Stora Enso?s financial position further
STORA ENSO OYJ Stock Exchange Release 30 January 2003 at 13.00
Stora Ensos financial position further strengthened; proposed
dividend unchanged at EUR 0.45
Fourth Quarter Results
Stora Ensos earnings per share excluding non-recurring items were
EUR 0.12 (EUR 0.15) in the fourth quarter. Profit before tax and
minority interests, excluding non-recurring items, amounted to
EUR 143.0 (EUR 196.8) million. The non-recurring items of the fourth
quarter totalled EUR 99.8 million, comprising the divestment of
forestlands in Finland and the USA (EUR 75.4 million), and a
positive currency effect (EUR 24.4 million) from the change in the
USD conversion rate applied to the impairment charge in the third
quarter. The share write-down relating to the impairment was tax-
deductible, resulting together with non-recurring items in an
increase of EUR 0.34 in earnings per share. Profit before taxes and
minority interests was EUR 242.8 (EUR -1 032.7) million.
Sales of EUR 3 212.1 million were 3.3% more than the previous
quarters EUR 3 108.6 million. Cash flow from operations was EUR
405.1 (EUR 565.5) million. The cash flow after investing activities
amounted to EUR 118.8 (EUR 380.3) million and the cash earnings per
share excluding non-recurring items, EUR 0.44 (EUR 0.51). Market-
related production curtailments totalled 325 000 tonnes (271 000
tonnes).
Year Ended 31 December
EUR
million 2001 2002 Q4/01 Q1/02 Q2/02 Q3/02 Q4/02
Sales 13 508.8 12 782.6 3 282.9 3 228.9 3 233.0 3 108.6 3 212.1
EBITDA1)2) 2 762.8 2 172.0 609.4 602.9 517.9 577.5 473.7
Operating
profit2) 1 495.2 926.5 286.8 274.0 190.2 255.4 206.9
Net non
recurring
items -8.3 -1 078.1 -16.7 - 51.6 -1 229.5 99.8
Operating
margin2), % 11.1 7.2 8.7 8.5 5.9 8.2 6.4
Operating
profit 1 486.9 -151.6 270.1 274.0 241.8 -974.1 306.7
Profit before
tax and
minority
interests2)1 231.3 734.9 265.9 240.5 154.6 196.8 143.0
Profit before
tax and
minority
interests 1 223.0 -343.2 249.2 240.5 206.2 -1 032.7 242.8
Net profit
for the
period 926.3 -222.2 274.5 161.0 138.0 -998.7 477.5
EPS2),
Basic,EUR 0.94 0.57 0.22 0.18 0.12 0.15 0.12
EPS,Basic,
EUR 1.03 -0.25 0.31 0.18 0.15 -1.12 0.54
CEPS2),EUR 2.34 1.97 0.58 0.55 0.48 0.51 0.44
ROCE2),% 10.8 7.1 8.4 7.8 5.6 7.9 7.1
1) EBITDA = Earnings before Interest, Taxes, Depreciation and
Amortisation
2) Excluding net non-recurring items
Full Year Results
Full year sales amounted to EUR 12 782.6 (EUR 13 508.8) million, a
decrease of EUR 726.2 million or 5.4% on the previous year. The
operating profit excluding non-recurring items was EUR 926.5
million, or 7.2% of sales (EUR 1 495.2 million), a decrease of 38.0%
on the previous year. Earnings per share were EUR 0.57 (EUR 0.94).
Cash flow from operations totalled EUR 2 083.8 (EUR 2 757.5)
million. The cash flow after investing activities amounted to EUR 1
247.7 (EUR 1 849.9) million and the cash earnings per share
excluding nonrecurring items EUR 1.97 (EUR 2.34).
Outlook
Commenting on the market outlook, Stora Ensos CEO Jukka Härmälä
said, In Europe demand for advertising-driven papers is stable at
low levels, but prices are under pressure mainly due to oversupply.
In North America demand improved from low levels in advertising-
driven paper grades towards the end of 2002. This positive trend has
continued thus far in 2003. The further continuation of the positive
trend in North America, and indeed the outlook for global paper
markets, depends largely on the outcome of the current geopolitical
situationö.
For further information, please contact:
Jukka Härmälä, Chief Executive Officer, tel. +358 2046 21404
Björn Hägglund, Deputy Chief Executive Officer, tel. +46 70 528 2785
Esko Mäkeläinen, CFO, tel. +44 20 8432 1540
Kari Vainio, EVP, Communications, tel. +44 77 9934 8197
Keith B Russell, SVP, Investor Relations, tel. +44 77 7578 8659
The full-length version of the Stora Enso interim review is
available on the Stora Enso website at
www.storaenso.com/investors
An image bank of pictures that may be freely used to illustrate
articles about Stora Enso is available at www.storaenso.com/images
Stora Ensos first quarter results will be published on 29 April
2003.
Stora Enso Fourth Quarter Results
Summary of Fourth Quarter Results (compared with the previous
quarter)
- Earnings per share (EPS) excluding non-recurring items were EUR
0.12 (EUR 0.15)
- Non-recurring items increased the basic EPS to EUR 0.54 (EUR -
1.12). - Profit before tax and minority interests excluding non-
recurring items was EUR 143.0 (EUR 196.8) million.
- Profit before tax and minority interests was EUR 242.8 (EUR -1
032.7) million
- Cash earnings per share EUR 0.44 (EUR 0.51)
- Strong Balance Sheet; debt/equity ratio 0.37 (0.53)
- Proposed dividend unchanged at EUR 0.45
In Europe magazine and fine paper prices declined, while packaging
board prices improved somewhat. Sales volumes increased for magazine
paper, newsprint and wood products but decreased for seasonal
reasons in fine paper and packaging board.
North American demand for printing and writing paper improved
towards the end of the year, resulting in price increases in local
currencies in newsprint and fine paper. However magazine paper
prices were stabilising at low levels.
Paper and board deliveries totalled 3 378 000 tonnes, which is 82
000 tonnes more than the previous quarters 3 296 000 tonnes.
Deliveries of wood products totalled 1 313 000 cubic metres,
compared with the previous quarters 1 252 000 cubic metres.
Paper production was curtailed by 325 000 tonnes to adjust for
market demand (3 000 tonnes in North America), compared with 271 000
tonnes (23 000 tonnes in North America) in the previous quarter. In
Europe curtailments in Newsprint, Fine Paper and Packaging Boards
increased.
Year Ended 31 December
EUR
million 2001 2002 Q4/01 Q1/02 Q2/02 Q3/02 Q4/02
Sales 13 508.8 12 782.6 3 282.9 3 228.9 3 233.0 3 108.6 3 212.1
EBITDA1)2)2 762.8 2 172.0 609.4 602.9 517.9 577.5 473.7
Operating
profit2) 1 495.2 926.5 286.8 274.0 190.2 255.4 206.9
Net non
recurring
items -8.3 -1 078.1 -16.7 - 51.6 -1 229.5 99.8
Operating
margin2),% 11.1 7.2 8.7 8.5 5.9 8.2 6.4
Operating
profit 1 486.9 -151.6 270.1 274.0 241.8 -974.1 306.7
Profit before
tax and
minority
interests2)1 231.3 734.9 265.9 240.5 154.6 196.8 143.0
Profit
before tax and
minority
interests 1 223.0 -343.2 249.2 240.5 206.2 -1 032.7 242.8
Net profit
for the
period 926.3 -222.2 274.5 161.0 138.0 -998.7 477.5
EPS2),Basic,
EUR 0.94 0.57 0.22 0.18 0.12 0.15 0.12
EPS,Basic,
EUR 1.03 -0.25 0.31 0.18 0.15 -1.12 0.54
CEPS2),
EUR 2.34 1.97 0.58 0.55 0.48 0.51 0.44
ROCE2),% 10.8 7.1 8.4 7.8 5.6 7.9 7.1
1) EBITDA = Earnings before Interest, Taxes, Depreciation and
Amortisation
2) Excluding net non-recurring items
Fourth Quarter Financial Results (compared with the previous
quarter) Earnings per share excluding non-recurring items were EUR
0.12 (EUR 0.15).
Sales of EUR 3 212.1 million were 3.3% up on the previous quarters
EUR 3 108.6 million.
The operating profit excluding non-recurring items was EUR 206.9
(EUR
255.4) million, which is 6.4% of sales and 19.0% down on the
previous quarter. The operating profit increased in Magazine Paper
and Timber Products but decreased in Newsprint, Packaging Boards and
Fine Paper. Increased profits were mainly due to higher sales
volumes offset by increases in fixed costs due to curtailments and,
as anticipated, in holiday maintenance stoppages. There were no
major currency effects on the operating profit during the quarter.
Non-recurring items amounted to EUR 99.8 million, or EUR 0.09 per
share, and comprised the divestment of forestlands in Finland and
the USA, and a positive currency effect of EUR 24.4 million from the
impairment charge in the third quarter due to the change in the
average USD conversion rate.
The share of associated company results came to EUR -3.1 (EUR -2.4)
million, of which EUR -5.5 million derived from Tornator Timberland
Oy, offset by positive results from other associates.
Net financial items were EUR -60.7 (EUR -56.2) million, EUR -0.05
per share. Net interest expenses amounted to EUR -49.2 (EUR -53.0)
million, which is 4.5% p.a. of interest-bearing net liabilities, and
net foreign exchange gains came to EUR 0.4 (EUR 13.2) million.
Valuation of financial instruments and derivatives resulted in a net
amount of EUR -11.9 (EUR -16.4) million, being a non-cash item;
these items are valued at market value, causing volatility in net
financial items.
Profit before taxes and minority interests, excluding non-recurring
items, amounted to EUR 143.0 (EUR 196.8) million.
Net taxes were a positive EUR 232.0 (EUR 36.6) million, thus
increasing EPS by EUR 0.27, though cumulative tax excluding non
recurring items represents an underlying rate of 31.4% (31.6%). The
write-down of the shares in the parent company relating to the
impairment charge in Stora Enso North America Corp. is tax-
deductible according to a recently received advanced tax ruling. At
the current tax rate of 29%, the value of this tax deduction, which
is considered a non-recurring item, amounts to EUR 298.4 million to
be utilised against 2002 results.
The minority interest in profits was EUR 2.7 (loss of EUR 2.6)
million, resulting in a net profit for the period of EUR 477.5 (EUR
998.7) million.
The return on capital employed excluding non-recurring items was
7.1% (7.9%). Capital employed was EUR 11 242.4 million at the end of
the period, a net decrease of EUR 573.7 million mainly reflecting
the sale of forest assets and the weakened US dollar.
Capital Structure
EUR million 31.12.2001 30.9.2002 31.12.2002
Fixed assets 14 882.2 12 734.1 12 089.4
Working capital 1 224.2 1 171.6 1 182.2
Operating Capital 16 106.4 13 905.7 13 271.6
Net tax liabilities -2 247.3 -2 089.6 -2 029.2
Capital Employed 13 859.1 11 816.1 11 242.4
Shareholders equity 8 989.0 7 647.6 8 156.9
Minority interests 50.2 53.3 30.4
Interest-bearing net
liabilities 4 819.9 4 115.2 3 055.1
Financing Total 13 859.1 11 816.1 11 242.4
Financing
The cash flow from operations remained strong at EUR 405.1 (EUR
565.5) million. The cash flow after investing activities amounted to
EUR 118.8 (EUR 380.3) million and the cash earnings per share
excluding non-recurring items EUR 0.44 (EUR 0.51).
At the end of the period, interest-bearing net liabilities were EUR
3 055.1 million, down EUR 1 060.1 million on the previous quarter.
Unutilised credit facilities, and cash and cash-equivalent reserves
totalled EUR 1.8 billion.
The debt/equity ratio at 31 December was 0.37 (0.53) and equity per
share EUR 9.49 (EUR 8.69).
Change in Interest-bearing Net Liabilities
Transla-
Ongoing Struct- Group tion Balance
Operat- ural Cash Differe- Sheet
EUR million ions Changes Flow nce Impact
Operating profit 229.0 77.7 306.7 0.0 306.7
Adjustments 253.8 0.0 253.8 -61.2 192.6
Change in working capital -77.7 51.2 -26.5 15.9 -10.6
Cash Flow from Operations 405.1 128.9 534.0 -45.3 488.7
Capital expenditure -331.4 0.0 -331.4 0.0 -331.4
Acquisitions 23.5 -141.1 -117.6 0.0 -117.6
Disposals 31.5 545.6 577.1 0.0 577.1
Other change in fixed
assets -9.9 -11.9 -21.8 345.8 324.0
Cash Flow after
Investing Activities 118.8 521.5 640.3 300.5 940.8
Net financing items
(incl. associated
companies) -62.9 0.0 -62.9 0.0 -62.9
Taxes paid 210.4 0.6 211.0 -40.0 171.0
Repurchase of own shares -91.4 0.0 -91.4 0.0 -91.4
Other change in
shareholders equity and
minority interests 124.0 17.4 141.4 -38.8 102.6
Change in Interest
bearing Net Liabilities 298.9 539.5 838.4 221.7 1 060.1
Capital Expenditure
Capital expenditure for the fourth quarter totalled EUR 331.4
(208.1) million. The main projects were the new PM4 (EUR 100.7
million) and rebuilding of PM3 at Langerbrugge in Belgium (EUR 19.1
million), rebuilding of Oulu PM6 in Finland (EUR 16.5 million),
folding boxboard improvement at Baienfurt in Germany (EUR 8.1
million) and finishing department investment at Fors in Sweden (EUR
6.9 million).
Approved investment plans in the ongoing Asset Restructuring
Programme to improve the overall competitiveness of assets are as
follows: the new SC paper machine at Kvarnsveden in Sweden (EUR 450
million), rebuilds of PM6 at Maxau in Germany (EUR 168 million), PM5
at Corbehem in France (EUR 60 million) and PM2 at Kotka in Finland
(EUR 31 million), and the new thermomechanical pulping line at
Varkaus in Finland (EUR 49 million). Upgrades of PM3 at Veitsiluoto
in Finland (EUR 125 million) and PM1 at Nymölla in Sweden (EUR 23
million) were also approved. These projects are spread over the
coming few years and consistent with the capital expenditure policy
of the Company.
Fourth Quarter Events
Dow Jones Ranking of Stora Enso as the Most Sustainable Forest
Products Company
In October Dow Jones disclosed the company-specific results behind
its latest sustainability indexes, the list of companies included in
its DJSI World and DJSI STOXX having already been published in
September. The more detailed analysis gave Stora Enso the highest
total score in the forest products and paper industry sector.
Strengthened Research Co-operation in China
On 27 November 2002 Stora Enso signed a comprehensive framework
agreement for co-operation in research and development with the
Chinese Academy of Forestry in Beijing. The agreement establishes
the basis for a wide range of studies in the field of reforestation
and use of plantation wood for papermaking, including the use of
native poplar trees. This agreement enhances the ongoing joint
research work on developing fast-growing southern, mainly
eucalyptus, species for efficient use in pulp and paper manufacture.
Risk Mitigation Loan Facility for Central and Eastern Europe
In December Stora Enso agreed a EUR 240 million risk mitigation
facility with the European Bank for Reconstruction and Development
(EBRD), co-sponsored by three Nordic banks: Nordea, Skandinaviska
Enskilda Banken and Svenska Handelsbanken. The facility, which takes
the form of a syndicated multi-purpose loan facility, can be drawn
until the end of 2005 with maturities of up to nine years. It is
intended to provide political risk mitigation for Group investments
in Central and Eastern Europe, including Russia, in an efficient
manner.
Agreement to Acquire Sylvester
In line with the earlier announcement, Stora Enso Timber and the
owners of AS Sylvester, Estonias largest wood products and wood
procurement company, signed an agreement for Stora Enso Timber to
acquire a majority interest in Sylvester. The agreement has been
filed for approval by the competition authorities and should be
closed in the first quarter of 2003.
Stora Enso North America
Half Year Performance
North American demand for printing and writing paper improved
towards the end of the year, resulting in price increases in
newsprint and fine paper. However, magazine paper prices stabilised
at low levels.
Stora Ensos results in North America improved during the second
half of the year though they continue to be unsatisfactory. The
operating loss for the period July to December was USD 50 (EUR 52.9)
million before goodwill amortisation and impairment and other non-
recurring items; this compares with a USD 105 (EUR 111.1) million
loss for the first half of 2002 and a loss of USD 24 (EUR 26.8)
million during the second half of 2001. The cash flow after
investing activities was USD 113 (EUR 119.5) million, before non-
recurring items, compared with USD 25 (EUR 26.5) million during the
first half of 2002 and USD 114 (EUR 127.2) million during the second
half of 2001.
Market-related downtime totalled 39 000 tonnes during the second
half of the year, a significant reduction on the 194 000 tonnes
during the first half of 2002 and 224 000 tonnes during the second
half of 2001. Synergies, mainly derived from transfer of best
practices, totalled USD 46 (EUR 49) million for the second half of
the year and USD 91 (EUR 96) million for the full year. The synergy
target for 2002, USD 110 million, was not met because the capacity
utilisation rate was lower during the first half of the year and
prices were lower than when the target was set in 2000.
Profit Enhancement Plan
A Profit Enhancement Plan was announced in August as a further
important step in an existing programme to improve the operational
and financial performance of the North America Division. The plan
aims to improve Stora Ensos competitiveness significantly in North
America and position the operations to become profitable in the
worlds largest paper market. The plan includes targeted capital
investments of USD 250 (EUR 238) million, permanent closure of
production units and an additional workforce reduction of some 500
jobs.
Related investments include the Kimberly PM97 rebuild (USD 24
million, EUR 23 million), the Niagara PM43 rebuild (USD 16 million,
EUR 15 million), installation of a new TMP line for the PM1
Newsprint line at Port Hawkesbury (USD 58 million, EUR 55 million)
and rebuilding of Wisconsin Rapids PM16 (USD 45.5 million, EUR 43
million). These rebuilds are scheduled for 2003-2004.
Full Year Results
Financial Results (compared with the previous year)
Earnings per share were EUR 0.57 (EUR 0.94) and cash earnings per
share EUR 1.97 (EUR 2.34), both excluding non-recurring items.
Earnings per share (basic) were EUR -0.25 (EUR 1.03) and cash
earnings per share EUR 2.49 (EUR 2.43). The share write-down related
to the impairment was tax-deductible, resulting in a basic earnings
per share increase of EUR 0.34.
Sales totalled EUR 12 782.6 (EUR 13 508.8) million, a decrease of
EUR 726.2 million or 5.4% on the previous year. Average prices
decreased in all product areas in 2002. Sales volumes increased in
Magazine Paper, Packaging Boards and Timber Products but decreased
in Newsprint and to some extent in Fine Paper.
The operating profit excluding non-recurring items was EUR 926.5
million, or 7.2% of sales (EUR 1 495.2 million, or 11.1%), a
decrease of 38.0% on the previous year. Magazine Paper, Newsprint
and Fine Paper reported lower operating profits than in 2001, mainly
due to lower sales prices, while Packaging Boards and Timber
Products increased profits. The weakening of the US dollar decreased
the operating profit by EUR 28 million, which was offset by hedges.
Non-recurring items comprised mainly a EUR -25.1 million provision
for closing down the UK merchant Papyrus GB Limited, a EUR 76.7
million capital gain on the sale of Billerud AB shares in Sweden,
EUR -54.0 (USD -50.0) million from the North American Profit
Enhancement Plan and EUR -1 166.7 (USD -1 081) million of US
impairment charge, offset by EUR 24.4 million from a change in the
average exchange rate. Other non-recurring items were the EUR 8.8
million closure costs at Summa in Finland and a EUR 75.4 million
capital gain on the sale of forest assets in Finland and USA.
The share of results of associated companies amounted to EUR 14.6
(EUR 79.6) million, of which EUR -5.5 million came from Tornator
Timberland Oy, offset by EUR 5.4 million from Billerud AB and
positive results in other associated companies.
The operating profit for the year totalled EUR -151.6 (EUR 1 486.9)
million, including non-recurring items of EUR -1 078.1 million.
Net interest costs for the year totalled EUR 229.5 million, which is
4.6% of interest-bearing net liabilities and EUR 103.6 million less
than for the previous year, mainly due to lower interest rates and a
positive cash flow. Foreign exchange gains in the financials items
for the year were EUR 44.9 million and dividend income was EUR 9.2
million. The valuation of financial instruments and derivatives
resulted in a net loss of EUR 50.4 million; these items are valued
at market value, thus causing volatility in net financial items,
although of a non-cash nature.
Profit before taxes and minority interests, excluding non-recurring
items, amounted to EUR 734.9 (EUR 1 231.3) million.
Net taxes were a positive EUR 120.9 (EUR -299.6) million, thus
increasing EPS by EUR 0.14, though cumulative tax excluding non
recurring items represents an underlying rate of 31.4% (31.6%). The
write-down of the shares in the parent company relating to the
impairment depreciation in Stora Enso North America Corp. is tax
deductible according to a recently received advanced tax ruling. At
the current tax rate of 29%, the value of this tax deduction, which
is considered a non-recurring item, is EUR 298.4 million to be
utilised against 2002 results.
The minority interests in profits was EUR 0.1 (EUR 2.9) million,
leaving a net loss for the period of EUR -222.2 (profit of EUR
926.3) million.
The return on capital employed was 7.1% (10.8%) before non-recurring
items. Capital employed was EUR 11 242.4 million at the end of the
period, a net decrease of EUR 2 616.7 million since the beginning of
the year, reflecting the impairment charges in North America and the
weakening of the US dollar.
Cash flow from operations totalled EUR 2 083.8 (EUR 2 757.5)
million. The cash flow after investing activities amounted to EUR 1
247.7 (EUR 1 849.9) million and the cash earnings per share
excluding nonrecurring items EUR 1.97 (EUR 2.34).
Capital Expenditure and Asset Restructuring
Capital expenditure for the whole year totalled EUR 877.6 million,
which is 70.5% of depreciation; this is lower than planned as some
expenditures have run over to 2003. The main investments were the
new PM4 (EUR 254.1 million) and rebuilding of PM3 (EUR 28.6 million)
at Langerbrugge in Belgium, the rebuilding of Oulu PM6 in Finland
(EUR 16.5 million), the folding boxboard improvement at Baienfurt in
Germany (EUR 10.2 million) and finishing department investment at
Fors in Sweden (EUR 10.6 million).
In October Stora Ensos Board of Directors approved a comprehensive
Asset Restructuring Programme that will improve the Groups asset
quality in the Magazine and Fine Paper businesses. This plan is part
of an ongoing programme by Stora Enso to increase the overall
competitiveness of its assets, which include about a hundred
production units, whilst meeting the growing quality and volume
demands of its customers. The plan includes targeted investments,
machine specialisation measures and elimination of less-competitive
production assets. The Asset Restructuring Programme complies with
the Companys capital expenditure policy.
Research and Development
In 2002 Stora Enso spent EUR 91.6 million on research and
development, which is 0.7% of net sales, the emphasis being on
consumer boards and product development for digital and other
document printing. The product portfolio for different printing
technologies has also been further enhanced.
Changes in Group Composition
In March Stora Enso announced the sale of Mölndal Mill in Sweden to
KLIPPAN AB, a Swedish listed speciality paper company. This
divestment is part of the Fine Paper Divisions Asset Restructuring
Programme to concentrate investment in large, cost-efficient mills.
In May plans to restructure ownership of Group forestlands in
Finland and the USA were announced, the transactions actually taking
place in December. Stora Enso sold 59% of its shares in its Tornator
forest company to a new company established by Finnish institutional
investors, leaving it with a 41% share, now accounted for as an
associate; the aggregate market value of the forest assets sold was
EUR 502 million. At the same time Stora Enso North America sold some
300 000 acres (125 000 hectares) of forestland to Plum Creek Timber
Company, Inc. for USD 141 (EUR 142) million.
In June Stora Enso sold most of its shareholding in Billerud AB in a
secondary market transaction. The sale of the shares resulted in a
capital gain of EUR 76.7 million, and following the sale Stora Enso
now owns only 300 000 shares, which is 0.5% of the share capital and
votes.
Personnel
Staff numbers were reduced by 472 during the year to 42 461 at 31
December, mainly due to the divestment of Finnish forest assets, the
closure of PM1 at Summa in Finland and reductions in North America.
The average number of employees was 43 853, down 422 on the previous
year.
Changes in the Management Group
In March Keith B Russell joined the Group as Senior Vice President
of Investor Relations, reporting to the CEO.
Also in March Petri Wager was appointed Senior Vice President,
Corporate Marketing and Sales, and joined the Management Group,
replacing Sven von Holst.
In June, John Bergin, Senior Vice President, Speciality Papers
Business Group (Packaging Board Division), joined the Management
Group, replacing Ronald Swanson.
Issues with Competition Authorities
In August the European Commission informed Stora Enso that it had
terminated its investigation in the competition case related to
newsprint producer operations instituted in 1999, when the European
Union Statement of Objection alleged that there had been a newsprint
price cartel in the period 1989 to 1995; the case is now closed.
Changes in Share Capital
During 2002 a total of 99 200 A shares and 25 672 634 R shares were
repurchased by the Company, representing 2.9% of the shares and 1.0%
of the voting rights, and with a counter (nominal) value of EUR 43.8
million. The average price paid for A shares was EUR 12.28 and for R
shares EUR 11.14.
The Annual General Meeting (AGM) on 19 March 2002 decided to lower
the Companys share capital by EUR 13.8 million through the
cancellation of 813 200 A shares and 7 319 800 R shares. These
shares had been repurchased under the authorisation of the AGM in
2001.
The AGM on 19 March 2002 further authorised the Board to repurchase
and dispose of not more than 9 100 000 A shares and not more than
35 500 000 R shares in the Company. Repurchases started on 24 May
2002 and by 31 December 2002 the Group had repurchased 85 400 A
shares and 25 326 834 R shares, 0.9% and 71.3% of the authorised
amounts respectively.
By 31 December 2002 the Company had allocated 69 303 of the
repurchased R shares under the terms of the Stora Enso North America
Option Plan, leaving the Company holding 85 400 A shares and
28 257 531 R shares.
During the annual conversion period of 16-27 September 2002, a total
of 1 143 700 A shares were converted into R shares.
A total of 1 161 000 new R shares were issued under the terms of the
1997 warrants, of which 3 000 were registered in the Finnish Trade
Register on 9 January 2003. A total of 864 000 new R shares are
subscribable against warrants outstanding.
Share Capital
At the year end Stora Enso had 182 316 685 A shares and 717 461 614
R shares in issue, of which the Company held 85 400 A shares and
28 257 531 R shares with a nominal value of EUR 48.2 million. The
holding represents 3.1% of the Companys share capital and 1.1% of
the voting rights. Shareholders equity amounted to EUR 8 156.9
million. The nominal value of the issued share capital was EUR 1
529.6 million. Market capitalisation on the Helsinki Exchanges on 31
December was EUR 9.1 billion.
Significant Changes in Ownership
In 2002 the Finnish State reported sales of Stora Enso shares on 4
April and 14 June. Following the sales, the Finnish State holds
55 595 937 A shares and 41 483 501 R shares, representing 10.8% of
the share capital and 23.5% of the voting rights.
Events after the Period
On 16 January Stora Enso signed a new EUR 2.5 billion revolving
credit facility agreement with a group of 21 banks. The facility,
which has a maturity of five years and a margin of 0.425% p.a. over
Euribor, is for general corporate purposes including the refinancing
of existing syndicated facilities amounting to EUR 1.6 billion.
Outlook
In Europe demand for advertising-driven papers is stable at low
levels, but prices are under pressure mainly due to oversupply.
Office paper demand has weakened seasonally, but it is expected to
recover slightly during the first quarter of 2003. Demand and prices
for packaging boards and wood products are expected to remain stable
in the near term.
In North America demand improved from low levels in advertising-
driven paper grades towards the end of 2002. This positive trend has
continued thus far in 2003. Demand for wood products is stable and
prices will be dependent on the supply and demand balance in the
near future.
The further continuation of the positive trend in North America, and
indeed the outlook for global paper markets, depends largely on the
outcome of the current geopolitical situation.
Annual General Meeting
The Annual General Meeting will be held at Finlandia Hall, Helsinki,
Finland on Thursday 20 March 2003, beginning at 4.00 p.m. (Finnish
time).
Proposals to the Annual General Meeting
The Board of Directors will propose redemption of the shares in
treasury and a new repurchase programme to the Annual General
Meeting.
Distribution of Dividend
The Board of Directors will propose to the forthcoming Annual
General Meeting of Shareholders that a dividend of EUR 0.45 per
share be paid for the financial year ending 31 December 2002. If the
proposal is approved, the dividend will be paid on 4 April to
shareholders entered on the dividend record date of 25 March in the
register of shareholders maintained by the Finnish Central
Securities Depository, Swedish VPC and US Citibank.
This report is unaudited.
Helsinki, 30 January 2003
Stora Enso Oyj,
Board of Directors
Product Areas (compared with the previous quarter)
Magazine Paper
EUR Change
million 2001 2002 Q1/02 Q2/02 Q3/02 Q4/02 Q4/Q3 %
Sales 3 449.0 3 036.8 767.3 721.0 747.1 801.4 7.3
Operating
profit 346.9 79.3 31.6 2.3 19.6 25.8 31.6
% of sales 10.1 2.6 4.1 0.3 2.6 3.2
ROOC, %* 10.1 2.6 3.8 0.3 2.6 3.8
Deliveries,
1000 t 3 871 3 908 932 910 986 1 080 9.5
* ROOC = 100% x Operating profit/Operating capital
Magazine Paper sales were EUR 801.4 million, 7% up on the previous
quarter, mainly due to the usual seasonal hike in the fourth
quarter. The operating profit was EUR 25.8 million, up 32% on the
previous quarter due to higher sales volumes. Market-related
production curtailments totalled 79 000 tonnes in Europe and 3 000
tonnes in North America.
In Europe demand for uncoated magazine paper slowed at the year end
to slightly below the previous years level. Coated magazine grades
on the other hand have enjoyed improved demand since the spring,
resulting in modest overall growth. Sales prices have been fairly
stable for uncoated magazine papers, whereas tough competition has
led to price declines for coated magazine papers.
Producer inventories have been kept at reasonable levels, but
customer inventories are reported to be very low.
The short-term outlook for printed advertising and magazine paper
consumption remains stable volume-wise, but with ongoing price
pressure due to overcapacity in LWC grades.
In North America coated magazine and SC paper shipments improved
during the quarter, continuing a favourable trend that began during
the second quarter of 2002. Demand strengthened largely because of
an increase in the number of advertising pages in magazines.
Despite better than seasonal strengthening in demand, prices
remained at very low levels. Prices for coated magazine papers and
SC papers are currently rather stable after being under pressure
earlier in the year.
Newsprint
EUR Change
million 2001 2002 Q1/02 Q2/02 Q3/02 Q4/02 Q4/Q3 %
Sales 1 933.9 1 641.5 412.8 413.2 403.2 412.3 2.3
Operating
profit 508.8 240.8 72.8 61.1 64.5 42.4 -34.3
% of
sales 26.3 14.7 17.6 14.8 16.0 10.3
ROOC, %* 41.4 19.1 24.3 20.4 20.7 13.0
Deliveries,
1000 t 3 031 2 899 706 726 717 750 4.7
* ROOC = 100% x Operating profit/Operating capital
Newsprint sales were EUR 412.3 million, up 2% on the previous
quarter. The operating profit was EUR 42.4 million, down 34% on the
previous quarter. The profits were down due to curtailments which
resulted in lower production and increased costs. Market-related
production curtailments totalled 106 000 tonnes in Europe; there
were no production curtailments in North America.
Western European markets showed no sign of recovery in the fourth
quarter because weakness in advertising persisted. As a result, the
increase in sales was due solely to seasonal factors. Inventories
were decreased by market-related production curtailments and higher
sales volumes. Prices were firm in Western Europe due to annual
contracts. Newsprint markets are expected to remain difficult in
Western Europe. European prices will decrease and market-related
curtailments will continue.
In Northern America the first price increase in two years was agreed
and the long downturn in prices came to an end. The markets are
improving slowly but still remain weak and further curtailments will
be needed.
Fine Paper
EUR Change
million 2001 2002 Q1/02 Q2/02 Q3/02 Q4/02 Q4/Q3 %
Sales 3 617.5 3 108.0 827.1 787.0 751.0 742.9 -1.1
Operating
profit 394.5 292.6 93.1 73.1 70.2 56.2 -19.9
% of sales 10.9 9.4 11.3 9.3 9.3 7.6
ROOC, %* 9.1 8.4 10.0 8.2 8.3 6.8
Deliveries,
1000 t 3 191 3 156 807 792 786 771 -1.9
* ROOC = 100% x Operating profit/Operating capital
Fine Paper sales were EUR 742.9 million, 1% down on the previous
quarter. The operating profit was EUR 56.2 million, down 20% on the
previous quarter as a result of increased fixed costs due to market
related curtailments, holiday stoppages and lower performance in the
uncoated area. Market-related production curtailments totalled 80
000 tonnes, all in Europe.
In Western Europe the order inflow for coated fine papers was higher
than in the preceding two years, although it slackened in mid
December because of the long holiday period. Improved demand did not
compensate for the subsequent capacity increase, resulting in short
order books.
Prices were quite stable during the quarter. Mill stocks in Western
Europe are still at a high level. This, in combination with
oversupply in the market, results in continuous price pressure.
Demand for uncoated fine paper has been below the normal seasonal
level due to general economic weakness and lower year-end demand.
There were some price decreases in the market in December, although
order books are normal. The uncoated fine paper market is expected
to recover towards the end of the first quarter of 2003.
In North America coated fine paper shipments were strong during the
quarter, exceeding seasonal expectations. Order books remained
healthy throughout the period, strengthened by improved demand and a
shortage of North American capacity due to permanent machine and
mill closures during the past two years. This improved balance
between supply and demand combined with the weakening US dollar
resulted in price increases in October and January. Producer and
customer inventories are reported to be lower than a year ago. Some
seasonal slowdown occurred towards the end of the year.
The normal seasonal pickup at the end of first quarter of 2003 is
expected.
Packaging Boards
EUR Change
million 2001 2002 Q1/02 Q2/02 Q3/02 Q4/02 Q4/Q3 %
Sales 2 724.0 3 043.4 766.2 781.9 758.6 736.7 -2.9
Operating
profit 346.2 365.8 100.6 70.7 116.2 78.3 -32.6
% of sales 12.7 12.0 13.1 9.0 15.3 10.6
ROOC, %* 12.8 12.0 12.7 9.2 15.2 10.3
Deliveries,
1000 t 2 765 3 186 778 823 808 777 -3.8
* ROOC = 100% x Operating profit/Operating capital
Packaging Board sales were EUR 736.7 million, down 3% on the
previous quarter due to holiday maintenance stoppages. The operating
profit was EUR 78.3 million, down 33% mainly due to lower volumes
and higher fixed costs related to the maintenance downtime in
December. Marketrelated production curtailments totalled 58 000
tonnes in Europe, mainly in cartonboards.
The order inflow was stable for most paper and board grades,
although the fourth quarter is a low season for some consumer board
and speciality paper products. In corrugated boards demand was
slightly higher than in the previous quarter, whereas the market for
paper cores was challenging. Prices improved in some boards and
speciality papers.
Demand and prices are expected to remain stable in the near future.
There may be some market-related downtime in the first quarter.
Growth is expected to continue in Russia and the Baltic States.
Timber Products
EUR Change
million 2001 2002 Q1/02 Q2/02 Q3/02 Q4/02 Q4/Q3 %
Sales 1 180.5 1 235.2 286.1 320.8 314.1 314.2 0.0
Operating
profit 12.6 46.8 11.2 14.1 9.7 11.8 21.6
% of
sales 1.1 3.8 3.9 4.4 3.1 3.8
ROOC, %* 3.1 11.1 10.2 13.4 9.2 11.2
Deliveries,
1000 m3 4 860 5 112 1 203 1 344 1 252 1 313 4.9
* ROOC = 100% x Operating profit/Operating capital
Timber sales were EUR 314.2 million, similar to the previous quarter
as production increased and the market was satisfactory. The
operating profit was EUR 11.8 million, up 21.6% on the previous
quarter due to higher sales prices.
Market conditions for wood products have varied between stable and
slightly positive. Although consumption indicators are pointing
slightly downwards in Europe, Japan and North America, overall
consumption has been rather high. The balance between supply and
demand has been reasonable, allowing improvements in sales prices,
other than in North America. However, exchange rate changes and
transport cost increases have slowed mill net price rises.
Market conditions are expected to remain slightly positive through
the first half of 2003, but profitability will be under pressure
from currency effects and freight rates. The US market will not
recover until the current oversupply eases. Low inventories and the
coming spring season will keep European and Japanese markets stable.
Merchants
Sales were EUR 169.7 million, 9% up on the previous quarter mainly
due to normal seasonal factors. The operating profit was EUR 3.4
million, up EUR 2.2 million on the previous quarter.
Sales prices have been under pressure in merchanted grades.
Inventories at the merchants are low and paper can be replenished
from mills with short lead times. The printing industry continues to
be financially pressed.
There are no signs of an upturn yet in the markets in Europe, except
possible seasonal pick-up.
Forest
Forest sales were EUR 516.9 million, 11% up on the previous quarter
mainly due to seasonal factors. The operating profit was EUR 21.9
million, down 13% on the previous quarter due to the lower margin in
wood sales in Finland, lower capital gains and divestment of Finnish
forestry operations.
Deliveries in Finland, Sweden and Germany totalled 10.8 million m
(solid wood under bark), 8% up on the previous quarter. Imports were
similar to the previous quarter.
Felling in the Groups forests at 1.5 million m³ was 27% more than
in the previous quarter.
Financials
Accounting Principles
This Interim Report is in compliance with IAS 34 Interim Financial
Reporting. The accounting policies and methods of computation used
in this Interim Report are the same as used in the last annual
report.
New accounting rules
The new accounting rule IAS 41 Accounting for Biological Assets will
be implemented from 1 January 2003. This means that Stora Ensos
biological assets in the form of standing trees will be valued at
market. The initial valuation at that date will be entered directly
in the Balance Sheet to equity net of related deferred tax, the
gross amount being added to assets. Periodic future changes due to
growth, price and other premises changes will be entered in the
Income Statement. The initial effect will be set out in the Annual
Report in the Financials section.
Key Ratios
Q1/01 Q2/01 Q3/01 Q4/01 2001 Q1/02 Q2/02 Q3/02 Q4/02 2002
Earnings per share (basic), EUR
0.31 0.17 0.24 0.31 1.03 0.18 0.15 -1.12 0.54 -0.25
Earnings per share excl. non recurring items, EUR
0.31 0.18 0.23 0.22 0.94 0.18 0.12 0.15 0.12 0.57
Cash earnings per share (CEPS), EUR
0.65 0.53 0.59 0.67 2.43 0.55 0.52 0.50 0.81 2.49
CEPS excl. non recurring items, EUR
0.65 0.54 0.58 0.58 2.34 0.55 0.48 0.51 0.44 1.97
Return on capital employed (ROCE), %
15.2 9.7 10.3 7.9 10.7 7.8 7.1 -30.0 10.6 -1.6
ROCE excl.non recurring items, %
15.2 9.9 9.8 8.4 10.8 7.8 5.6 7.9 7.1 7.1
Return on equity (ROE), %
13.1 7.2 9.7 12.2 10.4 7.2 6.2 -45.2 23.7 -3.3
Debt/equity ratio
0.59 0.62 0.55 0.53 0.53 0.59 0.46 0.53 0.37 0.37
Equity per share, EUR
9.30 9.54 9.62 10.03 10.03 9.81 9.87 8.69 9.49 9.49
Equity ratio, %
39.9 41.0 42.5 44.0 44.0 42.7 45.2 42.6 45.3 45.3
Operating profit, % ofsales
14.4 9.9 11.2 8.2 11.0 8.5 7.5 -31.3 9.5 -1.2
Operating profit excl. non recurring items,% of sales
14.4 10.2 10.6 8.7 11.1 8.5 5.9 8.2 6.4 7.2
Capital expenditure, EUR million
176 215 182 284 857 155 183 208.1 331.4 877.6
Capital expenditure, % of sales
4.8 6.4 5.7 8.7 6.3 4.9 5.7 6.7 10.3 6.9
Capital employed, EUR million
13 611 14 245 13 556 13 859 13 859 14 110 12 990 11 816 11 242 11 242
Interest -bearing net liabilities, EUR million
5 040 5 450 4 799 4 820 4 820 5 263 4 113 4 115 3 055 3 055
Average number of employees
42 570 43 896 44 182 44 275 44 275 42 572 43 568 43 757 43 853 43 853
Average number of shares (million)
- periodic
906.2 903.2 901.1 897.3 901.5 896.9 896.5 888.5 876.8 889.6
- cumulative
906.2 904.7 903.5 901.5 901.5 896.9 895.8 894.0 889.6 889.6
- cumulative,diluted
908.5 906.7 905.8 902.3 902.3 897.8 896.8 894.9 890.4 890.4
Key Exchange Rates for the Euro
One Euro is Closing Rate Average Rate
31 Dec 2001 31 Dec 2002 31 Dec 2001 31 Dec 2002
SEK 9.3012 9.1528 9.2481 9.1551
USD 0.8813 1.0487 0.8959 0.9455
GBP 0.6085 0.6505 0.6217 0.6285
CAD 1.4077 1.6550 1.3875 1.4836
Condensed Consolidated Income Statement
EUR million 2001 2002
Sales 13 508.8 12 782.6
Expenses less other operating income -8 519.9 -8 210.3
Personnel expenses -2 234.4 -2 282.0
Depreciation, amortisation and
impairment charges -1 267.6 -2 441.9
Operating Profit 1 486.9 -151.6
Share of results of associated
companies 79.6 14.6
Net financial items -343.5 -206.2
Profit before Tax and Minority
Interests 1 223.0 -343.2
Income tax expense -299.6 120.9
Profit after Tax 923.4 -222.3
Minority interests 2.9 0.1
Net Profit for the Period 926.3 -222.2
Key Ratios
Basic earnings per share, EUR 1.03 -0.25
Diluted earnings per share, EUR 1.03 -0.25
Condensed Consolidated Cash Flow Statement
EUR million 2001 2002
Cash Flow from Operating Activities
Operating profit 1 486.9 -151.6
Adjustments 1 219.2 2 256.2
Change in net working capital 51.4 -52.1
Change in short-term interest-bearing
receivables -222.6 -495.1
Cash Flow Generated by Operations 2 534.9 1 557.4
Net financial items -306.8 -69.1
Income taxes paid -699.6 -62.1
Net Cash Provided by Operating
Activities 1 528.5 1 426.2
Acquisitions -376.2 -56.3
Proceeds from sale of fixed assets
and shares 155.0 751.0
Capital expenditure -857.1 -877.6
Proceeds from the long-term
receivables, net 193.6 -74.4
Net Cash Used in Investing Activities -884.7 -257.3
Cash Flow from Financing Activities
Change in long-term liabilities -351.3 -487.6
Change in short-term borrowings -216.1 -56.3
Dividends paid -407.4 -403.6
Proceeds from issue of share capital 31.9 -
Purchase of own shares -199.8 -286.9
Net Cash Used in Financing Activities -1 142.7 -1 234.4
Net Increase in Cash and Cash
Equivalents -498.9 -65.5
Translation differences on cash
holdings 1.5 -13.0
Cash and bank at the beginning of
period 744.4 247.0
Cash and Cash Equivalents at Period
End 247.0 168.5
Property, Plant and Equipment, Intangible Assets and Goodwill
EUR million 2001 2002
Carrying value at 1 January 15 103.4 14 701.2
Acquisition of subsidiary companies 148.5 150.4
Additions 857.1 877.6
Disposals -288.5 -571.1
Depreciation/amortisation, impairment
and other movements -1 119.3 -3 217.2
Balance Sheet Total 14 701.2 11 940.9
Acquisitions of Subsidiary Companies
Property, plant and equipment 25.1 150.4
Borrowings - -71.1
Other assets, less liabilities 98.5 -23.0
Fair value of net assets 123.6 56.3
Goodwill 123.4 -
Total Purchase Consideration 247.0 56.3
Borrowings
EUR million 2001 2002
Non-current borrowings 5 182.0 650.4
Current borrowings 1 227.5 4 525.2
6 409.5 5 175.6
Carrying value at 1 January 6 855.5 6 409.5
Debt acquired with new subsidiaries - 71.1
Proceeds from / -payments of
borrowings (net) -584.2 -662.4
Translation difference 138.2 -642.6
Total Borrowings 6 409.5 5 175.6
Condensed Consolidated Balance Sheet
Assets
EUR million 31 Dec 2001 31 Dec 2002
Fixed Assets and Other Long-term
Investments
Property, plant & equipment,
intangibles and goodwill O 14 701.2 11 940.9
Unlisted shares O 181.0 148.5
Investment in associated companies I 306.7 218.7
Listed securities I 197.4 162.2
Non-current loan receivables I 505.4 480.6
Deferred tax assets T 28.1 52.7
Other non-current assets O 257.9 241.1
16 177.7 13 244.7
Current Assets
Inventories O 1 600.0 1 565.0
Tax receivables T 224.3 243.1
Short-term receivables O 1 976.3 1 902.4
Current portion of loan
receivables I 333.1 1 090.5
Cash and cash equivalents I 247.0 168.5
4 380.7 4 969.5
Total assets 20 558.4 18 214.2
Shareholders Equity and Liabilities
EUR million 31 Dec 2001 31 Dec 2002
Shareholders Equity 8 989.0 8 156.9
Minority Interests 50.2 30.4
Long-term Liabilities
Pension provisions O 774.0 747.0
Deferred tax liabilities T 2 011.0 1 787.3
Other provisions O 153.6 194.5
Long-term debt I 5 182.0 4 525.2
Other long-term liabilities O 51.4 36.9
8 172.0 7 290.9
Current Liabilities
Interest-bearing liabilities I 1 227.5 650.4
Tax liabilities T 488.7 537.7
Other current liabilities O 1 631.0 1 547.9
3 347.2 2 736.0
Total Liabilities 11 519.2 10 026.9
Total Shareholders Equity and
Liabilities 20 558.4 18 214.2
Items designated with Oö are included in operating capital.
Items designated with Iö are included in interest-bearing net
liabilities.
Items designated with Tö are included in the tax liability.
Statement of Changes in Shareholders Equity
Retained
Share Share Treasury Earni-
EUR million Capital Premium Shares OCI CTA ngs Total
Balance at
1 January
2001 1 576.3 1 823.2 -173.7 - -69.6 5 414.6 8 570.8
Effect of
adopting
IAS 39 - - - 75.7 - -8.5 67.2
Repurchase
of Stora
Enso Oyj
shares - - -199.8 - - - -199.8
Cancellation
of Stora
Enso Oyj
shares -39.4 -208.6 248.0 - - - 0.0
Dividend
(EUR 0.45
per share) - - - - - -407.4 -407.4
Share issue 4.6 31.1 - - - - 35.7
Options
exercised
(Consolidated
Papers,Inc.) - -6.2 - - - - -6.2
Net profit
for the
period - - - - - 926.3 926.3
OCI entries - - - -17.1 - - -17.1
Translation
adjustment - - - - 19.5 - 19.5
Balance at
31 December
2001 1 541.5 1 639.5 -125.5 58.6 -50.1 5 925.0 8 989.0
Repurchase
of Stora
Enso Oyj
shares - - -286.8 - - - -286.8
Cancellation
of Stora
Enso Oyj
shares -13.8 -83.6 97.4 - - - 0.0
Dividend
(EUR 0.45
per share) - - - - - -403.6 -403.6
Share issue 1.9 -1.9 - - - - 0.0
Net loss
for the
period - - - - - -222.2 -222.2
OCI entries - - - 174.8 - - 174.8
Translation
adjustment - - - - -94.3 - -94.3
Balance at
31 December
2002 1 529.6 1 554.0 -314.9 233.4 -144.4 5 299.2 8 156.9
CTA = Cumulative Translation Adjustment
OCI = Other Comprehensive Income
Commitments and Contingencies
EUR million 31 Dec 2001 31 Dec 2002
On own Behalf
Pledges given 18.7 0.8
Mortgages 396.6 111.4
On Behalf of Associated Companies
Mortgages 1.0 1.0
Guarantees 68.3 59.3
On Behalf of Others
Pledges given 0.6 0.3
Guarantees 98.0 16.8
Other Commitments, Own
Leasing commitments, in next 12 months 43.4 41.5
Leasing commitments, after next 12
months 257.3 237.2
Pension liabilities 2.1 2.7
Other commitments 92.5 71.5
Total 978.5 542.5
Pledges given 19.3 1.1
Mortgages 397.6 112.4
Guarantees 166.3 76.1
Leasing commitments 300.7 278.7
Pension liabilities 2.1 2.7
Other commitments 92.5 71.5
Total 978.5 542.5
Net Fair Values of Derivative Financial Instruments EUR million
31 Dec 31 Dec
2001 2002
Positi-
ve Negati-
Net Fair ve Net
Fair Value Fair Fair
Values s Values Values
Interest rate swaps 27.6 205.4 2.6 202.8
Interest rate options 0.0 - - -
Cross-currency swaps -50.6 1.6 23.2 -21.6
Forward contracts 23.2 192.0 11.7 180.3
Commodity contracts 33.1 252.4 0.0 252.4
Equity swaps 23.0 0.0 55.5 -55.5
Total 56.3 651.4 93.0 558.4
Nominal Values of Derivative Financial Instruments EUR million
31 Dec 31 Dec
2001 2002
Interest Rate Derivatives
Interest rate swaps
Maturity under 1 year 16.1 109.3
Maturity 2-5 years 766.5 922.8
Maturity 6-10 years 947.5 1 088.1
1 730.1 2 120.2
Interest rate options 500.0 -
Total 2 230.1 2 120.2
Foreign Exchange Derivatives
- Cross-currency swap agreements 243.7 216.5
- Forward contracts 7 526.2 3 902.4
Total 7 769.9 4 118.9
Commodity derivatives
Commodity contracts 270.1 538.6
Total 270.1 538.6
Equity swaps
Equity swaps 131.0 216.5
Total 131.0 216.5
Sales by Product Area
EUR million
Q1/01 Q2/01 Q3/01 Q4/01 2001
Magazine Paper
910.2 847.6 831.7 859.5 3 449.0
Newsprint
501.7 490.7 471.9 469.6 1 933.9
Fine Paper
1 021.3 904.1 838.6 853.5 3 617.5
Packaging Boards
701.9 704.2 672.8 645.1 2 724.0
Timber Products
307.3 311.8 266.2 295.2 1 180.5
Merchants
231.4 211.5 188.9 208.5 840.3
Forest
511.5 442.3 410.3 461.5 1 825.6
Other
-548.3 -523.8 -479.9 -510.0 -2 062.0
Total
3 637.0 3 388.4 3 200.5 3 282.9 13 508.8
Sales by Product Area
EUR million
Q1/02 Q2/02 Q3/02 Q4/02 2002
Magazine Paper
767.3 721.0 747.1 801.4 3 036.8
Newsprint
412.8 413.2 403.2 412.3 1 641.5
Fine Paper
827.1 787.0 751.0 742.9 3 108.0
Packaging Boards
766.2 781.9 758.6 736.7 3 043.4
Timber Products
286.1 320.8 314.1 314.2 1 235.2
Merchants
211.7 183.4 155.8 169.7 720.6
Forest
497.9 479.2 464.7 516.9 1 958.7
Other
-540.2 -453.5 -485.9 -482.0 -1 961.6
Total
3 228.9 3 233.0 3 108.6 3 212.1 12 782.6
Operating Profit by Product Area excluding
Non-recurring Items and Goodwill
EUR million
Q1/01 Q2/01 Q3/01 Q4/01 2001
Magazine Paper
113.6 72.3 83.9 77.1 346.9
Newsprint
134.1 125.6 128.7 120.4 508.8
Fine Paper
167.6 81.9 70.6 74.4 394.5
Packaging Boards
115.1 90.2 97.5 43.4 346.2
Timber Products
5.6 7.9 2.5 -3.4 12.6
Merchants
0.2 -1.3 -1.6 -4.5 -7.2
Forest
25.3 26.8 15.9 20.1 88.1
Other
-1.9 -17.7 -21.9 -1.7 -43.2
Amortisation on consolidation goodwill
-36.6 -39.3 -36.6 -39.0 -151.5
Operating Profit excl. non recurring Items
523.0 346.4 339.0 286.8 1 495.2
Non recurring items
- -9.6 18.0 -16.7 -8.3
Operating Profit Total (IAS)
523.0 336.8 357.0 270.1 1 486.9
Net financial items
-121.8 -121.4 -67.7 -32.6 -343.5
Share of results of associated companies
28.3 23.3 16.3 11.7 79.6
Profit Before Tax and Minority Interests
429.5 238.7 305.6 249.2 1 223.0
Income tax expense
-146.0 -82.2 -93.9 22.5 -299.6
Profit after Tax
283.5 156.5 211.7 271.7 923.4
Minority interests
-0.2 -1.7 2.0 2.8 2.9
Net Profit for the Period
283.3 154.8 213.7 274.5 926.3
Operating Profit by Product Area excluding
Non-recurring Items and Goodwill
EUR million
Q1/02 Q2/02 Q3/02 Q4/02 2002
Magazine Paper
31.6 2.3 19.6 25.8 79.3
Newsprint
72.8 61.1 64.5 42.4 240.8
Fine Paper
93.1 73.1 70.2 56.2 292.6
Packaging Boards
100.6 70.7 116.2 78.3 365.8
Timber Products
11.2 14.1 9.7 11.8 46.8
Merchants
-1.0 1.9 1.2 3.4 5.5
Forest
23.4 25.7 25.3 21.9 96.3
Other
-16.6 -17.5 -9.3 -8.4 -51.8
Amortisation on consolidation goodwill
-41.1 -41.2 -42.0 -24.5 -148.8
Operating Profit excl. non recurring Items
274.0 190.2 255.4 206.9 926.5
Non recurring items
- 51.6 -1 229.5 99.8 -1 078.1
Operating Profit Total (IAS)
274.0 241.8 -974.1 306.7 -151.6
Net financial items
-45.2 -44.0 -56.2 -60.8 -206.2
Share of results of associated companies
11.7 8.4 -2.4 -3.1 14.6
Profit Before Tax and Minority Interests
240.5 206.2 -1 032.7 242.8 -343.2
Income tax expense
-79.4 -68.3 36.6 232.0 120.9
Profit after Tax
161.1 137.9 -996.1 474.8 -222.3
Minority interests
-0.1 0.1 -2.6 2.7 0.1
Net Profit for the Period
161.0 138.0 -998.7 477.5 -222.2
Operating Profit by Product Area
EUR million
Q1/01 Q2/01 Q3/01 Q4/01 2001
Magazine Paper
98.1 55.1 68.6 60.9 282.7
Newsprint
132.5 124.0 127.7 118.9 503.1
Fine Paper
152.7 57.3 55.9 58.8 324.7
Packaging Boards
113.5 88.5 95.8 41.7 339.5
Timber Products
4.1 6.3 1.0 -6.2 5.2
Merchants
-0.5 -2.0 -2.3 -5.2 -10.0
Forest
25.3 26.8 15.9 20.1 88.1
Other
-2.7 -19.2 -5.6 -18.9 -46.4
Operating Profit Total
523.0 336.8 357.0 270.1 1 486.9
Net financial items
-121.8 -121.4 -67.7 -32.6 -343.5
Share of results of associated companies
28.3 23.3 16.3 11.7 79.6
Profit Before Tax and Minority Interests
429.5 238.7 305.6 249.2 1 223.0
Income tax expense
-146.0 -82.2 -93.9 22.5 -299.6
Profit after Tax
283.5 156.5 211.7 271.7 923.4
Minority interests
-0.2 -1.7 2.0 2.8 2.9
Net Profit for the Period
283.3 54.8 213.7 274.5 926.3
Operating Profit by Product Area
EUR million
Q1/02 Q2/02 Q3/02 Q4/02 2002
Magazine Paper
14.1 -14.4 -1 033.7 42.5 -991.5
Newsprint
71.4 59.7 63.2 41.0 235.3
Fine Paper
80.1 60.6 -121.4 50.0 69.3
Packaging Boards
96.4 61.2 112.7 75.4 345.7
Timber Products
7.9 9.4 6.5 8.6 32.4
Merchants
-1.7 -25.2 0.8 1.5 -24.6
Forest
23.4 25.7 25.3 47.8 122.2
Other
-17.6 64.8 -27.5 39.9 59.6
Operating Profit Total
274.0 241.8 -974.1 306.7 -151.6
Net financial items
-45.2 -44.0 -56.2 -60.8 -206.2
Share of results of associated companies
11.7 8.4 -2.4 -3.1 14.6
Profit Before Tax and Minority Interests
240.5 206.2 -1 032.7 242.8 -343.2
Income tax expense
-79.4 -68.3 36.6 232.0 120.9
Profit after Tax
161.1 137.9 -996.1 474.8 -222.3
Minority interests
-0.1 0.1 -2.6 2.7 0.1
Net Profit for the Period
161.0 138.0 -998.7 477.5 -222.2
Stora Enso shares
Closing
price Helsinki, EUR Stockholm, SEK New York, USD
Series A Series R Series A Series R ADRs
October 10.40 10.50 95.00 95.50 10.35
November 12.30 12.30 109.50 110.00 11.85
December 10.10 10.05 91.00 90.50 10.46
Trading
volume Helsinki Stockholm New York
Series
Series A Series R A Series R ADRs
October 112 177 85 477 027 328 992 38 897 870 1 862 500
November 782 807 60 206 649 203 080 27 578 351 1 733 200
December 3 973 478 49 108 490 316 332 26 145 817 1 274 200
Total 4 868 462 194 792 166 848 404 92 622 038 4 869 900
www.storaenso.com
www.storaenso.com/investors
Publication dates for financial information
Interim Review for January March 2003 29 April 2003
Interim Review for January June 2003 24 July 2003
Interim Review for January September 2003 23 October 2003
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 believesö,
expectsö, anticipatesö, foreseesö, 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 differ materially 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 Groups targeted customers, success of existing and
future collaboration arrangements, changes in business strategy or
development plans or targets, changes in the degree of protection
created by the Groups 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
Groups 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 Groups
principal geographic markets or fluctuations in exchange and
interest rates.
STORA ENSO OYJ
p.p. Jussi Siitonen Pauli Mäkimaa
