Stora Enso Interim Review January–March 2013

STORA ENSO OYJ INTERIM REVIEW 23 April 2013 at 13.00 EET

Q1 2013 (compared with Q1 2012)

• Operational EBITDA EUR 240 (EUR 265) million.
• Operational EBIT EUR 118 (EUR 150) million due to lower performance in Printing and Reading. Improvement in Biomaterials, Renewable Packaging and wood supply.
• EPS excluding NRI EUR 0.07 (0.10) and EPS EUR -0.02 (0.09).
• Cash flow from operations EUR 101 (EUR 223) million affected by working capital increase. Strong liquidity at EUR 1.7 (EUR 1.25) billion.

Q1 2013 (compared with Q4 2012)

• Operational EBITDA EUR 240 (EUR 276) million.
• Operational EBIT EUR 118 (EUR 158) million due to lower performance in Printing and Reading. Improvement in Renewable Packaging and wood supply.
• Ratio of net debt to the last twelve months’ operational EBITDA 2.7 (2.5).

Actions and outlook

• Final approvals to build plantation-based integrated board and pulp mills at Beihai city in Guangxi, China still pending.
• Ostrołęka containerboard machine PM 5 started up in January.
• Montes del Plata Pulp Mill has initiated the commissioning of the main equipment and expects to begin the mill start-up process during Q3/2013.
• Earlier announced restructuring plans progressing as planned in Printing and Reading. New plans announced to simplify and streamline Group and business structures aiming at reducing annual costs by EUR 200 million, including the earlier announced EUR 30 million in Building and Living.
• Q2 2013 sales expected to be slightly higher and operational EBIT in line with or slightly higher than Q1 2013.

Summary of First Quarter Results*

* Data for the comparative periods have been restated following adoption of the amended IAS 19 Employee Benefits standard. Data for the comparative periods have been restated in all tables affected by IAS 19. For further details, please see Basis of Preparation on page 12.
** Operational EBIT comprises the operating profit excluding NRI and fair valuations of the segments and Stora Enso’s share of the operating profit excluding NRI and fair valuations of its equity accounted investments (EAI). Fair valuations include equity incentive schemes, synthetic options net of realised and open hedges, CO2 emission rights and valuations of biological assets related to forest assets in EAI.


Stora Enso Deliveries and Production

* Stora Enso’s net market pulp position is expected to be about 1.2 million tonnes for 2013.

Key Figures

 Operational EBIT comprises the operating profit excluding NRI and fair valuations of the segments and Stora Enso’s share of the operating profit excluding NRI and fair valuations of its equity accounted investments (EAI). Fair valuations include equity incentive schemes, synthetic options net of realised and open hedges, CO2 emission rights and valuations of biological assets related to forest assets in EAI.

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 or reversals of write-downs, provisions for planned restructuring and penalties. Non-recurring items are normally specified individually if they exceed one cent per share.

Reconciliation of Operational Profitability

* Group’s share of operational EBIT of equity accounted investments (EAI).
** Fair valuations and non-operational items include equity incentive schemes, synthetic options net of realised and open hedges, CO2 emission rights and valuations of biological assets related to forest assets in equity accounted investments (EAI) and Group's share of tax and net financial items of EAI.

Q1/2013 Results (compared with Q1/2012)

Breakdown of Sales Change Q1/2012 to Q1/2013

* Wood, energy, paper for recycling, by-products etc.
** Asset closures, major investments, divestments and acquisitions

Operational EBIT at EUR 118 million was EUR 32 million lower than a year ago. This represents an operational EBIT margin of 4.4% (5.6%).

Lower prices in local currencies, mainly in Printing and Reading, decreased operational EBIT by EUR 46 million. Higher Renewable Packaging deliveries compensated for lower Printing and Reading deliveries. Harvesting conditions in the first quarter of 2013 were favourable in the Nordic countries, so Wood Supply operations reported in the segment Other performed well. Paper and board production was curtailed by 8% (7%) and sawnwood production by 6% (10%).

Lower variable costs in local currencies increased operating profit by EUR 13 million as higher logistics costs were more than offset by lower other variable costs, mainly for fibre.

Fixed costs were similar to the first quarter of 2012.

The average number of employees in the first quarter of 2013 was 800 lower than a year earlier at 28 200 as the number of employees decreased in all geographical areas, except for an increase in Stora Enso’s strategic investment in China.

The Group recorded non-recurring items (NRI) with a negative impact of approximately EUR 91 million on operating profit and a positive impact of approximately EUR 19 million on income tax in its first quarter 2013 results. The non-recurring items relate to restructuring plans in the Printing and Reading and Building and Living Business Areas.

Net financial expenses were EUR 19 million higher than a year ago, mainly due to foreign exchange losses and increased net interest expenses owing to higher gross debt.

Breakdown of Capital Employed Change Q1/2012 to Q1/2013

The operational return on capital employed was 5.4% (6.9%), excluding the ongoing strategic investments in Biomaterials and Renewable Packaging it would have been 6.2% (7.8%).

Q1/2013 Results (compared with Q4/2012)
Sales were similar to the previous quarter at EUR 2 667 million. Operational EBIT was EUR 40 million lower at EUR 118 million. Lower sales prices in local currencies decreased operational EBIT by EUR 13 million, mainly in Printing and Reading. Higher energy and logistic costs increased variable costs by EUR 31 million. Seasonally lower fixed costs and actions to improve fixed costs increased operational EBIT by EUR 24 million. The operational EBIT from the equity accounted investments decreased by EUR 11 million mainly due to lower capital gains in the Nordic forest equity accounted investments.

Net financial items were EUR 6 million more negative than in the previous quarter, mainly due to foreign exchange losses and increased net interest expenses owing to slightly higher net debt.

Capital Structure

* Operative fixed assets include property, plant and equipment, goodwill, biological assets, emission rights, available-for-sale operative shares and other intangible assets.

Financing Q1/2013 (compared with Q4/2012)

Total unutilised committed credit facilities were unchanged at EUR 700 million, and cash and cash equivalents net of overdrafts remained strong at EUR 1 742 million, which is EUR 103 million less than for the previous quarter. In addition, Stora Enso has access to various long-term sources of funding up to EUR 600 million.

The ratio of net debt to the last twelve months’ operational EBITDA was 2.7 (2.5). The weak cash flow in the first quarter of 2013 resulted in a EUR 117 million increase in net interest-bearing liabilities.

Cash Flow

Q1 2013 cash flow
First quarter 2013 cash flow from operations was low at EUR 101 million, mainly because working capital increased during the quarter as receivables were EUR 100 million higher due to higher sales activity at the end of the first quarter of 2013 and inventories increased by EUR 80 million, mainly in Nordic wood inventories. The working capital increase was partly offset by a EUR 60 million increase in payables and EUR 30 million increase in restructuring provisions.

Capital Expenditure for January–March 2013
Additions to fixed and biological assets in the first quarter of 2013 totalled EUR 61 million, which is 42% of depreciation in the same period. The equity injection into Montes del Plata, a joint venture in Uruguay, was EUR 10 million in the first quarter of 2013.

Investments in fixed assets and biological assets had a cash outflow impact of EUR 88 million in the first quarter of 2013.

The main projects ongoing during the first quarter of 2013 were Montes del Plata and the Ostrołęka containerboard machine investment.

Capital Expenditure, Equity Injections and Depreciation Forecast 2013

 * Excluding the capital expenditure in 2013 for the board and pulp mills project in Guangxi, China.

Capital expenditure in 2013 for the board and pulp mills project in Guangxi, China will be confirmed when the project approvals have been given and the construction and production schedule has been updated.

Near-term Outlook
In the second quarter of 2013 Group sales are expected to be slightly higher and operational EBIT in line with or slightly higher than the first quarter of 2013. 

Ostrołęka Mill PM 5 is not expected to have a material impact on sales in 2013 due to sales being mainly internal, but the EBITDA margin of PM 5 from the second half of 2013 is expected to be approximately 20%.

Montes del Plata Pulp Mill is expected to have limited impact on the Group’s sales and slightly negative impact on operational EBIT in 2013. In 2014 the Group’s sales are expected to be affected by 650 000 tonnes of Montes del Plata pulp with full positive EBITDA impact in the latter part of the year 2014 provided that the current market conditions prevail.

Segments Q1/13 compared with Q1/12


Printing and Reading
Printing and Reading is a world-class responsible supplier of paper from renewable sources for print media and office use. Its wide offering serves publishers, retailers, printing houses, merchants, converters and office suppliers, among others. Printing and Reading produces newsprint, book paper, SC paper, coated paper and office paper.

* Operational ROOC = 100% x Operational EBIT/Average operating capital

• Slightly lower sales prices in local currencies than a year ago were the main reason for low profitability. Lower fixed costs partially mitigated the impact.
• Volumes were lower, especially for coated paper and newsprint, as European paper demand remained subdued.
• The previously announced restructuring plans are proceeding according to plan, and it is planned to shut down Hylte Mill PM 2 and Kvarnsveden Mill PM 11 in Sweden permanently during the second quarter of 2013.

Markets

Biomaterials
Biomaterials offers a variety of pulp grades to meet the demands of paper, board and tissue producers. Pulp made from renewable resources in a sustainable manner is an excellent raw material with many different end uses. Biomaterials comprises mainly tree plantations, the Group’s joint-venture Veracel and Montes del Plata pulp mills, and Nordic stand-alone pulp mills.

* Operational ROOC = 100% x Operational EBIT/Average operating capital

• Market pulp prices were higher than a year ago, especially for hardwood pulp.
• The first quarter 2013 results included capital gains on land disposals of EUR 7 million at Montes del Plata and EUR 3 million in Thailand.

• Montes del Plata Pulp Mill has initiated the commissioning of the main equipment and expects to begin the mill start-up process during the third quarter of 2013.

• Skutskär Mill in Sweden will take its annual maintenance stoppage during the second quarter of 2013.

Markets

Building and Living
Building and Living provides wood-based innovations and solutions for everyday living and housing needs. The product range covers all areas of urban construction, from supporting structures to interior design and environmental construction. Further-processed products include massive wood elements and housing modules, wood components and pellets, in addition to a variety of sawn timber goods.

* Operational ROOC = 100% x Operational EBIT/Average operating capital

• Sales prices in local currencies and sales volumes especially in the overseas markets were higher.
• The raw material situation remains challenging in Central Europe, where most of the production curtailments were taken.
• As stated a year ago, a one-time gain of EUR 8 million from consolidation of the equity accounted investment Mena Wood Oy (formerly RETS Timber Oy) was included in the first quarter 2012 results.
• The previously announced plans to reduce costs and increase productivity throughout the Business Area, with targeted annual cost savings of EUR 30 million, are proceeding as planned.

Markets

Renewable Packaging
Renewable Packaging offers fibre-based packaging materials and innovative packaging solutions for consumer goods and industrial applications. Renewable Packaging operates throughout the value chain, from pulp production to production of materials and packaging, and recycling. The Business Area comprises three business units: Consumer Board, Packaging Solutions and Packaging Asia.

* Operational ROOC = 100% x Operational EBIT/Average operating capital

• Clearly higher volumes, mainly in Consumer Board, were partly offset by higher costs due to increased activity related to growth initiatives in Asia and ramp-up of the Ostrołęka new containerboard machine.  
• Ostrołęka containerboard machine PM 5 started up in January.
• Establishment of the joint venture Bulleh Shah Packaging (Private) Limited with Packages Ltd. of Pakistan is expected to be completed during the second quarter of 2013.
• The final approvals to build integrated plantation-based board and pulp mills at Beihai city in Guangxi in China are still pending. The construction and production schedule will be updated when the final approvals are given and detailed plans are in place.

Markets

Other
The segment Other includes the Nordic forest equity accounted investments, Stora Enso’s shareholding in Pohjolan Voima, operations supplying wood to the Nordic mills and Group shared services and administration.

• Operational EBIT was clearly higher than a year ago in Nordic wood sourcing operations due to favourable harvesting conditions during the quarter.
• Costs were lower in Group functions and services.

Short-term Risks and Uncertainties
The main short-term risks and uncertainties continue to relate to the potential impact on the Group’s products from the economic situation in Europe and the structural decline in paper demand.

Energy sensitivity analysis: the direct effect of a 10% increase in electricity, heat, oil and other fossil fuel market prices would have a negative impact of approximately EUR 20 million on operational EBIT for the next twelve months, after the effect of hedges.

Wood sensitivity analysis: the direct effect of a 10% increase in wood prices would have a negative impact of approximately EUR 204 million on operational EBIT for the next twelve months.

Chemicals and fillers sensitivity: the direct effect of a 10% increase in chemical and filler prices would have a negative impact of approximately EUR 53 million on operational EBIT for the next twelve months.

A decrease in energy, wood or chemical and filler prices would have the opposite impact.

Foreign exchange rates sensitivity analysis for the next twelve months: the direct effect on operational EBIT of a 10% strengthening in the value of the US dollar, Swedish krona and British pound against the euro would be about positive EUR 111 million, negative EUR 91 million and positive EUR 54 million annual impact, respectively. Weakening of the currencies would have the opposite impact. These numbers are before the effect of hedges and assuming no changes occur other than a single currency exchange rate movement.

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 7 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. 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. Veracel’s position is supported by documentation issued by the State environmental authority.

Class Action Lawsuits in USA
In the context of magazine paper sales in the USA in 2002 and 2003, Stora Enso Oyj (SEO) and Stora Enso North America (SENA) were sued in a number of class action (and other civil) lawsuits filed in the USA by various magazine paper purchasers that claimed damages for alleged antitrust violations. On 14 December 2010 a US federal district court granted a motion for summary judgement that Stora Enso had filed on behalf of both SEO and SENA seeking dismissal of the direct purchaser class action claims. Following appeal, a federal court of appeals on 6 August 2012 upheld the district court’s ruling as to SEO, which means that the direct purchaser class action claims against SEO have been found to be without legal foundation, but reversed the district court’s ruling as to SENA and referred that part of the case back to the district court for a jury trial to determine whether SENA’s conduct did violate the federal antitrust laws. The appeal court’s decision is procedural and does not constitute a legal finding that SENA has violated antitrust laws. The case against SENA will now proceed to trial in the district court. Furthermore, most of the indirect purchaser actions have been dismissed by a consent judgement, subject, however, to being reinstated if the plaintiffs in the direct cases are ultimately successful in obtaining a final judgement that SENA violated antitrust laws. Since Stora Enso disposed of SENA in 2007, Stora Enso’s liability, if any, will be determined by the provisions in the SENA Sales and Purchasing Agreement. No provisions have been made in Stora Enso’s accounts for these lawsuits.

Legal Proceedings in Finland
On 3 December 2009 the Finnish Market Court fined Stora Enso for competition law infringements in the market for roundwood in Finland from 1997 to 2004. Stora Enso did not appeal against the ruling.

On 31 March 2011 Metsähallitus of Finland initiated legal proceedings against Stora Enso, UPM and Metsäliitto claiming compensation for damages allegedly suffered due to the competition law infringements. The total claim against all the defendants amounts to approximately EUR 160 million and the secondary claim against Stora Enso to approximately EUR 85 million.

In addition, Finnish municipalities and private forest owners have initiated similar legal proceedings. The total amount claimed from all the defendants amounts to approximately EUR 75 million and the secondary claims and claims solely against Stora Enso to approximately EUR 25 million.

Stora Enso denies that Metsähallitus and other plaintiffs have suffered any damages whatsoever and will forcefully defend itself. No provisions have been made in Stora Enso’s accounts for these lawsuits.

Share Capital
During the quarter 1 000 A shares were converted into R shares. The shares were recorded in the Finnish trade register on 15 February 2013.

On 31 March 2013 Stora Enso had 177 146 772 A shares and 612 391 727 R shares in issue of which the Company held no A shares and 918 512 R shares with an accountable par of EUR 1.6 million. The holding represents 0.12% of the Company’s share capital and 0.04% of the voting rights.

Events after the Period
On 23 April 2013 Stora Enso announced that it plans to simplify and streamline Group and business structures with the aim of reducing annual costs by EUR 200 million including the earlier announced EUR 30 million in Building and Living.


This report is unaudited.

Helsinki, 23 April 2013
Stora Enso Oyj
Board of Directors

Financials


Basis of Preparation
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 2012.

The Group has for the first time applied the following amendment effective from 1 January 2013 that requires restatement of previous financial statements:

• IAS 19 Employee Benefits (amendment) eliminates the ‘corridor method’, streamlines the presentation of changes in assets and liabilities arising from defined benefit plans and enhances the disclosure requirements arising from the standard. The Group has not applied the ‘corridor method’. The effects of this amendment on the Group financial statements are not material. The effects on Condensed Consolidated Income Statement are the following:
   

The following standards have also been applicable for the first time effective from 1 January 2013:

• IAS 1 Presentation of Financial Statements (amendment) introduces changes to the presentation of items of other comprehensive income. Items that could be reclassified to profit or loss at a future point in time now have to be presented separately from items that will never be reclassified. The amendment affected presentation only and had no impact on the Group’s financial position or performance.
• IFRS 7 Financial Instruments: Enhanced disclosure requirements related to offsetting of financial assets and financial liabilities. The amendment might have some effect on presentation in the financial statements but had no impact on the Group’s financial position or performance.
• IFRS 13 Fair Value Measurement establishes the definition of fair value and introduces a single IFRS framework for measuring fair value while seeking to increase consistency and comparability by requiring disclosures about fair value measurements applied in the financial statements of an entity. The application of IFRS 13 has not materially affected the fair value measurements carried out by the Group. The new standard also requires specific disclosures on fair values, some of which replace existing disclosure requirements in other standards. Some of these disclosures are specifically required for financial instruments, thereby affecting the interim financial statement. The additional disclosures are included in this Interim Review.
• IAS 12 Income Taxes (amendment) provides additional regulation on deferred tax in the case of recovery of underlying assets. The amendment is not relevant to the Group.
• IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine introduces accounting treatment for stripping costs arising in the mining industry. The interpretation is not relevant to the Group.
   

All figures in this Interim Review have been rounded to the nearest million, unless otherwise stated.


Condensed Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Condensed Consolidated Statement of Cash Flows

Property, Plant and Equipment, Intangible Assets, Goodwill and Biological Assets

Borrowings

Condensed Consolidated Statement of Financial Position

* PPE = Property, Plant and Equipment

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

CTA = Cumulative Translation Adjustment
OCI = Other Comprehensive Income

Commitments and Contingencies

Capital commitments
The Group’s direct capital expenditure contracts, excluding acquisitions, amounted to EUR 67 million (compared with EUR 199 million at 31 March 2012 and EUR 72 million at 31 December 2012).

The Group’s share of capital expenditure contracts in equity accounted investments, excluding acquisitions, amounted to EUR 177 million (compared with EUR 393 million at 31 March 2012 and EUR 213 million at 31 December 2012) of which Stora Enso has guaranteed EUR 95 million (compared with EUR 189 million at 31 March 2012 and EUR 189 million at 31 December 2012).

Sales by Segment

Operational EBIT by Segment

*Fair valuations and non-operational items include equity incentive schemes, synthetic options net of realised and open hedges, CO2 emission rights, valuations of biological assets related to forest assets in EAI and Group’s share of tax and net financial items of EAI.


NRI by Segment

Fair Valuations and Non-operational Items* by Segment

*Fair valuations and non-operational items include equity incentive schemes, synthetic options net of realised and open hedges, CO2 emission rights, valuations of biological assets related to forest assets in EAI and Group’s share of tax and net financial items of EAI.

Operating Profit/Loss by Segment

Key Exchange Rates for the Euro

Transaction Risk and Hedges in Main Currencies as at 31 March 2013

Additional GBP hedges for 13–15 months increase the hedging percentages by 2%.

Changes in Exchange Rates on Operational EBIT

The sensitivity is based on estimated next 12 months 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. Weakening would have the opposite impact.

Fair Values of Financial Instruments

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

• Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;

• Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly;

• Level 3: techniques which use inputs which have a significant effect on the recorded fair values that are not based on observable market data.

The valuation techniques are described in more detail in the Financial Statements.


Carrying Amounts of Financial Assets and Liabilities by Measurement and Fair Value Categories: Q1 2013

Reconciliation of Level 3 Fair Value Measurement of Financial Assets: Q1 2013

Unlisted shares
The unlisted shares comprise mainly PVO shares for which the valuation method is described in more detail in the Annual Report. The valuation is most sensitive to changes in electricity prices and discount rates. The discount rate of 4.08% used in the valuation model is determined using the weighted average cost of capital method. A +/- 5% change in the electricity price used in the DCF would change the valuation by +/- EUR 85 million and a +/- 1% change in the discount rate would change the valuation by -/+ EUR 140 million.

Calculation of Key Figures

1) Capital employed = Operating capital – Net tax liabilities
2) Average for the financial period
3) Attributable to owners of the Parent



For further information, please contact:
Jouko Karvinen, CEO, tel. +358 2046 21410
Karl-Henrik Sundström, CFO, tel. +46 1046 71660
Ulla Paajanen-Sainio, SVP, Investor Relations, tel. +358 2046 21242
Sanna Lahti, SVP, Global Communications, tel. +358 2046 21251


Stora Enso’s second quarter 2013 results will be published on 19 July 2013 at 13.00 EET.



PRESS CONFERENCE IN HELSINKI

Questions can be addressed to Jouko Karvinen and Karl-Henrik Sundström after the presentation.

ANALYST CONFERENCE CALL
CEO Jouko Karvinen, CFO Karl-Henrik Sundström and SVP Investor Relations Ulla Paajanen-Sainio will be hosting a combined conference call and webcast today at 14.30 Finnish time (13.30 CET, 12.30 UK time, 07.30 US Eastern time).

If you wish to participate, please dial:

The live webcast may be accessed at www.storaenso.com/investors



Stora Enso is the global rethinker of the paper, biomaterials, wood products and packaging industry. We always rethink the old and expand to the new to offer our customers innovative solutions based on renewable materials. Stora Enso employs some 28 000 people worldwide, and our sales in 2012 amounted to EUR 10.8 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.

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STORA ENSO OYJ