Stora Enso takes next step towards more focused, efficient and faster-reacting company
Annual cost savings target from Business Area consolidation and significantly
leaner administration EUR 250 million by end of 2010
STORA ENSO OYJ STOCK EXCHANGE RELEASE 23 April 2009 at 5.59 GMT
EUR 250 million annual cost reduction; planned headcount reduction up to 2 000
mainly from leaner management structures
Majority of cost savings by end of 2009, remainder by end of 2010
New Group Executive Team and consolidated Business Area structure
Simplified operating models for Group functions
Stora Enso is planning to reorganise its operations with the aim of reducing
annual costs by EUR 250 million, majority of the reduction to be achieved during
2009 and the remainder by the end of 2010. Up to 2 000 employees will be
affected, mainly as a result of the leaner management structures. The final
outcome will depend on the result of the co-determination procedure.
“In the past two years Stora Enso has taken several proactive and even early
steps to position the Group for a strong future. From divestments that
strengthened our balance sheet to difficult restructuring programs in operations
and de-layering the organisation, which together reduced our total fixed costs
by 4 to 5 margin points in two years, we have had one consistent goal - to make
the Group stronger, faster reacting and more focused. And yet - with the
dramatic changes in our operating environment - this has been only the beginning
of our journey,” says Stora Enso CEO Jouko Karvinen.
“Today we are also taking the next step to make Stora Enso a simpler,
faster-reacting and more focused Group. Key objectives of this plan are
consolidating the organisation and building stronger and more powerful
businesses that can operationally and strategically react quickly in a rapidly
changing environment. We aim to simplify decision-making, and move decisions
clearly closer to the businesses serving our customers.”
The planned actions are partially motivated by the recent, radical change in the
operating environment of the forest products industry. The global financial
crisis and sharp economic downturn require rapid responses to adapt to change.
The savings will be obtained, according to the plan, mainly by reducing top and
middle management and by downscaling staff functions and country organisations
by one third. In addition, Group functions such as Wood Supply and Logistics
will have a revised operational model and be brought closer to the Business
Areas.
“The critical supply organisations Wood Supply, Logistics and Energy will be
managed by Business Area driven user boards to increase the clarity and
accountability of these P/L and balance sheet responsible organisations. Other
Group functions, including Human Resources, Communications, R&D and Purchasing,
will be focused by reducing Group and country-level organisations to the
absolute minimum where quantifiable cross Business Area economies of scale are
clearly greater than the benefits of being close to the business organisations,”
says Jouko Karvinen.
New Business Area Structure
The new organisational structure as of 23 April 2009 will ensure strategic
flexibility for possible industry consolidation. The new Business Areas are:
Publication Paper (comprising the former Newsprint & Book Paper and Magazine
Paper) headed by Juha Vanhainen
Packaging (comprising the former Consumer Board and Industrial Packaging) headed
by Mats Nordlander
Fine Paper headed by Hannu Alalauri
Wood Products headed by Hannu Kasurinen
The current transparent external segment reporting will not be changed.
New Group Executive Team
As of 23 April 2009, the Group Executive Team comprises the following eight
members:
Jouko Karvinen, CEO
Hannu Alalauri, EVP, Fine Paper
Hannu Kasurinen, EVP, Wood Products
Mats Nordlander, EVP, Packaging
Markus Rauramo, CFO
Bernd Rettig, EVP, Technology and Strategy, Country Manager Germany
Elisabet Salander Björklund, EVP, Wood Supply, HR, Sustainability, Country
Manager Sweden, regional responsibility for Latin America
Juha Vanhainen, EVP, Publication Paper, Country Manager Finland
Veli-Jussi Potka, who was a member of the Group Executive Team and head of the
Industrial Packaging Business Area, has been appointed Head of Strategy and M&A,
and Packaging Products within the new Packaging Business Area. Aulis Ansaharju,
who was a member of the Group Executive Team and head of the Fine Paper Business
Area, is responsible for the EUR 250 million cost savings and change project
announced today, and in that role he will report to CEO Jouko Karvinen.
Changes below the Group Executive Team will be in place by 1 July 2009 at the
latest. Stora Enso will proactively help the affected employees to find
alternative employment within or outside the Group.
For further information, please contact:
Jouko Karvinen, CEO, tel. +358 2046 21410
Markus Rauramo, CFO, tel. +358 2046 21121
Lauri Peltola, Head of Group Communications, tel. +358 50 570 5606
Keith B Russell, SVP, Investor Relations, tel. +44 7775 788 659
Ulla Paajanen-Sainio, VP, Investor Relations and Financial Communications, tel.
+358 40 763 8767
www.storaenso.com
www.storaenso.com/investors
PRESS CONFERENCE IN HELSINKI
You are most welcome to a press conference in Helsinki today hosted by CEO Jouko
Karvinen and CFO Markus Rauramo regarding the reorganisation and future of the
Group. The conference will be held in Finnish and will not be webcast.
Time: 13.00 Finnish time
Location: Bank Auditorio
Address: Unioninkatu 22, Helsinki
Hosts: Jouko Karvinen, CEO
Markus Rauramo, CFO
Stora Enso is a global paper, packaging and forest products company producing
newsprint and book paper, magazine paper, fine paper, consumer board, industrial
packaging and wood products. The Group has 32 000 employees and 85 production
facilities in more than 35 countries worldwide, and is a publicly traded company
listed in Helsinki and Stockholm. Our annual production capacity is 12.7 million
tonnes of paper and board, 1.5 billion square metres of corrugated packaging and
6.9 million cubic metres of sawn wood products, including 3.2 million cubic
metres of value-added products. Our sales in 2008 were EUR 11.0 billion.
STORA ENSO OYJ
Jari Suvanto Ulla Paajanen-Sainio
