As already announced, Stora Enso will record two non-recurring items (NRI) in its third quarter of 2007 results. These non-recurring items will have a total negative net impact of EUR 550 million on operating profit and a positive tax impact of EUR 111 million in the third quarter, and will reduce the depreciation charge by about EUR 50 million on an annual basis. The non-recurring items affecting operating profit are: a non-cash impairment charge of EUR 560 million; a positive NRI of EUR 10 million from the sale of Reisholz Mill site real estate. The impairment charges by the new segments are as follows: -------------------------------------------------------------------------------- | EUR million | Fixed Assets | Goodwill | Total | -------------------------------------------------------------------------------- | Magazine Paper | 118 | 110 | 228 | -------------------------------------------------------------------------------- | Fine Paper | 33 | | 33 | -------------------------------------------------------------------------------- | Consumer Board | 187 | | 187 | -------------------------------------------------------------------------------- | Industrial | 6 | | 6 | | Packaging | | | | -------------------------------------------------------------------------------- | Wood Products | 52 | 54 | 106 | -------------------------------------------------------------------------------- | Group Total | 396 | 164 | 560 | -------------------------------------------------------------------------------- The results of associated companies will be reported as part of operating profit from the third quarter of 2007 onwards, as these companies are clearly part of the value chain of operations. Previous quarters have been adjusted accordingly. The five largest associated companies are: -------------------------------------------------------------------------------- | Associated Company | Business Area | Reporting Segment | -------------------------------------------------------------------------------- | Bergvik | Wood Supply | Other | -------------------------------------------------------------------------------- | Tornator | Wood Supply | Other | -------------------------------------------------------------------------------- | Veracel | Fine Paper | Fine Paper | -------------------------------------------------------------------------------- | Sunila | Magazine Paper | Magazine Paper | -------------------------------------------------------------------------------- | Thiele Kaolin | Other Operations | Other | -------------------------------------------------------------------------------- As part of the reorganisation announced on 5 September 2007, the Speciality Paper Business Area was dissolved. The speciality paper machine (PM 6) at Imatra Mills in Finland was transferred to the Consumer Board Business Area and the speciality paper machine (PM 1) at Utersen Mill in Germany was transferred to the Fine Paper Business Area. Before the reorganisation, the Speciality Paper Business Area was part of the Packaging Board Division. Previous quarters have also been adjusted accordingly for these changes. Commencing with the third quarter of 2007, the sales and operating profit of Wood Supply will be included in Segment Other and will not be reported separately because the earnings of this cost centre are relatively immaterial. The historical figures based on the new segments are: Sales by Segment -------------------------------------------------------------------------------- | EUR million | 2005 | Q1/0 | Q2/06 | Q3/06 | Q4/06 | 2006 | Q1/07 | Q2/07 | | | | 6 | | | | | | | -------------------------------------------------------------------------------- | Newsprint | 1 435 | 406. | 421.5 | 427.2 | 448.7 | 1 704. | 438.7 | 429.9 | | | .8 | 6 | | | | 0 | | | -------------------------------------------------------------------------------- | Magazine Pa | 2 129 | 533. | 526.7 | 570.7 | 589.3 | 2 220. | 566.6 | 552.9 | | per | .7 | 6 | | | | 3 | | | -------------------------------------------------------------------------------- | Fine Paper | 2 086 | 609. | 572.3 | 538.1 | 542.1 | 2 261. | 577.0 | 522.8 | | | .5 | 3 | | | | 8 | | | -------------------------------------------------------------------------------- | Merchants | 1 173 | 496. | 452.6 | 450.1 | 508.2 | 1 907. | 532.9 | 479.4 | | | .2 | 3 | | | | 2 | | | -------------------------------------------------------------------------------- | Consumer Bo | 2 094 | 584. | 583.8 | 603.4 | 560.2 | 2 331. | 589.6 | 570.1 | | ard | .3 | 5 | | | | 9 | | | -------------------------------------------------------------------------------- | Industrial | 849.8 | 225. | 241.1 | 245.3 | 258.5 | 970.7 | 266.1 | 274.2 | | Packaging | | 8 | | | | | | | -------------------------------------------------------------------------------- | Wood Produc | 1 623 | 389. | 425.8 | 417.8 | 440.3 | 1 673. | 472.3 | 525.7 | | ts | .4 | 1 | | | | 0 | | | -------------------------------------------------------------------------------- | Other and e | -50.0 | -53. | 9.4 | -40.4 | -27.4 | -111.7 | -32.7 | 0.9 | | limination | | 3 | | | | | | | -------------------------------------------------------------------------------- | Continuing | 11 34 | 3 19 | 3 233 | 3 212 | 3 | 12 957 | 3 410. | 3 355 | | Operations | 2.7 | 1.9 | .2 | .2 | 319.9 | .2 | 5 | .9 | | Total | | | | | | | | | -------------------------------------------------------------------------------- | Discontinue | 1 964 | 475. | 442.8 | 486.2 | 462.4 | 1 866. | 487.9 | 484.3 | | d Operation | .7 | 4 | | | | 8 | | | | s | | | | | | | | | -------------------------------------------------------------------------------- | Elimination | -119. | -59. | -59.7 | -60.3 | - | -230.1 | -43.0 | -35.0 | | | 9 | 6 | | | 50.5 | | | | -------------------------------------------------------------------------------- | Total | 13 18 | 3 60 | 3 616 | 3 638 | 3 | 14 593 | 3 855. | 3 805 | | | 7.5 | 7.7 | .3 | .1 | 731.8 | .9 | 4 | .2 | -------------------------------------------------------------------------------- Operating Profit by Segment excluding NRI -------------------------------------------------------------------------------- | EUR million | 2005 | Q1/06 | Q2/06 | Q3/06 | Q4/06 | 2006 | Q1/07 | Q2/07 | -------------------------------------------------------------------------------- | Newsprint | 128.0 | 55.9 | 57.6 | 61.0 | 57.6 | 232.1 | 61.1 | 50.2 | -------------------------------------------------------------------------------- | Magazine | 41.1 | 24.0 | 12.3 | 12.0 | 22.4 | 70.7 | 13.0 | 9.6 | | Paper | | | | | | | | | -------------------------------------------------------------------------------- | Fine Paper | 56.4 | 44.4 | 50.3 | 29.8 | 28.2 | 152.7 | 60.2 | 34.6 | -------------------------------------------------------------------------------- | Merchants | 3.5 | 9.6 | 2.9 | 7.7 | 12.5 | 32.7 | 16.6 | 8.2 | -------------------------------------------------------------------------------- | Consumer | 191.7 | 81.3 | 55.9 | 64.3 | 39.4 | 240.9 | 72.4 | 29.0 | | Board | | | | | | | | | -------------------------------------------------------------------------------- | Industrial | 41.0 | 18.5 | 18.1 | 26.1 | 22.3 | 85.0 | 29.3 | 29.7 | | Packaging | | | | | | | | | -------------------------------------------------------------------------------- | Wood | -6.4 | 4.1 | 15.0 | 22.0 | 22.3 | 63.4 | 54.8 | 59.3 | | Products | | | | | | | | | -------------------------------------------------------------------------------- | Other | -15.9 | 37.5 | -67.0 | 23.3 | 13.1 | 6.9 | 19.8 | 31.8 | -------------------------------------------------------------------------------- | Continuing | 439.4 | 275.3 | 145.1 | 246.2 | 217.8 | 884.4 | 327.2 | 252.4 | | Operations | | | | | | | | | | Total | | | | | | | | | -------------------------------------------------------------------------------- | Discontinued | -1.0 | 3.3 | -6.7 | -6.7 | -4.8 | -14.9 | 4.3 | -15.9 | | Operations | | | | | | | | | -------------------------------------------------------------------------------- | Total, | 438.4 | 278.6 | 138.4 | 239.5 | 213.0 | 869.5 | 331.5 | 236.5 | | excluding | | | | | | | | | | NRI | | | | | | | | | -------------------------------------------------------------------------------- | Non-recurrin | -417. | -23.2 | 6.7 | -177. | 60.0 | -133. | 32.0 | 12.8 | | g items | 3 | | | 2 | | 7 | | | | Total | | | | | | | | | | Operations | | | | | | | | | -------------------------------------------------------------------------------- | Total | 21.1 | 255.4 | 145.1 | 62.3 | 273.0 | 735.8 | 363.5 | 249.3 | -------------------------------------------------------------------------------- NRI by Segment -------------------------------------------------------------------------------- | EUR million | 2005 | Q1/06 | Q2/06 | Q3/06 | Q4/06 | 2006 | Q1/07 | Q2/07 | -------------------------------------------------------------------------------- | Newsprint | -4.7 | - | 1.3 | - | - | 1.3 | - | - | -------------------------------------------------------------------------------- | Magazine | -101. | -2.9 | 1.2 | -164. | 2.1 | -163. | - | - | | Paper | 0 | | | 0 | | 6 | | | -------------------------------------------------------------------------------- | Fine Paper | -40.4 | -16.9 | 2.4 | 72.0 | 1.0 | 58.5 | - | - | -------------------------------------------------------------------------------- | Merchants | -7.4 | - | - | - | 0.4 | 0.4 | - | 24.4 | -------------------------------------------------------------------------------- | Consumer | -16.3 | - | -7.2 | - | 2.3 | -4.9 | - | - | | Board | | | | | | | | | -------------------------------------------------------------------------------- | Industrial | -2.6 | - | 1.7 | - | - | 1.7 | - | - | | Packaging | | | | | | | | | -------------------------------------------------------------------------------- | Wood | -52.6 | 1.7 | 1.2 | -24.0 | 0.4 | -20.7 | -12.0 | - | | Products | | | | | | | | | -------------------------------------------------------------------------------- | Other | -4.2 | -5.1 | 6.1 | -47.0 | 30.4 | -15.6 | - | - | -------------------------------------------------------------------------------- | Continuing | -229. | -23.2 | 6.7 | -163. | 36.6 | -142. | -12.0 | 24.4 | | Operations | 2 | | | 0 | | 9 | | | | Total | | | | | | | | | -------------------------------------------------------------------------------- | Discontinued | -188. | - | - | -14.2 | 23.4 | 9.2 | 44.0 | -11.6 | | Operations | 1 | | | | | | | | -------------------------------------------------------------------------------- | Total | -417. | -23.2 | 6.7 | -177. | 60.0 | -133. | 32.0 | 12.8 | | | 3 | | | 2 | | 7 | | | -------------------------------------------------------------------------------- Operating Profit by Segment -------------------------------------------------------------------------------- | EUR million | 2005 | Q1/06 | Q2/06 | Q3/06 | Q4/06 | 2006 | Q1/07 | Q2/07 | -------------------------------------------------------------------------------- | Newsprint | 123.3 | 55.9 | 58.9 | 61.0 | 57.6 | 233.4 | 61.1 | 50.2 | -------------------------------------------------------------------------------- | Magazine Pap | -59.9 | 21.1 | 13.5 | -152. | 24.5 | -92.9 | 13.0 | 9.6 | | er | | | | 0 | | | | | -------------------------------------------------------------------------------- | Fine Paper | 16.0 | 27.5 | 52.7 | 101.8 | 29.2 | 211.2 | 60.2 | 34.6 | -------------------------------------------------------------------------------- | Merchants | -3.9 | 9.6 | 2.9 | 7.7 | 12.9 | 33.1 | 16.6 | 32.6 | -------------------------------------------------------------------------------- | Consumer Boa | 175.4 | 81.3 | 48.7 | 64.3 | 41.7 | 236.0 | 72.4 | 29.0 | | rd | | | | | | | | | -------------------------------------------------------------------------------- | Industrial P | 38.4 | 18.5 | 19.8 | 26.1 | 22.3 | 86.7 | 29.3 | 29.7 | | ackaging | | | | | | | | | -------------------------------------------------------------------------------- | Wood Product | -59.0 | 5.8 | 16.2 | -2.0 | 22.7 | 42.7 | 42.8 | 59.3 | | s | | | | | | | | | -------------------------------------------------------------------------------- | Other | -20.1 | 32.4 | -60.9 | -23.7 | 43.5 | -8.7 | 19.8 | 31.8 | -------------------------------------------------------------------------------- | Continuing O | 210.2 | 252.1 | 151.8 | 83.2 | 254.4 | 741.5 | 315.2 | 276.8 | | perations To | | | | | | | | | | tal | | | | | | | | | -------------------------------------------------------------------------------- | Discontinued | -189. | 3.3 | -6.7 | -20.9 | 18.6 | -5.7 | 48.3 | -27.5 | | Operations | 1 | | | | | | | | -------------------------------------------------------------------------------- | Total | 21.1 | 255.4 | 145.1 | 62.3 | 273.0 | 735.8 | 363.5 | 249.3 | -------------------------------------------------------------------------------- Associated Companies by Segment -------------------------------------------------------------------------------- | EUR million | 2005 | Q1/06 | Q2/06 | Q3/06 | Q4/06 | 2006 | Q1/07 | Q2/07 | -------------------------------------------------------------------------------- | Newsprint | - | - | - | - | - | - | - | - | -------------------------------------------------------------------------------- | Magazine Pap | -1.8 | 2.3 | 0.8 | 3.2 | 3.8 | 10.1 | 3.6 | 1.2 | | er | | | | | | | | | -------------------------------------------------------------------------------- | Fine Paper | -0.1 | 7.6 | -1.6 | 5.0 | 1.5 | 12.5 | 5.1 | -3.9 | -------------------------------------------------------------------------------- | Merchants | 0.2 | - | - | - | - | - | - | - | -------------------------------------------------------------------------------- | Consumer Boa | - | - | - | - | - | - | - | - | | rd | | | | | | | | | -------------------------------------------------------------------------------- | Industrial P | -0.2 | 0.1 | 0.4 | -0.2 | 0.1 | 0.4 | 0.1 | 0.1 | | ackaging | | | | | | | | | -------------------------------------------------------------------------------- | Wood Product | -4.0 | 0.4 | 0.0 | 0.0 | 0.2 | 0.6 | - | - | | s | | | | | | | | | -------------------------------------------------------------------------------- | Other | 73.0 | 20.3 | 18.6 | 5.1 | 20.4 | 64.4 | 15.3 | 22.6 | -------------------------------------------------------------------------------- | Continuing O | 67.1 | 30.7 | 18.2 | 13.1 | 26.0 | 88.0 | 24.1 | 20.0 | | perations To | | | | | | | | | | tal | | | | | | | | | -------------------------------------------------------------------------------- | Discontinued | 0.1 | 0.9 | 2.0 | -2.9 | -0.6 | -0.6 | 0.1 | -0.2 | | Operations | | | | | | | | | -------------------------------------------------------------------------------- | Total | 67.2 | 31.6 | 20.2 | 10.2 | 25.4 | 87.4 | 24.2 | 19.8 | -------------------------------------------------------------------------------- ROOC/ROCE excluding NRI -------------------------------------------------------------------------------- | % | 2005 | Q1/06 | Q2/06 | Q3/06 | Q4/06 | 2006 | Q1/07 | Q2/07 | -------------------------------------------------------------------------------- | Newsprint | 8.8 | 15.9 | 16.2 | 17.2 | 16.4 | 16.7 | 17.6 | 14.7 | -------------------------------------------------------------------------------- | Magazine Pap | 2.1 | 4.7 | 2.4 | 2.4 | 4.5 | 3.5 | 2.6 | 1.9 | | er | | | | | | | | | -------------------------------------------------------------------------------- | Fine Paper | 2.5 | 7.8 | 8.7 | 5.5 | 5.7 | 7.1 | 11.7 | 6.5 | -------------------------------------------------------------------------------- | Merchants | 0.8 | 6.3 | 2.1 | 5.8 | 9.3 | 5.5 | 12.3 | 6.2 | -------------------------------------------------------------------------------- | Consumer Boa | 9.2 | 15.7 | 10.8 | 12.7 | 7.9 | 11.9 | 14.6 | 5.9 | | rd | | | | | | | | | -------------------------------------------------------------------------------- | Industrial P | 6.7 | 11.8 | 11.6 | 16.8 | 14.2 | 13.6 | 18.5 | 18.3 | | ackaging | | | | | | | | | -------------------------------------------------------------------------------- | Wood Product | -0.8 | 2.0 | 7.2 | 10.9 | 11.4 | 8.0 | 27.3 | 28.6 | | s | | | | | | | | | -------------------------------------------------------------------------------- | ROCE excl. N | 4.7 | 11.0 | 5.8 | 10.0 | 8.8 | 8.7 | 12.7 | 9.6 | | RI, Continui | | | | | | | | | | ng Operation | | | | | | | | | | s Total | | | | | | | | | -------------------------------------------------------------------------------- | ROCE incl. N | 2.3 | 10.0 | 6.1 | 3.4 | 10.2 | 7.3 | 12.2 | 10.5 | | RI, Continui | | | | | | | | | | ng Operation | | | | | | | | | | s Total | | | | | | | | | -------------------------------------------------------------------------------- | ROCE excl. N | 0.0 | 0.6 | -1.2 | -1.3 | -1.0 | -0.7 | 0.9 | -3.3 | | RI, Disconti | | | | | | | | | | nued Operati | | | | | | | | | | ons Total | | | | | | | | | -------------------------------------------------------------------------------- | ROCE incl. N | -8.1 | 0.6 | -1.2 | -4.0 | 3.7 | -0.3 | 10.0 | -5.7 | | RI, Disconti | | | | | | | | | | nued Operati | | | | | | | | | | ons Total | | | | | | | | | -------------------------------------------------------------------------------- | ROCE excl. N | 3.8 | 9.0 | 4.5 | 8.0 | 7.1 | 7.1 | 10.8 | 7.6 | | RI | | | | | | | | | -------------------------------------------------------------------------------- | ROCE incl. N | 0.2 | 8.3 | 4.8 | 2.1 | 9.1 | 6.0 | 11.9 | 8.0 | | RI | | | | | | | | | -------------------------------------------------------------------------------- For further information, please contact: Hannu Ryöppönen, CFO, tel. +44 20 7016 3114 Keith B Russell, Senior Vice President, Investor Relations, tel. +44 7775 788659 Ulla Paajanen-Sainio, VP, Investor Relations and Financial Communications, tel. +358 40 763 8767 www.storaenso.com www.storaenso.com/investors STORA ENSO OYJ Jyrki Kurkinen Ulla Paajanen-Sainio
Stora Enso's non-recurring items in third quarter 2007 and new segment reporting
| Source: Stora Enso Oyj