STORA ENSO OYJ INTERIM REVIEW 22 July 2010 at 06.00 GMT
Stora Enso Interim Review January-June 2010
Best quarterly earnings since second quarter of 2007 - testimony to early
actions combined with volume recovery
- EUR 213 million quarterly operating profit excluding NRI and fair valuations,
up
year-on-year by EUR 164 million driven by volume recovery combined with reduced
cost base, currency rate impact and pulp price strength;
- Quarterly operating profit margin excluding NRI and fair valuations increased
year-on-year to 7.9% (2.2%), ROCE excluding NRI and fair valuations 10.5% (2.3%)
- Quarterly EPS excluding NRI improved year-on-year to EUR 0.22 (0.06) and CEPS
excluding NRI to EUR 0.38 (0.24);
- Quarterly cash flow from operations and cash position strong at EUR 305
million
and EUR 856 million respectively;
- Sequential price increases realised for most of the Group's products;
- Structural overcapacity in Europe remains, most clearly in publication paper
Summary of Second Quarter Results
--------------------------------------------------------------------------------
| | | Q2/10 | Q1/10 | Q2/09 |
--------------------------------------------------------------------------------
| Sales | EUR | 2 692.2 | 2 295.9 | 2 184.8 |
| | million | | | |
--------------------------------------------------------------------------------
| EBITDA excl. NRI and fair | EUR | 329.8 | 232.1 | 190.4 |
| valuations | million | | | |
--------------------------------------------------------------------------------
| Operating Profit excl. NRI | EUR | 212.9 | 119.4 | 48.5 |
| and Fair Valuations | million | | | |
--------------------------------------------------------------------------------
| Operating profit/loss (IFRS) | EUR | 215.6 | 123.4 | -209.4 |
| | million | | | |
--------------------------------------------------------------------------------
| Profit before tax excl. NRI | EUR | 201.5 | 136.8 | 47.2 |
| | million | | | |
--------------------------------------------------------------------------------
| Profit/loss before tax | EUR | 193.0 | 117.9 | -370.6 |
| | million | | | |
--------------------------------------------------------------------------------
| Net profit excl. NRI | EUR | 168.4 | 121.0 | 44.9 |
| | million | | | |
--------------------------------------------------------------------------------
| Net profit/loss | EUR | 159.9 | 102.1 | -368.3 |
| | million | | | |
--------------------------------------------------------------------------------
| EPS excl. NRI | EUR | 0.22 | 0.15 | 0.06 |
--------------------------------------------------------------------------------
| EPS | EUR | 0.20 | 0.13 | -0.46 |
--------------------------------------------------------------------------------
| CEPS excl. NRI | EUR | 0.38 | 0.31 | 0.24 |
--------------------------------------------------------------------------------
| ROCE excl. NRI | % | 11.0 | 7.2 | 2.8 |
--------------------------------------------------------------------------------
| ROCE excl. NRI and fair | % | 10.5 | 6.0 | 2.3 |
| 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 Q2/2009
--------------------------------------------------------------------------------
| Product | Market | Demand | Price |
--------------------------------------------------------------------------------
| Newsprint | Europe | stable | significantly |
| | | | lower |
--------------------------------------------------------------------------------
| Coated magazine paper | Europe | significantly | slightly lower |
| | | stronger | |
--------------------------------------------------------------------------------
| Coated magazine paper | Latin | significantly | significantly |
| | America | stronger | lower |
--------------------------------------------------------------------------------
| Uncoated magazine paper | Europe | slightly weaker | lower |
--------------------------------------------------------------------------------
| Uncoated magazine paper | China | significantly | higher |
| | | stronger | |
--------------------------------------------------------------------------------
| Coated fine paper | Europe | significantly | slightly lower |
| | | stronger | |
--------------------------------------------------------------------------------
| Coated fine paper | China | stable | significantly |
| | | | higher |
--------------------------------------------------------------------------------
| Uncoated fine paper | Europe | significantly | slightly higher |
| | | stronger | |
--------------------------------------------------------------------------------
| Consumer board | Europe | stronger | stable |
--------------------------------------------------------------------------------
| Industrial packaging | Europe | stronger | higher |
--------------------------------------------------------------------------------
| Wood products | Europe | slightly stronger | significantly |
| | | | higher |
--------------------------------------------------------------------------------
Industry inventories were lower for newsprint, uncoated magazine paper and
uncoated fine paper, unchanged for coated fine paper and higher for coated
magazine paper. Industry inventories of wood products increased slightly from
very low levels a year ago.
Compared with Q1/2010
--------------------------------------------------------------------------------
| Product | Market | Demand | Price |
--------------------------------------------------------------------------------
| Newsprint | Europe | slightly stronger | stable |
--------------------------------------------------------------------------------
| Coated magazine | Europe | stronger | stable |
| paper | | | |
--------------------------------------------------------------------------------
| Coated magazine | Latin | significantly stronger | slightly |
| paper | America | | lower |
--------------------------------------------------------------------------------
| Uncoated magazine | Europe | stable | stable |
| paper | | | |
--------------------------------------------------------------------------------
| Uncoated magazine | China | slightly stronger | slightly |
| paper | | | higher |
--------------------------------------------------------------------------------
| Coated fine paper | Europe | seasonally slightly | slightly |
| | | weaker | higher |
--------------------------------------------------------------------------------
| Coated fine paper | China | stable | significantly |
| | | | higher |
--------------------------------------------------------------------------------
| Uncoated fine paper | Europe | stable | higher |
--------------------------------------------------------------------------------
| Consumer board | Europe | stronger | slightly |
| | | | higher |
--------------------------------------------------------------------------------
| Industrial packaging | Europe | seasonally stronger | higher |
--------------------------------------------------------------------------------
| Wood products | Europe | seasonally stronger | higher |
--------------------------------------------------------------------------------
Industry inventories were lower for newsprint and fine paper, and clearly higher
for magazine paper. Inventories of wood products were stable.
Stora Enso Deliveries and Production
--------------------------------------------------------------------------------
| | Q2/ | Q1/ | Q2/0 | 2009 | Q1-Q | Q1-Q | Change | Chang | Chang |
| | 10 | 10 | 9 | | 2/10 | 2/09 | % | e % | e % |
| | | | | | | | Q2/10- | Q2/10 | Q1-Q2 |
| | | | | | | | Q2/09 | -Q1/1 | /10-Q |
| | | | | | | | | 0 | 1-Q2/ |
| | | | | | | | | | 09 |
--------------------------------------------------------------------------------
| Paper and | 2 | 2 | 2 | 10 | 5 | 4 | 11.9 | 11.1 | 9.8 |
| board | 798 | 519 | 500 | 174 | 317 | 843 | | | |
| deliveries | | | | | | | | | |
| (1 000 | | | | | | | | | |
| tonnes) | | | | | | | | | |
--------------------------------------------------------------------------------
| Paper and | 2 | 2 | 2 | 10 | 5 | 4 | 13.3 | 4.1 | 13.2 |
| board | 786 | 675 | 460 | 036 | 461 | 823 | | | |
| production | | | | | | | | | |
| (1 000 | | | | | | | | | |
| tonnes) | | | | | | | | | |
--------------------------------------------------------------------------------
| Wood | 1 | 1 | 1 | 4 | 2 | 2 | 12.0 | 26.8 | 8.0 |
| products | 457 | 149 | 301 | 902 | 606 | 414 | | | |
| deliveries | | | | | | | | | |
| (1 000 m3) | | | | | | | | | |
--------------------------------------------------------------------------------
| Corrugated | 256 | 250 | 238 | 966 | 506 | 466 | 7.6 | 2.4 | 8.6 |
| packaging | | | | | | | | | |
| deliveries | | | | | | | | | |
| (million | | | | | | | | | |
| m2) | | | | | | | | | |
--------------------------------------------------------------------------------
Q2/2010 Results (compared with Q2/2009)
Sales at EUR 2 692 million were EUR 507 million higher than in the second
quarter of 2009, mainly due to significantly higher delivery volumes and
favourable exchange rate trends. Prices for the Group's products were generally
higher, but newsprint and magazine paper prices in local currencies decreased.
Pulp delivery volumes and prices increased significantly.
Key Figures
--------------------------------------------------------------------------------
| EUR million | Q2/ | Q1/ | Q2/ | Q1-Q | Q1-Q | 2009 | Chang | Chang | Chang |
| | 10 | 10 | 09 | 2/10 | 2/09 | | e % | e % | e % |
| | | | | | | | Q2/10 | Q2/10 | Q1-Q2 |
| | | | | | | | -Q2/0 | -Q1/1 | /10-Q |
| | | | | | | | 9 | 0 | 1-Q2/ |
| | | | | | | | | | 09 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales | 2 | 2 | 2 | 4 | 4 | 8 | 23.2 | 17.3 | 15.6 |
| | 692 | 295 | 184 | 988. | 315. | 945. | | | |
| | .2 | .9 | .8 | 1 | 3 | 1 | | | |
--------------------------------------------------------------------------------
| EBITDA excl. | 329 | 232 | 190 | 561. | 324. | 807. | 73.2 | 42.1 | 73.1 |
| NRI and fair | .8 | .1 | .4 | 9 | 7 | 81 | | | |
| valuations | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 212 | 119 | 48. | 332. | 51.5 | 320. | n/m | 78.3 | n/m |
| profit excl. | .9 | .4 | 5 | 3 | | 5 | | | |
| NRI and fair | | | | | | | | | |
| valuations | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 224 | 142 | 59. | 366. | 25.0 | 324. | 274.1 | 57.5 | n/m |
| profit/loss | .1 | .3 | 9 | 4 | | 9 | | | |
| excl. NRI | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 8.3 | 6.2 | 2.7 | 7.3 | 0.6 | 3.6 | 207.4 | 33.9 | n/m |
| margin excl. | | | | | | | | | |
| NRI, % | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 215 | 123 | -20 | 339. | -210 | -607 | 203.0 | 74.7 | 261.2 |
| profit/loss | .6 | .4 | 9.4 | 0 | .3 | .6 | | | |
| (IFRS) | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 8.0 | 5.4 | -9. | 6.8 | -4.9 | -6.8 | 183.3 | 48.1 | 238.8 |
| profit/loss, | | | 6 | | | | | | |
| % of sales | | | | | | | | | |
--------------------------------------------------------------------------------
| Profit/loss | 201 | 136 | 47. | 338. | -34. | 194. | n/m | 47.3 | n/m |
| before tax | .5 | .8 | 2 | 3 | 9 | 2 | | | |
| excl. NRI | | | | | | | | | |
--------------------------------------------------------------------------------
| Profit/loss | 193 | 117 | -37 | 310. | -418 | -886 | 152.1 | 63.7 | 174.3 |
| before tax | .0 | .9 | 0.6 | 9 | .7 | .8 | | | |
--------------------------------------------------------------------------------
| Net | 168 | 121 | 44. | 289. | -15. | 153. | 275.1 | 39.2 | n/m |
| profit/loss | .4 | .0 | 9 | 4 | 3 | 2 | | | |
| for the | | | | | | | | | |
| period excl. | | | | | | | | | |
| NRI | | | | | | | | | |
--------------------------------------------------------------------------------
| Net | 159 | 102 | -36 | 262. | -404 | -878 | 143.4 | 56.6 | 164.8 |
| profit/loss | .9 | .1 | 8.3 | 0 | .4 | .2 | | | |
| for the | | | | | | | | | |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital | 75. | 112 | 108 | 188. | 212. | 423. | -30.5 | -33.2 | -11.5 |
| expenditure | 3 | .8 | .3 | 1 | 5 | 8 | | | |
--------------------------------------------------------------------------------
| Depreciation | 127 | 126 | 144 | 254. | 288. | 548. | -11.9 | 0.5 | -12.0 |
| and | .4 | .8 | .6 | 2 | 8 | 7 | | | |
| impairment | | | | | | | | | |
| charges excl. | | | | | | | | | |
| NRI | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ROCE excl. | 10. | 6.0 | 2.3 | 8.3 | 1.2 | 3.9 | n/m | 75.0 | n/m |
| NRI and fair | 5 | | | | | | | | |
| valuations, % | | | | | | | | | |
--------------------------------------------------------------------------------
| ROCE excl. | 11. | 7.2 | 2.8 | 9.2 | 0.6 | 3.9 | 292.9 | 52.8 | n/m |
| NRI, % | 0 | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per | 0.2 | 0.1 | 0.0 | 0.37 | -0.0 | 0.19 | 266.7 | 46.7 | n/m |
| share (EPS) | 2 | 5 | 6 | | 2 | | | | |
| excl. NRI, | | | | | | | | | |
| EUR | | | | | | | | | |
--------------------------------------------------------------------------------
| EPS (basic), | 0.2 | 0.1 | -0. | 0.33 | -0.5 | -1.1 | 143.5 | 53.8 | 164.7 |
| EUR | 0 | 3 | 46 | | 1 | 2 | | | |
--------------------------------------------------------------------------------
| Cash earnings | 0.3 | 0.3 | 0.2 | 0.69 | 0.34 | 0.92 | 58.3 | 22.6 | 102.9 |
| per share | 8 | 1 | 4 | | | | | | |
| (CEPS) excl. | | | | | | | | | |
| NRI, EUR | | | | | | | | | |
--------------------------------------------------------------------------------
| CEPS, EUR | 0.3 | 0.3 | -0. | 0.63 | -0.1 | 0.35 | 213.8 | 10.0 | n/m |
| | 3 | 0 | 29 | | 7 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on | 11. | 7.8 | -26 | 9.8 | -14. | -16. | 144.4 | 52.6 | 168.1 |
| equity (ROE), | 9 | | .8 | | 4 | 2 | | | |
| % | | | | | | | | | |
--------------------------------------------------------------------------------
| Debt/equity | 0.4 | 0.5 | 0.5 | 0.49 | 0.53 | 0.51 | -7.5 | -9.3 | -7.5 |
| ratio | 9 | 4 | 3 | | | | | | |
--------------------------------------------------------------------------------
| Equity per | 6.9 | 6.6 | 7.0 | 6.92 | 7.00 | 6.50 | -1.1 | 4.8 | -1.1 |
| share, EUR | 2 | 0 | 0 | | | | | | |
--------------------------------------------------------------------------------
| Equity ratio, | 44. | 43. | 47. | 44.8 | 47.0 | 44.7 | -4.7 | 2.8 | -4.7 |
| % | 8 | 6 | 0 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average | 28 | 27 | 29 | 27 | 29 | 28 | -3.7 | 2.9 | -5.6 |
| number of | 040 | 245 | 116 | 670 | 305 | 696 | | | |
| employees | | | | | | | | | |
--------------------------------------------------------------------------------
| Average | | | | | | | | | |
| number of | | | | | | | | | |
| shares | | | | | | | | | |
| (million) | | | | | | | | | |
--------------------------------------------------------------------------------
| periodic | 788 | 788 | 788 | 788. | 788. | 788. | 0.0 | 0.0 | 0.0 |
| | .6 | .6 | .6 | 6 | 6 | 6 | | | |
--------------------------------------------------------------------------------
| cumulative | 788 | 788 | 788 | 788. | 788. | 788. | 0.0 | 0.0 | 0.0 |
| | .6 | .6 | .6 | 6 | 6 | 6 | | | |
--------------------------------------------------------------------------------
| cumulative, | 788 | 788 | 788 | 788. | 788. | 788. | 0.0 | 0.0 | 0.0 |
| diluted | .6 | .6 | .6 | 6 | 6 | 6 | | | |
--------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------
| EUR million | Q2/ | Q1/ | Q2 | 200 | Q1-Q | Q1-Q | Chan | Chan | Change |
| | 10 | 10 | /0 | 9 | 2/10 | 2/09 | ge % | ge % | % |
| | | | 9 | | | | Q2/1 | Q2/1 | Q1-Q2/ |
| | | | | | | | 0-Q2 | 0-Q1 | 10-Q1- |
| | | | | | | | /09 | /10 | Q2/09 |
--------------------------------------------------------------------------------
| Profit from | 202 | 105 | 42 | 259 | 307. | 31.9 | n/m | 92.4 | n/m |
| operations, | .4 | .2 | .2 | .1 | 6 | | | | |
| excl. NRI | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity accounted | 10. | 14. | 6. | 61. | 24.7 | 19.6 | 66.7 | -26. | 26.0 |
| investments, | 5 | 2 | 3 | 4 | | | | 1 | |
| operational, | | | | | | | | | |
| excl. fair | | | | | | | | | |
| valuations | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating Profit | 212 | 119 | 48 | 320 | 332. | 51.5 | n/m | 78.3 | n/m |
| excl. NRI and | .9 | .4 | .5 | .5 | 3 | | | | |
| Fair Valuations | | | | | | | | | |
--------------------------------------------------------------------------------
| Fair valuations | 11. | 22. | 11 | 4.4 | 34.1 | -26. | -1.8 | -51. | 228.7 |
| | 2 | 9 | .4 | | | 5 | | 1 | |
--------------------------------------------------------------------------------
| Operating | 224 | 142 | 59 | 324 | 366. | 25.0 | 274. | 57.5 | n/m |
| Profit, excl. | .1 | .3 | .9 | .9 | 4 | | 1 | | |
| NRI | | | | | | | | | |
--------------------------------------------------------------------------------
| NRI | -8. | -18 | -2 | -93 | -27. | -235 | 96.8 | 55.0 | 88.4 |
| | 5 | .9 | 69 | 2.5 | 4 | .3 | | | |
| | | | .3 | | | | | | |
--------------------------------------------------------------------------------
| Operating | 215 | 123 | -2 | -60 | 339. | -210 | 203. | 74.7 | 261.2 |
| Profit/Loss | .6 | .4 | 09 | 7.6 | 0 | .3 | 0 | | |
| (IFRS) | | | .4 | | | | | | |
--------------------------------------------------------------------------------
Q2/2010 Results (compared with Q2/2009) (continued)
Operating profit at EUR 213 million excluding non-recurring items and fair
valuations was EUR 164 million higher than a year ago. This represents an
operating margin of 8%. The significant increase in deliveries raised operating
profit by some EUR 148 million. The Group curtailed paper and board production
by 8% and sawnwood production by 5% of capacity.
Prices for the Group's products were generally higher but newsprint and magazine
paper prices were lower than a year ago. Significantly higher pulp prices and
volumes increased operating profit mainly for Consumer Board and Magazine Paper
by a total of EUR 26 million.
The favourable impact of exchange rate trends on sales was partly offset by the
unfavourable impact of exchange rate trends on costs, the net impact being some
EUR 48 million, after hedges. Variable costs increased, especially for pulp,
wood and RCP. Deliveries of wood to the Group's mills were 9.4 million cubic
metres, 27% up on the second quarter of 2009.
The share of the operational results of equity accounted investments amounted to
EUR 11 (EUR 6) million. Operating profit includes a net effect of EUR 11 (EUR
11) million for fair valuations related to the accounting of share-based
compensation, Total Return Swaps (TRS), CO2 emission rights and IAS 41 forest
valuations in equity accounted investments.
Stora Enso has recorded negative net EUR 9 million of non-recurring items in the
second quarter of 2010, including a one-time negative cash provision of some EUR
23 million related to the permanent shutdown of newsprint and directory paper
production at Varkaus in Finland. Stora Enso has finalised the divestment of its
Kotka Mills and laminating paper operations in Malaysia, as announced on 1 July,
and in consequence a further write-down of EUR 5 million relating to working
capital and fixed assets has been recorded. The closing consideration for Kotka
Mills is subject to fair value changes and therefore the final outcome of the
transaction is subject to change. Positive NRI items include the reversal of
impairments totalling EUR 11 million related to fixed asset sales and EUR 8
million related to Sunila Mill. The NRIs had no material impact on tax.
Net financial items were EUR -23 (EUR -161) million. Stora Enso recorded a
write-down of EUR 149 million related to the NewPage vendor note in its second
quarter 2009 results. Net interest expenses increased slightly from EUR 23
million to EUR 24 million.
Group capital employed was EUR 8 203 million on 30 June 2010, a net decrease of
EUR 290 million due to fixed asset impairments and restructuring of the Group,
and active working capital management, partly offset by the impacts of the
stronger Swedish krona and Brazilian real.
January-June 2010 Results (compared with the same period in 2009)
Sales were EUR 673 million higher than in the first half of 2009 due to
significantly higher delivery volumes and favourable exchange rate trends. 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
was EUR 281 million higher than in the first half of 2009 at EUR 332 million as
higher volumes and favourable exchange rate trends in sales more than offset
higher costs, and unfavourable exchange rate trends in costs.
Q2/2010 Results (compared with Q1/2010)
Sales were EUR 396 million up on the previous quarter due to generally higher
sales volumes and prices, and favourable exchange rate trends. Operating profit
excluding non-recurring items and fair valuations was EUR 94 million higher than
in the previous quarter at EUR 213 million as the generally higher sales volumes
and prices more than offset higher costs. The favourable impact of exchange rate
trends on sales was partly offset by their unfavourable impact on purchases.
Group capital employed was EUR 8 203 million on 30 June 2010, a net increase of
EUR 141 million due to the stronger Swedish krona and Brazilian real.
Capital Structure
--------------------------------------------------------------------------------
| EUR million | 30 Jun 10 | 31 Mar 10 | 31 Dec 09 | 30 Jun 09 |
--------------------------------------------------------------------------------
| Operative fixed assets | 6 068.4 | 6 084.6 | 5 936.2 | 6 593.7 |
--------------------------------------------------------------------------------
| Equity accounted investments | 1 687.1 | 1 572.0 | 1 481.3 | 1 117.9 |
--------------------------------------------------------------------------------
| Operative working capital | 1 323.2 | 1 256.2 | 1 171.2 | 1 540.6 |
--------------------------------------------------------------------------------
| Non-current interest-free | -519.2 | -499.6 | -498.1 | - 482.6 |
| items, net | | | | |
--------------------------------------------------------------------------------
| Operating Capital Total | 8 559.5 | 8 413.2 | 8 090.6 | 8 769.6 |
--------------------------------------------------------------------------------
| Net tax liabilities | -356.4 | -350.9 | -314.3 | -276.2 |
--------------------------------------------------------------------------------
| Capital Employed | 8 203.1 | 8 062.3 | 7 776.3 | 8 493.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity attributable to | 5 457.1 | 5 206.6 | 5 124.3 | 5 518.8 |
| Company shareholders | | | | |
--------------------------------------------------------------------------------
| Non-controlling interests | 52.7 | 58.8 | 58.2 | 57.0 |
--------------------------------------------------------------------------------
| Net interest-bearing | 2 698.0 | 2 811.9 | 2 593.8 | 2917.6 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Held for sale | -4.7 | -15.0 | - | - |
--------------------------------------------------------------------------------
| Financing Total | 8 203.1 | 8 062.3 | 7 776.3 | 8 493.4 |
--------------------------------------------------------------------------------
Financing Q2/2010 (compared with Q1/2010)
Cash flow from operations was EUR 305 (EUR 119) million and cash flow after
investing activities EUR 229 (EUR 6) million. Capital expenditure was EUR 75
million in the second quarter. At the end of the period, interest-bearing net
liabilities of the Group were EUR 2 698 million, a decrease of EUR 114 million.
During the second quarter of 2010, the Group paid the capital repayment of EUR
158 million decided by the AGM on 31 March 2010. In June 2010 EUR 500.0 million
bond relating to Stora Enso's Euro Medium Term Note programme matured.
Total unutilised committed credit facilities were unchanged at EUR 1 400
million, and cash and cash equivalents net of overdrafts remained strong at EUR
856 million, which is EUR 9 million less than for the previous quarter. In
addition, Stora Enso has access to various long-term sources of funding up to
EUR 750 million. In June 2010 Stora Enso issued two extendable floating rate
notes totalling EUR 50 million under its EMTN (Euro Medium Term Note) programme.
Stora Enso has an annual option to extend notes up to eight years. The cost of
funding is variable and the first coupon is 2.96%. There are no financial
covenants in the new debt.
The debt/equity ratio at 30 June 2010 was 0.49 (0.54). The currency effect on
owners' equity was positive EUR 118 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 decreased equity by EUR 27 million.
Financing Q2/2010 (compared with Q2/2009)
At the end of the second quarter of 2010 Stora Enso had current borrowings of
EUR 1 004 million compared with EUR 1 450 million at the end of the second
quarter of 2009. Cash and cash equivalents net of overdrafts at the end of the
second quarter of 2010 amounted to EUR 856 million, compared with EUR 645
million at the end of the second quarter of 2009.
Cash Flow
--------------------------------------------------------------------------------
| EUR million | Q2/ | Q1/ | Q2/09 | 2009 | Q1-Q | Q1-Q | Chang | Chang | Chang |
| | 10 | 10 | | | 2/10 | 2/09 | e % | e % | e % |
| | | | | | | | Q2/10 | Q2/10 | Q1-Q2 |
| | | | | | | | -Q2/0 | -Q1/1 | /10-Q |
| | | | | | | | 9 | 0 | 1-Q2/ |
| | | | | | | | | | 09 |
--------------------------------------------------------------------------------
| Operating | 215 | 123 | -209. | -607 | 339. | -210 | 203.0 | 74.7 | 261.2 |
| profit/loss | .6 | .4 | 4 | .6 | 0 | .3 | | | |
--------------------------------------------------------------------------------
| Depreciatio | 101 | 101 | 366.8 | 1 | 202. | 467. | -72.4 | 0.1 | -56.7 |
| n and other | .3 | .2 | | 262. | 5 | 7 | | | |
| non-cash | | | | 0 | | | | | |
| items | | | | | | | | | |
--------------------------------------------------------------------------------
| Change in | -12 | -10 | 31.9 | 606. | -117 | 195. | -138. | 88.2 | -160. |
| working | .4 | 5.4 | | 5 | .8 | 5 | 9 | | 3 |
| capital | | | | | | | | | |
--------------------------------------------------------------------------------
| Cash Flow | 304 | 119 | 189.3 | 1 | 423. | 452. | 60.9 | 155.5 | -6.4 |
| from | .5 | .2 | | 260. | 7 | 9 | | | |
| Operations | | | | 9 | | | | | |
--------------------------------------------------------------------------------
| Capital | -75 | -11 | -108. | -423 | -188 | -212 | 30.5 | 33.2 | 11.5 |
| expenditure | .3 | 2.8 | 3 | .7 | .1 | .5 | | | |
--------------------------------------------------------------------------------
| Cash Flow | 229 | 6.4 | 81.0 | 837. | 235. | 240. | 183.0 | n/m | -2.0 |
| after | .2 | | | 2 | 6 | 4 | | | |
| Investing | | | | | | | | | |
| Activities | | | | | | | | | |
--------------------------------------------------------------------------------
Capital Expenditure for January-June 2010
Capital expenditure for the first half of 2010 totalled EUR 188 million, which
is 74% of depreciation in the first half 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 half of 2010 were power plants and
energy-related projects at existing mills (EUR 95 million) and development of
existing production (EUR 47 million).
Short-term Risks and Uncertainties
The main short-term risks and uncertainties are related to the recovery of the
global economy, the effects of possible increases in raw material costs,
especially for wood, and possible decreases in pulp market prices.
Energy sensitivity analysis for 2010: the direct effect on 2010 operating profit
of a 10% change in electricity, oil and other fossil fuels market prices would
be about EUR 28 million annual impact, after the effect of hedges.
Wood sensitivity analysis for 2010: the direct effect on 2010 operating profit
of a 10% change in wood prices would be about EUR 215 million annual impact.
Pulp sensitivity analysis for 2010: the direct effect on 2010 operating profit
of a 10% change in yearly average pulp prices would be about EUR 57 million
annual impact.
Foreign exchange rates sensitivity analysis for 2010: the direct effect on 2010
operating profit of a 10% change in the value of the euro against the US dollar,
Swedish krona and British pound would be about EUR 110 million, EUR -105 million
and EUR 50 million annual impact respectively before the effect of hedges and
assuming no changes occur other than a single currency exchange rate movement.
Near-term Outlook
The outlook for the third quarter is mixed and still uncertain. Market demand in
all paper segments is expected to remain clearly below the pre-crisis levels of
2008. Prices are forecast to be slightly higher or higher than in the second
quarter of 2010 in many of the segments. Increasing inflation in variable costs,
especially in wood, will burden the third quarter clearly more than the second
quarter. In addition, significant maintenance stoppages will negatively affect
this year's third quarter results, as described in detail in the segment
reports. Continued focus on costs and capacity management is required to operate
at acceptable profit level. Wood Products is facing pressure on profitability
due to rapidly increasing sawlog costs.
In Europe demand for newsprint is expected to be similar to the third quarter of
2009 and the second quarter of 2010. Demand for coated magazine paper is
forecast to be stronger than a year earlier and seasonally stronger than in the
second quarter of 2010. Demand for uncoated magazine paper is forecast to be
unchanged on the third quarter of 2009 but better than in the second quarter of
2010 due to seasonal factors.
Fine paper demand is expected to be stronger than in the third quarter of 2009
and seasonally weaker than in the second quarter of 2010. In consumer board and
industrial packaging, demand is predicted to be stronger than in the third
quarter of 2009 but similar to the second quarter of 2010. Demand for wood
products is expected to be stronger than a year ago but seasonally weaker than
in the second quarter of 2010 and well below normal. In overseas markets
newsprint demand is forecast to increase slightly.
In Europe slight recovery in newsprint prices is anticipated from the third
quarter onwards. However, prices are still expected to stay clearly below 2009
levels. Further increases in newsprint prices are foreseen in overseas markets.
Higher magazine paper prices than in the second quarter of 2010 are predicted.
Fine paper prices are expected to rise during the third quarter of 2010.
Consumer board prices are forecast to increase for non-contractual business.
Some selective increases are anticipated in the prices of industrial packaging
grades and wood products.
In China demand for uncoated magazine paper is expected to decline seasonally to
the level of a year ago but prices are forecast to rise slightly. Demand for
coated fine paper is predicted to be stronger than a year ago but similar to the
second quarter of 2010. However, start-ups of new capacity continue to strain
the supply and demand balance, and lower coated fine paper prices are foreseen.
In Latin America demand for coated magazine paper is expected to be slightly
weaker than a year ago due to inventory build-ups but stronger than in the
second quarter of 2010. Slight rises in prices are anticipated.
The Group now expects its cost inflation excluding internal actions to be 2% -
instead of 1% as forecast in April - for the full year 2010, including the
impact of purchased pulp price increases. As the net market pulp position of the
Group is positive, the earnings impact of market pulp is positive.
Second Quarter Events
April
On 22 April 2010 Stora Enso announced that it had signed an agreement to sell
its integrated mills at Kotka in Finland and its laminating paper operations in
Malaysia to private equity firm OpenGate Capital.
On 22 April 2010 Stora Enso also announced that it would continue pulp, fine
paper and sawnwood production but planned to close down newsprint production
permanently at Varkaus in Finland.
May
On 3 May 2010 Stora Enso announced that Executive Vice President Mats Nordlander
had been appointed Country Manager Sweden following the appointment of Elisabet
Salander Björklund, M.Sc. (For.), as CEO of Bergvik Skog AB as of 1 September
2010.
On 7 May 2010 Stora Enso announced that it had signed an agreement with the
European Investment Bank (EIB) for a EUR 165 million loan to be used for
research and development. The loan agreement is part of the commitment by EIB to
lend altogether EUR 230 million to Stora Enso, including the EUR 65 million loan
announced on 10 February 2010.
On 18 May 2010 Stora Enso announced that it was enhancing the product portfolio
of its Wood Products Business Area by signing a contract to acquire a 19.46%
shareholding in the Finnish wood processor Arktos Group.
June
On 15 June 2010 Stora Enso announced that it would start co-determination
negotiations concerning possible temporary lay-offs at its Finnish sawmills,
which are at Kitee, Uimaharju, Varkaus and Honkalahti. The planned lay-offs were
in response to the threat that wood cost levels in Finland would become even
more uncompetitive if prevailing trends continued. The total number of employees
affected by the co-determination negotiations in Finland was about 500. The
negotiations addressed the plan to curtail production at individual sawmills if
necessary through temporary lay-offs between 1 September and 31 December 2010.
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 expected to rule on
Stora Enso's motion during the autumn of 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.
Share Capital
No conversions were recorded during the quarter.
On 30 June 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 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.
This report is unaudited.
Helsinki, 22 July 2010
Stora Enso Oyj
Board of Directors
Segments Q2/10 compared with Q2/09
Newsprint and Book Paper
--------------------------------------------------------------------------------
| EUR | Q2/1 | Q1/ | Q2/ | 2009 | Q1-Q | Q1-Q | Chang | Chang | Chang |
| million | 0 | 10 | 09 | | 2/10 | 2/09 | e % | e % | e % |
| | | | | | | | Q2/10 | Q2/10 | Q1-Q2 |
| | | | | | | | -Q2/0 | -Q1/1 | /10-Q |
| | | | | | | | 9 | 0 | 1-Q2/ |
| | | | | | | | | | 09 |
--------------------------------------------------------------------------------
| Sales | 325. | 287 | 327 | 1 | 612. | 636. | -0.7 | 13.1 | -3.7 |
| | 1 | .4 | .5 | 325.8 | 5 | 2 | | | |
--------------------------------------------------------------------------------
| EBITDA* | 16.1 | 20. | 57. | 228.2 | 36.4 | 106. | -72.2 | -20.7 | -65.8 |
| | | 3 | 9 | | | 3 | | | |
--------------------------------------------------------------------------------
| Operating | -6.6 | -1. | 31. | 128.7 | -8.2 | 52.6 | -121. | n/m | -115. |
| loss/profit | | 6 | 1 | | | | 2 | | 6 |
| * | | | | | | | | | |
--------------------------------------------------------------------------------
| % of sales | -2.0 | -0. | 9.5 | 9.7 | -1.3 | 8.3 | -121. | -233. | -115. |
| | | 6 | | | | | 1 | 3 | 7 |
--------------------------------------------------------------------------------
| ROOC, %** | -2.5 | -0. | 10. | 11.9 | -1.6 | 9.2 | -122. | n/m | -117. |
| | | 6 | 9 | | | | 9 | | 4 |
--------------------------------------------------------------------------------
| Deliveries, | 676 | 593 | 610 | 2 453 | 1 | 1 | 10.8 | 14.0 | 9.8 |
| 1 000 t | | | | | 269 | 156 | | | |
--------------------------------------------------------------------------------
| Production, | 648 | 634 | 600 | 2 451 | 1 | 1 | 8.0 | 2.2 | 9.3 |
| 1 000 t | | | | | 282 | 173 | | | |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Newsprint sales at EUR 325 million were similar to the second quarter of 2009.
Delivery volumes were 11% higher and exchange rate trends were favourable, but
prices were significantly lower. The operating loss of EUR 7 million was a
deterioration of EUR 38 million on the EUR 31 million operating profit a year
ago as increased deliveries and favourable exchange rate trends could not
compensate for lower prices and higher RCP costs.
The permanent shutdown of the two newsprint machines PM 2 and PM 4 at Varkaus
Mill in Finland at the end of third quarter of 2010 will reduce newsprint and
directory paper annual capacity by 290 000 tonnes.
Markets
--------------------------------------------------------------------------------
| Product | Marke | Demand Q2/10 | Demand Q2/10 | Price Q2/10 | Price Q2/10 |
| | t | compared | compared | compared | compared with |
| | | with Q2/09 | with Q1/10 | with Q2/09 | Q1/10 |
--------------------------------------------------------------------------------
| Newspri | Europ | stable | slightly | significantl | stable |
| nt | e | | stronger | y lower | |
--------------------------------------------------------------------------------
| Newspri | Globa | clearly | slightly | stable | higher |
| nt | l | stronger, | stronger | | |
| | | mainly due | | | |
| | | to Asian | | | |
| | | markets | | | |
--------------------------------------------------------------------------------
Industry inventories reached their lowest levels for years in the second quarter
of 2010.
Magazine Paper
--------------------------------------------------------------------------------
| EUR | Q2/1 | Q1/ | Q2/ | 2009 | Q1-Q | Q1-Q | Chang | Chang | Chang |
| million | 0 | 10 | 09 | | 2/10 | 2/09 | e % | e % | e % |
| | | | | | | | Q2/10 | Q2/10 | Q1-Q2 |
| | | | | | | | -Q2/0 | -Q1/1 | /10-Q |
| | | | | | | | 9 | 0 | 1-Q2/ |
| | | | | | | | | | 09 |
--------------------------------------------------------------------------------
| Sales | 530. | 435 | 396 | 1 | 965. | 776. | 33.9 | 21.7 | 24.3 |
| | 2 | .5 | .0 | 676.0 | 7 | 8 | | | |
--------------------------------------------------------------------------------
| EBITDA* | 46.0 | 27. | 33. | 145.3 | 73.3 | 61.2 | 35.7 | 68.5 | 19.8 |
| | | 3 | 9 | | | | | | |
--------------------------------------------------------------------------------
| Operating | 22.0 | 3.9 | 5.7 | 40.3 | 25.9 | 5.6 | 286.0 | n/m | n/m |
| profit/loss | | | | | | | | | |
| * | | | | | | | | | |
--------------------------------------------------------------------------------
| % of sales | 4.1 | 0.9 | 1.4 | 2.4 | 2.7 | 0.7 | 192.9 | n/m | 285.7 |
--------------------------------------------------------------------------------
| ROOC, %** | 7.1 | 1.3 | 1.6 | 3.1 | 4.1 | 0.8 | n/m | n/m | n/m |
--------------------------------------------------------------------------------
| Deliveries, | 598 | 526 | 512 | 2 150 | 1 | 999 | 16.8 | 13.7 | 12.5 |
| 1 000 t*** | | | | | 124 | | | | |
--------------------------------------------------------------------------------
| Production, | 614 | 550 | 503 | 2 110 | 1 | 1 | 22.1 | 11.6 | 15.9 |
| 1 000 t*** | | | | | 164 | 004 | | | |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital *** Excluding pulp
Magazine paper sales were EUR 530 million, up EUR 134 million on the second
quarter of 2009 as 17% higher deliveries and favourable exchange rate trends
more than offset sharp falls in coated and uncoated magazine paper prices. Pulp
deliveries increased significantly as Sunila Pulp Mill operated at full capacity
in the second quarter of 2010 and pulp prices rose. Operating profit at EUR 22
million was EUR 16 million up on a year ago. Increased deliveries, favourable
exchange rate trends and slightly lower energy costs more than offset lower
sales prices and increased RCP costs. Personnel costs increased due to
significant volume recovery as curtailments and temporary lay-offs were reduced.
The pulp mills' share of the operating profit is significant.
Kotka Mill in Finland was divested with effect from 1 July 2010. The divestment
reduced Stora Enso's annual capacity by 180 000 tonnes of machine-finished
coated (MFC) paper.
Markets
--------------------------------------------------------------------------------
| Product | Market | Demand | Demand Q2/10 | Price Q2/10 | Price Q2/10 |
| | | Q2/10 | compared | compared | compared |
| | | compared | with Q1/10 | with Q2/09 | with Q1/10 |
| | | with Q2/09 | | | |
--------------------------------------------------------------------------------
| Coated | Europe | significant | stronger | slightly | stable |
| magazine | | ly stronger | | lower | |
| paper | | | | | |
--------------------------------------------------------------------------------
| Coated | Latin | significant | significantl | significantl | slightly |
| magazine | Americ | ly stronger | y stronger | y lower | lower |
| paper | a | | | | |
--------------------------------------------------------------------------------
| Uncoated | Europe | slightly | stable | lower | stable |
| magazine | | weaker | | | |
| paper | | | | | |
--------------------------------------------------------------------------------
| Uncoated | China | significant | slightly | higher | slightly |
| magazine | | ly stronger | stronger | | higher |
| paper | | | | | |
--------------------------------------------------------------------------------
Compared with the second quarter of 2009, industry inventories were higher in
coated magazine paper and lower in uncoated magazine paper. Compared with the
previous quarter, industry inventories were clearly higher in both grades but
remained historically very low.
Fine Paper
--------------------------------------------------------------------------------
| EUR | Q2/1 | Q1/ | Q2/ | 2009 | Q1-Q2 | Q1-Q | Chang | Chang | Chang |
| million | 0 | 10 | 09 | | /10 | 2/09 | e % | e % | e % |
| | | | | | | | Q2/10 | Q2/10 | Q1-Q2 |
| | | | | | | | -Q2/0 | -Q1/1 | /10-Q |
| | | | | | | | 9 | 0 | 1-Q2/ |
| | | | | | | | | | 09 |
--------------------------------------------------------------------------------
| Sales | 554. | 474 | 450 | 1 | 1 | 882. | 23.1 | 16.8 | 16.6 |
| | 4 | .5 | .4 | 823.9 | 028.9 | 3 | | | |
--------------------------------------------------------------------------------
| EBITDA* | 101. | 62. | 25. | 134.5 | 163.1 | 47.8 | n/m | 62.6 | 241.2 |
| | 0 | 1 | 2 | | | | | | |
--------------------------------------------------------------------------------
| Operating | 79.4 | 41. | -4. | 32.7 | 120.9 | -9.8 | n/m | 91.3 | n/m |
| profit/los | | 5 | 1 | | | | | | |
| s* | | | | | | | | | |
--------------------------------------------------------------------------------
| % of sales | 14.3 | 8.7 | -0. | 1.8 | 11.8 | -1.1 | n/m | 64.4 | n/m |
| | | | 9 | | | | | | |
--------------------------------------------------------------------------------
| ROOC, %** | 33.5 | 17. | -1. | 2.8 | 25.6 | -1.5 | n/m | 89.3 | n/m |
| | | 7 | 3 | | | | | | |
--------------------------------------------------------------------------------
| Deliveries | 687 | 623 | 638 | 2 538 | 1 310 | 1 | 7.7 | 10.3 | 6.7 |
| , 1 000 t | | | | | | 228 | | | |
--------------------------------------------------------------------------------
| Production | 694 | 648 | 625 | 2 507 | 1 342 | 1 | 11.0 | 7.1 | 10.4 |
| , 1 000 t | | | | | | 216 | | | |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Fine paper sales were EUR 554 million, up EUR 104 million on the second quarter
of 2009. Deliveries increased by 8%. Local prices were slightly lower on
average, but the foreign exchange rate impact on sales was clearly positive.
Operating profit at EUR 79 million was an improvement of EUR 84 million on the
operating loss a year earlier due to recovery in demand for coated and uncoated
fine paper, a better product mix following restructuring in woodfree uncoated
fine paper, stable fixed costs despite increased volumes and slightly lower
variable costs.
There will be annual maintenance stoppages at various mills during the third
quarter of 2010.
Markets
--------------------------------------------------------------------------------
| Product | Market | Demand | Demand Q2/10 | Price Q2/10 | Price Q2/10 |
| | | Q2/10 | compared | compared | compared |
| | | compared | with Q1/10 | with Q2/09 | with Q1/10 |
| | | with Q2/09 | | | |
--------------------------------------------------------------------------------
| Coated | Europe | significant | seasonally | slightly | slightly |
| fine | | ly stronger | slightly | lower | higher |
| paper | | | weaker | | |
--------------------------------------------------------------------------------
| Coated | China | stable | stable | significantl | significantl |
| fine | | | | y higher | y higher |
| paper | | | | | |
--------------------------------------------------------------------------------
| Uncoated | Europe | significant | stable | slightly | higher |
| fine | | ly stronger | | higher | |
| paper | | | | | |
--------------------------------------------------------------------------------
Compared with the second quarter of 2009, industry inventories were similar for
coated fine paper, but lower for uncoated fine paper. As in the previous
quarter, industry inventories remained low.
Consumer Board
--------------------------------------------------------------------------------
| EUR | Q2/1 | Q1/ | Q2/ | 2009 | Q1-Q2 | Q1-Q | Chang | Chang | Chang |
| million | 0 | 10 | 09 | | /10 | 2/09 | e % | e % | e % |
| | | | | | | | Q2/10 | Q2/10 | Q1-Q2 |
| | | | | | | | -Q2/0 | -Q1/1 | /10-Q |
| | | | | | | | 9 | 0 | 1-Q2/ |
| | | | | | | | | | 09 |
--------------------------------------------------------------------------------
| Sales | 586. | 523 | 460 | 1 | 1 | 920. | 27.4 | 12.1 | 20.6 |
| | 3 | .1 | .3 | 895.9 | 109.4 | 2 | | | |
--------------------------------------------------------------------------------
| EBITDA* | 108. | 101 | 71. | 284.3 | 210.5 | 116. | 51.5 | 7.2 | 80.7 |
| | 9 | .6 | 9 | | | 5 | | | |
--------------------------------------------------------------------------------
| Operating | 76.9 | 70. | 41. | 164.9 | 147.4 | 57.1 | 84.9 | 9.1 | 158.1 |
| profit* | | 5 | 6 | | | | | | |
--------------------------------------------------------------------------------
| % of sales | 13.1 | 13. | 9.0 | 8.7 | 13.3 | 6.2 | 45.6 | -3.0 | 114.5 |
| | | 5 | | | | | | | |
--------------------------------------------------------------------------------
| ROOC, %** | 24.7 | 23. | 13. | 13.7 | 24.5 | 9.2 | 83.0 | 3.8 | 166.3 |
| | | 8 | 5 | | | | | | |
--------------------------------------------------------------------------------
| Deliveries | 590 | 551 | 545 | 2 201 | 1 141 | 1 | 8.3 | 7.1 | 6.2 |
| , 1 000 | | | | | | 074 | | | |
| t*** | | | | | | | | | |
--------------------------------------------------------------------------------
| Production | 591 | 602 | 551 | 2 161 | 1 193 | 1 | 7.3 | -1.8 | 12.5 |
| , 1 000 | | | | | | 060 | | | |
| t*** | | | | | | | | | |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital *** Excluding pulp
Consumer board sales were EUR 586 million, up EUR 126 million on the second
quarter of 2009 due to 8% higher board deliveries and somewhat higher board
prices supported by mix. The pulp balance was net positive and delivery volumes
and prices increased significantly. Operating profit at EUR 77 million was EUR
35 million higher than a year ago as increased deliveries, improved mix and
slightly higher prices more than offset higher variable costs. Fixed costs were
stable, although personnel costs increased due to less curtailments and
temporary lay-offs.
The annual maintenance stoppage at Imatra Mills will be during the third quarter
of this year, compared with the fourth quarter of last year, and will be longer
than usual for board machine 4 to complete the last step in its quality upgrade
investment. The annual maintenance stoppage at Enocell Pulp Mill will also be
during the third quarter of 2010.
Markets
--------------------------------------------------------------------------------
| Product | Market | Demand | Demand Q2/10 | Price Q2/10 | Price Q2/10 |
| | | Q2/10 | compared | compared | compared |
| | | compared | with Q1/10 | with Q2/09 | with Q1/10 |
| | | with Q2/09 | | | |
--------------------------------------------------------------------------------
| Consumer | Europe | stronger | stronger | stable | slightly |
| board | | | | | higher |
--------------------------------------------------------------------------------
Industrial Packaging
--------------------------------------------------------------------------------
| EUR million | Q2/ | Q1 | Q2/ | 200 | Q1- | Q1- | Chan | Chan | Chan |
| | 10 | /1 | 09 | 9 | Q2/ | Q2/ | ge % | ge % | ge % |
| | | 0 | | | 10 | 09 | Q2/1 | Q2/1 | Q1-Q |
| | | | | | | | 0-Q2 | 0-Q1 | 2/10 |
| | | | | | | | /09 | /10 | -Q1- |
| | | | | | | | | | Q2/0 |
| | | | | | | | | | 9 |
--------------------------------------------------------------------------------
| Sales | 259 | 22 | 194 | 815 | 482 | 391 | 33.6 | 16.1 | 23.3 |
| | .2 | 3. | .0 | .5 | .4 | .2 | | | |
| | | 2 | | | | | | | |
--------------------------------------------------------------------------------
| EBITDA* | 29. | 20 | 12. | 65. | 49. | 28. | 128. | 47.5 | 76.2 |
| | 5 | .0 | 9 | 4 | 5 | 1 | 7 | | |
--------------------------------------------------------------------------------
| Operating profit* | 17. | 7. | 0.9 | 17. | 24. | 4.4 | n/m | 122. | n/m |
| | 1 | 7 | | 6 | 8 | | | 1 | |
--------------------------------------------------------------------------------
| % of sales | 6.6 | 3. | 0.5 | 2.2 | 5.1 | 1.1 | n/m | 94.1 | n/m |
| | | 4 | | | | | | | |
--------------------------------------------------------------------------------
| ROOC, %** | 10. | 5. | 0.6 | 3.0 | 8.3 | 1.5 | n/m | 109. | n/m |
| | 9 | 2 | | | | | | 6 | |
--------------------------------------------------------------------------------
| Paper and board | 247 | 22 | 195 | 832 | 473 | 386 | 26.7 | 9.3 | 22.5 |
| deliveries, 1 000 t | | 6 | | | | | | | |
--------------------------------------------------------------------------------
| Paper and board | 239 | 24 | 181 | 807 | 480 | 370 | 32.0 | -0.8 | 29.7 |
| production, 1 000 t | | 1 | | | | | | | |
--------------------------------------------------------------------------------
| Corrugated packaging | 256 | 25 | 238 | 966 | 506 | 466 | 7.6 | 2.4 | 8.6 |
| deliveries, million | | 0 | | | | | | | |
| m2 | | | | | | | | | |
--------------------------------------------------------------------------------
| Corrugated packaging | 258 | 25 | 239 | 962 | 508 | 465 | 7.9 | 3.2 | 9.2 |
| production, million | | 0 | | | | | | | |
| m2 | | | | | | | | | |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Industrial packaging sales were EUR 259 million, up EUR 65 million on the second
quarter of 2009 due to higher deliveries and sales prices. Operating profit at
EUR 17 million was EUR 16 million up on the previous year as increased
deliveries and prices more than offset higher variable costs, especially for
recycled paper. Fixed costs increased slightly as volumes increased.
Kotka Mill in Finland was divested with effect from 1 July 2010. The divestment
reduced Stora Enso's annual capacity by 200 000 tonnes of laminating paper and
40 000 tonnes of Imprex products. The annual maintenance stoppage at Heinola
Mill will be during the third quarter of 2010.
Markets
--------------------------------------------------------------------------------
| Product | Market | Demand | Demand Q2/10 | Price Q2/10 | Price Q2/10 |
| | | Q2/10 | compared | compared | compared |
| | | compared | with Q1/10 | with Q2/09 | with Q1/10 |
| | | with Q2/09 | | | |
--------------------------------------------------------------------------------
| Industri | Europe | stronger | seasonally | higher | higher |
| al | | | stronger | | |
| packagin | | | | | |
| g | | | | | |
--------------------------------------------------------------------------------
Wood Products
--------------------------------------------------------------------------------
| EUR | Q2/1 | Q1/ | Q2/0 | 2009 | Q1-Q | Q1-Q | Chang | Chang | Chang |
| million | 0 | 10 | 9 | | 2/10 | 2/09 | e % | e % | e % |
| | | | | | | | Q2/10 | Q2/10 | Q1-Q2 |
| | | | | | | | -Q2/0 | -Q1/1 | /10-Q |
| | | | | | | | 9 | 0 | 1-Q2/ |
| | | | | | | | | | 09 |
--------------------------------------------------------------------------------
| Sales | 422. | 331 | 315. | 1 | 754. | 587. | 33.9 | 27.5 | 28.3 |
| | 7 | .6 | 8 | 239.6 | 3 | 8 | | | |
--------------------------------------------------------------------------------
| EBITDA* | 39.5 | 14. | -1.1 | 25.6 | 54.4 | -15. | n/m | 165.1 | n/m |
| | | 9 | | | | 4 | | | |
--------------------------------------------------------------------------------
| Operating | 30.1 | 5.4 | -8.7 | -8.0 | 35.5 | -32. | n/m | n/m | 209.6 |
| profit/los | | | | | | 4 | | | |
| s* | | | | | | | | | |
--------------------------------------------------------------------------------
| % of sales | 7.1 | 1.6 | -2.8 | -0.6 | 4.7 | -5.5 | n/m | n/m | 185.5 |
--------------------------------------------------------------------------------
| ROOC, %** | 20.5 | 3.8 | -5.9 | -1.4 | 12.3 | -10. | n/m | n/m | 213.9 |
| | | | | | | 8 | | | |
--------------------------------------------------------------------------------
| Deliveries | 1 | 1 | 1 | 4 902 | 2 | 2 | 12.0 | 26.8 | 8.0 |
| , 1 000 m3 | 457 | 149 | 301 | | 606 | 414 | | | |
--------------------------------------------------------------------------------
* Excluding non-recurring items ** ROOC = 100% x Operating profit/Operating
capital
Wood product sales were EUR 423 million, up EUR 107 million on the second
quarter of 2009 due to 12% higher deliveries, significantly higher sales prices
and favourable exchange rate trends. Operating profit at EUR 30 million was an
improvement of EUR 39 million on the operating loss a year ago as higher sales
prices and deliveries more than offset higher raw material prices. Fixed costs
including personnel costs increased, mainly because temporary curtailments and
lay-offs were reduced.
Co-determination negotiations concerning planned temporary curtailments at
Finnish sawmills commenced in June 2010. The planned lay-offs are in response to
the threat that wood cost levels in Finland will become even more uncompetitive.
Temporary curtailments are also planned in other countries. Kotka Sawmill in
Finland was divested with effect from 1 July 2010. The divestment reduced Stora
Enso's annual capacity by 230 000 m3 of sawnwood.
Markets
--------------------------------------------------------------------------------
| Product | Market | Demand | Demand Q2/10 | Price Q2/10 | Price Q2/10 |
| | | Q2/10 | compared | compared | compared |
| | | compared | with Q1/10 | with Q2/09 | with Q1/10 |
| | | with Q2/09 | | | |
--------------------------------------------------------------------------------
| Wood | Europe | slightly | seasonally | significantl | higher |
| products | | stronger | stronger | y higher | |
--------------------------------------------------------------------------------
| Wood | Asia, | stronger | seasonally | significantl | higher |
| products | Middle | | stronger | y higher | |
| | East | | | | |
| | and | | | | |
| | North | | | | |
| | Africa | | | | |
--------------------------------------------------------------------------------
With supply and demand in balance, inventories increased slightly to normal
throughout the supply chain from the very low levels a year ago, and they were
unchanged from 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 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 sale of integrated mills at Kotka in Finland and the laminating paper
operations in Malaysia has been accounted under IFRS 5 - Non-current Assets Held
for Sale. Assets are classified as 'Held for Sale' when it is highly probable
that the carrying amount of the assets will be recovered through a sale
transaction rather than continuing use. These assets and liabilities have been
measured at fair value less costs to sell. The closing sales consideration is
subject to fair value changes and therefore the final outcome of the transaction
is subject to change.
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 | Q2/ | Q1/1 | Q2/ | Q1-Q | Q1- | 2009 | Chan | Chang | Chang |
| | 10 | 0 | 09 | 2/10 | Q2/ | | ge % | e % | e % |
| | | | | | 09 | | Q2/1 | Q2/10 | Q1-Q2 |
| | | | | | | | 0-Q2 | -Q1/1 | /10-Q |
| | | | | | | | /09 | 0 | 1-Q2/ |
| | | | | | | | | | 09 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales | 2 | 2 | 2 | 4 | 4 | 8 | 23.2 | 17.3 | 15.6 |
| | 692 | 295. | 184 | 988. | 315 | 945.1 | | | |
| | .2 | 9 | .8 | 1 | .3 | | | | |
--------------------------------------------------------------------------------
| Other | 31. | 34.3 | 31. | 66.2 | 83. | 172.8 | 1.6 | -7.0 | -20.4 |
| operating | 9 | | 4 | | 2 | | | | |
| income | | | | | | | | | |
--------------------------------------------------------------------------------
| Materials and | -1 | -1 | -1 | -3 | -2 | -5 | -20. | -14.9 | -12.2 |
| services | 641 | 428. | 363 | 069. | 735 | 668.1 | 4 | | |
| | .3 | 1 | .4 | 4 | .0 | | | | |
--------------------------------------------------------------------------------
| Freight and | -26 | -225 | -19 | -489 | -40 | -833. | -34. | -17.2 | -19.9 |
| sales | 3.9 | .2 | 6.9 | .1 | 8.0 | 6 | 0 | | |
| commissions | | | | | | | | | |
--------------------------------------------------------------------------------
| Personnel | -36 | -329 | -32 | -690 | -70 | -1 | -11. | -10.0 | 1.5 |
| expenses | 1.8 | .0 | 5.6 | .8 | 1.6 | 349.6 | 1 | | |
--------------------------------------------------------------------------------
| Other | -14 | -112 | -40 | -260 | -51 | -833. | 63.1 | -32.3 | 49.6 |
| operating | 8.2 | .0 | 1.1 | .2 | 5.8 | 1 | | | |
| expenses | | | | | | | | | |
--------------------------------------------------------------------------------
| Share of | 14. | 19.1 | 6.0 | 34.0 | 25. | 111.8 | 148. | -22.0 | 33.9 |
| results of | 9 | | | | 4 | | 3 | | |
| equity | | | | | | | | | |
| accounted | | | | | | | | | |
| investments | | | | | | | | | |
--------------------------------------------------------------------------------
| Depreciation | -10 | -131 | -14 | -239 | -27 | -1 | 25.2 | 17.8 | 12.4 |
| and | 8.2 | .6 | 4.6 | .8 | 3.8 | 152.9 | | | |
| impairment | | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 215 | 123. | -20 | 339. | -21 | -607. | 203. | 74.7 | 261.2 |
| Profit/Loss | .6 | 4 | 9.4 | 0 | 0.3 | 6 | 0 | | |
--------------------------------------------------------------------------------
| Net financial | -22 | -5.5 | -16 | -28. | -20 | -279. | 86.0 | n/m | 86.5 |
| items | .6 | | 1.2 | 1 | 8.4 | 2 | | | |
--------------------------------------------------------------------------------
| Profit/Loss | 193 | 117. | -37 | 310. | -41 | -886. | 152. | 63.7 | 174.3 |
| before Tax | .0 | 9 | 0.6 | 9 | 8.7 | 8 | 1 | | |
--------------------------------------------------------------------------------
| Income tax | -33 | -15. | 2.3 | -48. | 14. | 8.6 | n/m | -109. | n/m |
| | .1 | 8 | | 9 | 3 | | | 5 | |
--------------------------------------------------------------------------------
| Net | 159 | 102. | -36 | 262. | -40 | -878. | 143. | 56.6 | 164.8 |
| Profit/Loss | .9 | 1 | 8.3 | 0 | 4.4 | 2 | 4 | | |
| for the | | | | | | | | | |
| Period | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable | | | | | | | | | |
| to: | | | | | | | | | |
--------------------------------------------------------------------------------
| Owners of the | 159 | 101. | -36 | 260. | -40 | -879. | 143. | 56.7 | 164.2 |
| Parent | .1 | 5 | 7.9 | 6 | 6.1 | 7 | 2 | | |
--------------------------------------------------------------------------------
| Non-controlli | 0.8 | 0.6 | -0. | 1.4 | 1.7 | 1.5 | 300. | 33.3 | -17.6 |
| ng interests | | | 4 | | | | 0 | | |
--------------------------------------------------------------------------------
| | 159 | 102. | -36 | 262. | -40 | -878. | 143. | 56.6 | 164.8 |
| | .9 | 1 | 8.3 | 0 | 4.4 | 2 | 4 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per | | | | | | | | | |
| Share | | | | | | | | | |
--------------------------------------------------------------------------------
| Basic | 0.2 | 0.13 | -0. | 0.33 | -0. | -1.12 | 143. | 53.8 | 164.7 |
| earnings per | 0 | | 46 | | 51 | | 5 | | |
| share, EUR | | | | | | | | | |
--------------------------------------------------------------------------------
| Diluted | 0.2 | 0.13 | -0. | 0.33 | -0. | -1.12 | 143. | 53.8 | 164.7 |
| earnings per | 0 | | 46 | | 51 | | 5 | | |
| share, EUR | | | | | | | | | |
--------------------------------------------------------------------------------
Consolidated Statement of Comprehensive Income
--------------------------------------------------------------------------------
| EUR million | Q2/10 | Q1/10 | Q2/09 | Q1-Q2 | Q1-Q2/ | 2009 |
| | | | | /10 | 09 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net profit/loss for the | 159.9 | 102.1 | -368. | 262.0 | -404.4 | -878.2 |
| period | | | 3 | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Other Comprehensive Income | | | | | | |
--------------------------------------------------------------------------------
| Actuarial gains and losses | - | - | - | - | - | -20.4 |
| on defined benefit pension | | | | | | |
| plans | | | | | | |
--------------------------------------------------------------------------------
| Asset revaluation on step | - | - | 3.9 | - | 3.9 | 3.9 |
| acquisition | | | | | | |
--------------------------------------------------------------------------------
| Available for sale | -28.5 | -16.6 | 334.3 | -45.1 | 150.9 | 180.3 |
| financial assets | | | | | | |
--------------------------------------------------------------------------------
| Currency and commodity | -4.8 | 23.9 | 103.4 | 19.1 | 105.6 | 224.1 |
| hedges | | | | | | |
--------------------------------------------------------------------------------
| Share of other | -1.1 | -0.3 | 2.2 | -1.4 | -10.4 | -8.5 |
| comprehensive income of | | | | | | |
| equity accounted | | | | | | |
| investments | | | | | | |
--------------------------------------------------------------------------------
| Currency translation | 112.8 | 144.3 | 67.4 | 257.1 | 91.7 | 252.6 |
| movements on equity net | | | | | | |
| investments (CTA) | | | | | | |
--------------------------------------------------------------------------------
| Currency translation | 5.0 | 1.1 | -1.7 | 6.1 | -1.2 | 5.9 |
| movements on | | | | | | |
| non-controlling interests | | | | | | |
--------------------------------------------------------------------------------
| Net investment hedges | 6.9 | -8.1 | 25.5 | -1.2 | 25.5 | 0.7 |
--------------------------------------------------------------------------------
| Income tax relating to | 0.0 | -4.7 | -32.3 | -4.7 | -36.3 | -65.0 |
| components of other | | | | | | |
| comprehensive income | | | | | | |
--------------------------------------------------------------------------------
| Other Comprehensive | 90.3 | 139.6 | 502.7 | 229.9 | 329.7 | 573.6 |
| Income, net of tax | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Total Comprehensive Income | 250.2 | 241.7 | 134.4 | 491.9 | -74.7 | -304.6 |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Total Comprehensive Income | | | | | | |
| Attributable to: | | | | | | |
--------------------------------------------------------------------------------
| Owners of the Parent | 244.4 | 240.0 | 136.5 | 484.4 | -75.2 | -312.0 |
--------------------------------------------------------------------------------
| Non-controlling interests | 5.8 | 1.7 | -2.1 | 7.5 | 0.5 | 7.4 |
--------------------------------------------------------------------------------
| | 250.2 | 241.7 | 134.4 | 491.9 | -74.7 | -304.6 |
--------------------------------------------------------------------------------
Condensed Consolidated Statement of Cash Flows
--------------------------------------------------------------------------------
| EUR million | Q1-Q2/10 | Q1-Q2/09 |
--------------------------------------------------------------------------------
| Cash Flow from Operating Activities | | |
--------------------------------------------------------------------------------
| Operating profit/loss | 339.0 | -210.3 |
--------------------------------------------------------------------------------
| Hedging result from OCI | 16.9 | 113.4 |
--------------------------------------------------------------------------------
| Adjustments for non-cash items | 202.5 | 467.7 |
--------------------------------------------------------------------------------
| Change in net working capital | -181.3 | 255.9 |
--------------------------------------------------------------------------------
| Cash Flow Generated by Operations | 377.1 | 626.7 |
--------------------------------------------------------------------------------
| Net financials items received/paid | 48.5 | -91.6 |
--------------------------------------------------------------------------------
| Income taxes paid, net | -21.0 | -4.2 |
--------------------------------------------------------------------------------
| Net Cash Provided by Operating Activities | 404.6 | 530.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash Flow from Investing Activities | | |
--------------------------------------------------------------------------------
| Acquisitions of subsidiaries | -5.6 | -8.3 |
--------------------------------------------------------------------------------
| Acquisitions of equity accounted investments | -13.2 | -0.1 |
--------------------------------------------------------------------------------
| Proceeds from sale of fixed assets and shares | 13.2 | 62.5 |
--------------------------------------------------------------------------------
| Capital expenditure | -188.1 | -212.5 |
--------------------------------------------------------------------------------
| Proceeds/payment of the non-current | 5.2 | -36.4 |
| receivables, net | | |
--------------------------------------------------------------------------------
| Net Cash Used in Investing Activities | -188.5 | -194.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash Flow from Financing Activities | | |
--------------------------------------------------------------------------------
| Proceeds from issue of new long-term debt | 350.5 | 223.0 |
--------------------------------------------------------------------------------
| Long-term debt, payments | -708.2 | -98.8 |
--------------------------------------------------------------------------------
| Change in short-term borrowings | 270.2 | -178.7 |
--------------------------------------------------------------------------------
| Capital repayments paid | -157.7 | - |
--------------------------------------------------------------------------------
| Dividend to non-controlling interests | -1.3 | -6.0 |
--------------------------------------------------------------------------------
| Net Cash Used in Financing Activities | -246.5 | -60.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net Decrease/Increase in Cash and Cash | -30.4 | 275.6 |
| Equivalents | | |
--------------------------------------------------------------------------------
| Cash and bank in disposed companies | -0.1 | - |
--------------------------------------------------------------------------------
| Cash and bank in acquired companies | - | 4.4 |
--------------------------------------------------------------------------------
| Translation adjustment | 9.0 | -8.1 |
--------------------------------------------------------------------------------
| Net cash and cash equivalents at the | 877.0 | 372.6 |
| beginning of period | | |
--------------------------------------------------------------------------------
| Net Cash and Cash Equivalents at Period End | 855.5 | 644.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and Cash Equivalents at Period End | 857.5 | 647.8 |
--------------------------------------------------------------------------------
| Bank Overdrafts at Period End | -2.0 | -3.3 |
--------------------------------------------------------------------------------
| Net Cash and Cash Equivalents at Period End | 855.5 | 644.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Acquisitions of Subsidiary Companies | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | - | 4.4 |
--------------------------------------------------------------------------------
| Fixed assets | - | 14.4 |
--------------------------------------------------------------------------------
| Working capital | - | 20.4 |
--------------------------------------------------------------------------------
| Tax assets and liabilities | - | 15.1 |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | - | -40.0 |
--------------------------------------------------------------------------------
| Non-controlling interests | 5.6 | -2.1 |
--------------------------------------------------------------------------------
| Fair Value of Net Assets | 5.6 | 12.2 |
--------------------------------------------------------------------------------
| Gain from step acquisition realised directly | - | -3.9 |
| in equity | | |
--------------------------------------------------------------------------------
| Total Purchase Consideration | 5.6 | 8.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Disposal of Subsidiary Companies | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 0.1 | - |
--------------------------------------------------------------------------------
| Fixed assets | 0.5 | 0.1 |
--------------------------------------------------------------------------------
| Working capital | - | 0.2 |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | -0.1 | - |
--------------------------------------------------------------------------------
| Tax liabilities | -0.1 | - |
--------------------------------------------------------------------------------
| Non-controlling Interest | - | - |
--------------------------------------------------------------------------------
| Net Assets in Divested Companies | 0.4 | 0.3 |
--------------------------------------------------------------------------------
| Income Statement capital gain/loss | - | - |
--------------------------------------------------------------------------------
| Total Disposal Consideration Received in Cash | 0.4 | 0.3 |
| and Kind | | |
--------------------------------------------------------------------------------
Property, Plant and Equipment, Intangible Assets and Goodwill
--------------------------------------------------------------------------------
| EUR million | Q1-Q2/10 | 2009 | Q1-Q2/09 |
--------------------------------------------------------------------------------
| Carrying value at 1 January | 5 157.7 | 5 899.4 | 5 899.4 |
--------------------------------------------------------------------------------
| Acquisition of subsidiary companies | - | 17.6 | 14.4 |
--------------------------------------------------------------------------------
| Capital expenditure | 177.4 | 394.4 | 192.9 |
--------------------------------------------------------------------------------
| Additions in biological assets | 10.7 | 35.5 | 19.6 |
--------------------------------------------------------------------------------
| Change in emission rights | 35.3 | -41.7 | -26.5 |
--------------------------------------------------------------------------------
| Disposals | -19.9 | -27.9 | -24.1 |
--------------------------------------------------------------------------------
| Disposals of subsidiary companies | -0.5 | -92.6 | -0.1 |
--------------------------------------------------------------------------------
| Depreciation and impairment | -239.8 | -1 152.9 | -273.8 |
--------------------------------------------------------------------------------
| Translation difference and other | 210.2 | 125.9 | 10.3 |
--------------------------------------------------------------------------------
| Statement of Financial Position | 5 331.1 | 5 157.7 | 5 812.1 |
| Total | | | |
--------------------------------------------------------------------------------
Borrowings
--------------------------------------------------------------------------------
| EUR million | 30 Jun 10 | 31 Dec 09 | 30 Jun 09 |
--------------------------------------------------------------------------------
| Non-current borrowings | 3 042.6 | 2 898.4 | 2 500.9 |
--------------------------------------------------------------------------------
| Current borrowings | 1 003.8 | 1 038.3 | 1 449.7 |
--------------------------------------------------------------------------------
| | 4 046.4 | 3 936.7 | 3 950.6 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| | Q1-Q2/10 | 2009 | Q1-Q2/09 |
--------------------------------------------------------------------------------
| Carrying value at 1 January | 3 936.7 | 4 076.1 | 4 076.1 |
--------------------------------------------------------------------------------
| Debt acquired with new subsidiaries | - | 44.1 | 40.0 |
--------------------------------------------------------------------------------
| Debt disposed with sold | -0.1 | - | - |
| subsidiaries | | | |
--------------------------------------------------------------------------------
| Proceeds/(Payments of) borrowings | -39.3 | -255.1 | -151.2 |
| (net) | | | |
--------------------------------------------------------------------------------
| Translation difference and other | 149.1 | 71.6 | -14.3 |
--------------------------------------------------------------------------------
| Statement of Financial Position | 4 046.4 | 3 936.7 | 3 950.6 |
| Total | | | |
--------------------------------------------------------------------------------
Condensed Consolidated Statement of Financial Position
--------------------------------------------------------------------------------
| EUR million | | 30 Jun | 31 Dec | 30 Jun |
| | | 10 | 09 | 09 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fixed Assets and Other Non-current | | | | |
| Investments | | | | |
--------------------------------------------------------------------------------
| Fixed assets | O | 5 | 4 979.9 | 5 617.6 |
| | | 081.5 | | |
--------------------------------------------------------------------------------
| Biological assets | O | 189.0 | 152.5 | 154.0 |
--------------------------------------------------------------------------------
| Emission rights | O | 60.6 | 25.3 | 40.5 |
--------------------------------------------------------------------------------
| Equity accounted investment | O | 1 | 1 481.3 | 1 117.9 |
| | | 687.1 | | |
--------------------------------------------------------------------------------
| Available-for-sale: Interest-bearing | I | 72.9 | 71.7 | 58.0 |
--------------------------------------------------------------------------------
| Available-for-sale: Operative | O | 737.3 | 778.5 | 781.6 |
--------------------------------------------------------------------------------
| Non-current loan receivables | I | 160.5 | 159.6 | 167.1 |
--------------------------------------------------------------------------------
| Deferred tax assets | T | 150.1 | 155.8 | 143.1 |
--------------------------------------------------------------------------------
| Other non-current assets | O | 38.8 | 30.4 | 19.6 |
--------------------------------------------------------------------------------
| | | 8 | 7 835.0 | 8 099.4 |
| | | 177.8 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current Assets | | | | |
--------------------------------------------------------------------------------
| Inventories | O | 1 | 1 281.6 | 1 491.5 |
| | | 363.3 | | |
--------------------------------------------------------------------------------
| Tax receivables | T | 9.2 | 2.4 | 35.0 |
--------------------------------------------------------------------------------
| Operative receivables | O | 1 | 1 362.6 | 1 437.4 |
| | | 597.4 | | |
--------------------------------------------------------------------------------
| Interest-bearing receivables | I | 257.5 | 221.2 | 160.1 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | I | 857.5 | 890.4 | 647.8 |
--------------------------------------------------------------------------------
| | | 4 | 3 758.2 | 3 771.8 |
| | | 084.9 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Asset of disposal group classified as | | 33.3 | - | - |
| held for sale* | | | | |
--------------------------------------------------------------------------------
| | | 4 | 3 758.2 | 3 771.8 |
| | | 118.2 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total Assets | | 12 | 11 593.2 | 11 871.2 |
| | | 296.0 | | |
--------------------------------------------------------------------------------
| Equity and Liabilities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Owners of the Parent | | 5 | 5 124.3 | 5 518.8 |
| | | 457.1 | | |
--------------------------------------------------------------------------------
| Non-controlling Interests | | 52.7 | 58.2 | 57.0 |
--------------------------------------------------------------------------------
| Total Equity | | 5 | 5 182.5 | 5 575.8 |
| | | 509.8 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current Liabilities | | | | |
--------------------------------------------------------------------------------
| Post-employment benefit provisions | O | 329.5 | 305.0 | 300.9 |
--------------------------------------------------------------------------------
| Other provisions | O | 206.6 | 180.4 | 179.3 |
--------------------------------------------------------------------------------
| Deferred tax liabilities | T | 376.7 | 364.4 | 318.0 |
--------------------------------------------------------------------------------
| Non-current debt | I | 3 | 2 898.4 | 2 500.9 |
| | | 042.6 | | |
--------------------------------------------------------------------------------
| Other non-current operative liabilities | O | 21.9 | 43.1 | 22.0 |
--------------------------------------------------------------------------------
| | | 3 | 3 791.3 | 3 321.1 |
| | | 977.3 | | |
--------------------------------------------------------------------------------
| Current Liabilities | | | | |
--------------------------------------------------------------------------------
| Current portion of long-term debt | I | 588.8 | 814.8 | 1 067.0 |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | I | 415.0 | 223.5 | 382.7 |
--------------------------------------------------------------------------------
| Operative liabilities | O | 1 | 1 473.0 | 1 388.3 |
| | | 637.5 | | |
--------------------------------------------------------------------------------
| Tax liabilities | T | 139.0 | 108.1 | 136.3 |
--------------------------------------------------------------------------------
| | | 2 | 2 619.4 | 2 974.3 |
| | | 780.3 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liability directly associated with the | | 28.6 | - | - |
| assets classified as held for sale* | | | | |
--------------------------------------------------------------------------------
| | | 2 | 2 619.4 | 2 974.3 |
| | | 808.9 | | |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Total Liabilities | | 6 | 6 410.7 | 6 295.4 |
| | | 786.2 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total Equity and Liabilities | | 12 | 11 593.2 | 11 871.2 |
| | | 296.0 | | |
--------------------------------------------------------------------------------
* Stora Enso finalised the divestment of its integrated mills at Kotka in
Finland and its laminating paper operations in Malaysia to private equity firm
OpenGate Capital on 1 July 2010. On 30 June 2010 the related assets were
classified as held for sale.
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
--------------------------------------------------------------------------------
| 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 | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Profit/ | - | - | - | - | - | - | - | - | - | -40 | -40 | 1.7 | -4 |
| Loss | | | | | | | | | | 6.1 | 6.1 | | 04 |
| for the | | | | | | | | | | | | | .4 |
| period | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| OCI | - | - | - | - | 3. | 15 | 10 | -10 | 117 | - | 367 | -1. | 36 |
| before | | | | | 9 | 0. | 5. | .4 | .2 | | .2 | 2 | 6. |
| tax | | | | | | 9 | 6 | | | | | | 0 |
--------------------------------------------------------------------------------
| Income | - | - | - | - | - | -3 | -2 | - | -6. | - | -36 | - | -3 |
| tax | | | | | | .1 | 6. | | 6 | | .3 | | 6. |
| relatin | | | | | | | 6 | | | | | | 3 |
| g to | | | | | | | | | | | | | |
| compone | | | | | | | | | | | | | |
| nts of | | | | | | | | | | | | | |
| OCI | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | - | - | | | | | | |
--------------------------------------------------------------------------------
| Total | - | - | - | - | 3. | 14 | 79 | -10 | 110 | -40 | -75 | 0.5 | -7 |
| Compreh | | | | | 9 | 7. | .0 | .4 | .6 | 6.1 | .2 | | 4. |
| ensive | | | | | | 8 | | | | | | | 7 |
| Income | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividen | - | - | - | - | - | - | - | - | - | - | - | - | - |
| ds | | | | | | | | | | | | | |
| relatin | | | | | | | | | | | | | |
| g to | | | | | | | | | | | | | |
| 2008 | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Balance | 1 | 2 | - | -1 | 3. | 65 | -8 | -20 | -33 | 1 | 5 | 57. | 5 |
| at 30 | 3 | 27 | | 0. | 9 | 8. | 7. | .9 | 3.2 | 689 | 518 | 0 | 57 |
| June | 4 | 6. | | 2 | | 4 | 1 | | | .3 | .8 | | 5. |
| 2009 | 2 | 4 | | | | | | | | | | | 8 |
| | . | | | | | | | | | | | | |
| | 2 | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Profit/ | - | - | - | - | - | - | - | - | - | -47 | -47 | -0. | -4 |
| Loss | | | | | | | | | | 3.6 | 3.6 | 2 | 73 |
| for the | | | | | | | | | | | | | .8 |
| period | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| OCI | - | - | - | - | - | 29 | 11 | 1.9 | 136 | -20 | 265 | 7.1 | 27 |
| before | | | | | | .4 | 8. | | .1 | .4 | .5 | | 2. |
| tax | | | | | | | 5 | | | | | | 6 |
--------------------------------------------------------------------------------
| Income | - | - | - | - | - | -3 | -3 | - | 2.5 | 4.6 | -28 | - | -2 |
| tax | | | | | | .6 | 2. | | | | .7 | | 8. |
| relatin | | | | | | | 2 | | | | | | 7 |
| g to | | | | | | | | | | | | | |
| compone | | | | | | | | | | | | | |
| nts of | | | | | | | | | | | | | |
| OCI | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | - | - | - | - | - | 25 | 86 | 1.9 | 138 | -48 | -23 | 6.9 | -2 |
| Compreh | | | | | | .8 | .3 | | .6 | 9.4 | 6.8 | | 29 |
| ensive | | | | | | | | | | | | | .9 |
| Income | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividen | - | - | - | - | - | - | - | - | - | - | - | -2. | -2 |
| ds | | | | | | | | | | | | 2 | .2 |
| relatin | | | | | | | | | | | | | |
| g to | | | | | | | | | | | | | |
| 2008 | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Acquisi | - | - | - | - | - | - | - | - | - | - | - | -3. | -3 |
| tions | | | | | | | | | | | | 4 | .4 |
| and | | | | | | | | | | | | | |
| disposa | | | | | | | | | | | | | |
| ls | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Buy-out | - | - | - | - | - | - | - | - | - | - | - | - | -0 |
| of | | | | | | | | | | | | 0.1 | .1 |
| non-con | | | | | | | | | | | | | |
| trollin | | | | | | | | | | | | | |
| g | | | | | | | | | | | | | |
| interes | | | | | | | | | | | | | |
| t | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Transfe | - | -2 | 2 | - | - | - | - | - | - | - | - | - | - |
| r to | | 04 | 04 | | | | | | | | | | |
| distrib | | 2. | 2. | | | | | | | | | | |
| utable | | 1 | 1 | | | | | | | | | | |
| reserve | | | | | | | | | | | | | |
| s | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Return | - | -1 | - | - | - | - | - | - | - | - | -15 | - | -1 |
| of | | 57 | | | | | | | | | 7.7 | | 57 |
| capital | | .7 | | | | | | | | | | | .7 |
| (EUR | | | | | | | | | | | | | |
| 0.20 | | | | | | | | | | | | | |
| per | | | | | | | | | | | | | |
| share) | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| 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/ | - | - | - | - | - | - | - | - | - | 260 | 260 | 1.4 | 26 |
| Loss | | | | | | | | | | .6 | .6 | | 2. |
| for the | | | | | | | | | | | | | 0 |
| period | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| OCI | - | - | - | - | - | -4 | 19 | -1. | 255 | - | 228 | 6.1 | 23 |
| before | | | | | | 5. | .1 | 4 | .9 | | .5 | | 4. |
| tax | | | | | | 1 | | | | | | | 6 |
--------------------------------------------------------------------------------
| Income | - | - | - | - | - | 0. | -5 | - | 0.3 | - | -4. | - | -4 |
| tax | | | | | | 6 | .6 | | | | 7 | | .7 |
| relatin | | | | | | | | | | | | | |
| g to | | | | | | | | | | | | | |
| compone | | | | | | | | | | | | | |
| nts of | | | | | | | | | | | | | |
| OCI | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | - | - | - | - | - | -4 | 13 | -1. | 256 | 260 | 484 | 7.5 | 49 |
| Compreh | | | | | | 4. | .5 | 4 | .2 | .6 | .4 | | 1. |
| ensive | | | | | | 5 | | | | | | | 9 |
| Income | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividen | - | - | - | - | - | - | - | - | - | - | - | -1. | -1 |
| ds | | | | | | | | | | | | 3 | .3 |
| relatin | | | | | | | | | | | | | |
| g to | | | | | | | | | | | | | |
| 2009 | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Acquisi | - | - | - | - | - | - | - | - | - | - | - | -5. | -5 |
| tions | | | | | | | | | | | | 6 | .6 |
| and | | | | | | | | | | | | | |
| disposa | | | | | | | | | | | | | |
| ls | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
| Buy-out | - | - | - | - | - | - | - | - | - | 6.1 | 6.1 | -6. | - |
| of | | | | | | | | | | | | 1 | |
| 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. | 63 | 12 | -20 | 61. | 2 | 5 | 52. | 5 |
| at 30 | 3 | .6 | 3. | 0. | 9 | 9. | .7 | .4 | 6 | 717 | 457 | 7 | 50 |
| June | 4 | | 1 | 2 | | 7 | | | | .9 | .1 | | 9. |
| 2010 | 2 | | | | | | | | | | | | 8 |
| | . | | | | | | | | | | | | |
| | 2 | | | | | | | | | | | | |
--------------------------------------------------------------------------------
CTA = Cumulative Translation Adjustment
OCI = Other Comprehensive Income
Commitments and Contingencies
--------------------------------------------------------------------------------
| EUR million | 30 Jun 10 | 31 Dec 09 | 30 Jun 09 |
--------------------------------------------------------------------------------
| On Own Behalf | | | |
--------------------------------------------------------------------------------
| Pledges given | - | - | 0.8 |
--------------------------------------------------------------------------------
| Mortgages | 11.2 | 16.2 | 72.5 |
--------------------------------------------------------------------------------
| On Behalf of Equity Accounted | | | |
| Investments | | | |
--------------------------------------------------------------------------------
| Guarantees | 182.1 | 180.2 | 193.0 |
--------------------------------------------------------------------------------
| On Behalf of Others | | | |
--------------------------------------------------------------------------------
| Guarantees | 121.4 | 121.7 | 127.9 |
--------------------------------------------------------------------------------
| Other Commitments, Own | | | |
--------------------------------------------------------------------------------
| Operating leases, in next 12 | 26.8 | 27.2 | 25.2 |
| months | | | |
--------------------------------------------------------------------------------
| Operating leases, after next 12 | 73.3 | 79.3 | 84.8 |
| months | | | |
--------------------------------------------------------------------------------
| Pension liabilities | 0.1 | 0.3 | 0.2 |
--------------------------------------------------------------------------------
| Other commitments | 32.7 | 36.4 | 160.7 |
--------------------------------------------------------------------------------
| Total | 447.6 | 461.3 | 665.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Pledges given | - | - | 0.8 |
--------------------------------------------------------------------------------
| Mortgages | 11.2 | 16.2 | 72.5 |
--------------------------------------------------------------------------------
| Guarantees | 303.5 | 301.9 | 320.9 |
--------------------------------------------------------------------------------
| Operating leases | 100.1 | 106.5 | 110.0 |
--------------------------------------------------------------------------------
| Pension liabilities | 0.1 | 0.3 | 0.2 |
--------------------------------------------------------------------------------
| Other commitments | 32.7 | 36.4 | 160.7 |
--------------------------------------------------------------------------------
| Total | 447.6 | 461.3 | 665.1 |
--------------------------------------------------------------------------------
Purchase Agreement Commitments
--------------------------------------------------------------------------------
| EUR million | Scheduled Contract Payments |
--------------------------------------------------------------------------------
| Type of Supply | Contract | Q3-Q4/201 | 2011-201 | 2013-201 | 2015+ |
| | Total | 0 | 2 | 4 | |
--------------------------------------------------------------------------------
| | Fibre | 1 728.5 | 120.0 | 454.1 | 428.1 | 726.3 |
--------------------------------------------------------------------------------
| | Energy | 1 700.3 | 282.4 | 476.3 | 334.3 | 607.3 |
--------------------------------------------------------------------------------
| | Logistics | 407.7 | 32.7 | 99.1 | 81.9 | 194.0 |
--------------------------------------------------------------------------------
| | Other production | 737.5 | 74.8 | 115.5 | 51.5 | 495.7 |
| | costs | | | | | |
--------------------------------------------------------------------------------
| | | 4 574.0 | 509.9 | 1 145.0 | 895.8 | 2 023. |
| | | | | | | 3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital Expenditure | 57.2 | 37.6 | 19.6 | - | - |
--------------------------------------------------------------------------------
| Total Contractual | 4 631.2 | 547.5 | 1 164.6 | 895.8 | 2 |
| Commitments at 30 | | | | | 023.3 |
| June 2010 | | | | | |
--------------------------------------------------------------------------------
Fair Values of Derivative Financial Instruments
--------------------------------------------------------------------------------
| EUR million | | 30 Jun | | | 31 Dec 09 | 30 Jun 09 |
| | | 10 | | | | |
--------------------------------------------------------------------------------
| | Positive | Negativ | Net | | Net | Net |
| | Fair | e | Fair | | Fair | Fair |
| | Values | Fair | Values | | Values | Values |
| | | Values | | | | |
--------------------------------------------------------------------------------
| Interest rate | 167.3 | -17.7 | 149.6 | | 156.6 | 179.1 |
| swaps | | | | | | |
--------------------------------------------------------------------------------
| Interest rate | - | -42.8 | -42.8 | | -26.7 | -26.9 |
| options | | | | | | |
--------------------------------------------------------------------------------
| Forward | 120.6 | -22.5 | 98.1 | | 20.5 | -124.2 |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Currency options | 13.8 | -44.1 | -30.3 | | 13.9 | 7.0 |
--------------------------------------------------------------------------------
| Commodity | 21.8 | -27.3 | -5.5 | | -21.8 | -49.3 |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Equity swaps | 9.5 | -11.8 | -2.3 | | -14.1 | -30.5 |
| ("TRS") | | | | | | |
--------------------------------------------------------------------------------
| Total | 333.0 | -166.2 | 166.8 | | 128.4 | -44.8 |
--------------------------------------------------------------------------------
Nominal Values of Derivative Financial Instruments
--------------------------------------------------------------------------------
| EUR million | 30 Jun 10 | 31 Dec 09 | 30 Jun 09 |
--------------------------------------------------------------------------------
| Interest Rate Derivatives | | | |
--------------------------------------------------------------------------------
| Interest rate swaps | | | |
--------------------------------------------------------------------------------
| Maturity under 1 year | 866.1 | 666.8 | 1 262.5 |
--------------------------------------------------------------------------------
| Maturity 2-5 years | 1 665.4 | 2 384.0 | 2 412.5 |
--------------------------------------------------------------------------------
| Maturity 6-10 years | 1 006.1 | 861.8 | 874.3 |
--------------------------------------------------------------------------------
| | 3 537.6 | 3 912.6 | 4 549.3 |
--------------------------------------------------------------------------------
| Interest rate options | 541.7 | 387.4 | 343.4 |
--------------------------------------------------------------------------------
| Total | 4 079.3 | 4 300.0 | 4 892.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Foreign Exchange Derivatives | | | |
--------------------------------------------------------------------------------
| Forward contracts | 2 557.5 | 2 935.7 | 2 721.7 |
--------------------------------------------------------------------------------
| Currency options | 2 555.2 | 1 590.7 | 2 025.3 |
--------------------------------------------------------------------------------
| Total | 5 112.7 | 4 526.4 | 4 747.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Commodity Derivatives | | | |
--------------------------------------------------------------------------------
| Commodity contracts | 310.8 | 396.7 | 482.5 |
--------------------------------------------------------------------------------
| Total | 310.8 | 396.7 | 482.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 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 | Q2/10 | Q1/10 | 2009 | Q4/09 | Q3/09 | Q2/09 | Q1/09 |
--------------------------------------------------------------------------------
| Newsprint and | 325.1 | 287.4 | 1 | 359.6 | 330.0 | 327.5 | 308.7 |
| Book Paper | | | 325.8 | | | | |
--------------------------------------------------------------------------------
| Magazine Paper | 530.2 | 435.5 | 1 | 430.2 | 469.0 | 396.0 | 380.8 |
| | | | 676.0 | | | | |
--------------------------------------------------------------------------------
| Fine Paper | 554.4 | 474.5 | 1 | 492.0 | 449.6 | 450.4 | 431.9 |
| | | | 823.9 | | | | |
--------------------------------------------------------------------------------
| Consumer Board | 586.3 | 523.1 | 1 | 505.0 | 470.7 | 460.3 | 459.9 |
| | | | 895.9 | | | | |
--------------------------------------------------------------------------------
| Industrial | 259.2 | 223.2 | 815.5 | 220.6 | 203.7 | 194.0 | 197.2 |
| Packaging | | | | | | | |
--------------------------------------------------------------------------------
| Wood Products | 422.7 | 331.6 | 1 | 344.9 | 306.9 | 315.8 | 272.0 |
| | | | 239.6 | | | | |
--------------------------------------------------------------------------------
| Other | 648.6 | 625.3 | 2 | 619.4 | 450.1 | 507.8 | 597.9 |
| | | | 175.2 | | | | |
--------------------------------------------------------------------------------
| Inter-segment | -634.3 | -604.7 | -2 | -572.9 | -449.0 | -467.0 | -517. |
| sales | | | 006.8 | | | | 9 |
--------------------------------------------------------------------------------
| Total | 2 | 2 295.9 | 8 | 2 | 2 | 2 | 2 |
| | 692.2 | | 945.1 | 398.8 | 231.0 | 184.8 | 130.5 |
--------------------------------------------------------------------------------
Operating Profit/Loss by Segment excluding NRI and Fair Valuations
--------------------------------------------------------------------------------
| EUR million | Q2/10 | Q1/10 | 2009 | Q4/09 | Q3/09 | Q2/09 | Q1/09 |
--------------------------------------------------------------------------------
| Newsprint and | -6.6 | -1.6 | 128.7 | 41.3 | 34.8 | 31.1 | 21.5 |
| Book Paper | | | | | | | |
--------------------------------------------------------------------------------
| Magazine Paper | 22.0 | 3.9 | 40.3 | 4.1 | 30.6 | 5.7 | -0.1 |
--------------------------------------------------------------------------------
| Fine Paper | 79.4 | 41.5 | 32.7 | 22.1 | 20.4 | -4.1 | -5.7 |
--------------------------------------------------------------------------------
| Consumer Board | 76.9 | 70.5 | 164.9 | 42.9 | 64.9 | 41.6 | 15.5 |
--------------------------------------------------------------------------------
| Industrial | 17.1 | 7.7 | 17.6 | 2.9 | 10.3 | 0.9 | 3.5 |
| Packaging | | | | | | | |
--------------------------------------------------------------------------------
| Wood Products | 30.1 | 5.4 | -8.0 | 15.0 | 9.4 | -8.7 | -23.7 |
--------------------------------------------------------------------------------
| Other | -16.5 | -22.2 | -117. | -26.6 | -44.9 | -24.3 | -21.3 |
| | | | 1 | | | | |
--------------------------------------------------------------------------------
| Operating | 202.4 | 105.2 | 259.1 | 101.7 | 125.5 | 42.2 | -10.3 |
| Profit/Loss | | | | | | | |
| excl. NRI by | | | | | | | |
| Segment | | | | | | | |
--------------------------------------------------------------------------------
| Share of | 10.5 | 14.2 | 61.4 | 35.8 | 6.0 | 6.3 | 13.3 |
| results of | | | | | | | |
| equity | | | | | | | |
| accounted | | | | | | | |
| investments | | | | | | | |
| excl. fair | | | | | | | |
| valuations | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 212.9 | 119.4 | 320.5 | 137.5 | 131.5 | 48.5 | 3.0 |
| Profit excl. | | | | | | | |
| NRI and Fair | | | | | | | |
| Valuations* | | | | | | | |
--------------------------------------------------------------------------------
| Fair | 11.2 | 22.9 | 4.4 | 9.9 | 21.0 | 11.4 | -37.9 |
| valuations* | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 224.1 | 142.3 | 324.9 | 147.4 | 152.5 | 59.9 | -34.9 |
| Profit/Loss | | | | | | | |
| excl. NRI | | | | | | | |
--------------------------------------------------------------------------------
| NRI | -8.5 | -18.9 | -932. | -42.1 | -655.1 | -269.3 | 34.0 |
| | | | 5 | | | | |
--------------------------------------------------------------------------------
| Operating | 215.6 | 123.4 | -607. | 105.3 | -502.6 | -209.4 | -0.9 |
| Profit/Loss | | | 6 | | | | |
| (IFRS) | | | | | | | |
--------------------------------------------------------------------------------
| Net financial | -22.6 | -5.5 | -279. | -24.7 | -46.1 | -161.2 | -47.2 |
| items | | | 2 | | | | |
--------------------------------------------------------------------------------
| Profit/Loss | 193.0 | 117.9 | -886. | 80.6 | -548.7 | -370.6 | -48.1 |
| before Tax and | | | 8 | | | | |
| Non-controllin | | | | | | | |
| g Interests | | | | | | | |
--------------------------------------------------------------------------------
| Income tax | -33.1 | -15.8 | 8.6 | -34.7 | 29.0 | 2.3 | 12.0 |
| expense | | | | | | | |
--------------------------------------------------------------------------------
| Net | 159.9 | 102.1 | -878. | 45.9 | -519.7 | -368.3 | -36.1 |
| Profit/Loss | | | 2 | | | | |
--------------------------------------------------------------------------------
* 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 | Q2/10 | Q1/10 | 2009 | Q4/09 | Q3/09 | Q2/09 | Q1/09 |
--------------------------------------------------------------------------------
| Newsprint and | -13.0 | - | -52.2 | -1.1 | -80.1 | - | 29.0 |
| Book Paper | | | | | | | |
--------------------------------------------------------------------------------
| Magazine Paper | 9.2 | -5.7 | -163. | -11.4 | -152.1 | - | - |
| | | | 5 | | | | |
--------------------------------------------------------------------------------
| Fine Paper | 8.5 | - | -314. | -0.6 | -313.6 | - | - |
| | | | 2 | | | | |
--------------------------------------------------------------------------------
| Consumer Board | - | - | -34.2 | 1.6 | -35.8 | - | - |
--------------------------------------------------------------------------------
| Industrial | -3.3 | -13.2 | -28.7 | -0.5 | -28.2 | - | - |
| Packaging | | | | | | | |
--------------------------------------------------------------------------------
| Wood Products | 0.5 | 1.6 | -7.7 | 1.0 | -8.7 | - | - |
--------------------------------------------------------------------------------
| Other | -10.4 | -1.6 | -332. | -31.1 | -36.6 | -269.3 | 5.0 |
| | | | 0 | | | | |
--------------------------------------------------------------------------------
| NRI on | -8.5 | -18.9 | -932. | -42.1 | -655.1 | -269.3 | 34.0 |
| Operating | | | 5 | | | | |
| Profit | | | | | | | |
--------------------------------------------------------------------------------
| NRI on | - | - | -148. | - | - | -148.5 | - |
| financial | | | 5 | | | | |
| items | | | | | | | |
--------------------------------------------------------------------------------
| NRI on tax | - | - | 49.6 | 12.0 | 42.9 | 4.6 | -9.9 |
--------------------------------------------------------------------------------
| NRI on Net | -8.5 | -18.9 | -1 | -30.1 | -612.2 | -413.2 | 24.1 |
| Profit | | | 031.4 | | | | |
--------------------------------------------------------------------------------
Operating Profit/Loss by Segment
--------------------------------------------------------------------------------
| EUR million | Q2/10 | Q1/10 | 2009 | Q4/09 | Q3/09 | Q2/09 | Q1/09 |
--------------------------------------------------------------------------------
| Newsprint and | -19.6 | -1.6 | 76.5 | 40.2 | -45.3 | 31.1 | 50.5 |
| Book Paper | | | | | | | |
--------------------------------------------------------------------------------
| Magazine Paper | 31.2 | -1.8 | -123. | -7.3 | -121.5 | 5.7 | -0.1 |
| | | | 2 | | | | |
--------------------------------------------------------------------------------
| Fine Paper | 87.9 | 41.5 | -281. | 21.5 | -293.2 | -4.1 | -5.7 |
| | | | 5 | | | | |
--------------------------------------------------------------------------------
| Consumer Board | 76.9 | 70.5 | 130.7 | 44.5 | 29.1 | 41.6 | 15.5 |
--------------------------------------------------------------------------------
| Industrial | 13.8 | -5.5 | -11.1 | 2.4 | -17.9 | 0.9 | 3.5 |
| Packaging | | | | | | | |
--------------------------------------------------------------------------------
| Wood Products | 30.6 | 7.0 | -15.7 | 16.0 | 0.7 | -8.7 | -23.7 |
--------------------------------------------------------------------------------
| Other | -20.1 | -5.8 | -495. | -89.6 | -63.3 | -281.9 | -60.3 |
| | | | 1 | | | | |
--------------------------------------------------------------------------------
| Share of | 14.9 | 19.1 | 111.8 | 77.6 | 8.8 | 6.0 | 19.4 |
| results of | | | | | | | |
| equity | | | | | | | |
| accounted | | | | | | | |
| investments | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 215.6 | 123.4 | -607. | 105.3 | -502.6 | -209.4 | -0.9 |
| Profit/Loss | | | 6 | | | | |
| (IFRS) | | | | | | | |
--------------------------------------------------------------------------------
| Net financial | -22.6 | -5.5 | -279. | -24.7 | -46.1 | -161.2 | -47.2 |
| items | | | 2 | | | | |
--------------------------------------------------------------------------------
| Profit/Loss | 193.0 | 117.9 | -886. | 80.6 | -548.7 | -370.6 | -48.1 |
| before Tax and | | | 8 | | | | |
| Non-controllin | | | | | | | |
| g Interests | | | | | | | |
--------------------------------------------------------------------------------
| Income tax | -33.1 | -15.8 | 8.6 | -34.7 | 29.0 | 2.3 | 12.0 |
| expense | | | | | | | |
--------------------------------------------------------------------------------
| Net | 159.9 | 102.1 | -878. | 45.9 | -519.7 | -368.3 | -36.1 |
| Profit/Loss | | | 2 | | | | |
--------------------------------------------------------------------------------
Key Exchange Rates for the Euro
--------------------------------------------------------------------------------
| One Euro is | Closing Rate | Average Rate |
--------------------------------------------------------------------------------
| | 30 Jun 10 | 31 Dec 09 | 30 Jun 10 | 31 Dec 09 |
--------------------------------------------------------------------------------
| SEK | 9.5259 | 10.2520 | 9.7963 | 10.6180 |
--------------------------------------------------------------------------------
| USD | 1.2271 | 1.4406 | 1.3284 | 1.3941 |
--------------------------------------------------------------------------------
| GBP | 0.8175 | 0.8881 | 0.8698 | 0.8909 |
--------------------------------------------------------------------------------
Transaction Risk and Hedges in Main Currencies as at 30 June 2010
--------------------------------------------------------------------------------
| EUR million | USD | GBP | SEK |
--------------------------------------------------------------------------------
| Estimated annual net operating cash flow | 1 100 | 500 | -1 050 |
| exposure | | | |
--------------------------------------------------------------------------------
| Transaction hedges as at 30 June 2010 | -670 | -260 | 600 |
--------------------------------------------------------------------------------
| Hedging percentage as at 30 June 2010 for | 61% | 52% | 57% |
| the next 12 months | | | |
--------------------------------------------------------------------------------
Changes in Exchange Rates on Operating Profit
--------------------------------------------------------------------------------
| Operating Profit: Currency effect +/- 10% | EUR million |
--------------------------------------------------------------------------------
| | |
--------------------------------------------------------------------------------
| USD | 110 |
--------------------------------------------------------------------------------
| SEK | -105 |
--------------------------------------------------------------------------------
| GBP | 50 |
--------------------------------------------------------------------------------
The sensitivity is based on expected 2010 net operating cash flow. The
calculation does not take into account currency hedges, and assumes no changes
occur other than a single currency exchange rate movement.
Stora Enso Shares
--------------------------------------------------------------------------------
| Trading | Helsinki | Stockholm |
| volume | | |
--------------------------------------------------------------------------------
| | A share | R share | A share | R share |
--------------------------------------------------------------------------------
| April | 185 032 | 98 826 364 | 358 405 | 28 165 093 |
--------------------------------------------------------------------------------
| May | 200 582 | 124 052 824 | 337 911 | 28 429 295 |
--------------------------------------------------------------------------------
| June | 186 148 | 97 028 071 | 290 604 | 25 002 587 |
--------------------------------------------------------------------------------
| Total | 571 762 | 319 907 259 | 986 920 | 81 596 975 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Closing Price | Helsinki, EUR | Stockholm, SEK |
--------------------------------------------------------------------------------
| | A share | R share | A share | R share |
--------------------------------------------------------------------------------
| April | 6.29 | 6.31 | 60.00 | 60.00 |
--------------------------------------------------------------------------------
| May | 6.10 | 6.08 | 58.50 | 58.25 |
--------------------------------------------------------------------------------
| June | 6.15 | 5.98 | 58.45 | 56.90 |
--------------------------------------------------------------------------------
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 - Depreciation and Impairment
Average number of shares
EPS Net profit/loss for the period
Average number of shares
1) Capital employed = Operating capital - Net tax liabilities
2) Average for the financial period
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, tel. +358 2046 21380
Stora Enso's third quarter results 2010 will be published on 27 October 2010.
PRESS CONFERENCE IN HELSINKI
Time: 14.00 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 7138 0826 Continental Europe and the UK
+358 (0)9
2319 4344 Finland
+46 (0)8 5051 3786 Sweden
+1 212 444 0481 USA
Access code: 9194075#
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
Jari Suvanto Ulla Paajanen-Sainio
