR 4 million was a slight improvement on the operating loss of EUR 0.1
million a year ago mainly due to better results from the pulp mills. Higher
paper sales volumes and lower production costs partially compensated for lower
paper prices.
The new power plant at Maxau Mill in Germany is expected to start up towards the
end of the second quarter of 2010, further improving the efficiency of the mill.
Markets
Compared with Q1/2009
In Europe demand for magazine paper was slightly stronger than a year ago but
still much weaker than before the economic slowdown. Although advertising
expenditure has not recovered yet, an upturn in publishing is apparent in all
parts of Europe. Prices for coated and uncoated mechanical grades were
significantly lower mainly due to oversupply. Producer inventories were even
lower than in the previous year.
In Latin America demand for coated magazine paper was significantly stronger
than a year earlier and back to pre-crisis levels, but prices were lower, as
prices a year ago had not yet been affected by the economic crisis.
In China demand for uncoated magazine paper recovered, taking into account
seasonal softness, but prices were similar to a year ago.
Compared with Q4/2009
In Europe demand seasonally weakened and prices declined significantly.
Oversupply put great pressure on prices in all grades. Industry inventories
generally declined further from the already low levels of the previous quarter,
but producer inventories remained steady although fairly low in coated
mechanical grades.
In Latin America demand for coated magazine paper seasonally weakened slightly
due to the holiday season, but prices increased marginally.
In China demand for uncoated magazine paper strengthened a little in
anticipation of price increases, and prices rose slightly.
Fine Paper
--------------------------------------------------------------------------------
| EUR million | Q1/10 | Q4/09 | Q1/09 | Change % | Change % |
| | | | | Q1/10-Q1/ | Q1/10-Q4 |
| | | | | 09 | /09 |
--------------------------------------------------------------------------------
| Sales | 474.5 | 492.0 | 431.9 | 9.9 | -3.6 |
--------------------------------------------------------------------------------
| EBITDA* | 62.1 | 44.7 | 22.6 | 174.8 | 38.9 |
--------------------------------------------------------------------------------
| Operating profit/loss* | 41.5 | 22.1 | -5.7 | n/m | 87.8 |
--------------------------------------------------------------------------------
| % of sales | 8.7 | 4.5 | -1.3 | n/m | 93.3 |
--------------------------------------------------------------------------------
| ROOC, %** | 17.7 | 9.3 | -1.7 | n/m | 90.3 |
--------------------------------------------------------------------------------
| Deliveries, 1 000 t | 623 | 694 | 590 | 5.6 | -10.2 |
--------------------------------------------------------------------------------
| Production, 1 000 t | 648 | 652 | 591 | 9.6 | -0.6 |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Fine paper sales were EUR 475 million, up 10% on the first quarter of 2009 due
to higher deliveries. Operating profit was EUR 42 million, an improvement of EUR
47 million on the first quarter of 2009 due to ongoing cost reductions, a better
product mix following restructuring in office paper and improved demand. The
stevedores' strike in Finland caused direct losses of approximately of EUR 6
million in the first quarter of 2010.
Paper machine (PM) 8 at Imatra Mills was permanently shut down in March,
decreasing uncoated fine paper capacity by 210 000 tonnes.
Markets
Compared with Q1/2009
In Europe demand was stronger than a year earlier for coated and uncoated fine
paper, but prices were lower, especially for uncoated fine paper. Industry
inventories were lower than a year ago for coated but similar for uncoated fine
paper.
In China demand for coated fine paper was good and prices were substantially
higher than a year ago.
Compared with Q4/2009
In Europe demand weakened slightly for coated fine paper but strengthened
seasonally for uncoated fine paper. Coated fine paper prices decreased slightly,
but uncoated fine paper prices were stable. Industry inventories remained low.
In China demand for coated fine paper was steady, but prices continued to rise.
Consumer Board
--------------------------------------------------------------------------------
| EUR million | Q1/10 | Q4/09 | Q1/09 | Change % | Change % |
| | | | | Q1/10-Q1/ | Q1/10-Q4 |
| | | | | 09 | /09 |
--------------------------------------------------------------------------------
| Sales | 523.1 | 505.0 | 459.9 | 13.7 | 3.6 |
--------------------------------------------------------------------------------
| EBITDA* | 101.6 | 74.1 | 44.6 | 127.8 | 37.1 |
--------------------------------------------------------------------------------
| Operating profit* | 70.5 | 42.9 | 15.5 | n/m | 64.3 |
--------------------------------------------------------------------------------
| % of sales | 13.5 | 8.5 | 3.4 | 297.1 | 58.8 |
--------------------------------------------------------------------------------
| ROOC, %** | 23.8 | 14.5 | 4.9 | n/m | 64.1 |
--------------------------------------------------------------------------------
| Deliveries, 1 000 t*** | 551 | 560 | 529 | 4.2 | -1.6 |
--------------------------------------------------------------------------------
| Production, 1 000 t*** | 602 | 512 | 509 | 18.3 | 17.6 |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital *** Excluding pulp
Consumer board sales were EUR 523 million, up 14% on the first quarter of 2009
mainly due to higher total volumes and higher sales prices, especially for
chemical pulp. Operating profit was EUR 71 million, up EUR 55 million on the
first quarter of 2009 due to higher volumes and lower costs, supported by stable
raw material costs.
Markets
Compared with Q1/2009
Demand was stronger, but prices for some consumer board grades were slightly
lower than a year ago. Inventory levels were similar to a year earlier.
Compared with Q4/2009
Demand grew and prices were relatively stable but started to rise. The pulp
market clearly improved during the quarter and pulp prices increased, boosted by
exchange rate trends.
Industrial Packaging
--------------------------------------------------------------------------------
| EUR million | Q1/10 | Q4/09 | Q1/09 | Change % | Change % |
| | | | | Q1/10-Q1/ | Q1/10-Q4 |
| | | | | 09 | /09 |
--------------------------------------------------------------------------------
| Sales | 223.2 | 220.6 | 197.2 | 13.2 | 1.2 |
--------------------------------------------------------------------------------
| EBITDA* | 20.0 | 14.8 | 15.2 | 31.6 | 35.1 |
--------------------------------------------------------------------------------
| Operating profit* | 7.7 | 2.9 | 3.5 | 120.0 | 165.5 |
--------------------------------------------------------------------------------
| % of sales | 3.4 | 1.3 | 1.8 | 88.9 | 161.5 |
--------------------------------------------------------------------------------
| ROOC, %** | 5.2 | 2.0 | 2.4 | 116.7 | 160.0 |
--------------------------------------------------------------------------------
| Paper and board | 226 | 229 | 191 | 18.3 | -1.3 |
| deliveries, 1 000 t | | | | | |
--------------------------------------------------------------------------------
| Paper and board | 241 | 221 | 189 | 27.5 | 9.0 |
| production, 1 000 t | | | | | |
--------------------------------------------------------------------------------
| Corrugated packaging | 250 | 255 | 228 | 9.6 | -2.0 |
| deliveries, million m2 | | | | | |
--------------------------------------------------------------------------------
| Corrugated packaging | 250 | 258 | 226 | 10.6 | -3.1 |
| production, million m2 | | | | | |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Industrial packaging sales were EUR 223 million, up 13% on the first quarter of
2009 mainly due to higher delivery volumes in all main businesses. Operating
profit was EUR 8 million, up EUR 4 million on the first quarter of 2009 as
higher volumes more than offset the costs of planned restructuring in the core
business and higher raw material costs.
Markets
Compared with Q1/2009
Demand was better than the generally weak levels a year ago in all main
businesses. Prices for recycled-fibre board were substantially higher than the
exceptionally low levels a year ago. Corrugated packaging prices were mostly
stable in main markets but core and SC fluting prices were lower.
Compared with Q4/2009
Market demand was relatively stable except for some seasonal weakening in
corrugated packaging. Prices generally continued to rise.
Wood Products
--------------------------------------------------------------------------------
| EUR million | Q1/10 | Q4/09 | Q1/09 | Change % | Change % |
| | | | | Q1/10-Q1/ | Q1/10-Q4 |
| | | | | 09 | /09 |
--------------------------------------------------------------------------------
| Sales | 331.6 | 344.9 | 272.0 | 21.9 | -3.9 |
--------------------------------------------------------------------------------
| EBITDA* | 14.9 | 23.9 | -14.3 | 204.2 | -37.7 |
--------------------------------------------------------------------------------
| Operating profit/loss* | 5.4 | 15.0 | -23.7 | 122.8 | -64.0 |
--------------------------------------------------------------------------------
| % of sales | 1.6 | 4.3 | -8.7 | 118.4 | -62.8 |
--------------------------------------------------------------------------------
| ROOC, %** | 3.8 | 10.4 | -15.7 | 124.2 | -63.5 |
--------------------------------------------------------------------------------
| Deliveries, 1 000 m3 | 1 149 | 1 298 | 1 113 | 3.2 | -11.5 |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Wood product sales were EUR 332 million, up 22% on the first quarter of 2009 due
to higher sales prices. Operating profit was EUR 5 million, an improvement of
EUR 29 million on the first quarter of 2009. This was achieved through higher
sales prices, ongoing reductions in fixed costs and higher operating efficiency
following restructuring measures, which more than offset higher raw material
costs. Although demand remained weak, sales prices rose as constrained supply
and low inventory levels improved the supply and demand balance.
Most of the former Tolkkinen sawmill site was sold in the first quarter of 2010,
contributing EUR 4 million to operating profit as a non-recurring item.
Markets
Compared with Q1/2009
Demand was still weak in the main European and Asian markets as construction
activity remained subdued, but prices recovered considerably from the lows of a
year ago. Inventories clearly decreased throughout the value chain as the supply
and demand balance improved following severe curtailments.
Compared with Q4/2009
Demand remained weak but relatively stable in Europe and Asia. However, markets
turned increasingly upbeat towards the end of the quarter, and prices continued
to rise in Europe and Asia. Inventories increased slightly but were still
generally very low.
Financials
Basis of Preparation
Except as described below, this unaudited interim financial report has been
prepared in accordance with the accounting policies set out in International
Accounting Standard 34 on Interim Financial Reporting and in the Group's Annual
Report for 2009:
Taxes on income have been calculated based on the best estimate of the weighted
average annual income tax rate expected for the full financial year.
The planned sale of integrated mills at Kotka in Finland and the laminating
paper operations in Malaysia has been accounted under IFRS 5 - Non-current
Assets Held for Sale and Discontinued Operations. Assets are classified as 'Held
for Sale' when it is highly probable that the carrying amount of the assets will
be recovered through a sale transaction rather than continuing use. These assets
and liabilities have been measured at fair value less costs to sell. The closing
sales consideration is subject to fair value changes and therefore the final
outcome of the transaction is subject to change.
The following amendments to standards and interpretations were adopted from 1
January 2010 but had no impact on the Group financial statements;
IFRS 1 First-time Adoption of International Financial Reporting Standards -
Additional Exemptions for First-time Adopters (Amendments).
IFRS 2 Group Cash-settled Share-based Payment Arrangements clarifies the scope
and the accounting for group cash-settled share-based payment transactions.
IAS 39 Financial Instruments: Recognition and Measurement - Eligible hedged
items (Amendment) clarifies that an entity is permitted to designate a portion
of the fair value changes or cash flow variability of a financial instrument as
a hedged item. This also covers the designation of inflation as a hedged risk or
portion in particular situations.
IFRIC 17 Distributions on Non-cash Assets to Owners provides guidance on the
appropriate accounting treatment when an entity distributes assets other than
cash as dividends to its shareholders.
Condensed Consolidated Income Statement
--------------------------------------------------------------------------------
| EUR million | Q1/10 | Q4/09 | Q1/09 | 2009 | Change | Change |
| | | | | | % | % |
| | | | | | Q1/10-Q | Q1/10-Q |
| | | | | | 1/09 | 4/09 |
--------------------------------------------------------------------------------
| Sales | 2 | 2 | 2 | 8 | 7.8 | -4.3 |
| | 295.9 | 398.8 | 130.5 | 945.1 | | |
--------------------------------------------------------------------------------
| Other operating income | 34.3 | 58.9 | 51.8 | 172.8 | -33.8 | -41.8 |
--------------------------------------------------------------------------------
| Materials and services | -1 | -1 | -1 | -5 | -4.1 | 6.6 |
| | 428.1 | 529.4 | 371.6 | 668.1 | | |
--------------------------------------------------------------------------------
| Freight and sales | -225. | -218.4 | -211.1 | -833. | -6.7 | -3.1 |
| commissions | 2 | | | 6 | | |
--------------------------------------------------------------------------------
| Personnel expenses | -329. | -349.9 | -376.0 | -1 | 12.5 | 6.0 |
| | 0 | | | 349.6 | | |
--------------------------------------------------------------------------------
| Other operating | -112. | -161.4 | -114.2 | -833. | 1.9 | 30.6 |
| expenses | 0 | | | 1 | | |
--------------------------------------------------------------------------------
| Share of results of | 19.1 | 77.6 | 18.9 | 111.8 | 1.1 | -75.4 |
| equity accounted | | | | | | |
| investments | | | | | | |
--------------------------------------------------------------------------------
| Depreciation and | -131. | -170.9 | -129.2 | -1 | -1.9 | 23.0 |
| impairment | 6 | | | 152.9 | | |
--------------------------------------------------------------------------------
| Operating Profit/Loss | 123.4 | 105.3 | -0.9 | -607. | n/m | 17.2 |
| | | | | 6 | | |
--------------------------------------------------------------------------------
| Net financial items | -5.5 | -24.7 | -47.2 | -279. | 88.3 | 77.7 |
| | | | | 2 | | |
--------------------------------------------------------------------------------
| Profit/Loss before Tax | 117.9 | 80.6 | -48.1 | -886. | n/m | 46.3 |
| | | | | 8 | | |
--------------------------------------------------------------------------------
| Income tax | -15.8 | -34.7 | 12.0 | 8.6 | -231.7 | 54.5 |
--------------------------------------------------------------------------------
| Net Profit/Loss for | 102.1 | 45.9 | -36.1 | -878. | n/m | 122.4 |
| the Period | | | | 2 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to: | | | | | | |
--------------------------------------------------------------------------------
| Owners of the Parent | 101.5 | 46.1 | -38.2 | -879. | n/m | 120.2 |
| | | | | 7 | | |
--------------------------------------------------------------------------------
| Non-controlling | 0.6 | -0.2 | 2.1 | 1.5 | -71.4 | n/m |
| interests | | | | | | |
--------------------------------------------------------------------------------
| | 102.1 | 45.9 | -36.1 | -878. | n/m | 122.4 |
| | | | | 2 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per Share | | | | | | |
--------------------------------------------------------------------------------
| Basic earnings per | 0.13 | 0.05 | -0.05 | -1.12 | n/m | 160.0 |
| share, EUR | | | | | | |
--------------------------------------------------------------------------------
| Diluted earnings per | 0.13 | 0.05 | -0.05 | -1.12 | n/m | 160.0 |
| share, EUR | | | | | | |
--------------------------------------------------------------------------------
Consolidated Statement of Comprehensive Income
--------------------------------------------------------------------------------
| EUR million | Q1/10 | Q4/09 | Q1/09 | 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net profit/loss for the period | 102.1 | 45.9 | -36.1 | -878.2 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Other Comprehensive Income | | | | |
--------------------------------------------------------------------------------
| Actuarial gains & losses on | - | -14.9 | - | -20.4 |
| defined benefit pension plans | | | | |
--------------------------------------------------------------------------------
| Asset revaluation on step | - | - | - | 3.9 |
| acquisition | | | | |
--------------------------------------------------------------------------------
| Available for sale financial | -16.6 | 75.0 | -183.4 | 180.3 |
| assets | | | | |
--------------------------------------------------------------------------------
| Currency and commodity hedges | 23.9 | 20.1 | 2.2 | 224.1 |
--------------------------------------------------------------------------------
| Share of other comprehensive | -0.3 | 0.7 | -12.6 | -8.5 |
| income of equity accounted | | | | |
| investments | | | | |
--------------------------------------------------------------------------------
| Currency translation movements on | 144.3 | 47.3 | 24.3 | 252.6 |
| equity net investments (CTA) | | | | |
--------------------------------------------------------------------------------
| Currency translation movements on | 1.1 | -10.5 | 0.5 | 5.9 |
| non-controlling interests | | | | |
--------------------------------------------------------------------------------
| Net investment hedges | -8.1 | 0.7 | - | 0.7 |
--------------------------------------------------------------------------------
| Income tax relating to components | -4.7 | -1.2 | -4.0 | -65.0 |
| of other comprehensive income | | | | |
--------------------------------------------------------------------------------
| Other Comprehensive Income, net of | 139.6 | 117.2 | -173.0 | 573.6 |
| tax | | | | |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Total Comprehensive Income | 241.7 | 163.1 | -209.1 | -304.6 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Total Comprehensive Income | | | | |
| Attributable to: | | | | |
--------------------------------------------------------------------------------
| Owners of the Parent | 240.1 | 156.2 | -211.7 | -312.0 |
--------------------------------------------------------------------------------
| Non-controlling interests | 1.6 | 6.9 | 2.6 | 7.4 |
--------------------------------------------------------------------------------
| | 241.7 | 163.1 | -209.1 | -304.6 |
--------------------------------------------------------------------------------
Condensed Consolidated Statement of Cash Flows
--------------------------------------------------------------------------------
| EUR million | Q1/10 | Q1/09 |
--------------------------------------------------------------------------------
| Cash Flow from Operating Activities | | |
--------------------------------------------------------------------------------
| Operating profit/loss | 123.4 | -0.9 |
--------------------------------------------------------------------------------
| Hedging result from OCI | 15.0 | 17.6 |
--------------------------------------------------------------------------------
| Adjustments for non-cash items | 101.2 | 100.9 |
--------------------------------------------------------------------------------
| Change in net working capital | -123.0 | 165.4 |
--------------------------------------------------------------------------------
| Cash Flow Generated by Operations | 116.6 | 283.0 |
--------------------------------------------------------------------------------
| Net financial items paid/received | -5.7 | 4.9 |
--------------------------------------------------------------------------------
| Income taxes paid, net | -5.5 | -1.7 |
--------------------------------------------------------------------------------
| Net Cash Provided by Operating Activities | 105.4 | 286.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash Flow from Investing Activities | | |
--------------------------------------------------------------------------------
| Acquisitions of subsidiaries | -0.8 | - |
--------------------------------------------------------------------------------
| Acquisitions of equity accounted investments | -7.1 | - |
--------------------------------------------------------------------------------
| Proceeds from sale of fixed assets and shares | 10.8 | 50.5 |
--------------------------------------------------------------------------------
| Capital expenditure | -112.8 | -104.2 |
--------------------------------------------------------------------------------
| Proceeds/payment of the non-current | 3.6 | -29.9 |
| receivables, net | | |
--------------------------------------------------------------------------------
| Net Cash Used in Investing Activities | -106.3 | -83.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash Flow from Financing Activities | | |
--------------------------------------------------------------------------------
| Proceeds from issue of new long-term debt | 71.6 | 33.7 |
--------------------------------------------------------------------------------
| Long-term debt, payments | -172.3 | -35.5 |
--------------------------------------------------------------------------------
| Change in short-term borrowings | 79.3 | -75.3 |
--------------------------------------------------------------------------------
| Equity repayment and dividend to | -0.2 | -1.8 |
| non-controlling interests | | |
--------------------------------------------------------------------------------
| Net Cash Used in Financing Activities | -21.6 | -78.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net Decrease/Increase in Cash and Cash | -22.5 | 123.7 |
| Equivalents | | |
--------------------------------------------------------------------------------
| Translation adjustment | 9.8 | -7.8 |
--------------------------------------------------------------------------------
| Net cash and cash equivalents at the | 877.0 | 372.6 |
| beginning of period | | |
--------------------------------------------------------------------------------
| Net Cash and Cash Equivalents at Period End | 864.3 | 488.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and Cash Equivalents at Period End | 865.1 | 493.0 |
--------------------------------------------------------------------------------
| Bank Overdrafts at Period End | -0.8 | -4.5 |
--------------------------------------------------------------------------------
| Net Cash and Cash Equivalents at Period End | 864.3 | 488.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Acquisitions of Subsidiary Companies | | |
--------------------------------------------------------------------------------
| Non-controlling interests | 0.8 | - |
--------------------------------------------------------------------------------
| Fair Value of Net Assets | 0.8 | 0.0 |
--------------------------------------------------------------------------------
| Goodwill | - | - |
--------------------------------------------------------------------------------
| Total Purchase Consideration | 0.8 | 0.0 |
--------------------------------------------------------------------------------
Property, Plant and Equipment, Intangible Assets and Goodwill
--------------------------------------------------------------------------------
| EUR million | Q1/10 | Q1/09 | 2009 |
--------------------------------------------------------------------------------
| Carrying value at 1 January | 5 157.7 | 5 899.4 | 5 899.4 |
--------------------------------------------------------------------------------
| Acquisition of subsidiary companies | - | - | 17.6 |
--------------------------------------------------------------------------------
| Capital expenditure | 107.2 | 92.4 | 394.4 |
--------------------------------------------------------------------------------
| Additions in biological assets | 5.6 | 11.8 | 35.5 |
--------------------------------------------------------------------------------
| Change in emission rights | 50.0 | 37.4 | -41.7 |
--------------------------------------------------------------------------------
| Disposals | -7.6 | -19.3 | -27.9 |
--------------------------------------------------------------------------------
| Disposals of subsidiary companies | - | - | -92.6 |
--------------------------------------------------------------------------------
| Depreciation and impairment | -131.6 | -129.2 | -1 152.9 |
--------------------------------------------------------------------------------
| Translation difference and other | 143.6 | -21.3 | 125.9 |
--------------------------------------------------------------------------------
| Statement of Financial Position | 5 324.9 | 5 871.2 | 5 157.7 |
| Total | | | |
--------------------------------------------------------------------------------
Borrowings
--------------------------------------------------------------------------------
| EUR million | 31 Mar 10 | 31 Dec 09 | 31 Mar 09 |
--------------------------------------------------------------------------------
| Non-current borrowings | 3 042.4 | 2 898.4 | 2 935.5 |
--------------------------------------------------------------------------------
| Current borrowings | 1 133.8 | 1 038.3 | 1 103.0 |
--------------------------------------------------------------------------------
| | 4 176.2 | 3 936.7 | 4 038.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Q1/10 | 2009 | Q1/09 |
--------------------------------------------------------------------------------
| Carrying value at 1 January | 3 936.7 | 4 076.1 | 4 076.1 |
--------------------------------------------------------------------------------
| Debt acquired with new subsidiaries | - | 44.1 | - |
--------------------------------------------------------------------------------
| Proceeds/(payments of) borrowings | 147.3 | -255.1 | -18.5 |
| (net) | | | |
--------------------------------------------------------------------------------
| Translation difference and other | 92.2 | 71.6 | -19.1 |
--------------------------------------------------------------------------------
| Statement of Financial Position | 4 176.2 | 3 936.7 | 4 038.5 |
| Total | | | |
--------------------------------------------------------------------------------
Condensed Consolidated Statement of Financial Position
--------------------------------------------------------------------------------
| EUR million | | 31 Mar 10 | 31 Dec 09 | 31 Mar 09 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fixed Assets and Other | | | | |
| Non-current Investments | | | | |
--------------------------------------------------------------------------------
| Fixed assets | O | 5 082.3 | 4 979.9 | 5 615.9 |
--------------------------------------------------------------------------------
| Biological assets | O | 167.3 | 152.5 | 150.9 |
--------------------------------------------------------------------------------
| Emission rights | O | 75.3 | 25.3 | 104.4 |
--------------------------------------------------------------------------------
| Equity accounted investment | O | 1 572.0 | 1 481.3 | 1 063.5 |
--------------------------------------------------------------------------------
| Available-for-sale: | I | 75.7 | 71.7 | 159.8 |
| Interest-bearing | | | | |
--------------------------------------------------------------------------------
| Available-for-sale: Operative | O | 759.7 | 778.5 | 777.6 |
--------------------------------------------------------------------------------
| Non-current loan receivables | I | 160.4 | 159.6 | 159.6 |
--------------------------------------------------------------------------------
| Deferred tax assets | T | 195.7 | 155.8 | 114.4 |
--------------------------------------------------------------------------------
| Other non-current assets | O | 34.1 | 30.4 | 18.8 |
--------------------------------------------------------------------------------
| | | 8 122.5 | 7 835.0 | 8 164.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current Assets | | | | |
--------------------------------------------------------------------------------
| Inventories | O | 1 332.7 | 1 281.6 | 1 667.8 |
--------------------------------------------------------------------------------
| Tax receivables | T | 2.5 | 2.4 | 28.5 |
--------------------------------------------------------------------------------
| Operative receivables | O | 1 433.6 | 1 362.6 | 1 424.3 |
--------------------------------------------------------------------------------
| Interest-bearing receivables | I | 263.1 | 221.2 | 273.5 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | I | 865.1 | 890.4 | 493.0 |
--------------------------------------------------------------------------------
| | | 3 897.0 | 3 758.2 | 3 887.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Asset of disposal group | | 49.9 | - | - |
| classified as held for sale | | | | |
--------------------------------------------------------------------------------
| | | 3 946.9 | 3 758.2 | 3 887.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total Assets | | 12 069.4 | 11 593.2 | 12 052.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity and Liabilities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Owners of the Parent | | 5 206.6 | 5 124.3 | 5 382.3 |
--------------------------------------------------------------------------------
| Non-controlling Interests | | 58.8 | 58.2 | 57.3 |
--------------------------------------------------------------------------------
| Total Equity | | 5 265.4 | 5 182.5 | 5 439.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current Liabilities | | | | |
--------------------------------------------------------------------------------
| Post-employment benefit | O | 330.3 | 305.0 | 304.6 |
| provisions | | | | |
--------------------------------------------------------------------------------
| Other provisions | O | 186.8 | 180.4 | 194.1 |
--------------------------------------------------------------------------------
| Deferred tax liabilities | T | 421.7 | 364.4 | 284.7 |
--------------------------------------------------------------------------------
| Non-current debt | I | 3 042.4 | 2 898.4 | 2 935.5 |
--------------------------------------------------------------------------------
| Other non-current operative | O | 16.6 | 43.1 | 11.2 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| | | 3 997.8 | 3 791.3 | 3 730.1 |
--------------------------------------------------------------------------------
| Current Liabilities | | | | |
--------------------------------------------------------------------------------
| Current portion of long-term | I | 696.4 | 814.8 | 563.8 |
| debt | | | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | I | 437.4 | 223.5 | 539.2 |
--------------------------------------------------------------------------------
| Operative liabilities | O | 1 510.1 | 1 473.0 | 1 656.7 |
--------------------------------------------------------------------------------
| Tax liabilities | T | 127.4 | 108.1 | 122.6 |
--------------------------------------------------------------------------------
| | | 2 771.3 | 2 619.4 | 2 882.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liability directly associated | | 34.9 | - | - |
| with the assets classified as | | | | |
| held for sale | | | | |
--------------------------------------------------------------------------------
| | | 2 806.2 | 2 619.4 | 2 882.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total Liabilities | | 6 804.0 | 6 410.7 | 6 612.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total Equity and Liabilities | | 12 069.4 | 11 593.2 | 12 052.0 |
--------------------------------------------------------------------------------
Items designated with “O” comprise Operating Capital
Items designated with “I” comprise Interest-bearing Net Liabilities
Items designated with “T” comprise Net Tax Liabilities
Statement of Changes in Equity
--------------------------------------------------------------------------------
| EUR | Sh | Sh | In | Tr | St | Av | Cu | Cur | CTA | Ret | Att | Non | Tot |
| milli | ar | ar | ve | ea | ep | ai | rr | ren | & | ain | ri- | -co | al |
| on | e | e | st | su | Ac | la | en | cy | net | ed | but | ntr | |
| | Ca | Pr | ed | ry | qu | bl | cy | and | inv | Ear | abl | oll | |
| | pi | em | No | Sh | is | e | an | com | est | nin | e | ing | |
| | ta | iu | n- | ar | it | fo | d | mod | men | gs | to | int | |
| | l | m | Re | es | io | r | co | ity | t | | own | ere | |
| | | & | st | | n | sa | mm | hed | hed | | ers | sts | |
| | | Re | ri | | Re | le | od | ges | ges | | of | | |
| | | se | ct | | va | fi | it | of | | | the | | |
| | | rv | ed | | lu | na | y | equ | | | par | | |
| | | e | Eq | | at | nc | he | ity | | | ent | | |
| | | fu | ui | | io | ia | dg | acc | | | | | |
| | | nd | ty | | n | l | es | oun | | | | | |
| | | | Fu | | Su | as | | ted | | | | | |
| | | | nd | | rp | se | | inv | | | | | |
| | | | | | lu | ts | | est | | | | | |
| | | | | | s | | | men | | | | | |
| | | | | | | | | ts | | | | | |
--------------------------------------------------------------------------------
| Balan | 1 | 2 | - | -1 | - | 51 | -1 | -10 | -44 | 2 | 5 | 56. | 5 |
| ce at | 34 | 27 | | 0. | | 0. | 66 | .5 | 3.8 | 095 | 594 | 5 | 650 |
| 31 | 2. | 6. | | 2 | | 6 | .1 | | | .4 | .0 | | .5 |
| Decem | 2 | 4 | | | | | | | | | | | |
| ber | | | | | | | | | | | | | |
| 2008 | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Profi | - | - | - | - | - | - | - | - | | -38 | -38 | 2.1 | -36 |
| t/Los | | | | | | | | | | .2 | .2 | | .1 |
| s for | | | | | | | | | | | | | |
| the | | | | | | | | | | | | | |
| perio | | | | | | | | | | | | | |
| d | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| OCI | - | - | - | - | - | -1 | 2. | -12 | 24. | - | -16 | 0.5 | -16 |
| befor | | | | | | 83 | 2 | .6 | 3 | | 9.5 | | 9.0 |
| e tax | | | | | | .4 | | | | | | | |
--------------------------------------------------------------------------------
| Incom | - | - | - | - | - | -3 | 0. | - | -1. | - | -4. | - | -4. |
| e tax | | | | | | .0 | 2 | | 2 | | 0 | | 0 |
| relat | | | | | | | | | | | | | |
| ing | | | | | | | | | | | | | |
| to | | | | | | | | | | | | | |
| compo | | | | | | | | | | | | | |
| nents | | | | | | | | | | | | | |
| of | | | | | | | | | | | | | |
| OCI | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | - | - | - | - | - | -1 | 2. | -12 | 23. | -38 | -21 | 2.6 | -20 |
| Compr | | | | | | 86 | 4 | .6 | 1 | .2 | 1.7 | | 9.1 |
| ehens | | | | | | .4 | | | | | | | |
| ive | | | | | | | | | | | | | |
| Incom | | | | | | | | | | | | | |
| e | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Divid | - | - | - | - | - | - | - | - | - | - | - | -1. | -1. |
| ends | | | | | | | | | | | | 8 | 8 |
| relat | | | | | | | | | | | | | |
| ing | | | | | | | | | | | | | |
| to | | | | | | | | | | | | | |
| 2008 | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Balan | 1 | 2 | - | -1 | - | 32 | -1 | -23 | -42 | 2 | 5 | 57. | 5 |
| ce at | 34 | 27 | | 0. | | 4. | 63 | .1 | 0.7 | 057 | 382 | 3 | 439 |
| 31 | 2. | 6. | | 2 | | 2 | .7 | | | .2 | .3 | | .6 |
| March | 2 | 4 | | | | | | | | | | | |
| 2009 | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Profi | - | - | - | - | - | - | - | - | - | -84 | -84 | -0. | -84 |
| t / | | | | | | | | | | 1.5 | 1.5 | 6 | 2.1 |
| Loss | | | | | | | | | | | | | |
| for | | | | | | | | | | | | | |
| the | | | | | | | | | | | | | |
| perio | | | | | | | | | | | | | |
| d | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| OCI | - | - | - | - | 3. | 36 | 22 | 4.1 | 229 | -20 | 802 | 5.4 | 807 |
| befor | | | | | 9 | 3. | 1. | | .0 | .4 | .2 | | .6 |
| e tax | | | | | | 7 | 9 | | | | | | |
--------------------------------------------------------------------------------
| Incom | - | - | - | - | - | -3 | -5 | - | -2. | 4.6 | -61 | - | -61 |
| e tax | | | | | | .7 | 9. | | 9 | | .0 | | .0 |
| relat | | | | | | | 0 | | | | | | |
| ing | | | | | | | | | | | | | |
| to | | | | | | | | | | | | | |
| compo | | | | | | | | | | | | | |
| nents | | | | | | | | | | | | | |
| of | | | | | | | | | | | | | |
| OCI | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | - | - | - | - | 3. | 36 | 16 | 4.1 | 226 | -85 | -10 | 4.8 | -95 |
| Compr | | | | | 9 | 0. | 2. | | .1 | 7.3 | 0.3 | | .5 |
| ehens | | | | | | 0 | 9 | | | | | | |
| ive | | | | | | | | | | | | | |
| Incom | | | | | | | | | | | | | |
| e | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Divid | - | - | - | - | - | - | - | - | - | - | - | -0. | -0. |
| ends | | | | | | | | | | | | 4 | 4 |
| relat | | | | | | | | | | | | | |
| ing | | | | | | | | | | | | | |
| to | | | | | | | | | | | | | |
| 2008 | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Acqui | - | - | - | - | - | - | - | - | - | - | - | -3. | -3. |
| sitio | | | | | | | | | | | | 4 | 4 |
| ns & | | | | | | | | | | | | | |
| dispo | | | | | | | | | | | | | |
| sals | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Buy-o | - | - | - | - | - | - | - | - | - | - | - | -0. | -0. |
| ut of | | | | | | | | | | | | 1 | 1 |
| non-c | | | | | | | | | | | | | |
| ontro | | | | | | | | | | | | | |
| lling | | | | | | | | | | | | | |
| inter | | | | | | | | | | | | | |
| est | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Trans | - | -2 | 2 | - | - | - | - | - | - | - | - | - | - |
| fer | | 04 | 04 | | | | | | | | | | |
| to | | 2. | 2. | | | | | | | | | | |
| distr | | 1 | 1 | | | | | | | | | | |
| ibuta | | | | | | | | | | | | | |
| ble | | | | | | | | | | | | | |
| reser | | | | | | | | | | | | | |
| ves | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Retur | - | -1 | - | - | - | - | - | - | - | - | -15 | - | -15 |
| n of | | 57 | | | | | | | | | 7.7 | | 7.7 |
| capit | | .7 | | | | | | | | | | | |
| al | | | | | | | | | | | | | |
| (EUR | | | | | | | | | | | | | |
| 0.20 | | | | | | | | | | | | | |
| per | | | | | | | | | | | | | |
| share | | | | | | | | | | | | | |
| ) | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Balan | 1 | 76 | 2 | -1 | 3. | 68 | -0 | -19 | -19 | 1 | 5 | 58. | 5 |
| ce at | 34 | .6 | 04 | 0. | 9 | 4. | .8 | .0 | 4.6 | 199 | 124 | 2 | 182 |
| 31 | 2. | | 2. | 2 | | 2 | | | | .9 | .3 | | .5 |
| Decem | 2 | | 1 | | | | | | | | | | |
| ber | | | | | | | | | | | | | |
| 2009 | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Profi | - | - | - | - | - | - | - | - | - | 101 | 101 | 0.6 | 102 |
| t/Los | | | | | | | | | | .5 | .5 | | .1 |
| s for | | | | | | | | | | | | | |
| the | | | | | | | | | | | | | |
| perio | | | | | | | | | | | | | |
| d | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| OCI | - | - | - | - | - | -1 | 23 | -0. | 136 | - | 143 | 1.1 | 144 |
| befor | | | | | | 6. | .9 | 3 | .2 | | .2 | | .3 |
| e tax | | | | | | 6 | | | | | | | |
--------------------------------------------------------------------------------
| Incom | - | - | - | - | - | -0 | -6 | - | 2.1 | - | -4. | - | -4. |
| e tax | | | | | | .6 | .2 | | | | 7 | | 7 |
| relat | | | | | | | | | | | | | |
| ing | | | | | | | | | | | | | |
| to | | | | | | | | | | | | | |
| compo | | | | | | | | | | | | | |
| nents | | | | | | | | | | | | | |
| of | | | | | | | | | | | | | |
| OCI | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | - | - | - | - | - | -1 | 17 | -0. | 138 | 101 | 240 | 1.7 | 241 |
| Compr | | | | | | 7. | .7 | 3 | .3 | .5 | .0 | | .7 |
| ehens | | | | | | 2 | | | | | | | |
| ive | | | | | | | | | | | | | |
| Incom | | | | | | | | | | | | | |
| e | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Divid | - | - | - | - | - | - | - | - | - | - | - | -0. | -0. |
| ends | | | | | | | | | | | | 2 | 2 |
| relat | | | | | | | | | | | | | |
| ing | | | | | | | | | | | | | |
| to | | | | | | | | | | | | | |
| 2009 | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Acqui | - | - | - | - | - | - | - | - | - | - | - | -0. | -0. |
| sitio | | | | | | | | | | | | 9 | 9 |
| ns & | | | | | | | | | | | | | |
| dispo | | | | | | | | | | | | | |
| sals | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Retur | - | - | -1 | - | - | - | - | - | - | - | -15 | - | -15 |
| n of | | | 57 | | | | | | | | 7.7 | | 7.7 |
| capit | | | .7 | | | | | | | | | | |
| al | | | | | | | | | | | | | |
| (EUR | | | | | | | | | | | | | |
| 0.20 | | | | | | | | | | | | | |
| per | | | | | | | | | | | | | |
| share | | | | | | | | | | | | | |
| ) | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Trans | - | - | -1 | - | - | - | - | - | - | 1 | - | - | - |
| fer | | | 25 | | | | | | | 251 | | | |
| to | | | 1. | | | | | | | .3 | | | |
| retai | | | 3 | | | | | | | | | | |
| ned | | | | | | | | | | | | | |
| earni | | | | | | | | | | | | | |
| ngs | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Balan | 1 | 76 | 63 | -1 | 3. | 66 | 16 | -19 | -56 | 2 | 5 | 58. | 5 |
| ce at | 34 | .6 | 3. | 0. | 9 | 7. | .9 | .3 | .3 | 552 | 206 | 8 | 265 |
| 31 | 2. | | 1 | 2 | | 0 | | | | .7 | .6 | | .4 |
| March | 2 | | | | | | | | | | | | |
| 2010 | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
CTA = Cumulative Translation Adjustment
OCI = Other Comprehensive Income
Commitments and Contingencies
--------------------------------------------------------------------------------
| EUR million | 31 Mar 10 | 31 Dec 09 | 31 Mar 09 |
--------------------------------------------------------------------------------
| On Own Behalf | | | |
--------------------------------------------------------------------------------
| Pledges given | - | - | 0.8 |
--------------------------------------------------------------------------------
| Mortgages | 25.5 | 16.2 | 74.8 |
--------------------------------------------------------------------------------
| On Behalf of Equity Accounted | | | |
| Investments | | | |
--------------------------------------------------------------------------------
| Guarantees | 180.0 | 180.2 | 192.3 |
--------------------------------------------------------------------------------
| On Behalf of Others | | | |
--------------------------------------------------------------------------------
| Guarantees | 128.4 | 121.7 | 158.3 |
--------------------------------------------------------------------------------
| Other Commitments, Own | | | |
--------------------------------------------------------------------------------
| Operating leases, in next 12 | 26.7 | 27.2 | 26.8 |
| months | | | |
--------------------------------------------------------------------------------
| Operating leases, after next 12 | 75.2 | 79.3 | 89.8 |
| months | | | |
--------------------------------------------------------------------------------
| Pension liabilities | 0.1 | 0.3 | 0.2 |
--------------------------------------------------------------------------------
| Other commitments | 36.2 | 36.4 | 43.2 |
--------------------------------------------------------------------------------
| Total | 472.1 | 461.3 | 586.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Pledges given | - | - | 0.8 |
--------------------------------------------------------------------------------
| Mortgages | 25.5 | 16.2 | 74.8 |
--------------------------------------------------------------------------------
| Guarantees | 308.4 | 301.9 | 350.6 |
--------------------------------------------------------------------------------
| Operating leases | 101.9 | 106.5 | 116.6 |
--------------------------------------------------------------------------------
| Pension liabilities | 0.1 | 0.3 | 0.2 |
--------------------------------------------------------------------------------
| Other commitments | 36.2 | 36.4 | 43.2 |
--------------------------------------------------------------------------------
| Total | 472.1 | 461.3 | 586.2 |
--------------------------------------------------------------------------------
Purchase Agreement Commitments
--------------------------------------------------------------------------------
| EUR million | Scheduled Contract Payments |
--------------------------------------------------------------------------------
| Type of Supply | Contract | Q2-Q4/201 | 2011-201 | 2013-201 | 2015+ |
| | Total | 0 | 2 | 4 | |
--------------------------------------------------------------------------------
| | Fibre | 1 563.6 | 180.4 | 388.2 | 375.2 | 619.8 |
--------------------------------------------------------------------------------
| | Energy | 1 753.8 | 331.2 | 466.4 | 330.9 | 625.3 |
--------------------------------------------------------------------------------
| | Logistics | 454.8 | 49.9 | 110.3 | 93.8 | 200.8 |
--------------------------------------------------------------------------------
| | Other production | 707.9 | 81.8 | 108.8 | 50.2 | 467.1 |
| | costs | | | | | |
--------------------------------------------------------------------------------
| | | 4 480.1 | 643.3 | 1 073.7 | 850.1 | 1 |
| | | | | | | 913.0 |
--------------------------------------------------------------------------------
| Capital Expenditure | 67.5 | 47.7 | 19.8 | - | - |
--------------------------------------------------------------------------------
| Total Contractual | 4 547.6 | 691.0 | 1 093.5 | 850.1 | 1 913. |
| Commitments at 31 | | | | | 0 |
| March 2010 | | | | | |
--------------------------------------------------------------------------------
Fair Values of Derivative Financial Instruments
--------------------------------------------------------------------------------
| EUR million | | 31 Mar | | | 31 Dec 09 | 31 Mar 09 |
| | | 10 | | | | |
--------------------------------------------------------------------------------
| | Positive | Negativ | Net | | Net | Net |
| | Fair | e | Fair | | Fair | Fair |
| | Values | Fair | Values | | Values | Values |
| | | Values | | | | |
--------------------------------------------------------------------------------
| Interest rate | 239.7 | -54.7 | 185.0 | | 156.6 | 258.6 |
| swaps | | | | | | |
--------------------------------------------------------------------------------
| Interest rate | - | -29.3 | -29.3 | | -26.7 | -34.0 |
| options | | | | | | |
--------------------------------------------------------------------------------
| Forward | 81.3 | -31.0 | 50.3 | | 20.5 | -68.0 |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Currency options | 15.5 | -13.0 | 2.5 | | 13.9 | -0.6 |
--------------------------------------------------------------------------------
| Commodity | 22.5 | -51.4 | -28.9 | | -21.8 | -110.9 |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Equity swaps | 12.2 | -12.5 | -0.3 | | -14.1 | -85.3 |
| ("TRS") & equity | | | | | | |
| options | | | | | | |
--------------------------------------------------------------------------------
| Total | 371.2 | -191.9 | 179.3 | | 128.4 | -40.2 |
--------------------------------------------------------------------------------
Nominal Values of Derivative Financial Instruments
--------------------------------------------------------------------------------
| EUR million | 31 Mar 10 | 31 Dec 09 | 31 Mar 09 |
--------------------------------------------------------------------------------
| Interest Rate Derivatives | | | |
--------------------------------------------------------------------------------
| Interest rate swaps | | | |
--------------------------------------------------------------------------------
| Maturity under 1 year | 543.0 | 666.8 | 768.2 |
--------------------------------------------------------------------------------
| Maturity 2-5 years | 2 442.8 | 2 384.0 | 1 594.9 |
--------------------------------------------------------------------------------
| Maturity 6-10 years | 920.3 | 861.8 | 2 379.1 |
--------------------------------------------------------------------------------
| | 3 906.1 | 3 912.6 | 4 742.2 |
--------------------------------------------------------------------------------
| Interest rate options | 508.9 | 387.4 | 408.8 |
--------------------------------------------------------------------------------
| Total | 4 415.0 | 4 300.0 | 5 151.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Foreign Exchange Derivatives | | | |
--------------------------------------------------------------------------------
| Forward contracts | 2 028.6 | 2 935.7 | 3 078.7 |
--------------------------------------------------------------------------------
| Currency options | 1 676.7 | 1 590.7 | 1 998.3 |
--------------------------------------------------------------------------------
| Total | 3 705.3 | 4 526.4 | 5 077.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Commodity Derivatives | | | |
--------------------------------------------------------------------------------
| Commodity contracts | 345.7 | 396.7 | 537.2 |
--------------------------------------------------------------------------------
| Total | 345.7 | 396.7 | 537.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total Return (Equity) Swaps | | | |
--------------------------------------------------------------------------------
| Equity swaps ("TRS") | 104.7 | 104.7 | 133.4 |
--------------------------------------------------------------------------------
| Equity options | - | - | 22.0 |
--------------------------------------------------------------------------------
| Total | 104.7 | 104.7 | 155.4 |
--------------------------------------------------------------------------------
Sales by Segment
--------------------------------------------------------------------------------
| EUR million | Q1/10 | 2009 | Q4/09 | Q3/09 | Q2/09 | Q1/09 |
--------------------------------------------------------------------------------
| Newsprint and | 287.4 | 1 | 359.6 | 330.0 | 327.5 | 308.7 |
| Book Paper | | 325.8 | | | | |
--------------------------------------------------------------------------------
| Magazine Paper | 435.5 | 1 | 430.2 | 469.0 | 396.0 | 380.8 |
| | | 676.0 | | | | |
--------------------------------------------------------------------------------
| Fine Paper | 474.5 | 1 | 492.0 | 449.6 | 450.4 | 431.9 |
| | | 823.9 | | | | |
--------------------------------------------------------------------------------
| Consumer Board | 523.1 | 1 | 505.0 | 470.7 | 460.3 | 459.9 |
| | | 895.9 | | | | |
--------------------------------------------------------------------------------
| Industrial | 223.2 | 815.5 | 220.6 | 203.7 | 194.0 | 197.2 |
| Packaging | | | | | | |
--------------------------------------------------------------------------------
| Wood Products | 331.6 | 1 | 344.9 | 306.9 | 315.8 | 272.0 |
| | | 239.6 | | | | |
--------------------------------------------------------------------------------
| Other | 625.3 | 2 | 619.4 | 450.1 | 507.8 | 597.9 |
| | | 175.2 | | | | |
--------------------------------------------------------------------------------
| Inter-segment | -604.7 | -2 | -572.9 | -449.0 | -467.0 | -517.9 |
| sales | | 006.8 | | | | |
--------------------------------------------------------------------------------
| Total | 2 295.9 | 8 | 2 | 2 231.0 | 2 184.8 | 2 130.5 |
| | | 945.1 | 398.8 | | | |
--------------------------------------------------------------------------------
Operating Profit/Loss by Segment excluding NRI and Fair Valuations
--------------------------------------------------------------------------------
| EUR million | Q1/10 | 2009 | Q4/09 | Q3/09 | Q2/09 | Q1/09 |
--------------------------------------------------------------------------------
| Newsprint and | -1.6 | 128.7 | 41.3 | 34.8 | 31.1 | 21.5 |
| Book Paper | | | | | | |
--------------------------------------------------------------------------------
| Magazine Paper | 3.9 | 40.3 | 4.1 | 30.6 | 5.7 | -0.1 |
--------------------------------------------------------------------------------
| Fine Paper | 41.5 | 32.7 | 22.1 | 20.4 | -4.1 | -5.7 |
--------------------------------------------------------------------------------
| Consumer Board | 70.5 | 164.9 | 42.9 | 64.9 | 41.6 | 15.5 |
--------------------------------------------------------------------------------
| Industrial | 7.7 | 17.6 | 2.9 | 10.3 | 0.9 | 3.5 |
| Packaging | | | | | | |
--------------------------------------------------------------------------------
| Wood Products | 5.4 | -8.0 | 15.0 | 9.4 | -8.7 | -23.7 |
--------------------------------------------------------------------------------
| Other | -22.2 | -117.1 | -26.6 | -44.9 | -24.3 | -21.3 |
--------------------------------------------------------------------------------
| Operating | 105.2 | 259.1 | 101.7 | 125.5 | 42.2 | -10.3 |
| Profit/Loss excl. | | | | | | |
| NRI by Segment | | | | | | |
--------------------------------------------------------------------------------
| Share of results | 14.2 | 61.4 | 35.8 | 6.0 | 6.3 | 13.3 |
| of equity | | | | | | |
| accounted | | | | | | |
| investments excl. | | | | | | |
| fair valuations | | | | | | |
--------------------------------------------------------------------------------
| Operating Profit | 119.4 | 320.5 | 137.5 | 131.5 | 48.5 | 3.0 |
| excl. NRI and | | | | | | |
| Fair Valuations* | | | | | | |
--------------------------------------------------------------------------------
| Fair valuations* | 22.9 | 4.4 | 9.9 | 21.0 | 11.4 | -37.9 |
--------------------------------------------------------------------------------
| Operating | 142.3 | 324.9 | 147.4 | 152.5 | 59.9 | -34.9 |
| Profit/Loss excl. | | | | | | |
| NRI | | | | | | |
--------------------------------------------------------------------------------
| NRI | -18.9 | -932.5 | -42.1 | -655.1 | -269.3 | 34.0 |
--------------------------------------------------------------------------------
| Operating | 123.4 | -607.6 | 105.3 | -502.6 | -209.4 | -0.9 |
| Profit/Loss | | | | | | |
| (IFRS) | | | | | | |
--------------------------------------------------------------------------------
| Net financial | -5.5 | -279.2 | -24.7 | -46.1 | -161.2 | -47.2 |
| items | | | | | | |
--------------------------------------------------------------------------------
| Profit/Loss | 117.9 | -886.8 | 80.6 | -548.7 | -370.6 | -48.1 |
| before Tax and | | | | | | |
| Non-controlling | | | | | | |
| Interests | | | | | | |
--------------------------------------------------------------------------------
| Income tax | -15.8 | 8.6 | -34.7 | 29.0 | 2.3 | 12.0 |
| expense | | | | | | |
--------------------------------------------------------------------------------
| Net Profit/Loss | 102.1 | -878.2 | 45.9 | -519.7 | -368.3 | -36.1 |
--------------------------------------------------------------------------------
* Fair valuations include synthetic options net of realised and open hedges, CO2
emission rights, and valuations of biological assets related to forest assets in
equity accounted investments.
NRI by Segment
--------------------------------------------------------------------------------
| EUR million | Q1/10 | 2009 | Q4/09 | Q3/09 | Q2/09 | Q1/09 |
--------------------------------------------------------------------------------
| Newsprint and | - | -52.2 | -1.1 | -80.1 | - | 29.0 |
| Book Paper | | | | | | |
--------------------------------------------------------------------------------
| Magazine Paper | -5.7 | -163.5 | -11.4 | -152.1 | - | - |
--------------------------------------------------------------------------------
| Fine Paper | - | -314.2 | -0.6 | -313.6 | - | - |
--------------------------------------------------------------------------------
| Consumer Board | - | -34.2 | 1.6 | -35.8 | - | - |
--------------------------------------------------------------------------------
| Industrial | -13.2 | -28.7 | -0.5 | -28.2 | - | - |
| Packaging | | | | | | |
--------------------------------------------------------------------------------
| Wood Products | 1.6 | -7.7 | 1.0 | -8.7 | - | - |
--------------------------------------------------------------------------------
| Other | -1.6 | -332.0 | -31.1 | -36.6 | -269.3 | 5.0 |
--------------------------------------------------------------------------------
| NRI on Operating | -18.9 | -932.5 | -42.1 | -655.1 | -269.3 | 34.0 |
| Profit | | | | | | |
--------------------------------------------------------------------------------
| NRI on financial | - | -148.5 | - | - | -148.5 | - |
| items | | | | | | |
--------------------------------------------------------------------------------
| NRI on tax | - | 49.6 | 12.0 | 42.9 | 4.6 | -9.9 |
--------------------------------------------------------------------------------
| NRI on Net Profit | -18.9 | -1 | -30.1 | -612.2 | -413.2 | 24.1 |
| | | 031.4 | | | | |
--------------------------------------------------------------------------------
Operating Profit/Loss by Segment
--------------------------------------------------------------------------------
| EUR million | Q1/10 | 2009 | Q4/09 | Q3/09 | Q2/09 | Q1/09 |
--------------------------------------------------------------------------------
| Newsprint and | -1.6 | 76.5 | 40.2 | -45.3 | 31.1 | 50.5 |
| Book Paper | | | | | | |
--------------------------------------------------------------------------------
| Magazine Paper | -1.8 | -123.2 | -7.3 | -121.5 | 5.7 | -0.1 |
--------------------------------------------------------------------------------
| Fine Paper | 41.5 | -281.5 | 21.5 | -293.2 | -4.1 | -5.7 |
--------------------------------------------------------------------------------
| Consumer Board | 70.5 | 130.7 | 44.5 | 29.1 | 41.6 | 15.5 |
--------------------------------------------------------------------------------
| Industrial | -5.5 | -11.1 | 2.4 | -17.9 | 0.9 | 3.5 |
| Packaging | | | | | | |
--------------------------------------------------------------------------------
| Wood Products | 7.0 | -15.7 | 16.0 | 0.7 | -8.7 | -23.7 |
--------------------------------------------------------------------------------
| Other | -5.8 | -495.1 | -89.6 | -63.3 | -281.9 | -60.3 |
--------------------------------------------------------------------------------
| Share of results | 19.1 | 111.8 | 77.6 | 8.8 | 6.0 | 19.4 |
| of equity | | | | | | |
| accounted | | | | | | |
| investments | | | | | | |
--------------------------------------------------------------------------------
| Operating | 123.4 | -607.6 | 105.3 | -502.6 | -209.4 | -0.9 |
| profit/Loss | | | | | | |
| (IFRS) | | | | | | |
--------------------------------------------------------------------------------
| Net financial | -5.5 | -279.2 | -24.7 | -46.1 | -161.2 | -47.2 |
| items | | | | | | |
--------------------------------------------------------------------------------
| Profit/Loss | 117.9 | -886.8 | 80.6 | -548.7 | -370.6 | -48.1 |
| before Tax and | | | | | | |
| Non-controlling | | | | | | |
| Interests | | | | | | |
--------------------------------------------------------------------------------
| Income tax | -15.8 | 8.6 | -34.7 | 29.0 | 2.3 | 12.0 |
| expense | | | | | | |
--------------------------------------------------------------------------------
| Net Profit/Loss | 102.1 | -878.2 | 45.9 | -519.7 | -368.3 | -36.1 |
--------------------------------------------------------------------------------
Key Exchange Rates for the Euro
--------------------------------------------------------------------------------
| One Euro is | Closing Rate | Average Rate |
--------------------------------------------------------------------------------
| | 31 Mar 10 | 31 Dec 09 | 31 Mar 10 | 31 Dec 09 |
--------------------------------------------------------------------------------
| SEK | 9.7135 | 10.2520 | 9.9529 | 10.6180 |
--------------------------------------------------------------------------------
| USD | 1.3479 | 1.4406 | 1.3842 | 1.3941 |
--------------------------------------------------------------------------------
| GBP | 0.8898 | 0.8881 | 0.8868 | 0.8909 |
--------------------------------------------------------------------------------
Transaction Risk and Hedges in Main Currencies as at 31 March 2010
--------------------------------------------------------------------------------
| EUR million | USD | GBP | SEK |
--------------------------------------------------------------------------------
| Estimated annual net operating cash flow | 850 | 450 | -1 050 |
| exposure | | | |
--------------------------------------------------------------------------------
| Transaction hedges as at 31 March 2010 | -425 | -235 | 600 |
--------------------------------------------------------------------------------
| Hedging percentage as at 31 March 2010 for | 50% | 52% | 57% |
| the next 12 months | | | |
--------------------------------------------------------------------------------
Changes in Exchange Rates on Operating Profit
--------------------------------------------------------------------------------
| Operating Profit: Currency effect +/- 10% | EUR million |
--------------------------------------------------------------------------------
| | |
--------------------------------------------------------------------------------
| USD | 85 |
--------------------------------------------------------------------------------
| SEK | -105 |
--------------------------------------------------------------------------------
| GBP | 45 |
--------------------------------------------------------------------------------
The sensitivity is based on expected 2010 net operating cash flow. The
calculation does not take into account currency hedges, and assumes no changes
occur other than a single currency exchange rate movement.
Stora Enso Shares
--------------------------------------------------------------------------------
| Trading | Helsinki | Stockholm |
| volume | | |
--------------------------------------------------------------------------------
| | A share | R share | A share | R share |
--------------------------------------------------------------------------------
| January | 304 617 | 129 305 365 | 164 534 | 43 100 530 |
--------------------------------------------------------------------------------
| February | 155 799 | 95 521 928 | 215 299 | 33 869 817 |
--------------------------------------------------------------------------------
| March | 119 035 | 109 395 394 | 338 060 | 45 698 184 |
--------------------------------------------------------------------------------
| Total | 579 451 | 334 222 687 | 717 893 | 122 668 531 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Closing Price | Helsinki, EUR | Stockholm, SEK |
--------------------------------------------------------------------------------
| | A share | R share | A share | R share |
--------------------------------------------------------------------------------
| January | 5.50 | 4.47 | 56.50 | 45.50 |
--------------------------------------------------------------------------------
| February | 5.47 | 4.65 | 54.25 | 45.00 |
--------------------------------------------------------------------------------
| March | 6.21 | 5.64 | 60.25 | 55.00 |
--------------------------------------------------------------------------------
Calculation of Key Figures
Return on capital employed,
ROCE (%) 100 x Operating profit
Capital employed 1) 2)
Return on operating capital, 100 x Operating profit
ROOC (%) Operating capital 1) 2)
Return on equity, 100 x Profit before tax and non-controlling items - taxes
ROE (%) Total equity 2)
Equity ratio (%) 100 x Total equity
Total assets
Interest-bearing net liabilities Interest-bearing liabilities -
interest-bearing assets
Debt/equity ratio Interest-bearing net liabilities
Equity
CEPS Net profit/loss for the period - Depreciation and Impairment
Average number of shares
EPS Net profit/loss for the period
Average number of shares
1) Capital employed = Operating capital - Net tax liabilities
2) Average for the financial period
For further information, please contact:
Jouko Karvinen, CEO, tel. +358 2046 21410
Markus Rauramo, CFO, tel. +358 2046 21121
Ulla Paajanen-Sainio, Head of Investor Relations, tel. +358 2046 21242
Päivi Kauhanen, Director, Communications in Finland, tel. +358 2046 21380
Stora Enso's second quarter results 2010 will be published on 22 July 2010.
PRESS CONFERENCE IN HELSINKI
Time: 11.30 local time today
Location: Stora Enso Oyj
Address: Kanavaranta 1
Hosts: Jouko Karvinen, CEO
Markus Rauramo, CFO
The conference will be held in Finnish. Questions can be addressed to Jouko
Karvinen and Markus Rauramo after the presentation.
ANALYST CONFERENCE CALL
CEO Jouko Karvinen and CFO Markus Rauramo will be hosting a combined conference
call and webcast today at 16.00 Finnish time (15.00 CET, 14.00 UK time, 9.00 US
Eastern time).
If you wish to participate, please dial:
+44 (0)20 7138 0825 Continental Europe and the UK
09 2319
4344 Finland
08 5352 6439 Sweden
1 212 444 0481 USA
Access code: 2879284#
The live webcast may be accessed at www.storaenso.com/investors
Stora Enso is a global paper, packaging and wood products company producing
newsprint and book paper, magazine paper, fine paper, consumer board, industrial
packaging and wood products. The Group is the world leader in forest industry
sustainability. We offer our customers solutions based on renewable raw
materials. Our products provide a climate-friendly alternative to many
non-renewable materials, and have a smaller carbon footprint. Stora Enso is
listed in the Dow Jones Sustainability Index and the FTSE4Good Index. Stora Enso
employs some 27 000 people worldwide, and our sales in 2009 amounted to EUR 8.9
billion. Stora Enso shares are listed on NASDAQ OMX Helsinki (STEAV, STERV) and
Stockholm (STE A, STE R). In addition, the shares are traded in the USA as ADRs
(SEOAY) in the International OTCQX over-the-counter market.
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.
www.storaenso.com
www.storaenso.com/investors
STORA ENSO OYJ
Jari Suvanto Ulla Paajanen-Sainio
