Breaking News

Tweet TWEET

Stora Enso CEO Jouko Karvinen Comments on Fourth Quarter and Full Year 2012 Results Announced Today

Stora Enso CEO Jouko Karvinen Comments on Fourth Quarter and Full Year 2012
Results Announced Today

"Strong cash flow, earnings stable in fourth quarter - clearly deteriorating
paper outlook requires further permanent capacity reductions"

HELSINKI, Finland, Feb. 5, 2013 (GLOBE NEWSWIRE) -- "Stora Enso finished the
fourth quarter with continued strong cash flow and operating earnings slightly
up year-on-year, but slightly down on the previous quarter. This is the result
of our ever-continuing focus on improving costs and working capital, and it
demonstrates that we can and will continue on this path into the future as
well. I want to give full credit for this to the Stora Enso people throughout
the world.
"I also want to highlight that the first two of our growth investments – the
investments at Skoghall and the new board machine at Ostrołęka – have been
completed on time. In fact Ostrołęka's new light-weight container board
machine started up six weeks ahead of schedule and the focus is now on
successful ramp up, which is expected to take couple of months. In Uruguay
everybody from Stora Enso and our partners is fully focused on hitting our mid
2013 start-up target and, even more important, a successful ramp-up after
that.

"The darker side of our news today is that the decline in consumer demand in
paper-based media in Europe has continued in the fourth quarter. Whereas the
structural trend in total paper demand has been about -5% per year since 2007,
we now read the demand in the two largest media-driven segments, newsprint and
coated magazine paper, decreased in 2012 by about 9%. As before, the
unfavourable supply and demand balance has led to further pressure on margins.

"That means we must accelerate capacity reduction plans to avoid running cash
zero or even negative businesses. We plan to close one newsprint machine at
Kvarnsveden and another one at Hylte, which just had to adjust to closure of a
paper machine at the end of 2012. Separately, in the Building and Living
Business Area we do not expect any significant improvement to the depressed
European construction activity or high raw material costs. To combat the
continued inadequate profitability in the very weak market environment, we are
launching a cost improvement plan to adjust our cost structure and improve our
competitiveness. These difficult actions are essential not only to safeguard
the stronger parts of Printing and Reading and Building and Living, but also
to be able to invest in our high-return growth-market businesses.

"After many years of restructuring, I do realise that the announced plans,
which are all subject to local co-determination negotiations, will be very
difficult for the employees to accept. I can only ask that we all try to
understand that a reduction in consumer demand for printing paper and the
impact of continued poor market conditions in Building and Living must be
addressed. We will do our utmost to support the employees affected by these
plans.

"The past six years have been persistently challenging in some of our markets,
with both structural deterioration and cyclical economic weakness. We are
determined to stay on our path, a continuing path of strong cash generation
financing transformation into a global renewable materials company."

For further information, please contact:
Jouko Karvinen, CEO, tel. +358 2046 21410
Lauri Peltola, EVP, Global Identity, tel. +358 2046 21380
Ulla Paajanen-Sainio, SVP, Investor Relations, tel. +358 2046 21242

www.storaenso.com
www.storaenso.com/investors

Stora Enso is the global rethinker of the paper, biomaterials, wood products
and packaging industry. We always rethink the old and expand to the new to
offer our customers innovative solutions based on renewable materials. Stora
Enso employs some 28 000 people worldwide, and our sales in 2012 amounted to
EUR 10.8 billion. Stora Enso shares are listed on NASDAQ OMX Helsinki (STEAV,
STERV) and Stockholm (STE A, STE R). In addition, the shares are traded in the
USA as ADRs (SEOAY) in the International OTCQX over-the-counter market.

STORA ENSO OYJ
 
Press spacebar to pause and continue. Press esc to stop.