Stora Enso plans restructuring and profitability improvement actions
STORA ENSO OYJ STOCK EXCHANGE RELEASE 5 February 2013 at 12.57 EET
Stora Enso plans to restructure its operations through the permanent shutdown of two newspaper machines in Sweden. Stora Enso also plans efficiency improvements in the Printing and Reading customer service and the Building and Living Business Area. The profitability improvement actions are planned to reduce annual costs by EUR 54 million and reduce the number of employees by approximately 600 altogether.
Printing and Reading plans to close capacity in Sweden and reorganise its Customer Service Centres
Printing and Reading plans the permanent shutdown of paper machine (PM) 2 at Hylte Mill in Sweden with annual capacity 205 000 tonnes of newsprint and PM 11 at Kvarnsveden Mill in Sweden with annual capacity 270 000 tonnes of newsprint in the second quarter of 2013. This represents 3.4% of European newsprint capacity. The plans to shut down capacity are due to continuing structural weakening of newsprint demand in Europe.
In addition, Stora Enso plans to create a common platform for all its Printing and Reading sales desk, order handling and logistic services in Europe to improve customer service. These processes currently handled at seven customer service centres, mills and logistic service centres will be centralised into five customer service centres located in Finland, Sweden, Germany, Belgium and the UK. It is planned to establish a separate Logistics Service Centre for overseas business in Gothenburg, Sweden to serve all Stora Enso’s Business Areas.
Building and Living to streamline operations throughout the whole Business Area
Building and Living plans to reduce costs, increase productivity and find sustainable improvement in all operations to overcome continued poor profitability. The plans announced include downsizing of Sollenau Sawmill in Austria, transfer of some production from the high-cost Pfarrkirchen Mill in Germany to the low-cost Zdírec Mill in the Czech Republic and efficiency improvement actions at Kitee and Honkalahti sawmills in Finland. In addition, Building and Living is planning cost reduction measures in all other units and in sales and general administration, as well as in support functions throughout the whole business area.
Stora Enso will record a restructuring provision and a fixed asset and working capital write-down as non-recurring items related to the restructuring plans described above with a negative impact of approximately EUR 88 million on the operating profit in its first quarter 2013 results.
|Annual sales reduction||Annual cost savings||Fixed asset and working capital write-downs||Provisions with cash impact||Planned reduction in personnel|
|Printing and Reading||EUR 190 million||EUR 24 million,
starting Q3 2013, full impact Q1 2014
|EUR 42 million||EUR 40 million||300|
|Building and Living||No impact||EUR 30 million, starting Q2 2013,
full impact early 2014
|-||EUR 6 million||300|
|Total||EUR 190 million||EUR 54 million||EUR 42 million||EUR 46 million||600|
No decisions regarding closures and employee reductions will be taken until the local co-determination negotiations have concluded. Stora Enso would make every effort in co-operation with local communities to help the affected personnel find new employment opportunities, and all job openings in other Stora Enso units would be available to those affected.
For further information, please contact:
Jouko Karvinen, CEO, tel. +358 2046 21410
Karl-Henrik Sundström, CFO, tel. +46 1046 71660
Ulla Paajanen-Sainio, SVP, Investor Relations, tel. +358 2046 21242
Lauri Peltola, EVP, Global Identity, tel. +358 2046 21380
Stora Enso is the global rethinker of the paper, biomaterials, wood product and packaging industry. We always rethink the old and expand to the new to offer our customers innovative solutions based on renewable materials. Stora Enso employs some 30 000 people worldwide, and our sales in 2011 amounted to EUR 11.0 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.
STORA ENSO OYJ