Stora Enso Interim Review January-September 2010
STORA ENSO OYJ INTERIM REVIEW 27 October 2010 at 09.00 EET
Stora Enso Interim Review January-September 2010
Profits nearly doubled year-on-year - another strong quarterly performance
- EUR 255 million quarterly operating profit excluding NRI and fair valuations,
up
year-on-year by EUR 124 million driven mainly by improved product mix, prices
and volumes;
- Quarterly operating profit margin excluding NRI and fair valuations increased
year-on-year to 10% (6%), ROCE excluding NRI and fair valuations 12% (7%);
- Quarterly EPS excluding NRI improved year-on-year to EUR 0.23 (0.12) and CEPS
excluding NRI to EUR 0.40 (0.29);
- Quarterly cash flow from operations and cash position strong at EUR 304
million
and EUR 1 121 million respectively;
- Debt/equity ratio improved quarter-on-quarter to 0.43 (0.49), net debt
reduced
to EUR 2 445 million;
- Market outlook remains generally favourable, but pressure on variable costs,
seasonal demand weakness in some products and maintenance stoppages are expected
to decrease fourth quarter earnings quarter-on-quarter;
- Stora Enso is acquiring 51% of the Chinese packaging company Inpac
International
operating in China and India.
Summary of Third Quarter Results
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| | | Q3/10 | Q2/10 | Q3/09 |
--------------------------------------------------------------------------------
| Sales | EUR | 2 623.6 | 2 692.2 | 2 231.0 |
| | million | | | |
--------------------------------------------------------------------------------
| EBITDA excl. NRI and fair | EUR | 365.8 | 329.8 | 255.9 |
| valuations | million | | | |
--------------------------------------------------------------------------------
| Operating Profit excl. NRI | EUR | 255.0 | 212.9 | 131.5 |
| and Fair Valuations | million | | | |
--------------------------------------------------------------------------------
| Operating profit/loss (IFRS) | EUR | 276.9 | 215.6 | -502.6 |
| | million | | | |
--------------------------------------------------------------------------------
| Profit before tax excl. NRI | EUR | 220.4 | 201.5 | 106.4 |
| | million | | | |
--------------------------------------------------------------------------------
| Profit/loss before tax | EUR | 225.8 | 193.0 | -548.7 |
| | million | | | |
--------------------------------------------------------------------------------
| Net profit excl. NRI | EUR | 188.9 | 168.4 | 92.5 |
| | million | | | |
--------------------------------------------------------------------------------
| Net profit/loss | EUR | 194.3 | 159.9 | -519.7 |
| | million | | | |
--------------------------------------------------------------------------------
| EPS excl. NRI | EUR | 0.23 | 0.22 | 0.12 |
--------------------------------------------------------------------------------
| EPS | EUR | 0.25 | 0.20 | -0.66 |
--------------------------------------------------------------------------------
| CEPS excl. NRI | EUR | 0.40 | 0.38 | 0.29 |
--------------------------------------------------------------------------------
| ROCE excl. NRI and fair | % | 12.4 | 10.5 | 6.6 |
| valuations | | | | |
--------------------------------------------------------------------------------
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 Q3/2009
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| Product | Market | Demand | Price |
--------------------------------------------------------------------------------
| Newsprint | Europe | slightly stronger | significantly |
| | | | lower |
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| Coated magazine paper | Europe | stronger | lower |
--------------------------------------------------------------------------------
| Uncoated magazine paper | Europe | slightly weaker | significantly |
| | | | lower |
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| Coated fine paper | Europe | slightly stronger | higher |
--------------------------------------------------------------------------------
| Uncoated fine paper | Europe | stronger | higher |
--------------------------------------------------------------------------------
| Consumer board | Europe | stronger | higher |
--------------------------------------------------------------------------------
| Industrial packaging | Europe | stronger | significantly |
| | | | higher |
--------------------------------------------------------------------------------
| Wood products | Europe | slightly stronger | significantly |
| | | | higher |
--------------------------------------------------------------------------------
Industry inventories were significantly lower for newsprint, lower for magazine
paper and uncoated fine paper, and higher for coated fine paper and wood
products.
Compared with Q2/2010
--------------------------------------------------------------------------------
| Product | Market | Demand | Price |
--------------------------------------------------------------------------------
| Newsprint | Europe | stable | slightly higher |
--------------------------------------------------------------------------------
| Coated magazine paper | Europe | stronger | slightly higher |
--------------------------------------------------------------------------------
| Uncoated magazine paper | Europe | stronger | slightly higher |
--------------------------------------------------------------------------------
| Coated fine paper | Europe | slightly weaker | slightly higher |
--------------------------------------------------------------------------------
| Uncoated fine paper | Europe | seasonally weaker | higher |
--------------------------------------------------------------------------------
| Consumer board | Europe | stable | slightly higher |
--------------------------------------------------------------------------------
| Industrial packaging | Europe | stable | higher |
--------------------------------------------------------------------------------
| Wood products | Europe | seasonally weaker | slightly higher |
--------------------------------------------------------------------------------
Industry inventories were slightly lower for newsprint, seasonally lower for
wood products, stable for magazine paper and higher for fine paper.
Stora Enso Deliveries and Production
--------------------------------------------------------------------------------
| | Q3/1 | Q2/1 | Q3/0 | 2009 | Q1-Q | Q1-Q | Chang | Chang | Chang |
| | 0 | 0 | 9 | | 3/10 | 3/09 | e % | e % | e % |
| | | | | | | | Q3/10 | Q3/10 | Q1-Q3 |
| | | | | | | | -Q3/0 | -Q2/1 | /10-Q |
| | | | | | | | 9 | 0 | 1-Q3/ |
| | | | | | | | | | 09 |
--------------------------------------------------------------------------------
| Paper and | 2 | 2 | 2 | 10 | 8 | 7 | 5.0 | -2.9 | 8.1 |
| board | 717 | 798 | 587 | 174 | 034 | 430 | | | |
| deliveries | | | | | | | | | |
| (1 000 | | | | | | | | | |
| tonnes) | | | | | | | | | |
--------------------------------------------------------------------------------
| Paper and | 2 | 2 | 2 | 10 | 8 | 7 | 2.3 | -3.6 | 9.4 |
| board | 686 | 786 | 626 | 036 | 147 | 449 | | | |
| production | | | | | | | | | |
| (1 000 | | | | | | | | | |
| tonnes) | | | | | | | | | |
--------------------------------------------------------------------------------
| Wood | 1 | 1 | 1 | 4 | 3 | 3 | 12.0 | -8.5 | 9.3 |
| products | 333 | 457 | 190 | 902 | 939 | 604 | | | |
| deliveries | | | | | | | | | |
| (1 000 m3) | | | | | | | | | |
--------------------------------------------------------------------------------
| Corrugated | 250 | 256 | 245 | 966 | 756 | 711 | 2.0 | -2.3 | 6.3 |
| packaging | | | | | | | | | |
| deliveries | | | | | | | | | |
| (million | | | | | | | | | |
| m2) | | | | | | | | | |
--------------------------------------------------------------------------------
Q3/2010 Results (compared with Q3/2009)
Sales at EUR 2 624 million were EUR 393 million higher than in the third quarter
of 2009. Prices for the Group's products were generally higher, although
newsprint and magazine paper prices in local currencies decreased. Volume
recovery and favourable exchange rates also increased sales. Pulp delivery
volumes and prices increased considerably.
Key Figures
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| EUR million | Q3/ | Q2/ | Q3/ | Q1-Q | Q1-Q | 2009 | Chan | Chang | Chang |
| | 10 | 10 | 09 | 3/10 | 3/09 | | ge % | e % | e % |
| | | | | | | | Q3/1 | Q3/10 | Q1-Q3 |
| | | | | | | | 0-Q3 | -Q2/1 | /10-Q |
| | | | | | | | /09 | 0 | 1-Q3/ |
| | | | | | | | | | 09 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales | 2 | 2 | 2 | 7 | 6 | 8 | 17.6 | -2.5 | 16.3 |
| | 623 | 692 | 231 | 611. | 546. | 945.1 | | | |
| | .6 | .2 | .0 | 7 | 3 | | | | |
--------------------------------------------------------------------------------
| EBITDA excl. | 365 | 329 | 255 | 927. | 580. | 807.8 | 42.9 | 10.9 | 59.8 |
| NRI and fair | .8 | .8 | .9 | 7 | 6 | 1 | | | |
| valuations | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 255 | 212 | 131 | 587. | 183. | 320.5 | 93.9 | 19.8 | 220.9 |
| profit excl. | .0 | .9 | .5 | 3 | 0 | | | | |
| NRI and fair | | | | | | | | | |
| valuations | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 9.7 | 7.9 | 5.9 | 7.7 | 2.8 | 3.6 | 64.4 | 22.8 | 175.0 |
| margin excl. | | | | | | | | | |
| NRI and fair | | | | | | | | | |
| valuations, % | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 276 | 215 | -50 | 615. | -712 | -607. | 155. | 28.4 | 186.4 |
| profit/loss | .9 | .6 | 2.6 | 9 | .9 | 6 | 1 | | |
| (IFRS) | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 10. | 8.0 | -22 | 8.1 | -10. | -6.8 | 147. | 32.5 | 174.3 |
| profit/loss, | 6 | | .5 | | 9 | | 1 | | |
| % of sales | | | | | | | | | |
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| Profit before | 220 | 201 | 106 | 558. | 71.5 | 194.2 | 107. | 9.4 | n/m |
| tax excl. NRI | .4 | .5 | .4 | 7 | | | 1 | | |
--------------------------------------------------------------------------------
| Profit/loss | 225 | 193 | -54 | 536. | -967 | -886. | 141. | 17.0 | 155.5 |
| before tax | .8 | .0 | 8.7 | 7 | .4 | 8 | 2 | | |
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| Net profit | 188 | 168 | 92. | 478. | 77.2 | 153.2 | 104. | 12.2 | n/m |
| for the | .9 | .4 | 5 | 3 | | | 2 | | |
| period excl. | | | | | | | | | |
| NRI | | | | | | | | | |
--------------------------------------------------------------------------------
| Net | 194 | 159 | -51 | 456. | -924 | -878. | 137. | 21.5 | 149.4 |
| profit/loss | .3 | .9 | 9.7 | 3 | .1 | 2 | 4 | | |
| for the | | | | | | | | | |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital | 73. | 75. | 109 | 261. | 321. | 423.8 | -32. | -2.4 | -18.7 |
| expenditure | 5 | 3 | .4 | 6 | 9 | | 8 | | |
--------------------------------------------------------------------------------
| Depreciation | 132 | 127 | 130 | 387. | 419. | 548.7 | 1.7 | 4.2 | -7.7 |
| and | .7 | .4 | .5 | 0 | 3 | | | | |
| impairment | | | | | | | | | |
| charges excl. | | | | | | | | | |
| NRI | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ROCE excl. | 12. | 10. | 6.6 | 9.8 | 3.0 | 3.9 | 87.9 | 18.1 | 226.7 |
| NRI and fair | 4 | 5 | | | | | | | |
| valuations, % | | | | | | | | | |
--------------------------------------------------------------------------------
| ROCE excl. | 13. | 11. | 7.7 | 10.6 | 2.9 | 3.9 | 71.4 | 20.0 | 265.5 |
| NRI, % | 2 | 0 | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per | 0.2 | 0.2 | 0.1 | 0.60 | 0.10 | 0.19 | 91.7 | 4.5 | n/m |
| share (EPS) | 3 | 2 | 2 | | | | | | |
| excl. NRI, | | | | | | | | | |
| EUR | | | | | | | | | |
--------------------------------------------------------------------------------
| EPS (basic), | 0.2 | 0.2 | -0. | 0.58 | -1.1 | -1.12 | 137. | 25.0 | 149.6 |
| EUR | 5 | 0 | 66 | | 7 | | 9 | | |
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| Cash earnings | 0.4 | 0.3 | 0.2 | 1.09 | 0.63 | 0.92 | 37.9 | 5.3 | 73.0 |
| per share | 0 | 8 | 9 | | | | | | |
| (CEPS) excl. | | | | | | | | | |
| NRI, EUR | | | | | | | | | |
--------------------------------------------------------------------------------
| CEPS, EUR | 0.4 | 0.3 | 0.2 | 1.06 | 0.07 | 0.35 | 79.2 | 30.3 | n/m |
| | 3 | 3 | 4 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on | 13. | 11. | -39 | 11.1 | -23. | -16.2 | 135. | 16.0 | 148.1 |
| equity (ROE), | 8 | 9 | .2 | | 1 | | 2 | | |
| % | | | | | | | | | |
--------------------------------------------------------------------------------
| Debt/equity | 0.4 | 0.4 | 0.5 | 0.43 | 0.58 | 0.51 | -25. | -12.2 | -25.9 |
| ratio | 3 | 9 | 8 | | | | 9 | | |
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| Equity per | 7.2 | 6.9 | 6.3 | 7.27 | 6.30 | 6.50 | 15.4 | 5.1 | 15.4 |
| share, EUR | 7 | 2 | 0 | | | | | | |
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| Equity ratio, | 45. | 44. | 44. | 45.8 | 44.4 | 44.7 | 3.2 | 2.2 | 3.2 |
| % | 8 | 8 | 4 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average | 27 | 28 | 28 | 27 | 29 | 28 | -3.2 | -0.9 | -5.0 |
| number of | 785 | 040 | 689 | 595 | 051 | 696 | | | |
| employees | | | | | | | | | |
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| Average | | | | | | | | | |
| number of | | | | | | | | | |
| shares | | | | | | | | | |
| (million) | | | | | | | | | |
--------------------------------------------------------------------------------
| periodic | 788 | 788 | 788 | 788. | 788. | 788.6 | 0.0 | 0.0 | 0.0 |
| | .6 | .6 | .6 | 6 | 6 | | | | |
--------------------------------------------------------------------------------
| cumulative | 788 | 788 | 788 | 788. | 788. | 788.6 | 0.0 | 0.0 | 0.0 |
| | .6 | .6 | .6 | 6 | 6 | | | | |
--------------------------------------------------------------------------------
| cumulative, | 788 | 788 | 788 | 788. | 788. | 788.6 | 0.0 | 0.0 | 0.0 |
| diluted | .6 | .6 | .6 | 6 | 6 | | | | |
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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
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| EUR million | Q3/ | Q2/ | Q3/0 | 2009 | Q1-Q | Q1-Q | Chan | Chan | Chan |
| | 10 | 10 | 9 | | 3/10 | 3/09 | ge % | ge % | ge % |
| | | | | | | | Q3/1 | Q3/1 | Q1-Q |
| | | | | | | | 0-Q3 | 0-Q2 | 3/10 |
| | | | | | | | /09 | /10 | -Q1- |
| | | | | | | | | | Q3/0 |
| | | | | | | | | | 9 |
--------------------------------------------------------------------------------
| Profit from | 233 | 202 | 125. | 259. | 540. | 157. | 85.7 | 15.2 | 243. |
| operations, | .1 | .4 | 5 | 1 | 7 | 4 | | | 5 |
| excl. NRI | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 21. | 10. | 6.0 | 61.4 | 46.6 | 25.6 | 265. | 108. | 82.0 |
| accounted | 9 | 5 | | | | | 0 | 6 | |
| investments, | | | | | | | | | |
| operational, | | | | | | | | | |
| excl. fair | | | | | | | | | |
| valuations | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 255 | 212 | 131. | 320. | 587. | 183. | 93.9 | 19.8 | 220. |
| Profit excl. | .0 | .9 | 5 | 5 | 3 | 0 | | | 9 |
| NRI and | | | | | | | | | |
| Fair | | | | | | | | | |
| Valuations | | | | | | | | | |
--------------------------------------------------------------------------------
| Fair valuations | 16. | 11. | 21.0 | 4.4 | 50.6 | -5.5 | -21. | 47.3 | n/m |
| | 5 | 2 | | | | | 4 | | |
--------------------------------------------------------------------------------
| Operating | 271 | 224 | 152. | 324. | 637. | 177. | 78.0 | 21.2 | 259. |
| Profit, excl. | .5 | .1 | 5 | 9 | 9 | 5 | | | 4 |
| NRI | | | | | | | | | |
--------------------------------------------------------------------------------
| NRI | 5.4 | -8. | -655 | -932 | -22. | -890 | 100. | 163. | 97.5 |
| | | 5 | .1 | .5 | 0 | .4 | 8 | 5 | |
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| Operating | 276 | 215 | -502 | -607 | 615. | -712 | 155. | 28.4 | -186 |
| Profit/Loss | .9 | .6 | .6 | .6 | 9 | .9 | 1 | | .4 |
| (IFRS) | | | | | | | | | |
--------------------------------------------------------------------------------
Q3/2010 Results (compared with Q3/2009) (continued)
Operating profit at EUR 255 million excluding non-recurring items and fair
valuations was EUR 124 million higher than a year ago. This represents an
operating margin of 10%. Improvements in prices in local currencies and mix
increased operating profit by EUR 106 million. Volume recovery increased
operating profit by EUR 78 million. Paper and board production was curtailed by
8% and sawnwood production by 5% of capacity.
Prices for the Group's products were generally higher except in newsprint and
magazine paper, where prices were lower than a year ago. Higher costs, mainly
for pulp and RCP, but to some extent also for sawlogs and chemicals, decreased
operating profit by EUR 105 million. However, market pulp had a positive net
impact of EUR 28 million, mainly in Magazine Paper, as profit improvement
through external pulp sales more than offset the higher cost of externally
purchased pulp.
The favourable impact of exchange rates on sales was significantly offset by the
unfavourable impact of exchange rates on costs, the net impact being some EUR 30
million, after hedges. Deliveries of wood to the Group's mills were 8.7 million
cubic metres, 16% up on the third quarter of 2009.
The share of the operational results of equity accounted investments amounted to
EUR 22 (EUR 6) million, with the largest contribution from Bergvik Skog and
Tornator.
The Group recorded a net positive EUR 5 million of non-recurring items in the
third quarter of 2010. Disposal of the Baienfurt mill site resulted in a gain of
EUR 50 million due to provision releases and fixed asset impairment reversals,
which more than offset the EUR 37 million closure provisions and write-downs
related to PM 7 at Maxau Mill in Germany and EUR 8 million increases in closure
provisions and write-downs related to PM 2 and PM 4 at Varkaus Mill in Finland.
Net financial items were EUR -51 (EUR -46) million. Net interest expenses
decreased slightly from EUR 25 million to EUR 24 million.
Group capital employed was EUR 8 226 million on 30 September 2010, a net
increase of EUR 334 million due to the Group's capital investments in equity
accounted investments in Uruguay and strengthening of the Swedish krona and
Brazilian real.
January-September 2010 Results (compared with the same period in 2009)
Sales increased by EUR 1 065 million year-on-year to EUR 7 612 million due to
higher delivery volumes and favourable exchange rates. Sales prices were higher
for most of the Group's products but the price trend was unfavourable for
newsprint and magazine paper. Pulp deliveries and prices increased. Operating
profit excluding non-recurring items and fair valuations increased by EUR 404
million year-on-year to EUR 587 million as higher volumes and favourable
exchange rate trends in sales more than offset higher costs and unfavourable
exchange rate trends in costs.
Q3/2010 Results (compared with Q2/2010)
Sales were slightly down by EUR 69 million on the previous quarter. Operating
profit excluding non-recurring items and fair valuations was EUR 42 million
higher than in the previous quarter at EUR 255 million as the generally higher
sales prices more than offset higher costs. Group capital employed was EUR 8 226
million on 30 September 2010, a net increase of EUR 23 million.
Capital Structure
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| EUR million | 30 Sep 10 | 30 June | 31 Dec 09 | 30 Sep 09 |
| | | 10 | | |
--------------------------------------------------------------------------------
| Operative fixed assets | 6 065.7 | 6 068.4 | 5 936.2 | 6 037.2 |
--------------------------------------------------------------------------------
| Equity accounted investments | 1 656.7 | 1 687.1 | 1 481.3 | 1 177.3 |
--------------------------------------------------------------------------------
| Operative working capital | 1 389.5 | 1 323.2 | 1 171.2 | 1 471.0 |
--------------------------------------------------------------------------------
| Non-current interest-free | -474.3 | -519.2 | -498.1 | -500.2 |
| items, net | | | | |
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| Operating Capital Total | 8 637.6 | 8 559.5 | 8 090.6 | 8 185.3 |
--------------------------------------------------------------------------------
| Net tax liabilities | -411.2 | -356.4 | -314.3 | -292.5 |
--------------------------------------------------------------------------------
| Capital Employed | 8 226.4 | 8 203.1 | 7 776.3 | 7 892.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity attributable to | 5 731.3 | 5 457.1 | 5 124.3 | 4 968.1 |
| Company shareholders | | | | |
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| Non-controlling interests | 50.3 | 52.7 | 58.2 | 57.0 |
--------------------------------------------------------------------------------
| Net interest-bearing | 2 444.8 | 2 698.0 | 2 593.8 | 2867.7 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Held for sale | - | -4.7 | - | - |
--------------------------------------------------------------------------------
| Financing Total | 8 226.4 | 8 203.1 | 7 776.3 | 7 892.8 |
--------------------------------------------------------------------------------
Financing Q3/2010 (compared with Q2/2010)
Cash flow from operations remained strong at EUR 304 (EUR 305) million due to
improved profitability and active working capital management. Capital
expenditure was EUR 74 million in the third quarter due to active capital
expenditure management, which further improved cash flow after investing
activities to EUR 230 (EUR 229) million. At the end of the period,
interest-bearing net liabilities of the Group were EUR 2 445 million, a decrease
of EUR 253 million. In September 2010 USD 47.6 million of a bond maturing in
2011 was repurchased.
Total unutilised committed credit facilities were unchanged at EUR 1 400
million, and cash and cash equivalents net of overdrafts remained strong at EUR
1 121 million, which is EUR 265 million more than for the previous quarter. In
addition, Stora Enso has access to various long-term sources of funding up to
EUR 750 million. In August 2010 Stora Enso issued two five-year bonds totalling
SEK 2 300 million under its EMTN (Euro Medium Term Note) programme. The SEK 1
000 million bond pays a floating coupon of three-month Stibor plus 370 basis
points and has an issue/reoffer price of 100.000. The SEK 1 300 million bond
pays a fixed coupon of 5.75% and has an issue/reoffer price of 99.778 to give a
spread of 370 basis points over five-year mid swap. There are no financial
covenants in the new debt.
The debt/equity ratio at 30 September 2010 was 0.43 (0.49). The currency effect
on owners' equity was negative EUR 28 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 increased equity by EUR 46 million.
Cash Flow
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| EUR million | Q3/ | Q2/ | Q3/09 | 2009 | Q1-Q | Q1-Q | Chang | Chang | Chang |
| | 10 | 10 | | | 3/10 | 3/09 | e % | e % | e % |
| | | | | | | | Q3/10 | Q3/10 | Q1-Q3 |
| | | | | | | | -Q3/0 | -Q2/1 | /10- |
| | | | | | | | 9 | 0 | Q1-Q3 |
| | | | | | | | | | /09 |
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| Operating | 276 | 215 | -502. | -607 | 615. | -712 | 155.1 | 28.4 | 186.4 |
| profit/loss | .9 | .6 | 6 | .6 | 9 | .9 | | | |
--------------------------------------------------------------------------------
| Depreciatio | 100 | 101 | 693.2 | 1 | 302. | 1 | -85.5 | -1.1 | -73.9 |
| n and other | .2 | .3 | | 262. | 7 | 160. | | | |
| non-cash | | | | 0 | | 9 | | | |
| items | | | | | | | | | |
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| Change in | -73 | -12 | 134.9 | 606. | -191 | 330. | -154. | n/m | -157. |
| working | .2 | .4 | | 5 | .0 | 4 | 3 | | 8 |
| capital | | | | | | | | | |
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| Cash Flow | 303 | 304 | 325.5 | 1 | 727. | 778. | -6.6 | -0.2 | -6.5 |
| from | .9 | .5 | | 260. | 6 | 4 | | | |
| Operations | | | | 9 | | | | | |
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| Capital | -73 | -75 | -109. | -423 | -261 | -321 | 32.8 | 2.4 | 18.7 |
| expenditure | .5 | .3 | 4 | .7 | .6 | .9 | | | |
--------------------------------------------------------------------------------
| Cash Flow | 230 | 229 | 216.1 | 837. | 466. | 456. | 6.6 | 0.5 | 2.1 |
| after | .4 | .2 | | 2 | 0 | 5 | | | |
| Investing | | | | | | | | | |
| Activities | | | | | | | | | |
--------------------------------------------------------------------------------
Capital Expenditure for January-September 2010
Capital expenditure for the first three quarters of 2010 totalled EUR 262
million, which is 68% of depreciation in the first three quarters of 2010. Stora
Enso's annual depreciation will be about EUR 530 million in 2010. Capital
expenditure for the Group for the full year 2010 will be approximately EUR 400
million.
The main projects during the first three quarters of 2010 were power plants and
energy-related projects at existing mills (EUR 117 million) and development of
existing production (EUR 54 million).
Short-term Risks and Uncertainties
The main short-term risks and uncertainties are related to the global economy,
foreign exchange volatility, the effects of possible increases in raw material
costs, especially for wood, development of the wood market, especially
uncertainty related to Russian wood duties, and possible decreases in pulp
market prices.
Energy sensitivity analysis for 2010: the direct effect on 2010 operating profit
of a 10% increase in electricity, oil and other fossil fuel market prices would
be about negative EUR 18 million annual impact, after the effect of hedges.
Wood sensitivity analysis for 2010: the direct effect on 2010 operating profit
of a 10% increase in wood prices would be about negative EUR 216 million annual
impact.
Pulp sensitivity analysis for 2010: the direct effect on 2010 operating profit
of a 10% increase in yearly average pulp prices would be about positive EUR 48
million annual impact.
A decrease of energy, wood or pulp prices would have the opposite impact.
Foreign exchange rates sensitivity analysis for the next twelve months: the
direct effect on operating profit of a 10% strengthening in the value of the US
dollar, Swedish krona and British pound against the euro would be about positive
EUR 110 million, negative EUR 100 million and positive EUR 55 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.
Near-term Outlook
In Europe and globally demand for newsprint is expected to be unchanged from a
year ago. In Europe demand for coated magazine paper is forecast to be slightly
stronger as demand for uncoated magazine paper slightly weaker than a year ago.
Demand for coated fine paper is predicted to be slightly stronger and demand for
uncoated fine paper stronger than a year ago. Demand for consumer board is
expected to be slightly stronger than a year ago but seasonally weaker than in
the third quarter of 2010. Demand for industrial packaging is expected to be
slightly stronger than a year ago. Demand for wood products is anticipated to be
similar to a year ago but weaker than in the third quarter of 2010.
In Europe newsprint prices are forecast to be similar to the third quarter of
2010, whereas global newsprint prices are forecast to be slightly higher than in
the third quarter of 2010. Prices for coated and uncoated magazine paper are
expected to be slightly higher than in the previous quarter.
Fine paper prices are predicted to be slightly higher than in the third quarter
of 2010. Consumer board prices are forecast to be similar to the previous
quarter, whereas industrial packaging prices are forecast to be slightly higher.
Prices for wood products are predicted to be lower than in the third quarter of
2010.
Maintenance stoppages and wood and RCP costs are expected to have a greater
negative impact at Group level on the fourth quarter 2010 results than the third
quarter 2010 results. Wood Products faces pressure on profitability due to
weakening market conditions and high raw material costs.
The Group expects its cost inflation excluding internal actions to remain 2% for
the full year 2010.
Third Quarter Events
July
On 1 July 2010 Stora Enso announced that it had finalised the divestment of its
integrated mills at Kotka in Finland and its laminating paper operations in
Malaysia to private equity firm OpenGate Capital as announced on 22 April 2010,
the total consideration including earn-out being up to EUR 24 million.
On 7 July 2010 Stora Enso announced that it would permanently close down
newsprint and directory paper production at Varkaus in Finland by the end of the
third quarter of 2010. The co-determination negotiations at Varkaus were
concluded at the end of June. The reasons for the planned capacity closure
announced on 22 April 2010 had not changed: the European newsprint and directory
paper market is strongly structurally oversupplied and sales prices had fallen
significantly. As a result, newsprint production at Varkaus Mill was expected to
remain unprofitable in the long term.
August
On 24 August 2010 Stora Enso announced that Stora Enso Baienfurt GmbH had signed
an agreement to divest its Baienfurt mill site real estate in Germany.
September
On 2 September 2010 Stora Enso announced in response to an article published in
the Finnish daily newspaper Helsingin Sanomat on 2 September 2010 that there
were no discussions ongoing concerning a possible newsprint joint venture
between Stora Enso, Holmen and Norske Skog.
On 7 September 2010 Stora Enso announced that it would permanently shut down the
195 000 tonnes per year newsprint machine at Maxau Mill in Germany by the end of
November 2010. Newsprint production at Maxau would end due to the weak European
market outlook and high production costs. Sales prices had fallen significantly
while recovered paper and wood costs had risen strongly. As a result, there was
no realistic prospect of newsprint production at Maxau Mill becoming profitable
again in the foreseeable future.
On 29 September 2010 Stora Enso announced that it was continuing to expand in
solid biofuels by investing EUR 10 million in starting pellet production at
Imavere Sawmill in Estonia. The pellet plant project would commence in the
fourth quarter of 2010 and was expected to be completed in the fourth quarter of
2011.
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 remaining administrative fixed cost saving plans is
on schedule. 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. Veracel's position is supported by documentation issued by the State
environmental authority.
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. All discovery in those class action lawsuits
has been completed and Stora Enso has filed a motion for summary judgement
seeking dismissal of all plaintiffs' claims. The court is still expected to rule
on Stora Enso's motion during 2010. If the court denies Stora Enso's motion, a
trial will be held in 2011. No provisions have been made in Stora Enso's
accounts for these lawsuits.
Changes in Group Management
Elisabet Salander Björklund, Executive Vice President and a member of the Group
Executive Team, relinquished her duties with Stora Enso on 31 August 2010.
On 13 August 2010 Stora Enso announced that it had appointed Lars Häggström as
Head of Group Human Resources and member of the Group Executive Team, effective
as of 1 October 2010. He reports to CEO Jouko Karvinen.
Share Capital
No conversions were recorded during the quarter.
On 30 September 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.
Events after the Period
On 11 October 2010 Stora Enso announced that its joint venture with Neste Oil,
NSE Biofuels Oy, would commence environmental impact assessments for a
commercial-scale biorefinery at Porvoo and at Imatra in Finland. The two
locations are seen as potential alternative sites for a unit capable of
producing approximately 200 000 tonnes of premium-quality renewable diesel per
year from wood biomass.
On 18 October 2010 Stora Enso announced that its Nomination Board had been
appointed. The composition of the Board is as follows: Gunnar Brock (Chairman of
the Board of Directors), Juha Rantanen (Vice Chairman of the Board of
Directors), Marcus Wallenberg (appointed by shareholder FAM) and Keijo Suila
(appointed by shareholder Solidium). Keijo Suila is the Chairman of the
Nomination Board.
On 27 October 2010 Stora Enso announced that it had signed an agreement to
acquire 51% of the Chinese packaging company Inpac International.
This report is unaudited.
Helsinki, 27 October 2010
Stora Enso Oyj
Board of Directors
Segments Q3/10 compared with Q3/09
Newsprint and Book Paper
--------------------------------------------------------------------------------
| EUR | Q3/1 | Q2/1 | Q3/0 | 2009 | Q1-Q | Q1-Q | Chang | Change | Chang |
| million | 0 | 0 | 9 | | 3/10 | 3/09 | e % | % | e % |
| | | | | | | | Q3/10 | Q3/10- | Q1-Q3 |
| | | | | | | | -Q3/0 | Q2/10 | /10- |
| | | | | | | | 9 | | Q1-Q3 |
| | | | | | | | | | /09 |
--------------------------------------------------------------------------------
| Sales | 322. | 325. | 330. | 1 | 935. | 966. | -2.2 | -0.7 | -3.2 |
| | 9 | 1 | 0 | 325. | 4 | 2 | | | |
| | | | | 8 | | | | | |
--------------------------------------------------------------------------------
| EBITDA* | 23.6 | 16.1 | 58.6 | 228. | 60.0 | 164. | -59.7 | 46.6 | -63.6 |
| | | | | 2 | | 9 | | | |
--------------------------------------------------------------------------------
| Operating | 0.1 | -6.6 | 34.8 | 128. | -8.1 | 87.4 | -99.7 | 101.5 | -109. |
| loss/prof | | | | 7 | | | | | 3 |
| it* | | | | | | | | | |
--------------------------------------------------------------------------------
| % of | 0.0 | -2.0 | 10.5 | 9.7 | -0.9 | 9.0 | -100. | 100.0 | -110. |
| sales | | | | | | | 0 | | 0 |
--------------------------------------------------------------------------------
| ROOC, %** | 0.0 | -2.5 | 12.6 | 11.9 | -1.1 | 10.6 | -100. | 100.0 | -110. |
| | | | | | | | 0 | | 4 |
--------------------------------------------------------------------------------
| Deliverie | 649 | 676 | 622 | 2 | 1 | 1 | 4.3 | -4.0 | 7.9 |
| s, 1 000 | | | | 453 | 918 | 778 | | | |
| t | | | | | | | | | |
--------------------------------------------------------------------------------
| Productio | 653 | 648 | 627 | 2 | 1 | 1 | 4.1 | 0.8 | 7.5 |
| n, 1 000 | | | | 451 | 935 | 800 | | | |
| t | | | | | | | | | |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Newsprint and book paper sales were EUR 323 million, down 2% on the third
quarter of 2009 due to lower sales prices. Operating profit was EUR 0 million,
down EUR 35 million on the third quarter of 2009 due to lower sales prices and
higher RCP costs.
Stora Enso permanently shut down two newsprint machines PM 2 and PM 4 at Varkaus
Mill in Finland at the end of the third quarter of 2010, reducing newsprint
annual capacity by 290 000 tonnes. Stora Enso will also permanently shut down
the 195 000 tonnes per year newsprint machine at Maxau Mill in Germany by the
end of November 2010.
Markets
--------------------------------------------------------------------------------
| Product | Marke | Demand Q3/10 | Demand Q3/10 | Price Q3/10 | Price Q3/10 |
| | t | compared | compared | compared | compared with |
| | | with Q3/09 | with Q2/10 | with Q3/09 | Q2/10 |
--------------------------------------------------------------------------------
| Newspri | Europ | slightly | stable | significantl | slightly |
| nt | e | stronger | | y lower | higher |
--------------------------------------------------------------------------------
| Newspri | Globa | stable | stable | higher | higher |
| nt | l | | | | |
--------------------------------------------------------------------------------
Industry inventories were significantly lower than in the third quarter of 2009
and slightly lower than in the previous quarter.
Magazine Paper
--------------------------------------------------------------------------------
| EUR | Q3/ | Q2/1 | Q3/0 | 2009 | Q1-Q | Q1-Q | Chang | Change | Chang |
| million | 10 | 0 | 9 | | 3/10 | 3/09 | e % | % | e % |
| | | | | | | | Q3/10 | Q3/10- | Q1-Q3 |
| | | | | | | | -Q3/0 | Q2/10 | /10- |
| | | | | | | | 9 | | Q1-Q3 |
| | | | | | | | | | /09 |
--------------------------------------------------------------------------------
| Sales | 541 | 530. | 469. | 1 | 1 | 1 | 15.4 | 2.0 | 20.9 |
| | .0 | 2 | 0 | 676. | 506. | 245. | | | |
| | | | | 0 | 7 | 8 | | | |
--------------------------------------------------------------------------------
| EBITDA* | 71. | 46.0 | 55.3 | 145. | 144. | 116. | 28.6 | 54.6 | 23.9 |
| | 1 | | | 3 | 4 | 5 | | | |
--------------------------------------------------------------------------------
| Operating | 45. | 22.0 | 30.6 | 40.3 | 71.4 | 36.2 | 48.7 | 106.8 | 97.2 |
| profit* | 5 | | | | | | | | |
--------------------------------------------------------------------------------
| % of sales | 8.4 | 4.1 | 6.5 | 2.4 | 4.7 | 2.9 | 29.2 | 104.9 | 62.1 |
--------------------------------------------------------------------------------
| ROOC, %** | 13. | 7.1 | 9.3 | 3.1 | 7.3 | 3.6 | 47.3 | 93.0 | 102.8 |
| | 7 | | | | | | | | |
--------------------------------------------------------------------------------
| Deliveries | 613 | 598 | 565 | 2 | 1 | 1 | 8.5 | 2.5 | 11.1 |
| , 1 000 | | | | 150 | 737 | 564 | | | |
| t*** | | | | | | | | | |
--------------------------------------------------------------------------------
| Production | 616 | 614 | 555 | 2 | 1 | 1 | 11.0 | 0.3 | 14.2 |
| , 1 000 | | | | 110 | 780 | 559 | | | |
| t*** | | | | | | | | | |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital *** Excluding pulp
Magazine paper sales were EUR 541 million, up 15% on the third quarter of 2009
mainly due to higher pulp volumes and prices, and favourable exchange rates,
although magazine paper prices declined. Operating profit was EUR 46 million, up
EUR 15 million on a year ago as stronger demand for paper, higher pulp prices
and the net favourable impact of exchange rates more than compensated for higher
costs, especially for RCP.
There will be an annual maintenance stoppage at Sunila Pulp Mill in Finland and
a combined annual maintenance and minor investment stoppage at Skutskär Pulp
Mill in Sweden in the fourth quarter of 2010.
Markets
--------------------------------------------------------------------------------
| Product | Market | Demand | Demand Q3/10 | Price Q3/10 | Price Q3/10 |
| | | Q3/10 | compared | compared | compared |
| | | compared | with Q2/10 | with Q3/09 | with Q2/10 |
| | | with Q3/09 | | | |
--------------------------------------------------------------------------------
| Coated | Europe | stronger | stronger | lower | slightly |
| magazine | | | | | higher |
| paper | | | | | |
--------------------------------------------------------------------------------
| Coated | Latin | significant | significantl | slightly | higher |
| magazine | Americ | ly stronger | y stronger | higher | |
| paper | a | | | | |
--------------------------------------------------------------------------------
| Uncoated | Europe | slightly | stronger | significantl | slightly |
| magazine | | weaker | | y lower | higher |
| paper | | | | | |
--------------------------------------------------------------------------------
| Uncoated | China | significant | significantl | higher | slightly |
| magazine | | ly stronger | y weaker | | lower |
| paper | | | | | |
--------------------------------------------------------------------------------
Industry inventories were lower than a year ago and unchanged on the previous
quarter.
Fine Paper
--------------------------------------------------------------------------------
| EUR | Q3/1 | Q2/1 | Q3/0 | 2009 | Q1-Q | Q1-Q | Chang | Change | Chang |
| million | 0 | 0 | 9 | | 3/10 | 3/09 | e % | % | e % |
| | | | | | | | Q3/10 | Q3/10- | Q1-Q3 |
| | | | | | | | -Q3/0 | Q2/10 | /10- |
| | | | | | | | 9 | | Q1-Q3 |
| | | | | | | | | | /09 |
--------------------------------------------------------------------------------
| Sales | 563. | 554. | 449. | 1 | 1 | 1 | 25.3 | 1.6 | 19.5 |
| | 3 | 4 | 6 | 823. | 592. | 331. | | | |
| | | | | 9 | 2 | 9 | | | |
--------------------------------------------------------------------------------
| EBITDA* | 90.8 | 101. | 42.0 | 134. | 253. | 89.8 | 116.2 | -10.1 | 182.7 |
| | | 0 | | 5 | 9 | | | | |
--------------------------------------------------------------------------------
| Operating | 70.9 | 79.4 | 20.4 | 32.7 | 191. | 10.6 | 247.5 | -10.7 | n/m |
| profit/lo | | | | | 8 | | | | |
| ss* | | | | | | | | | |
--------------------------------------------------------------------------------
| % of | 12.6 | 14.3 | 4.5 | 1.8 | 12.0 | 0.8 | 180.0 | -11.9 | n/m |
| sales | | | | | | | | | |
--------------------------------------------------------------------------------
| ROOC, %** | 30.5 | 33.5 | 7.3 | 2.8 | 27.9 | 1.2 | n/m | -9.0 | n/m |
--------------------------------------------------------------------------------
| Deliverie | 665 | 687 | 616 | 2 | 1 | 1 | 8.0 | -3.2 | 7.1 |
| s, 1 000 | | | | 538 | 975 | 844 | | | |
| t | | | | | | | | | |
--------------------------------------------------------------------------------
| Productio | 642 | 694 | 639 | 2 | 1 | 1 | 0.5 | -7.5 | 7.0 |
| n, 1 000 | | | | 507 | 984 | 855 | | | |
| t | | | | | | | | | |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Fine paper sales were EUR 563 million, up 25% on the third quarter of 2009
mainly due to an improved mix following restructuring, higher sales prices and
volumes, and favourable exchange rates. Operating profit was EUR 71 million, up
EUR 50 million on the previous year as higher sales more than offset higher pulp
and other costs.
Various units had their annual maintenance stoppages during the third quarter of
2010, and they proceeded as expected.
Markets
--------------------------------------------------------------------------------
| Product | Market | Demand | Demand Q3/10 | Price Q3/10 | Price Q3/10 |
| | | Q3/10 | compared | compared | compared |
| | | compared | with Q2/10 | with Q3/09 | with Q2/10 |
| | | with Q3/09 | | | |
--------------------------------------------------------------------------------
| Coated | Europe | slightly | slightly | higher | slightly |
| fine | | stronger | weaker | | higher |
| paper | | | | | |
--------------------------------------------------------------------------------
| Coated | China | slightly | seasonally | slightly | lower |
| fine | | stronger | stronger | lower | |
| paper | | | | | |
--------------------------------------------------------------------------------
| Uncoated | Europe | stronger | seasonally | higher | higher |
| fine | | | weaker | | |
| paper | | | | | |
--------------------------------------------------------------------------------
Coated fine paper inventories in Europe were higher than in the third quarter of
2009 and previous quarter, but still at long-term average levels. Uncoated fine
paper inventories in Europe were below the long-term average and lower than in
the third quarter of 2009, but higher than in the previous quarter.
Consumer Board
--------------------------------------------------------------------------------
| EUR | Q3/ | Q2/1 | Q3/0 | 2009 | Q1-Q | Q1-Q | Chang | Change | Chang |
| million | 10 | 0 | 9 | | 3/10 | 3/09 | e % | % | e % |
| | | | | | | | Q3/10 | Q3/10- | Q1-Q3 |
| | | | | | | | -Q3/0 | Q2/10 | /10- |
| | | | | | | | 9 | | Q1-Q3 |
| | | | | | | | | | /09 |
--------------------------------------------------------------------------------
| Sales | 593 | 586. | 470. | 1 | 1 | 1 | 26.2 | 1.3 | 22.5 |
| | .8 | 3 | 7 | 895. | 703. | 390. | | | |
| | | | | 9 | 2 | 9 | | | |
--------------------------------------------------------------------------------
| EBITDA* | 109 | 108. | 93.7 | 284. | 320. | 210. | 17.2 | 0.8 | 52.4 |
| | .8 | 9 | | 3 | 3 | 2 | | | |
--------------------------------------------------------------------------------
| Operating | 77. | 76.9 | 64.9 | 164. | 225. | 122. | 19.6 | 0.9 | 84.4 |
| profit* | 6 | | | 9 | 0 | 0 | | | |
--------------------------------------------------------------------------------
| % of sales | 13. | 13.1 | 13.8 | 8.7 | 13.2 | 8.8 | -5.1 | 0.0 | 50.0 |
| | 1 | | | | | | | | |
--------------------------------------------------------------------------------
| ROOC, %** | 24. | 24.7 | 21.3 | 13.7 | 24.3 | 13.1 | 13.1 | -2.4 | 85.5 |
| | 1 | | | | | | | | |
--------------------------------------------------------------------------------
| Deliveries | 594 | 590 | 567 | 2 | 1 | 1 | 4.8 | 0.7 | 5.7 |
| , 1 000 | | | | 201 | 735 | 641 | | | |
| t*** | | | | | | | | | |
--------------------------------------------------------------------------------
| Production | 579 | 591 | 589 | 2 | 1 | 1 | -1.7 | -2.0 | 7.4 |
| , 1 000 | | | | 161 | 771 | 649 | | | |
| t*** | | | | | | | | | |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital *** Excluding pulp
Consumer board sales were EUR 594 million, up 26% on the third quarter of 2009
as board and pulp volumes and prices were overall higher than a year ago,
especially following the restart of production at Enocell Pulp Mill. Operating
profit was EUR 78 million, up EUR 13 million on a year ago as the higher volumes
and sales prices more than offset higher variable costs, especially for pulp.
Net impact of exchange rate development was slightly negative.
Scheduled maintenance stoppages and related start-ups at the Imatra and Enocell
mills in Finland were successfully completed. The annual major maintenance
stoppage at Skoghall Mill in Sweden will be during the fourth quarter of 2010.
Production of short-fibre pulp will be curtailed at Imatra Mill due to the
limited supply of birch pulpwood.
Markets
--------------------------------------------------------------------------------
| Product | Market | Demand | Demand Q3/10 | Price Q3/10 | Price Q3/10 |
| | | Q3/10 | compared | compared | compared |
| | | compared | with Q2/10 | with Q3/09 | with Q2/10 |
| | | with Q3/09 | | | |
--------------------------------------------------------------------------------
| Consumer | Europe | stronger | stable | higher | slightly |
| board | | | | | higher |
--------------------------------------------------------------------------------
Industrial Packaging
--------------------------------------------------------------------------------
| EUR million | Q3/ | Q2/ | Q3/ | 20 | Q1- | Q1-Q | Chan | Chan | Chan |
| | 10 | 10 | 09 | 09 | Q3/ | 3/09 | ge % | ge % | ge % |
| | | | | | 10 | | Q3/1 | Q3/1 | Q1-Q |
| | | | | | | | 0-Q3 | 0-Q2 | 3/10 |
| | | | | | | | /09 | /10 | - |
| | | | | | | | | | Q1-Q |
| | | | | | | | | | 3/09 |
--------------------------------------------------------------------------------
| Sales | 225 | 259 | 203 | 81 | 707 | 594. | 10.7 | -13. | 19.0 |
| | .4 | .2 | .7 | 5. | .8 | 9 | | 0 | |
| | | | | 5 | | | | | |
--------------------------------------------------------------------------------
| EBITDA* | 30. | 29. | 22. | 65 | 79. | 50.6 | 34.2 | 2.4 | 57.5 |
| | 2 | 5 | 5 | .4 | 7 | | | | |
--------------------------------------------------------------------------------
| Operating profit* | 18. | 17. | 10. | 17 | 43. | 14.7 | 81.6 | 9.4 | 195. |
| | 7 | 1 | 3 | .6 | 5 | | | | 9 |
--------------------------------------------------------------------------------
| % of sales | 8.3 | 6.6 | 5.1 | 2. | 6.1 | 2.5 | 62.7 | 25.8 | 144. |
| | | | | 2 | | | | | 0 |
--------------------------------------------------------------------------------
| ROOC, %** | 12. | 10. | 7.2 | 3. | 9.8 | 3.3 | 66.7 | 10.1 | 197. |
| | 0 | 9 | | 0 | | | | | 0 |
--------------------------------------------------------------------------------
| Paper and board | 196 | 247 | 217 | 83 | 669 | 603 | -9.7 | -20. | 10.9 |
| deliveries, 1 000 t | | | | 2 | | | | 6 | |
--------------------------------------------------------------------------------
| Paper and board | 196 | 239 | 216 | 80 | 677 | 586 | -9.3 | -18. | 15.5 |
| production, 1 000 t | | | | 7 | | | | 0 | |
--------------------------------------------------------------------------------
| Corrugated | 250 | 256 | 245 | 96 | 756 | 711 | 2.0 | -2.3 | 6.3 |
| packaging | | | | 6 | | | | | |
| deliveries, million | | | | | | | | | |
| m2 | | | | | | | | | |
--------------------------------------------------------------------------------
| Corrugated | 253 | 258 | 239 | 96 | 761 | 704 | 5.9 | -1.9 | 8.1 |
| packaging | | | | 2 | | | | | |
| production, million | | | | | | | | | |
| m2 | | | | | | | | | |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Industrial packaging sales were EUR 225 million, up 11% on the third quarter of
2009 due to higher sales prices and higher volumes in the remaining operations
following divestment of the laminating paper business, although the segment's
total volumes decreased because of the divestment. Operating profit was EUR 19
million, up EUR 8 million on the previous year as higher sales more than offset
higher variable costs especially for RCP and corrugated raw material.
Markets
--------------------------------------------------------------------------------
| Product | Market | Demand | Demand Q3/10 | Price Q3/10 | Price Q3/10 |
| | | Q3/10 | compared | compared | compared |
| | | compared | with Q2/10 | with Q3/09 | with Q2/10 |
| | | with Q3/09 | | | |
--------------------------------------------------------------------------------
| Industri | Europe | stronger | stable | significantl | higher |
| al | | | | y higher | |
| packagin | | | | | |
| g | | | | | |
--------------------------------------------------------------------------------
Wood Products
--------------------------------------------------------------------------------
| EUR | Q3/1 | Q2/1 | Q3/0 | 2009 | Q1-Q | Q1-Q | Chang | Change | Chang |
| million | 0 | 0 | 9 | | 3/10 | 3/09 | e % | % | e % |
| | | | | | | | Q3/10 | Q3/10- | Q1-Q3 |
| | | | | | | | -Q3/0 | Q2/10 | /10- |
| | | | | | | | 9 | | Q1-Q3 |
| | | | | | | | | | /09 |
--------------------------------------------------------------------------------
| Sales | 424. | 422. | 306. | 1 | 1 | 894. | 38.2 | 0.3 | 31.7 |
| | 1 | 7 | 9 | 239. | 178. | 7 | | | |
| | | | | 6 | 4 | | | | |
--------------------------------------------------------------------------------
| EBITDA* | 35.2 | 39.5 | 17.1 | 25.6 | 89.6 | 1.7 | 105.8 | -10.9 | n/m |
--------------------------------------------------------------------------------
| Operating | 25.2 | 30.1 | 9.4 | -8.0 | 60.7 | -23. | 168.1 | -16.3 | n/m |
| profit/lo | | | | | | 0 | | | |
| ss* | | | | | | | | | |
--------------------------------------------------------------------------------
| % of | 5.9 | 7.1 | 3.1 | -0.6 | 5.2 | -2.6 | 90.3 | -16.9 | n/m |
| sales | | | | | | | | | |
--------------------------------------------------------------------------------
| ROOC, %** | 16.8 | 20.5 | 6.4 | -1.4 | 13.8 | -5.1 | 162.5 | -18.0 | n/m |
--------------------------------------------------------------------------------
| Deliverie | 1 | 1 | 1 | 4 | 3 | 3 | 9.2 | -8.3 | 6.4 |
| s, 1 000 | 299 | 417 | 190 | 902 | 834 | 604 | | | |
| m3 | | | | | | | | | |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Wood product sales were EUR 424 million, up 38% on the third quarter of 2009
mainly due to higher sales prices and higher volumes. Operating profit was EUR
25 million, up EUR 16 million on a year earlier as the higher sales prices more
than offset clearly higher wood costs. Fixed costs were higher, mainly because
volumes increased.
Temporary production curtailments are being planned in case market conditions
deteriorate or raw material costs become excessive.
Markets
--------------------------------------------------------------------------------
| Product | Market | Demand | Demand Q3/10 | Price Q3/10 | Price Q3/10 |
| | | Q3/10 | compared | compared | compared |
| | | compared | with Q2/10 | with Q3/09 | with Q2/10 |
| | | with Q3/09 | | | |
--------------------------------------------------------------------------------
| Wood | Europe | slightly | seasonally | significantl | slightly |
| products | | stronger | weaker | y higher | higher |
--------------------------------------------------------------------------------
| Wood | Asia, | stronger | seasonally | significantl | higher |
| products | Middle | | weaker | y higher | |
| | East | | | | |
| | and | | | | |
| | North | | | | |
| | Africa | | | | |
--------------------------------------------------------------------------------
Industry inventories were higher than a year ago, but seasonally lower than in
the previous quarter.
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 in the Interim Review have been calculated using the estimated
average annual effective income tax rate applied to the pre-tax income of the
interim period.
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 | Q3/ | Q2/ | Q3/0 | Q1-Q | Q1-Q | 2009 | Chan | Chan | Chan |
| | 10 | 10 | 9 | 3/10 | 3/09 | | ge % | ge % | ge % |
| | | | | | | | Q3/1 | Q3/1 | Q1-Q |
| | | | | | | | 0-Q3 | 0-Q2 | 3/10 |
| | | | | | | | /09 | /10 | - |
| | | | | | | | | | Q1-Q |
| | | | | | | | | | 3/09 |
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--------------------------------------------------------------------------------
| Sales | 2 | 2 | 2 | 7 | 6 | 8 | 17.6 | -2.5 | 16.3 |
| | 623 | 692 | 231. | 611. | 546. | 945. | | | |
| | .6 | .2 | 0 | 7 | 3 | 1 | | | |
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| Other operating | 38. | 31. | 30.7 | 104. | 113. | 172. | 25.7 | 21.0 | -8.0 |
| income | 6 | 9 | | 8 | 9 | 8 | | | |
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| Materials and | -1 | -1 | -1 | -4 | -4 | -5 | -12. | 4.1 | -12. |
| services | 574 | 641 | 403. | 643. | 138. | 668. | 1 | | 2 |
| | .2 | .3 | 7 | 5 | 7 | 1 | | | |
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| Freight and | -26 | -26 | -207 | -756 | -615 | -833 | -29. | -1.3 | -23. |
| sales | 7.3 | 3.9 | .2 | .4 | .2 | .6 | 0 | | 0 |
| commissions | | | | | | | | | |
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| Personnel | -30 | -36 | -298 | -1 | -999 | -1 | -3.9 | 14.4 | -0.1 |
| expenses | 9.7 | 1.8 | .1 | 000. | .7 | 349. | | | |
| | | | | 5 | | 6 | | | |
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| Other operating | -11 | -14 | -155 | -380 | -671 | -833 | 23.2 | 19.2 | 43.4 |
| expenses | 9.8 | 8.2 | .9 | .1 | .7 | .1 | | | |
--------------------------------------------------------------------------------
| Share of | 24. | 14. | 8.8 | 58.4 | 34.2 | 111. | 177. | 63.8 | 70.8 |
| results of | 4 | 9 | | | | 8 | 3 | | |
| equity | | | | | | | | | |
| accounted | | | | | | | | | |
| investments | | | | | | | | | |
--------------------------------------------------------------------------------
| Depreciation | -13 | -10 | -708 | -378 | -982 | -1 | 80.4 | -28. | 61.5 |
| and impairment | 8.7 | 8.2 | .2 | .5 | .0 | 152. | | 2 | |
| | | | | | | 9 | | | |
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| Operating | 276 | 215 | -502 | 615. | -712 | -607 | 155. | 28.4 | 186. |
| Profit/Loss | .9 | .6 | .6 | 9 | .9 | .6 | 1 | | 4 |
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| Net financial | -51 | -22 | -46. | -79. | -254 | -279 | -10. | -126 | 68.9 |
| items | .1 | .6 | 1 | 2 | .5 | .2 | 8 | .1 | |
--------------------------------------------------------------------------------
| Profit/Loss | 225 | 193 | -548 | 536. | -967 | -886 | 141. | 17.0 | 155. |
| before Tax | .8 | .0 | .7 | 7 | .4 | .8 | 2 | | 5 |
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| Income tax | -31 | -33 | 29.0 | -80. | 43.3 | 8.6 | -208 | 4.8 | -285 |
| | .5 | .1 | | 4 | | | .6 | | .7 |
--------------------------------------------------------------------------------
| Net Profit/Loss | 194 | 159 | -519 | 456. | -924 | -878 | 137. | 21.5 | 149. |
| for the Period | .3 | .9 | .7 | 3 | .1 | .2 | 4 | | 4 |
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| Attributable | | | | | | | | | |
| to: | | | | | | | | | |
--------------------------------------------------------------------------------
| Owners of the | 193 | 159 | -519 | 453. | -925 | -879 | 137. | 21.4 | 149. |
| Parent | .2 | .1 | .7 | 8 | .8 | .7 | 2 | | 0 |
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| Non-controlling | 1.1 | 0.8 | 0.0 | 2.5 | 1.7 | 1.5 | n/m | 37.5 | 47.1 |
| interests | | | | | | | | | |
--------------------------------------------------------------------------------
| | 194 | 159 | -519 | 456. | -924 | -878 | 137. | 21.5 | 149. |
| | .3 | .9 | .7 | 3 | .1 | .2 | 4 | | 4 |
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| Earnings per | | | | | | | | | |
| Share | | | | | | | | | |
--------------------------------------------------------------------------------
| Basic earnings | 0.2 | 0.2 | -0.6 | 0.58 | -1.1 | -1.1 | 137. | 25.0 | 149. |
| per share, EUR | 5 | 0 | 6 | | 7 | 2 | 9 | | 6 |
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| Diluted | 0.2 | 0.2 | -0.6 | 0.58 | -1.1 | -1.1 | 137. | 25.0 | 149. |
| earnings per | 5 | 0 | 6 | | 7 | 2 | 9 | | 6 |
| share, EUR | | | | | | | | | |
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Consolidated Statement of Comprehensive Income
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| EUR million | Q3/10 | Q2/10 | Q3/09 | Q1-Q3 | Q1-Q3/ | 2009 |
| | | | | /10 | 09 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net profit/loss for the | 194.3 | 159.9 | -519. | 456.3 | -924.1 | -878.2 |
| period | | | 7 | | | |
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| | | | | | | |
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| Other Comprehensive Income | | | | | | |
--------------------------------------------------------------------------------
| Actuarial gains and losses | -2.4 | - | -5.5 | -2.4 | -5.5 | -20.4 |
| on defined benefit pension | | | | | | |
| plans | | | | | | |
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| Asset revaluation on step | - | - | - | - | 3.9 | 3.9 |
| acquisition | | | | | | |
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| Available for sale | 46.2 | -28.5 | -45.6 | 1.1 | 105.3 | 180.3 |
| financial assets | | | | | | |
--------------------------------------------------------------------------------
| Currency and commodity | 84.0 | -4.8 | 98.4 | 103.1 | 204.0 | 224.1 |
| hedges | | | | | | |
--------------------------------------------------------------------------------
| Share of other | 1.8 | -1.1 | 1.2 | 0.4 | -9.2 | -8.5 |
| comprehensive income of | | | | | | |
| equity accounted | | | | | | |
| investments | | | | | | |
--------------------------------------------------------------------------------
| Currency translation | -22.9 | 112.8 | 114.8 | 234.2 | 206.5 | 252.6 |
| movements on equity net | | | | | | |
| investments (CTA) | | | | | | |
--------------------------------------------------------------------------------
| Currency translation | -2.6 | 5.0 | 0.0 | 3.5 | -1.2 | 5.9 |
| movements on | | | | | | |
| non-controlling interests | | | | | | |
--------------------------------------------------------------------------------
| Net investment hedges | -6.6 | 6.9 | -9.1 | -7.8 | 16.4 | 0.7 |
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| Income tax relating to | -19.8 | 0.0 | -27.5 | -24.5 | -63.8 | -65.0 |
| components of other | | | | | | |
| comprehensive income | | | | | | |
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| Other Comprehensive | 77.7 | 90.3 | 126.7 | 307.6 | 456.4 | 573.6 |
| Income, net of tax | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Total Comprehensive Income | 272.0 | 250.2 | -393. | 763.9 | -467.7 | -304.6 |
| | | | 0 | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Total Comprehensive Income | | | | | | |
| Attributable to: | | | | | | |
--------------------------------------------------------------------------------
| Owners of the Parent | 273.6 | 244.4 | -393. | 758.0 | -468.2 | -312.0 |
| | | | 0 | | | |
--------------------------------------------------------------------------------
| Non-controlling interests | -1.6 | 5.8 | 0.0 | 5.9 | 0.5 | 7.4 |
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| | 272.0 | 250.2 | -393. | 763.9 | -467.7 | -304.6 |
| | | | 0 | | | |
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Condensed Consolidated Statement of Cash Flows
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| EUR million | Q1-Q3/10 | Q1-Q3/09 |
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| Cash Flow from Operating Activities | | |
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| Operating profit/loss | 615.9 | -712.9 |
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| Hedging result from OCI | 92.0 | 213.6 |
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| Adjustments for non-cash items | 302.7 | 1 160.9 |
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| Change in net working capital | -253.7 | 352.2 |
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| Cash Flow Generated by Operations | 756.9 | 1 013.8 |
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| Net financials items paid | -114.2 | -271.1 |
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| Income taxes paid, net | -35.4 | -4.5 |
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| Net Cash Provided by Operating Activities | 607.3 | 738.2 |
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| Cash Flow from Investing Activities | | |
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| Acquisitions of subsidiaries | -5.9 | -8.3 |
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| Acquisitions of equity accounted investments | -13.8 | -0.5 |
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| Proceeds from sale of fixed assets and shares | 24.1 | 84.6 |
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| Capital expenditure | -261.6 | -321.9 |
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| Proceeds/payment of the non-current | 41.1 | -33.5 |
| receivables, net | | |
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| Net Cash Used in Investing Activities | -216.1 | -279.6 |
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| Cash Flow from Financing Activities | | |
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| Proceeds from issue of new long-term debt | 599.2 | 225.2 |
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| Long-term debt, payments | -774.5 | -164.9 |
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| Change in short-term borrowings | 184.7 | -171.2 |
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| Capital repayments paid | -157.7 | -157.7 |
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| Dividend to non-controlling interests | -1.2 | -7.5 |
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| Net Cash Used in Financing Activities | -149.5 | -276.1 |
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| Net Increase in Cash and Cash Equivalents | 241.7 | 182.5 |
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| Cash and bank in disposed companies | -0.3 | - |
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| Cash and bank in acquired companies | - | 4.3 |
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| Translation adjustment | 2.2 | -22.6 |
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| Net cash and cash equivalents at the | 877.0 | 372.6 |
| beginning of period | | |
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| Net Cash and Cash Equivalents at Period End | 1 120.6 | 536.8 |
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--------------------------------------------------------------------------------
| Cash and Cash Equivalents at Period End | 1 121.2 | 548.3 |
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| Bank Overdrafts at Period End | -0.6 | -11.5 |
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| Net Cash and Cash Equivalents at Period End | 1 120.6 | 536.8 |
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| Acquisitions of Subsidiary Companies | | |
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| Cash and cash equivalents | - | 4.4 |
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| Fixed assets | - | 18.4 |
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| Working capital | - | 20.4 |
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| Tax assets and liabilities | - | 15.1 |
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| Interest-bearing liabilities | - | -44.1 |
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| Non-controlling interests | 5.9 | -2.0 |
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| Fair Value of Net Assets | 5.9 | 12.2 |
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| Gain from step acquisition realised directly | - | -3.9 |
| in equity | | |
--------------------------------------------------------------------------------
| Total Purchase Consideration | 5.9 | 8.3 |
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| Disposal of Subsidiary Companies | | |
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| Cash and cash equivalents | 0.3 | - |
--------------------------------------------------------------------------------
| Fixed assets | 0.5 | - |
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| Working capital | 6.2 | 0.1 |
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| Interest-bearing liabilities | -5.5 | - |
--------------------------------------------------------------------------------
| Tax liabilities | -0.7 | - |
--------------------------------------------------------------------------------
| Non-controlling Interest | - | - |
--------------------------------------------------------------------------------
| Net Assets in Divested Companies | 0.8 | 0.1 |
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| Income Statement capital gain/loss | - | - |
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| Total Disposal Consideration Received in Cash | 0.8 | 0.1 |
| and Kind | | |
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Property, Plant and Equipment, Intangible Assets and Goodwill
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| EUR million | Q1-Q3/10 | 2009 | Q1-Q3/09 |
--------------------------------------------------------------------------------
| Carrying value at 1 January | 5 157.7 | 5 899.4 | 5 899.4 |
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| Acquisition of subsidiary companies | - | 17.6 | 18.4 |
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| Capital expenditure | 247.3 | 394.4 | 293.8 |
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| Additions in biological assets | 14.3 | 35.5 | 28.1 |
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| Change in emission rights | 25.4 | -41.7 | -27.9 |
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| Disposals | -23.2 | -27.9 | -26.7 |
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| Disposals of subsidiary companies | -0.5 | -92.6 | - |
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| Depreciation and impairment | -378.5 | -1 152.9 | -982.0 |
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| Held for sale | - | - | -98.3 |
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| Translation difference and other | 240.7 | 125.9 | 108.7 |
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| Statement of Financial Position | 5 283.2 | 5 157.7 | 5 213.5 |
| Total | | | |
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Borrowings
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| EUR million | 30 Sep 10 | 31 Dec 09 | 30 Sep 09 |
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| Non-current borrowings | 3 123.9 | 2 898.4 | 2 453.5 |
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| Current borrowings | 933.8 | 1 038.3 | 1 414.4 |
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| | 4 057.7 | 3 936.7 | 3 867.9 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| | Q1-Q3/10 | 2009 | Q1-Q3/09 |
--------------------------------------------------------------------------------
| Carrying value at 1 January | 3 936.7 | 4 076.1 | 4 076.1 |
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| Debt acquired with new subsidiaries | - | 44.1 | 44.1 |
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| Debt disposed with sold | -7.5 | - | - |
| subsidiaries | | | |
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| Payments of borrowings (net) | -23.8 | -255.1 | -316.2 |
--------------------------------------------------------------------------------
| Translation difference and other | 152.3 | 71.6 | 63.9 |
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| Statement of Financial Position | 4 057.7 | 3 936.7 | 3 867.9 |
| Total | | | |
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Condensed Consolidated Statement of Financial Position
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| EUR million | | 30 Sep | 31 Dec | 30 Sep |
| | | 10 | 09 | 09 |
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--------------------------------------------------------------------------------
| Assets | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fixed Assets and Other Non-current | | | | |
| Investments | | | | |
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| Fixed assets | O | 5 | 4 979.9 | 5 031.0 |
| | | 055.9 | | |
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| Biological assets | O | 176.6 | 152.5 | 143.4 |
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| Emission rights | O | 50.7 | 25.3 | 39.1 |
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| Equity accounted investment | O | 1 | 1 481.3 | 1 177.3 |
| | | 656.7 | | |
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| Available-for-sale: Interest-bearing | I | 75.7 | 71.7 | 68.7 |
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| Available-for-sale: Operative | O | 782.5 | 778.5 | 723.5 |
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| Non-current loan receivables | I | 126.9 | 159.6 | 169.1 |
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| Deferred tax assets | T | 170.1 | 155.8 | 187.9 |
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| Other non-current assets | O | 53.1 | 30.4 | 22.7 |
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| | | 8 | 7 835.0 | 7 562.7 |
| | | 148.2 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current Assets | | | | |
--------------------------------------------------------------------------------
| Inventories | O | 1 | 1 281.6 | 1 429.9 |
| | | 422.3 | | |
--------------------------------------------------------------------------------
| Tax receivables | T | 6.8 | 2.4 | 9.7 |
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| Operative receivables | O | 1 | 1 362.6 | 1 447.2 |
| | | 638.2 | | |
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| Interest-bearing receivables | I | 289.1 | 221.2 | 214.1 |
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| Cash and cash equivalents | I | 1 | 890.4 | 548.3 |
| | | 121.2 | | |
--------------------------------------------------------------------------------
| | | 4 | 3 758.2 | 3 649.2 |
| | | 477.6 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Asset of disposal group classified as | | - | - | 103.0 |
| held for sale | | | | |
--------------------------------------------------------------------------------
| | | 4 | 3 758.2 | 3 752.2 |
| | | 477.6 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total Assets | | 12 | 11 593.2 | 11 314.9 |
| | | 625.8 | | |
--------------------------------------------------------------------------------
| Equity and Liabilities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Owners of the Parent | | 5 | 5 124.3 | 4 968.1 |
| | | 731.3 | | |
--------------------------------------------------------------------------------
| Non-controlling Interests | | 50.3 | 58.2 | 57.0 |
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| Total Equity | | 5 | 5 182.5 | 5 025.1 |
| | | 781.6 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current Liabilities | | | | |
--------------------------------------------------------------------------------
| Post-employment benefit provisions | O | 331.9 | 305.0 | 307.4 |
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| Other provisions | O | 162.7 | 180.4 | 193.8 |
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| Deferred tax liabilities | T | 434.8 | 364.4 | 363.6 |
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| Non-current debt | I | 3 | 2 898.4 | 2 453.5 |
| | | 123.9 | | |
--------------------------------------------------------------------------------
| Other non-current operative liabilities | O | 32.8 | 43.1 | 21.7 |
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| | | 4 | 3 791.3 | 3 340.0 |
| | | 086.1 | | |
--------------------------------------------------------------------------------
| Current Liabilities | | | | |
--------------------------------------------------------------------------------
| Current portion of long-term debt | I | 603.9 | 814.8 | 998.2 |
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| Interest-bearing liabilities | I | 329.9 | 223.5 | 416.2 |
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| Operative liabilities | O | 1 | 1 473.0 | 1 406.1 |
| | | 671.0 | | |
--------------------------------------------------------------------------------
| Tax liabilities | T | 153.3 | 108.1 | 126.5 |
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| | | 2 | 2 619.4 | 2 947.0 |
| | | 758.1 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liability directly associated with the | | - | - | 2.8 |
| assets classified as held for sale | | | | |
--------------------------------------------------------------------------------
| | | 2 | 2 619.4 | 2 949.8 |
| | | 758.1 | | |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Total Liabilities | | 6 | 6 410.7 | 6 289.8 |
| | | 844.2 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total Equity and Liabilities | | 12 | 11 593.2 | 11 314.9 |
| | | 625.8 | | |
--------------------------------------------------------------------------------
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
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| EUR | S | Sh | In | Tr | St | Av | Cu | Cur | CTA | Ret | Att | Non | To |
| million | h | ar | ve | ea | ep | ai | rr | ren | & | ain | rib | -co | ta |
| | a | e | st | su | Ac | la | en | cy | net | ed | uta | ntr | l |
| | r | Pr | ed | ry | qu | bl | cy | and | inv | Ear | ble | oll | |
| | e | em | No | Sh | is | e | an | com | est | nin | to | ing | |
| | C | iu | n- | ar | it | fo | d | mod | men | gs | own | int | |
| | a | m | Re | es | io | r | co | ity | t | | ers | ere | |
| | p | & | st | | n | sa | mm | hed | hed | | of | sts | |
| | i | Re | ri | | Re | le | od | ges | ges | | the | | |
| | t | se | ct | | va | fi | it | of | | | par | | |
| | a | rv | ed | | lu | na | y | equ | | | ent | | |
| | l | e | Eq | | at | nc | he | ity | | | | | |
| | | 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 | | | | | |
--------------------------------------------------------------------------------
| Balance | 1 | 2 | - | -1 | - | 51 | -1 | -10 | -44 | 2 | 5 | 56. | 5 |
| at 31 | 3 | 27 | | 0. | | 0. | 66 | .5 | 3.8 | 095 | 594 | 5 | 65 |
| Decembe | 4 | 6. | | 2 | | 6 | .1 | | | .4 | .0 | | 0. |
| r 2008 | 2 | 4 | | | | | | | | | | | 5 |
| | . | | | | | | | | | | | | |
| | 2 | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Loss | - | - | - | - | - | - | - | - | - | -92 | -92 | 1.7 | -9 |
| for the | | | | | | | | | | 5.8 | 5.8 | | 24 |
| period | | | | | | | | | | | | | .1 |
--------------------------------------------------------------------------------
| OCI | - | - | - | - | 3. | 10 | 20 | -9. | 222 | -5. | 521 | -1. | 52 |
| before | | | | | 9 | 5. | 4. | 2 | .9 | 5 | .4 | 2 | 0. |
| tax | | | | | | 3 | 0 | | | | | | 2 |
--------------------------------------------------------------------------------
| Income | - | - | - | - | - | -6 | -5 | - | -4. | - | -63 | - | -6 |
| tax | | | | | | .1 | 3. | | 3 | | .8 | | 3. |
| relatin | | | | | | | 4 | | | | | | 8 |
| g to | | | | | | | | | | | | | |
| compone | | | | | | | | | | | | | |
| nts of | | | | | | | | | | | | | |
| OCI | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | - | - | - | - | 3. | 99 | 15 | -9. | 218 | -93 | -46 | 0.5 | -4 |
| Compreh | | | | | 9 | .2 | 0. | 2 | .6 | 1.3 | 8.2 | | 67 |
| ensive | | | | | | | 6 | | | | | | .7 |
| Income | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Transfe | - | -1 | 1 | - | - | - | - | - | - | - | - | - | - |
| r to | | 92 | 92 | | | | | | | | | | |
| distrib | | 7. | 7. | | | | | | | | | | |
| utable | | 1 | 1 | | | | | | | | | | |
| reserve | | | | | | | | | | | | | |
| s | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Return | - | -1 | - | - | - | - | - | - | - | - | -15 | - | -1 |
| of | | 57 | | | | | | | | | 7.7 | | 57 |
| capital | | .7 | | | | | | | | | | | .7 |
| (EUR | | | | | | | | | | | | | |
| 0.20 | | | | | | | | | | | | | |
| per | | | | | | | | | | | | | |
| share) | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Balance | 1 | 19 | 1 | -1 | 3. | 60 | -1 | -19 | -22 | 1 | 4 | 57. | 5 |
| at 30 | 3 | 1. | 92 | 0. | 9 | 9. | 5. | .7 | 5.2 | 164 | 968 | 0 | 02 |
| Septemb | 4 | 6 | 7. | 2 | | 8 | 5 | | | .1 | .1 | | 5. |
| er 2009 | 2 | | 1 | | | | | | | | | | 1 |
| | . | | | | | | | | | | | | |
| | 2 | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Profit | - | - | - | - | - | - | - | - | - | 46. | 46. | -0. | 45 |
| for the | | | | | | | | | | 1 | 1 | 2 | .9 |
| period | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| OCI | - | - | - | - | - | 75 | 20 | 0.7 | 30. | -14 | 111 | 7.1 | 11 |
| before | | | | | | .0 | .1 | | 4 | .9 | .3 | | 8. |
| tax | | | | | | | | | | | | | 4 |
--------------------------------------------------------------------------------
| Income | - | - | - | - | - | -0 | -5 | - | 0.2 | 4.6 | -1. | - | -1 |
| tax | | | | | | .6 | .4 | | | | 2 | | .2 |
| relatin | | | | | | | | | | | | | |
| g to | | | | | | | | | | | | | |
| compone | | | | | | | | | | | | | |
| nts of | | | | | | | | | | | | | |
| OCI | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | - | - | - | - | - | 74 | 14 | 0.7 | 30. | 35. | 156 | 6.9 | 16 |
| Compreh | | | | | | .4 | .7 | | 6 | 8 | .2 | | 3. |
| ensive | | | | | | | | | | | | | 1 |
| Income | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividen | - | - | - | - | - | - | - | - | - | - | - | -2. | -2 |
| ds | | | | | | | | | | | | 2 | .2 |
| relatin | | | | | | | | | | | | | |
| g to | | | | | | | | | | | | | |
| 2008 | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Acquisi | - | - | - | - | - | - | - | - | - | - | - | -3. | -3 |
| tions | | | | | | | | | | | | 4 | .4 |
| and | | | | | | | | | | | | | |
| disposa | | | | | | | | | | | | | |
| ls | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Buy-out | - | - | - | - | - | - | - | - | - | - | - | -0. | -0 |
| of | | | | | | | | | | | | 1 | .1 |
| non-con | | | | | | | | | | | | | |
| trollin | | | | | | | | | | | | | |
| g | | | | | | | | | | | | | |
| interes | | | | | | | | | | | | | |
| t | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Transfe | - | -1 | 11 | - | - | - | - | - | - | - | - | - | - |
| r to | | 15 | 5. | | | | | | | | | | |
| distrib | | .0 | 0 | | | | | | | | | | |
| utable | | | | | | | | | | | | | |
| reserve | | | | | | | | | | | | | |
| s | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Balance | 1 | 76 | 2 | -1 | 3. | 68 | -0 | -19 | -19 | 1 | 5 | 58. | 5 |
| at 31 | 3 | .6 | 04 | 0. | 9 | 4. | .8 | .0 | 4.6 | 199 | 124 | 2 | 18 |
| Decembe | 4 | | 2. | 2 | | 2 | | | | .9 | .3 | | 2. |
| r 2009 | 2 | | 1 | | | | | | | | | | 5 |
| | . | | | | | | | | | | | | |
| | 2 | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Profit | - | - | - | - | - | - | - | - | - | 453 | 453 | 2.4 | 45 |
| for the | | | | | | | | | | .9 | .9 | | 6. |
| period | | | | | | | | | | | | | 3 |
--------------------------------------------------------------------------------
| OCI | - | - | - | - | - | 1. | 10 | 0.4 | 226 | -2. | 328 | 3.5 | 33 |
| before | | | | | | 1 | 3. | | .4 | 4 | .6 | | 2. |
| tax | | | | | | | 1 | | | | | | 1 |
--------------------------------------------------------------------------------
| Income | - | - | - | - | - | 0. | -2 | - | 2.0 | 0.8 | -24 | - | -2 |
| tax | | | | | | 3 | 7. | | | | .5 | | 4. |
| relatin | | | | | | | 6 | | | | | | 5 |
| g to | | | | | | | | | | | | | |
| compone | | | | | | | | | | | | | |
| nts of | | | | | | | | | | | | | |
| OCI | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | - | - | - | - | - | 1. | 75 | 0.4 | 228 | 452 | 758 | 5.9 | 76 |
| Compreh | | | | | | 4 | .5 | | .4 | .3 | .0 | | 3. |
| ensive | | | | | | | | | | | | | 9 |
| Income | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividen | - | - | - | - | - | - | - | - | - | - | - | -1. | -1 |
| ds | | | | | | | | | | | | 2 | .2 |
| relatin | | | | | | | | | | | | | |
| g to | | | | | | | | | | | | | |
| 2009 | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Acquisi | - | - | - | - | - | - | - | - | - | - | - | -5. | -5 |
| tions | | | | | | | | | | | | 9 | .9 |
| and | | | | | | | | | | | | | |
| disposa | | | | | | | | | | | | | |
| ls | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Buy-out | - | - | - | - | - | - | - | - | - | 6.8 | 6.8 | -6. | - |
| of | | | | | | | | | | | | 8 | |
| non-con | | | | | | | | | | | | | |
| trollin | | | | | | | | | | | | | |
| g | | | | | | | | | | | | | |
| interes | | | | | | | | | | | | | |
| t | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Return | - | - | -1 | - | - | - | - | - | - | - | -15 | - | -1 |
| of | | | 57 | | | | | | | | 7.7 | | 57 |
| capital | | | .7 | | | | | | | | | | .7 |
| (EUR | | | | | | | | | | | | | |
| 0.20 | | | | | | | | | | | | | |
| per | | | | | | | | | | | | | |
| share) | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Transfe | - | - | -1 | - | - | - | - | - | - | 1 | - | - | - |
| r to | | | 25 | | | | | | | 251 | | | |
| retaine | | | 1. | | | | | | | .3 | | | |
| d | | | 3 | | | | | | | | | | |
| earning | | | | | | | | | | | | | |
| s | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Balance | 1 | 76 | 63 | -1 | 3. | 68 | 74 | -18 | 33. | 2 | 5 | 50. | 5 |
| at 30 | 3 | .6 | 3. | 0. | 9 | 5. | .7 | .6 | 8 | 910 | 731 | 2 | 78 |
| Septemb | 4 | | 1 | 2 | | 6 | | | | .3 | .4 | | 1. |
| er 2010 | 2 | | | | | | | | | | | | 6 |
| | . | | | | | | | | | | | | |
| | 2 | | | | | | | | | | | | |
--------------------------------------------------------------------------------
CTA = Cumulative Translation Adjustment
OCI = Other Comprehensive Income
Commitments and Contingencies
--------------------------------------------------------------------------------
| EUR million | 30 Sep 10 | 31 Dec 09 | 30 Sep 09 |
--------------------------------------------------------------------------------
| On Own Behalf | | | |
--------------------------------------------------------------------------------
| Pledges given | - | - | 0.8 |
--------------------------------------------------------------------------------
| Mortgages | 11.2 | 16.2 | 46.2 |
--------------------------------------------------------------------------------
| On Behalf of Equity Accounted | | | |
| Investments | | | |
--------------------------------------------------------------------------------
| Guarantees | 160.0 | 180.2 | 185.9 |
--------------------------------------------------------------------------------
| On Behalf of Others | | | |
--------------------------------------------------------------------------------
| Guarantees | 109.1 | 121.7 | 123.5 |
--------------------------------------------------------------------------------
| Other Commitments, Own | | | |
--------------------------------------------------------------------------------
| Operating leases, in next 12 | 27.1 | 27.2 | 26.3 |
| months | | | |
--------------------------------------------------------------------------------
| Operating leases, after next 12 | 79.7 | 79.3 | 83.5 |
| months | | | |
--------------------------------------------------------------------------------
| Pension liabilities | 0.1 | 0.3 | 0.2 |
--------------------------------------------------------------------------------
| Other commitments | 49.0 | 36.4 | 36.8 |
--------------------------------------------------------------------------------
| Total | 436.2 | 461.3 | 503.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Pledges given | - | - | 0.8 |
--------------------------------------------------------------------------------
| Mortgages | 11.2 | 16.2 | 46.2 |
--------------------------------------------------------------------------------
| Guarantees | 269.1 | 301.9 | 309.4 |
--------------------------------------------------------------------------------
| Operating leases | 106.8 | 106.5 | 109.8 |
--------------------------------------------------------------------------------
| Pension liabilities | 0.1 | 0.3 | 0.2 |
--------------------------------------------------------------------------------
| Other commitments | 49.0 | 36.4 | 36.8 |
--------------------------------------------------------------------------------
| Total | 436.2 | 461.3 | 503.2 |
--------------------------------------------------------------------------------
Purchase Agreement Commitments
--------------------------------------------------------------------------------
| EUR million | Scheduled Contract Payments |
--------------------------------------------------------------------------------
| Type of Supply | Contract | Q4/201 | 2011-2012 | 2013-2014 | 2015+ |
| | Total | 0 | | | |
--------------------------------------------------------------------------------
| | Fibre | 1 695.2 | 69.2 | 463.5 | 431.0 | 731.5 |
--------------------------------------------------------------------------------
| | Energy | 1 676.3 | 122.3 | 508.5 | 350.2 | 695.3 |
--------------------------------------------------------------------------------
| | Logistics | 405.6 | 16.3 | 105.6 | 87.4 | 196.3 |
--------------------------------------------------------------------------------
| | Other production | 694.3 | 36.6 | 116.6 | 51.7 | 489.4 |
| | costs | | | | | |
--------------------------------------------------------------------------------
| | | 4 471.4 | 244.4 | 1 194.2 | 920.3 | 2 112. |
| | | | | | | 5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital Expenditure | 57.3 | 23.0 | 29.6 | 4.7 | 0.0 |
--------------------------------------------------------------------------------
| Total Contractual | 4 528.7 | 267.4 | 1 223.8 | 925.0 | 2 |
| Commitments at 30 | | | | | 112.5 |
| Sep 2010 | | | | | |
--------------------------------------------------------------------------------
Fair Values of Derivative Financial Instruments
--------------------------------------------------------------------------------
| EUR million | | 30 Sep | | | 31 Dec 09 | 30 Sep 09 |
| | | 10 | | | | |
--------------------------------------------------------------------------------
| | Positive | Negativ | Net | | Net | Net |
| | Fair | e | Fair | | Fair | Fair |
| | Values | Fair | Values | | Values | Values |
| | | Values | | | | |
--------------------------------------------------------------------------------
| Interest rate | 204.7 | -44.3 | 160.4 | | 156.6 | 206.5 |
| swaps | | | | | | |
--------------------------------------------------------------------------------
| Interest rate | 0.0 | -47.4 | -47.4 | | -26.7 | -29.9 |
| options | | | | | | |
--------------------------------------------------------------------------------
| Forward | 100.2 | -96.8 | 3.4 | | 20.5 | -105.8 |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Currency options | 39.1 | -10.2 | 28.9 | | 13.9 | 32.5 |
--------------------------------------------------------------------------------
| Commodity | 17.5 | -24.1 | -6.6 | | -21.8 | -53.8 |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Equity swaps | 27.4 | -9.0 | 18.4 | | -14.1 | -14.6 |
| ("TRS") | | | | | | |
--------------------------------------------------------------------------------
| Total | 388.9 | -231.8 | 157.1 | | 128.4 | 34.9 |
--------------------------------------------------------------------------------
Nominal Values of Derivative Financial Instruments
--------------------------------------------------------------------------------
| EUR million | 30 Sep 10 | 31 Dec 09 | 30 Sep 09 |
--------------------------------------------------------------------------------
| Interest Rate Derivatives | | | |
--------------------------------------------------------------------------------
| Interest rate swaps | | | |
--------------------------------------------------------------------------------
| Maturity under 1 year | 831.5 | 666.8 | 1 287.7 |
--------------------------------------------------------------------------------
| Maturity 2-5 years | 1 710.4 | 2 384.0 | 2 430.3 |
--------------------------------------------------------------------------------
| Maturity 6-10 years | 913.5 | 861.8 | 848.9 |
--------------------------------------------------------------------------------
| | 3 455.4 | 3 912.6 | 4 566.9 |
--------------------------------------------------------------------------------
| Interest rate options | 504.7 | 387.4 | 382.3 |
--------------------------------------------------------------------------------
| Total | 3 960.1 | 4 300.0 | 4 949.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Foreign Exchange Derivatives | | | |
--------------------------------------------------------------------------------
| Forward contracts | 1 395.0 | 2 935.7 | 2 716.8 |
--------------------------------------------------------------------------------
| Currency options | 2 344.4 | 1 590.7 | 1 768.1 |
--------------------------------------------------------------------------------
| Total | 3 739.4 | 4 526.4 | 4 484.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Commodity Derivatives | | | |
--------------------------------------------------------------------------------
| Commodity contracts | 256.4 | 396.7 | 435.8 |
--------------------------------------------------------------------------------
| Total | 256.4 | 396.7 | 435.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total Return (Equity) Swaps | | | |
--------------------------------------------------------------------------------
| Equity swaps ("TRS") | 112.7 | 104.7 | 104.7 |
--------------------------------------------------------------------------------
| Total | 112.7 | 104.7 | 104.7 |
--------------------------------------------------------------------------------
Sales by Segment
--------------------------------------------------------------------------------
| EUR million | Q3/10 | Q2/10 | Q1/10 | 2009 | Q4/09 | Q3/09 | Q2/09 | Q1/0 |
| | | | | | | | | 9 |
--------------------------------------------------------------------------------
| Newsprint | 322.9 | 325.1 | 287.4 | 1 | 359.6 | 330.0 | 327.5 | 308. |
| and Book | | | | 325.8 | | | | 7 |
| Paper | | | | | | | | |
--------------------------------------------------------------------------------
| Magazine | 541.0 | 530.2 | 435.5 | 1 | 430.2 | 469.0 | 396.0 | 380. |
| Paper | | | | 676.0 | | | | 8 |
--------------------------------------------------------------------------------
| Fine Paper | 563.3 | 554.4 | 474.5 | 1 | 492.0 | 449.6 | 450.4 | 431. |
| | | | | 823.9 | | | | 9 |
--------------------------------------------------------------------------------
| Consumer | 593.8 | 586.3 | 523.1 | 1 | 505.0 | 470.7 | 460.3 | 459. |
| Board | | | | 895.9 | | | | 9 |
--------------------------------------------------------------------------------
| Industrial | 225.4 | 259.2 | 223.2 | 815.5 | 220.6 | 203.7 | 194.0 | 197. |
| Packaging | | | | | | | | 2 |
--------------------------------------------------------------------------------
| Wood | 424.1 | 422.7 | 331.6 | 1 | 344.9 | 306.9 | 315.8 | 272. |
| Products | | | | 239.6 | | | | 0 |
--------------------------------------------------------------------------------
| Other | 623.4 | 648.6 | 625.3 | 2 | 619.4 | 450.1 | 507.8 | 597. |
| | | | | 175.2 | | | | 9 |
--------------------------------------------------------------------------------
| Inter-segmen | -670. | -634. | -604.7 | -2 | -572. | -449. | -467. | -517 |
| t sales | 3 | 3 | | 006.8 | 9 | 0 | 0 | .9 |
--------------------------------------------------------------------------------
| Total | 2 | 2 | 2 | 8 | 2 | 2 | 2 | 2 |
| | 623.6 | 692.2 | 295.9 | 945.1 | 398.8 | 231.0 | 184.8 | 130. |
| | | | | | | | | 5 |
--------------------------------------------------------------------------------
Operating Profit/Loss by Segment excluding NRI and Fair Valuations
--------------------------------------------------------------------------------
| EUR million | Q3/10 | Q2/10 | Q1/10 | 2009 | Q4/09 | Q3/09 | Q2/09 | Q1/0 |
| | | | | | | | | 9 |
--------------------------------------------------------------------------------
| Newsprint | 0.1 | -6.6 | -1.6 | 128.7 | 41.3 | 34.8 | 31.1 | 21.5 |
| and Book | | | | | | | | |
| Paper | | | | | | | | |
--------------------------------------------------------------------------------
| Magazine | 45.5 | 22.0 | 3.9 | 40.3 | 4.1 | 30.6 | 5.7 | -0.1 |
| Paper | | | | | | | | |
--------------------------------------------------------------------------------
| Fine Paper | 70.9 | 79.4 | 41.5 | 32.7 | 22.1 | 20.4 | -4.1 | -5.7 |
--------------------------------------------------------------------------------
| Consumer | 77.6 | 76.9 | 70.5 | 164.9 | 42.9 | 64.9 | 41.6 | 15.5 |
| Board | | | | | | | | |
--------------------------------------------------------------------------------
| Industrial | 18.7 | 17.1 | 7.7 | 17.6 | 2.9 | 10.3 | 0.9 | 3.5 |
| Packaging | | | | | | | | |
--------------------------------------------------------------------------------
| Wood | 25.2 | 30.1 | 5.4 | -8.0 | 15.0 | 9.4 | -8.7 | -23. |
| Products | | | | | | | | 7 |
--------------------------------------------------------------------------------
| Other | -4.9 | -16.5 | -22.2 | -117. | -26.6 | -44.9 | -24.3 | -21. |
| | | | | 1 | | | | 3 |
--------------------------------------------------------------------------------
| Operating | 233.1 | 202.4 | 105.2 | 259.1 | 101.7 | 125.5 | 42.2 | -10. |
| Profit/Loss | | | | | | | | 3 |
| excl. NRI by | | | | | | | | |
| Segment | | | | | | | | |
--------------------------------------------------------------------------------
| Share of | 21.9 | 10.5 | 14.2 | 61.4 | 35.8 | 6.0 | 6.3 | 13.3 |
| results of | | | | | | | | |
| equity | | | | | | | | |
| accounted | | | | | | | | |
| investments | | | | | | | | |
| excl. fair | | | | | | | | |
| valuations | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 255.0 | 212.9 | 119.4 | 320.5 | 137.5 | 131.5 | 48.5 | 3.0 |
| Profit excl. | | | | | | | | |
| NRI and Fair | | | | | | | | |
| Valuations* | | | | | | | | |
--------------------------------------------------------------------------------
| Fair | 16.5 | 11.2 | 22.9 | 4.4 | 9.9 | 21.0 | 11.4 | -37. |
| valuations* | | | | | | | | 9 |
--------------------------------------------------------------------------------
| Operating | 271.5 | 224.1 | 142.3 | 324.9 | 147.4 | 152.5 | 59.9 | -34. |
| Profit/Loss | | | | | | | | 9 |
| excl. NRI | | | | | | | | |
--------------------------------------------------------------------------------
| NRI | 5.4 | -8.5 | -18.9 | -932. | -42.1 | -655. | -269. | 34.0 |
| | | | | 5 | | 1 | 3 | |
--------------------------------------------------------------------------------
| Operating | 276.9 | 215.6 | 123.4 | -607. | 105.3 | -502. | -209. | -0.9 |
| Profit/Loss | | | | 6 | | 6 | 4 | |
| (IFRS) | | | | | | | | |
--------------------------------------------------------------------------------
| Net | -51.1 | -22.6 | -5.5 | -279. | -24.7 | -46.1 | -161. | -47. |
| financial | | | | 2 | | | 2 | 2 |
| items | | | | | | | | |
--------------------------------------------------------------------------------
| Profit/Loss | 225.8 | 193.0 | 117.9 | -886. | 80.6 | -548. | -370. | -48. |
| before Tax | | | | 8 | | 7 | 6 | 1 |
| and | | | | | | | | |
| Non-controll | | | | | | | | |
| ing | | | | | | | | |
| Interests | | | | | | | | |
--------------------------------------------------------------------------------
| Income tax | -31.5 | -33.1 | -15.8 | 8.6 | -34.7 | 29.0 | 2.3 | 12.0 |
| expense | | | | | | | | |
--------------------------------------------------------------------------------
| Net | 194.3 | 159.9 | 102.1 | -878. | 45.9 | -519. | -368. | -36. |
| Profit/Loss | | | | 2 | | 7 | 3 | 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 | Q3/10 | Q2/10 | Q1/10 | 2009 | Q4/09 | Q3/09 | Q2/09 | Q1/0 |
| | | | | | | | | 9 |
--------------------------------------------------------------------------------
| Newsprint | -44.4 | -13.0 | - | -52.2 | -1.1 | -80.1 | - | 29.0 |
| and Book | | | | | | | | |
| Paper | | | | | | | | |
--------------------------------------------------------------------------------
| Magazine | - | 9.2 | -5.7 | -163. | -11.4 | -152. | - | - |
| Paper | | | | 5 | | 1 | | |
--------------------------------------------------------------------------------
| Fine Paper | - | 8.5 | - | -314. | -0.6 | -313. | - | - |
| | | | | 2 | | 6 | | |
--------------------------------------------------------------------------------
| Consumer | 49.8 | - | - | -34.2 | 1.6 | -35.8 | - | - |
| Board | | | | | | | | |
--------------------------------------------------------------------------------
| Industrial | - | -3.3 | -13.2 | -28.7 | -0.5 | -28.2 | - | - |
| Packaging | | | | | | | | |
--------------------------------------------------------------------------------
| Wood | - | 0.5 | 1.6 | -7.7 | 1.0 | -8.7 | - | - |
| Products | | | | | | | | |
--------------------------------------------------------------------------------
| Other | - | -10.4 | -1.6 | -332. | -31.1 | -36.6 | -269. | 5.0 |
| | | | | 0 | | | 3 | |
--------------------------------------------------------------------------------
| NRI on | 5.4 | -8.5 | -18.9 | -932. | -42.1 | -655. | -269. | 34.0 |
| Operating | | | | 5 | | 1 | 3 | |
| Profit | | | | | | | | |
--------------------------------------------------------------------------------
| NRI on | - | - | - | -148. | - | - | -148. | - |
| financial | | | | 5 | | | 5 | |
| items | | | | | | | | |
--------------------------------------------------------------------------------
| NRI on tax | - | - | - | 49.6 | 12.0 | 42.9 | 4.6 | -9.9 |
--------------------------------------------------------------------------------
| NRI on Net | 5.4 | -8.5 | -18.9 | -1 | -30.1 | -612. | -413. | 24.1 |
| Profit | | | | 031.4 | | 2 | 2 | |
--------------------------------------------------------------------------------
Operating Profit/Loss by Segment
--------------------------------------------------------------------------------
| EUR million | Q3/10 | Q2/10 | Q1/10 | 2009 | Q4/09 | Q3/09 | Q2/09 | Q1/0 |
| | | | | | | | | 9 |
--------------------------------------------------------------------------------
| Newsprint | -44.3 | -19.6 | -1.6 | 76.5 | 40.2 | -45.3 | 31.1 | 50.5 |
| and Book | | | | | | | | |
| Paper | | | | | | | | |
--------------------------------------------------------------------------------
| Magazine | 45.5 | 31.2 | -1.8 | -123. | -7.3 | -121. | 5.7 | -0.1 |
| Paper | | | | 2 | | 5 | | |
--------------------------------------------------------------------------------
| Fine Paper | 70.9 | 87.9 | 41.5 | -281. | 21.5 | -293. | -4.1 | -5.7 |
| | | | | 5 | | 2 | | |
--------------------------------------------------------------------------------
| Consumer | 127.4 | 76.9 | 70.5 | 130.7 | 44.5 | 29.1 | 41.6 | 15.5 |
| Board | | | | | | | | |
--------------------------------------------------------------------------------
| Industrial | 18.7 | 13.8 | -5.5 | -11.1 | 2.4 | -17.9 | 0.9 | 3.5 |
| Packaging | | | | | | | | |
--------------------------------------------------------------------------------
| Wood | 25.2 | 30.6 | 7.0 | -15.7 | 16.0 | 0.7 | -8.7 | -23. |
| Products | | | | | | | | 7 |
--------------------------------------------------------------------------------
| Other | 9.1 | -20.1 | -5.8 | -495. | -89.6 | -63.3 | -281. | -60. |
| | | | | 1 | | | 9 | 3 |
--------------------------------------------------------------------------------
| Share of | 24.4 | 14.9 | 19.1 | 111.8 | 77.6 | 8.8 | 6.0 | 19.4 |
| results of | | | | | | | | |
| equity | | | | | | | | |
| accounted | | | | | | | | |
| investments | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 276.9 | 215.6 | 123.4 | -607. | 105.3 | -502. | -209. | -0.9 |
| Profit/Loss | | | | 6 | | 6 | 4 | |
| (IFRS) | | | | | | | | |
--------------------------------------------------------------------------------
| Net | -51.1 | -22.6 | -5.5 | -279. | -24.7 | -46.1 | -161. | -47. |
| financial | | | | 2 | | | 2 | 2 |
| items | | | | | | | | |
--------------------------------------------------------------------------------
| Profit/Loss | 225.8 | 193.0 | 117.9 | -886. | 80.6 | -548. | -370. | -48. |
| before Tax | | | | 8 | | 7 | 6 | 1 |
| and | | | | | | | | |
| Non-controll | | | | | | | | |
| ing | | | | | | | | |
| Interests | | | | | | | | |
--------------------------------------------------------------------------------
| Income tax | -31.5 | -33.1 | -15.8 | 8.6 | -34.7 | 29.0 | 2.3 | 12.0 |
| expense | | | | | | | | |
--------------------------------------------------------------------------------
| Net | 194.3 | 159.9 | 102.1 | -878. | 45.9 | -519. | -368. | -36. |
| Profit/Loss | | | | 2 | | 7 | 3 | 1 |
--------------------------------------------------------------------------------
Key Exchange Rates for the Euro
--------------------------------------------------------------------------------
| One Euro is | Closing Rate | Average Rate |
--------------------------------------------------------------------------------
| | 30 Sep 10 | 31 Dec 09 | 30 Sep 10 | 31 Dec 09 |
--------------------------------------------------------------------------------
| SEK | 9.1421 | 10.2520 | 9.6567 | 10.6180 |
--------------------------------------------------------------------------------
| USD | 1.3648 | 1.4406 | 1.3166 | 1.3941 |
--------------------------------------------------------------------------------
| GBP | 0.8600 | 0.8881 | 0.8577 | 0.8909 |
--------------------------------------------------------------------------------
Transaction Risk and Hedges in Main Currencies as at 30 September 2010
--------------------------------------------------------------------------------
| EUR million | USD | GBP | SEK |
--------------------------------------------------------------------------------
| Estimated annual net operating cash flow | 1 100 | 550 | -1 000 |
| exposure | | | |
--------------------------------------------------------------------------------
| Transaction hedges as at 30 Sep 2010 | -560 | -250 | 550 |
--------------------------------------------------------------------------------
| Hedging percentage as at 30 Sep 2010 for | 51% | 45% | 55% |
| the next 12 months | | | |
--------------------------------------------------------------------------------
Changes in Exchange Rates on Operating Profit
--------------------------------------------------------------------------------
| Operating Profit: Currency strengthening of +10% | EUR million |
--------------------------------------------------------------------------------
| | |
--------------------------------------------------------------------------------
| USD | 110 |
--------------------------------------------------------------------------------
| SEK | -100 |
--------------------------------------------------------------------------------
| GBP | 55 |
--------------------------------------------------------------------------------
The sensitivity is based on estimated net operating cash flow in next 12 months.
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.
Stora Enso Shares
--------------------------------------------------------------------------------
| Trading | Helsinki | Stockholm |
| volume | | |
--------------------------------------------------------------------------------
| | A share | R share | A share | R share |
--------------------------------------------------------------------------------
| July | 166 157 | 101 685 426 | 159 518 | 25 444 596 |
--------------------------------------------------------------------------------
| August | 95 839 | 88 045 620 | 124 074 | 16 901 956 |
--------------------------------------------------------------------------------
| September | 130 754 | 95 887 014 | 231 462 | 23 049 331 |
--------------------------------------------------------------------------------
| Total | 392 750 | 285 618 060 | 515 054 | 65 395 883 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Closing Price | Helsinki, EUR | Stockholm, SEK |
--------------------------------------------------------------------------------
| | A share | R share | A share | R share |
--------------------------------------------------------------------------------
| July | 6.82 | 6.22 | 62.60 | 58.60 |
--------------------------------------------------------------------------------
| August | 6.52 | 6.09 | 60.65 | 57.05 |
--------------------------------------------------------------------------------
| September | 7.33 | 7.25 | 67.50 | 66.70 |
--------------------------------------------------------------------------------
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 3) - Depreciation and Impairment
Average number of shares
EPS Net profit/loss for the period 3)
Average number of shares
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
Markus Rauramo, CFO, tel. +358 2046 21121
Ulla Paajanen-Sainio, Head of Investor Relations, tel. +358 2046 21242
Lauri Peltola, Head of Communications and Global Responsibility, tel. +358 2046
21380
Stora Enso's full year 2010 results will be published on 8 February 2011.
PRESS CONFERENCE IN HELSINKI
Time: 11.00 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 7136 2051 Continental Europe and the UK
+358 (0)9
2319 4345 Finland
+46 (0)8 5051 3786 Sweden
+1 212 444 0481 USA
Access code: 7571754#
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
