Quarterly Report • Apr 27, 2017
Quarterly Report
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January–March 2017
Q2/2017 sales are estimated to be similar to or slightly higher than the amount of the EUR 2 497 million, and operational EBIT is expected to be in line with the EUR 215 million recorded in Q1/2017. Q2/2017 operational EBIT estimate includes the negative impact of the ramp-up of Beihai operations of EUR 18 million. The impact of the annual maintenance shutdowns is expected to be approximately EUR 30 million higher than in Q1/2017, and it is included in the above guidance.
| EUR million | Q1/17 | Q1/16 | Change % Q1/17–Q1/16 |
Q4/16 | Change % Q1/17–Q4/16 |
2016 |
|---|---|---|---|---|---|---|
| Sales | 2 497 | 2 445 | 2.1% | 2 438 | 2.4% | 9 802 |
| Operational EBITDA | 352 | 363 | -3.0% | 310 | 13.5% | 1 371 |
| Operational EBITDA margin | 14.1% | 14.8% | 12.7% | 14.0% | ||
| Operational EBIT | 215 | 248 | -13.3% | 191 | 12.6% | 884 |
| Operational EBIT margin | 8.6% | 10.1% | 7.8% | 9.0% | ||
| Operating profit (IFRS) | 193 | 194 | -0.5% | 145 | 33.1% | 783 |
| Profit before tax excl. IAC | 191 | 183 | 4.4% | 110 | 73.6% | 575 |
| Profit before tax | 164 | 155 | 5.8% | 76 | 115.8% | 541 |
| Net profit for the period | 107 | 114 | -6.1% | 56 | 91.1% | 407 |
| Capital expenditure | 108 | 188 | -42.6% | 194 | -44.3% | 729 |
| Capital expenditure excluding investments in biological assets |
88 | 167 | -47.3% | 170 | -48.2% | 638 |
| Depreciation and impairment charges excl. IAC | 139 | 124 | 12.1% | 131 | 6.1% | 502 |
| Net interest-bearing liabilities | 2 711 | 3 185 | -14.9% | 2 726 | -0.6% | 2 726 |
| Operational ROCE | 10.0% | 11.3% | 8.9% | 10.2% | ||
| Earnings per share (EPS) excl. IAC, EUR | 0.17 | 0.19 | 0.17 | 0.65 | ||
| EPS (basic), EUR | 0.14 | 0.15 | 0.12 | 0.59 | ||
| Return on equity (ROE) | 7.2% | 8.2% | 3.9% | 7.2% | ||
| Debt/equity ratio | 0.46 | 0.58 | 0.47 | 0.47 | ||
| Net debt/last 12 months' operational EBITDA ratio | 2.0 | 2.2 | 2.0 | 2.0 | ||
| Fixed costs to sales | 24.1% | 24.4% | 25.8% | 25.3% | ||
| Equity per share, EUR | 7.50 | 6.97 | 7.6% | 7.36 | 1.9% | 7.36 |
| Average number of employees | 25 591 | 25 521 | 0.3% | 26 135 | -2.1% | 26 269 |
| TRI rate1 | 9.0 | 12.0 | -25.0% | 10.9 | -17.4% | 11.7 |
| LTA rate1 | 5.9 | 3.9 | 51.3% | 4.3 | 37.2% | 4.4 |
Operational key figures: see chapter Non-IFRS measures at the beginning of the Financials section.
Items affecting comparability (IAC): see chapter Non-IFRS measures at the beginning of the Financials section.
TRI (Total recordable incidents) rate = number of incidents per one million hours worked.
LTA (Lost-time accident) rate = number of lost-time accidents per one million hours worked.
1 As of January 2017 Stora Enso applies new Occupational Health and Safety Administration (OHSA) definitions in the reporting of TRI and LTA rates to better align with international standards. Due to this change, Q1 figures are not fully comparable with historical figures.
| Q1/17 | Q1/16 | Change % Q1/17–Q1/16 |
Q4/16 | Change % Q1/17–Q4/16 |
2016 | |
|---|---|---|---|---|---|---|
| Board deliveries, 1 000 tonnes | 930 | 797 | 16.7% | 876 | 6.2% | 3 376 |
| Board production, 1 000 tonnes | 1 038 | 926 | 12.1% | 984 | 5.5% | 3 775 |
| Corrugated packaging deliveries, million m2 | 267 | 259 | 3.1% | 276 | -3.3% | 1 082 |
| Market pulp deliveries, 1 000 tonnes | 536 | 466 | 15.0% | 570 | -6.0% | 2 068 |
| Wood product deliveries, 1 000 m3 | 1 257 | 1 124 | 11.8% | 1 228 | 2.4% | 4 814 |
| Paper deliveries, 1 000 tonnes | 1 205 | 1 340 | -10.1% | 1 207 | -0.2% | 5 141 |
| Paper production, 1 000 tonnes | 1 203 | 1 395 | -13.8% | 1 219 | -1.3% | 5 155 |
"Year 2017 had a promising start and our transformation into a renewable materials growth company is progressing well. I am pleased that our sales have increased for the first time since 2012. Excluding the paper business, sales increased 9.7%, primarily due to the ramp-ups of Beihai consumer board, Murów and Varkaus (board and LVL) mills.
Operational EBIT decreased by EUR 33 million mainly due to lower hardwood pulp and paper prices, ramp-up of Beihai, Varkaus and Murów mills, and other transformational costs, such as innovation and growth investments. Looking beyond these temporary costs, the underlying business shows good progress and strong promise for the future. Our balance sheet continues to strengthen. Yes, we are on the right track towards our transformation to a renewable materials growth company.
The ramp-up of Beihai Mill is proceeding ahead of plan. An important step for us, the first commercial volumes of liquid packaging board and CUK (coated unbleached kraftboard) were delivered to our customers during the quarter. Additional transformation steps include the ramp-ups of kraftliner and the production line for wooden building components (LVL) at Varkaus Mill.
We continue to invest to meet growing customer demand globally. We are investing EUR 28 million in our Heinola Fluting Mill in Finland. The investment contributes to improved quality and production capacity of our AvantFlute SC by Stora Enso; a Semi-Chemical fluting which endure demanding conditions. The timing of this investment is ideal, as we expect increased demand for high quality fluting products used for food, fruit and vegetable packaging.
We have started co-determination negotiations with our employees at Kvarnsveden Mill in Sweden regarding the plan to reorganise the mill. As we have announced earlier, this includes a permanent closure of paper machine 8 by the end of the second quarter of 2017. The entire plan would result in annual cost savings of EUR 12 million, and contribute to the mill's competitiveness.
During the quarter, we had a very positive experience as the main sponsor of the Centenary Nordic World Ski Championships in Lahti, Finland. It was a great opportunity for us to show, how everything that is made with fossil-based materials today can be made from a tree tomorrow. Renewable wood-based materials are one essential way to help reduce the carbon footprint of any event. We had 8 000 customers, suppliers, investors and employees on site, which contributed to a very memorable event celebrating Finland's 100th anniversary year of independence.
As always, I would like to thank our customers for their business, our employees for their dedication, and our investors for their trust."
Karl-Henrik Sundström, CEO
8.6%
Operational ROCE
10.0 (Target % >13%)
Net debt to operational EBITDA
2.0 (Target <3.0)
| Change % | Change % | |||||
|---|---|---|---|---|---|---|
| EUR million | Q1/17 | Q1/16 | Q1/17–Q1/16 | Q4/16 | Q1/17–Q4/16 | 2016 |
| Operational EBITDA | 352 | 363 | -3.0% | 310 | 13.5% | 1 371 |
| Equity accounted investments (EAI), operational1 Operational decrease in the value of biological |
14 | 16 | -12.5% | 31 | -54.8% | 80 |
| assets | -12 | -7 | -71.4% | -19 | 36.8% | -65 |
| Depreciation and impairment excl. IAC | -139 | -124 | -12.1% | -131 | -6.1% | -502 |
| Operational EBIT | 215 | 248 | -13.3% | 191 | 12.6% | 884 |
| Fair valuations and non-operational items2 | 5 | -26 | n/m | -12 | n/m | -67 |
| Items affecting comparability (IAC)3 | -27 | -28 | 3.6% | -34 | 20.6% | -34 |
| Operating profit (IFRS) | 193 | 194 | -0.5% | 145 | 33.1% | 783 |
1 The group's share of operational EBIT of equity accounted investments (EAI).
2 Fair valuations and non-operational items include equity incentive schemes and related hedges, CO2 emission rights, valuations of biological assets, and the group's share of tax and net financial items of EAI.
3 Items affecting comparability detailed in the Financials section.
| Sales Q1/2016, EUR million | 2 445 |
|---|---|
| Price and mix | -1% |
| Currency | 1% |
| Volume | 4% |
| Other sales1 | 0% |
| Total before structural changes | 4% |
| Structural changes2 | -2% |
| Total | 2% |
| Sales Q1/2017, EUR million | 2 497 |
1 Wood, energy, paper for recycling, by-products etc.
2 Asset closures, major investments, divestments and acquisitions
Group sales increased EUR 52 million or 2.1% to EUR 2 497 million (EUR 2 445 million) despite decreasing paper demand and divestments of Kabel and Arapoti mills, and the Suzhou Mill site divestment. Sales increased mainly because of the ramp-up of Beihai consumer board mill in China, Varkaus kraftliner mill and LVL (laminated veneer lumber) line in Finland and Murów sawmill in Poland, and also due to overall stronger volumes in all divisions, except Paper.
Operational EBIT was EUR 33 million lower at EUR 215 million (EUR 248 million) compared to a year ago. The negative impact of the ramp-up of Beihai Mill decreased operational EBIT by EUR 12 million, including EUR 7.5 million provision due to a turbine damage. The operational EBIT margin was 8.6% (10.1%).
Lower sales price in local currencies decreased operational EBIT by EUR 21 million, mainly due to lower hardwood pulp and paper prices. Higher volumes in all divisions, excluding divestments, improved operational EBIT by EUR 30 million and lower variable costs by EUR 13 million. Fixed costs were EUR 31 million higher, due mainly to the ramp-ups of transformation projects mentioned above, and the innovation centres in Helsinki and Stockholm. Depreciation and impairment increased EUR 15 million, and the operational result from the equity accounted investments decreased EUR 2 million. The net foreign exchange rates and the closed units had a negative EUR 3 million impact, respectively.
The EUR 50 million profit improvement programme is proceeding according to plan.
The planned and unplanned production downtime was 2% (2%) for board, 0% (1%) for sawn wood and 4% (8%) for paper.
The average number of employees in the first quarter of 2017 was approximately 25 600, similar to a year ago. The average number of employees in Europe was approximately 19 400, which was 200 lower than a year ago. In China, the average number of employees was approximately 5 100, which was 400 higher than a year ago.
Fair valuations and non-operational items had a positive EUR 5 (negative EUR 26) million impact on operating profit.
Earnings per share were EUR 0.14 (EUR 0.15) and earnings per share excluding items affecting comparability were EUR 0.17 (EUR 0.19).
Items affecting comparability (IAC) had a negative net impact of EUR 27 (negative EUR 28) million on operating profit. The IAC consisted of the closure of Kvarnsveden Mill paper machine 8 of EUR 17 million, and the devaluation of Green Certificates of EUR 10 million affecting the Paper, Consumer Board, Packaging Solutions and Biomaterials divisions. These had a positive impact of EUR 6 million on income tax.
Net financial expenses at EUR 29 million were EUR 10 million lower than a year ago. The net interest expenses increased by EUR 7 million. This was primarily due to lower capitalised interest and lower interest income, only partly offset by lower interest expenses. Other net financial expenses were EUR 4 million lower mainly due to fair valuation of interest rate derivatives. The net foreign exchange impact in respect of cash, interest-bearing assets and liabilities and related hedges amounted to a EUR 13 million higher gain than a year ago. This was mainly due to the revaluation of foreign currency loans in subsidiaries and jointoperations.
Breakdown of change in capital employed 31 March 2016 to 31 March 2017
| EUR million | Capital employed |
|---|---|
| 31 March 2016 | 8 797 |
| Capital expenditure less depreciation | -3 |
| Impairments and reversal of impairments | -67 |
| Fair valuation of biological assets | -119 |
| Costs related to growth of biological assets | -147 |
| Available-for-sale: operative (mainly PVO) | 101 |
| Equity accounted investments | 93 |
| Net liabilities in defined benefit plans | -62 |
| Operative working capital and other interest-free items, net | -76 |
| Net tax liabilities | -17 |
| Translation difference | 181 |
| Other changes | -2 |
| 31 March 2017 | 8 679 |
The operational return on capital employed (ROCE) in the first quarter of 2017 was 10.0% (11.3%). Excluding the investment in Beihai Mill in the Consumer Board division, the operational ROCE would have been 12.9% (13.7%).
Sales were EUR 59 million or 2.4% higher at EUR 2 497 million (EUR 2 438 million). Operational EBIT improved EUR 24 million to EUR 215 million (EUR 191 million) and operational EBIT margin to 8.6% (7.8%). Sales prices in local currencies, in all divisions except Paper, were EUR 17 million higher, and increased volumes improved operational EBIT by EUR 6 million. Fixed costs were EUR 26 million lower, mainly due to lower maintenance activity in the first quarter of 2017. The operational result from the equity accounted investments decreased EUR 17 million and net foreign exchange had a negative impact of EUR 9 million.
| EUR million | 31 Mar 17 | 31 Dec 16 | 31 Mar 16 |
|---|---|---|---|
| Operative fixed assets1 | 6 728 | 6 785 | 6 794 |
| Equity accounted investments | 1 602 | 1 594 | 1 545 |
| Operative working capital, net | 955 | 825 | 980 |
| Non-current interest-free items, net | -536 | -554 | -464 |
| Operating Capital Total | 8 749 | 8 650 | 8 855 |
| Net tax liabilities | -70 | -56 | -58 |
| Capital Employed | 8 679 | 8 594 | 8 797 |
| Equity attributable to owners of the Parent | 5 914 | 5 806 | 5 500 |
| Non-controlling interests | 54 | 62 | 112 |
| Net interest-bearing liabilities | 2 711 | 2 726 | 3 185 |
| Financing Total | 8 679 | 8 594 | 8 797 |
1 Operative fixed assets include property, plant and equipment, goodwill, biological assets, emission rights, available-for-sale operative shares and other intangible assets.
Total unutilised committed credit facilities were unchanged at EUR 700 million, and cash and cash equivalents net of overdrafts decreased by EUR 25 million to EUR 924 million. In addition, Stora Enso has access to various long-term sources of funding up to EUR 900 (1 000) million.
The net debt was EUR 2 711 million, a decrease of EUR 15 million from the previous quarter.
The fair value of PVO shares accounted for as available-for-sale investments decreased in the quarter by EUR 14 million to EUR 228 million. The change in fair value is mostly caused by the decrease in electricity prices. The changes in fair valuation are included in the Other Comprehensive Income in equity.
The ratio of net debt to the last 12 months' operational EBITDA remained at 2.0 (2.0). The debt/equity ratio at 31 March 2017 was 0.46 (0.47).
| EUR million | Q1/17 | Q1/16 | Change % Q1/17–Q1/16 |
Q4/16 | Change % Q1/17–Q4/16 |
2016 |
|---|---|---|---|---|---|---|
| Operational EBITDA | 352 | 363 | -3.0% | 310 | 13.5% | 1 371 |
| IAC on operational EBITDA | -24 | -27 | 11.1% | -26 | 7.7% | -77 |
| Dividends received from equity accounted investments | 12 | - | - | - | - | 58 |
| Other adjustments | 5 | 14 | -64.3% | -3 | 266.7% | -2 |
| Change in working capital | -167 | -61 | -173.8% | 180 | -192.8% | 283 |
| Cash Flow from Operations (non-IFRS) | 178 | 289 | -38.4% | 461 | -61.4% | 1 633 |
| Cash spent on fixed and biological assets | -135 | -193 | 30.1% | -220 | 38.6% | -798 |
| Acquisitions of equity accounted investments | - | - | - | -1 | - | -1 |
| Cash Flow after Investing Activities (non-IFRS) | 43 | 96 | -55.2% | 240 | -82.1% | 834 |
First quarter 2017 cash flow after investing activities was at EUR 43 million. Working capital increased by EUR 167 million, mainly due to higher inventories and higher trade receivables. Cash spent on fixed and biological assets was EUR 135 million. Payments related to the previously announced restructuring provisions were EUR 7 million.
Additions to fixed and biological assets in the first quarter 2017 totalled EUR 108 million, of which EUR 88 million were fixed assets and EUR 20 million biological assets. Depreciations and impairment in the first quarter totalled EUR 139 million. Additions in fixed and biological assets had a cash outflow impact of EUR 135 million.
The main projects ongoing in the first quarter of 2017 were a new polyethylene extrusion (PE) coating plant and an automated roll warehouse at Imatra Mills in Finland, the PE coating investment at Beihai Mill in China, and the consolidation of manufacturing of corrugated packaging in Finland.
| EUR million | Forecast 2017 |
|---|---|
| Capital expenditure | 600–650 |
| Depreciation | 490–510 |
| Operational decrease in biological asset values | 50–70 |
The capital expenditure forecast includes approximately EUR 100 million for the group's biological assets and approximately EUR 47 million for the new polyethylene extrusion (PE) coating plant and an automated roll warehouse at Imatra Mills. Moreover, it includes EUR 26 million for the PE coating investment at Beihai Mill, EUR 18 million for the fluff pulp investment at Skutskär Mill in Sweden, EUR 19 million for the consolidation of manufacturing of corrugated packaging in Finland, and EUR 10 million for the Heinola Fluting Mill in Finland.
The Consumer Board division develops and provides consumer packaging boards for printing and packaging applications. A wide board and barrier coating selection is suitable for the design and optimisation of packaging for liquid, food, pharmaceutical and luxury goods. We serve converters and brand owners globally and are expanding in growth markets such as China and Asia Pacific to meet rising demand.
| Change % Q1/17– |
Change % Q1/17– |
|||||
|---|---|---|---|---|---|---|
| EUR million | Q1/17 | Q1/16 | Q1/16 | Q4/16 | Q4/16 | 2016 |
| Sales | 611 | 564 | 8.3% | 580 | 5.3% | 2 342 |
| Operational EBITDA | 119 | 110 | 8.2% | 92 | 29.3% | 447 |
| Operational EBITDA margin | 19.5% | 19.5% | 15.9% | 19.1% | ||
| Operational EBIT | 61 | 73 | -16.4% | 38 | 60.5% | 254 |
| Operational EBIT margin | 10.0% | 12.9% | 6.6% | 10.8% | ||
| Operational ROOC1 | 12.2% | 14.3% | 7.4% | 12.7% | ||
| Cash flow from operations (non-IFRS) | 67 | 82 | -18.3% | 114 | -41.2% | 453 |
| Cash flow after investing activities (non-IFRS) | 2 | -16 | 112.5% | 13 | -84.6% | 40 |
| Board deliveries, 1 000 tonnes | 684 | 588 | 16.3% | 639 | 7.0% | 2 507 |
| Board production, 1 000 tonnes | 710 | 624 | 13.8% | 663 | 7.1% | 2 554 |
1 Operational ROOC = 100% x Operational EBIT/Average operating capital
For non-IFRS measures, see chapter Non-IFRS measures at the beginning of the Financials section.
| Product | Market | Demand Q1/17 compared with Q1/16 |
Demand Q1/17 compared with Q4/16 |
Price Q1/17 compared with Q1/16 |
Price Q1/17 compared with Q4/16 |
|---|---|---|---|---|---|
| Consumer board | Europe | Slightly stronger | Stable | Slightly lower | Stable |
Operational ROOC excl. Beihai
12.2%
38.0%
(Target: >20%)
Scheduled annual maintenance shutdowns
| 2017 | 2016 | |
|---|---|---|
| Q1 | – | – |
| Q2 | – | – |
| Q3 | Imatra and Ingerois mills | Imatra and Ingerois mills |
| Q4 | Skoghall and Fors mills | Skoghall and Fors mills |
Packaging Solutions division develops fibre-based packaging, and operates at every stage of the value chain from pulp production, material and packaging production to recycling. Our solutions serve leading converters, brand owners and retailer customers helping to optimise performance, reduce total costs and enhance sales.
| Change % | Change % | |||||
|---|---|---|---|---|---|---|
| EUR million | Q1/17 | Q1/16 | Q1/17–Q1/16 | Q4/16 | Q1/17–Q4/16 | 2016 |
| Sales | 290 | 245 | 18.4% | 282 | 2.8% | 1 044 |
| Operational EBITDA | 43 | 23 | 87.0% | 36 | 19.4% | 129 |
| Operational EBITDA margin | 14.8% | 9.4% | 12.8% | 12.4% | ||
| Operational EBIT | 24 | 7 | 242.9% | 19 | 26.3% | 64 |
| Operational EBIT margin | 8.3% | 2.9% | 6.7% | 6.1% | ||
| Operational ROOC1 | 11.1% | 3.2% | 8.8% | 7.6% | ||
| Cash flow from operations (non-IFRS) | 31 | 10 | 210.0% | 44 | -29.5% | 132 |
| Cash flow after investing activities (non-IFRS) | 16 | -10 | 260.0% | 23 | -30.4% | 63 |
| Board deliveries (external), 1 000 tonnes | 246 | 209 | 17.7% | 237 | 3.8% | 869 |
| Board production, 1 000 tonnes | 328 | 302 | 8.6% | 321 | 2.2% | 1 221 |
| Corrugated packaging deliveries, million m2 | 267 | 259 | 3.1% | 276 | -3.3% | 1 082 |
| Corrugated packaging production, million m2 | 267 | 253 | 5.5% | 274 | -2.6% | 1 073 |
1 Operational ROOC = 100% x Operational EBIT/Average operating capital
For non-IFRS measures, see chapter Non-IFRS measures at the beginning of the Financials section.
| Product | Market | Demand Q1/17 compared with Q1/16 |
Demand Q1/17 compared with Q4/16 |
Price Q1/17 compared with Q1/16 |
Price Q1/17 compared with Q4/16 |
|---|---|---|---|---|---|
| Virgin fibre-based containerboard |
Global | Slightly stronger | Slightly stronger | Stable | Slightly higher |
| RCP containerboard | Europe | Slightly stronger | Slightly stronger | Lower | Slightly higher |
| Corrugated packaging | Europe | Slightly stronger | Stronger | Stable | Stable |
11.1 %
(Target: >20%)
| 2017 | 2016 | |
|---|---|---|
| Q1 | – | – |
| Q2 | Ostrołęka Mill | Ostrołęka Mill |
| Q3 | Varkaus Mill | Heinola Mill |
| Q4 | Heinola Mill | Varkaus Mill |
The Biomaterials division offers a variety of pulp grades to meet the demands of paper, board, tissue, textile and hygiene product producers. We also develop new ways to maximise the value extractable from wood, as well as other kinds of lignocellulosic biomasses. Sugars and lignin hold potential for use in applications in the specialty chemical, construction, personal care and food industries.
| Change % | Change % | |||||
|---|---|---|---|---|---|---|
| EUR million | Q1/17 | Q1/16 | Q1/17–Q1/16 | Q4/16 | Q1/17–Q4/16 | 2016 |
| Sales | 369 | 351 | 5.1% | 349 | 5.7% | 1 376 |
| Operational EBITDA | 90 | 115 | -21.7% | 75 | 20.0% | 361 |
| Operational EBITDA margin | 24.4% | 32.8% | 21.5% | 26.2% | ||
| Operational EBIT | 53 | 84 | -36.9% | 40 | 32.5% | 224 |
| Operational EBIT margin | 14.4% | 23.9% | 11.5% | 16.3% | ||
| Operational ROOC1 | 7.9% | 13.1% | 6.1% | 8.5% | ||
| Cash flow from operations (non-IFRS) | 75 | 115 | -34.8% | 79 | -5.1% | 419 |
| Cash flow after investing activities (non-IFRS) | 52 | 81 | -35.8% | 37 | 40.5% | 278 |
| Pulp deliveries, 1 000 tonnes | 662 | 617 | 7.3% | 651 | 1.7% | 2 508 |
1 Operational ROOC = 100% x Operational EBIT/Average operating capital
For non-IFRS measures, see chapter Non-IFRS measures at the beginning of the Financials section.
| Product | Market | Demand Q1/17 compared with Q1/16 |
Demand Q1/17 compared with Q4/16 |
Price Q1/17 compared with Q1/16 |
Price Q1/17 compared with Q4/16 |
|---|---|---|---|---|---|
| Softwood pulp | Europe | Stable | Slightly stronger | Slightly higher | Slightly higher |
| Hardwood pulp | Europe | Stable | Stable | Significantly lower | Slightly higher |
(Target: > 15%)
| 2017 | 2016 | |
|---|---|---|
| Q1 | – | – |
| Q2 | Montes del Plata and Sunila mills |
Montes del Plata Mill |
| Q3 | – | Veracel and Skutskär mills |
| Q4 | Veracel and Skutskär mills | Enocell Mill |
Wood Products division provides versatile wood-based solutions for building and housing. Our product range covers all areas of urban construction including massive wood elements, wood components, and pellets. We also offer a variety of sawn timber goods. Our customers are mainly construction and joinery companies, merchandisers and retailers.
| Change % | Change % | |||||
|---|---|---|---|---|---|---|
| EUR million | Q1/17 | Q1/16 | Q1/17–Q1/16 | Q4/16 | Q1/17–Q4/16 | 2016 |
| Sales | 416 | 382 | 8.9% | 395 | 5.3% | 1 595 |
| Operational EBITDA | 31 | 23 | 34.8% | 24 | 29.2% | 118 |
| Operational EBITDA margin | 7.5% | 6.0% | 6.1% | 7.4% | ||
| Operational EBIT | 22 | 16 | 37.5% | 17 | 29.4% | 88 |
| Operational EBIT margin | 5.3% | 4.2% | 4.3% | 5.5% | ||
| Operational ROOC1 | 16.4% | 12.3% | 13.1% | 16.8% | ||
| Cash flow from operations (non-IFRS) | 22 | 34 | -35.3% | -3 | n/m | 142 |
| Cash flow after investing activities (non-IFRS) | 10 | 10 | 0.0% | -11 | 190.9% | 75 |
| Wood products deliveries, 1 000 m3 | 1 212 | 1 086 | 11.6% | 1 176 | 3.1% | 4 643 |
1 Operational ROOC = 100% x Operational EBIT/Average operating capital
For non-IFRS measures, see chapter Non-IFRS measures at the beginning of the Financials section.
| Product | Market | Demand Q1/17 compared with Q1/16 |
Demand Q1/17 compared with Q4/16 |
Price Q1/17 compared with Q1/16 |
Price Q1/17 compared with Q4/16 |
|---|---|---|---|---|---|
| Wood products | Europe | Stronger | Stronger | Slightly higher | Slightly higher |
16.4 %
(Target: >18%)
Paper division provides best-in-class paper solutions for print media and office use. The wide selection covers papers made from recycled and fresh wood fibre. Our main customer groups include publishers, retailers, printing houses, merchants, converters and office suppliers. Three of the mills produce paper based on 100% recycled fibre.
| Change % | Change % | |||||
|---|---|---|---|---|---|---|
| EUR million | Q1/17 | Q1/16 | Q1/17–Q1/16 | Q4/16 | Q1/17–Q4/16 | 2016 |
| Sales | 748 | 854 | -12.4% | 760 | -1.6% | 3 245 |
| Operational EBITDA | 68 | 83 | -18.1% | 90 | -24.4% | 324 |
| Operational EBITDA margin | 9.1% | 9.7% | 11.8% | 10.0% | ||
| Operational EBIT | 42 | 51 | -17.6% | 64 | -34.4% | 211 |
| Operational EBIT margin | 5.6% | 6.0% | 8.4% | 6.5% | ||
| Operational ROOC1 | 17.7% | 17.1% | 25.6% | 19.4% | ||
| Cash flow from operations (non-IFRS) | 42 | 53 | -20.8% | 126 | -66.7% | 351 |
| Cash flow after investing activities (non-IFRS) | 32 | 45 | -28.9% | 90 | -64.4% | 277 |
| Cash flow after investing activities to sales | ||||||
| (non-IFRS) | 4.3% | 5.3% | 11.8% | 8.5% | ||
| Paper deliveries, 1 000 tonnes | 1 205 | 1 340 | -10.1% | 1 207 | -0.2% | 5 141 |
| Paper production, 1 000 tonnes | 1 203 | 1 395 | -13.8% | 1 219 | -1.3% | 5 155 |
1 Operational ROOC = 100% x Operational EBIT/Average operating capital
For non-IFRS measures, see chapter Non-IFRS measures at the beginning of the Financials section.
| Product | Market | Demand Q1/17 compared with Q1/16 |
Demand Q1/17 compared with Q4/16 |
Price Q1/17 compared with Q1/16 |
Price Q1/17 compared with Q4/16 |
|---|---|---|---|---|---|
| Paper | Europe | Slightly weaker | Slightly weaker | Slightly lower | Stable |
Sales and operational EBITDA Cash flow after investing activities to sales1
(Target: >7%)
| 2017 | 2016 | |
|---|---|---|
| Q1 | – | – |
| Q2 | Oulu Mill | Langerbrugge Mill |
| Q3 | Veitsiluoto Mill | Anjala, Maxau, Oulu, and Veitsiluoto mills |
| Q4 | Nymölla Mill | – |
1 The Paper division's financial target is cash flow after investing activities to sales (non-IFRS), because the division's goal is to generate cash flow for the group so that it can transform into a renewable materials growth company.
The segment Other includes the Nordic forest equity-accounted investments, Stora Enso's shareholding in the energy company Pohjolan Voima, operations supplying wood to the Nordic mills and group shared services and administration.
| Change % | Change % | |||||
|---|---|---|---|---|---|---|
| EUR million | Q1/17 | Q1/16 | Q1/17–Q1/16 | Q4/16 | Q1/17–Q4/16 | 2016 |
| Sales | 651 | 648 | 0.5% | 641 | 1.6% | 2 477 |
| Operational EBITDA | 1 | 9 | -88.9% | -7 | 114.3% | -8 |
| Operational EBITDA margin | 0.2% | 1.4% | -1.1% | -0.3% | ||
| Operational EBIT | 13 | 17 | -23.5% | 13 | 0.0% | 43 |
| Operational EBIT margin | 2.0% | 2.6% | 2.0% | 1.7% | ||
| Cash flow from operations (non-IFRS) | -59 | -5 | n/m | 101 | -158.4% | 136 |
| Cash flow after investing activities (non-IFRS) | -69 | -14 | n/m | 88 | -178.4% | 101 |
For non-IFRS measures, see chapter Non-IFRS measures at the beginning of the Financials section.
Operational EBIT was EUR 4 million lower due to slightly higher costs mainly for clean-up of historic environmental liabilities of previously closed sites.
| Q1/17² | Q1/16 | Q4/16 | 2016 | Milestone | Milestone to be reached by |
|
|---|---|---|---|---|---|---|
| TRI rate | 9.0 | 12.0 | 10.9 | 11.7 | ||
| LTA rate | 5.9 | 3.9 | 4.3 | 4.4 | 4.0 | end of 2017 |
TRI (Total recordable incident) rate = number of incidents per one million hours worked. LTA (Lost-time accident) rate = number of lost-time accidents per one million hours worked.
1 For Stora Enso employees, excluding joint operations
² As of January 2017 Stora Enso applies new Occupational Health and Safety Administration (OHSA) definitions in the reporting of TRI and LTA rates to better align with international standards. Due to this change Q1 figures are not fully comparable with historical figures.
The LTA rate milestone has been set to 4.0 (3.8) based on past performance.
In March, tragically an employee working at the Wood Products unit in Murów, Poland, lost his life in an industrial accident. A Root Cause Analysis has been conducted and Corrective Actions will be implemented. Similar risks elsewhere in the group will be assessed and appropriate remedies undertaken.
| 31 March 17 | 31 Dec 16 | 31 March 16 | Target | Target to be reached by |
|
|---|---|---|---|---|---|
| % of supplier spend covered by the Supplier | |||||
| Code of Conduct1 | 93% | 92% | 91% | 95% | end of 2017 |
1 Excluding joint operations.
A new target level has been set at 95% (90%).
The final report by ILO on the formative ground research on child labour and decent work deficits in Punjab Province, Pakistan is expected during Q2/2017.
To improve the quality of the research further, ILO commissioned local engagement involving more than 170 stakeholders to advance decent work in Punjab Province.
| Completed | On track | Not on track | Closed1 | Regular review2 | |
|---|---|---|---|---|---|
| Implementation progress, % of all the actions | 87% | 1% | 1% | 7% | 4% |
1 Issues that were identified in the Human Rights assessments but closed following reassessment of their validity in specific local contexts.
2 Longer-term actions without a targeted end-date that require continuous review.
At the end of the Q1 87% (86% by the end of 2016) of the preventive and remediation actions were completed. The actions are based on the UN Guiding Principles on Business and Human Rights and criteria created in collaboration with DIHR. As reported earlier, the remaining actions will be progressed to an appropriate conclusion during 2017 and the reporting on Human Rights Action Plan progress will be stopped.
| 31 March 17 | 31 Dec 16 | 31 March 16 | |
|---|---|---|---|
| Number of direct active suppliers | 117 | 276 | 276 |
| Audit coverage year-to-date (%)1 | 11% | 15% | 6% |
1 The share of direct suppliers of Old Corrugated Containers (OCC) and agricultural by-products that are audited during the calendar year. Excluding institutional OCC suppliers identified as low risk.
Bulleh Shah Packaging (BSP) conducted 19 (55) audits of its material and service suppliers during the first quarter. In addition, 7 (0) supplier audits were conducted by an external party. During the quarter, two proven young worker cases, unacceptable for Stora Enso and BSP, were found in the operations of suppliers providing Paper for Recycling for BSP from non-institutional sources. Cases involving workers between 14–18 years of age are referred to as young workers in accordance with Pakistanspecific implementation of the ILO Minimum Working Age Convention (ILO C138). The hiring of these young workers by subcontractors violates the suppliers' contractual obligations under BSP's Supplier Sustainability Requirements. The young workers were employed in temporary part-time jobs and not conducting hazardous work. One has already left the job. The other one is still working for the supplier, and the plan for the remediation under the Child Labour Remediation Policy is under development. The suppliers will be re-audited with an unannounced audit within two months.
In October 2016, the Government of Punjab passed revised legislation regarding the employment of children and adolescents, clarifying the conditions under which adolescents may work. In line with this legislation, BSP is reviewing and revising its current Supplier Sustainability Requirements, which prohibit suppliers from employing anyone less than 18 years of age. The ILO is supporting BSP in the revision of its internal policies and procedures. This is in order to ensure that any employment by BSP suppliers of adolescent workers complies with applicable labor rights, and that they are only engaged in non-hazardous work. Once these changes come into effect, only those cases of adolescent workers where there is a breach of the law will be reported. Cases of child labor will be reported as previously.
Due to a sufficient stockpile and consequently less sourcing of biomass during 2016, the number of direct active suppliers has decreased. Biomass sourcing and the amount of suppliers are expected to increase later during the year. Due to the uncertainty related to the amount of suppliers during the year, BSP has not placed a fixed target on the annual audit coverage of the suppliers.
The vehicle installations for the mobile medical clinic by the Yunus Center at the Asian Institute of Technology have been completed, and the medical staff has been trained by the Salamar Hospital in Lahore. Operational activities in the communities are expected to start during the second quarter, and after this the reporting on the medical mobile clinic will be stopped.
| 31 March 17 | 31 Dec 16 | 31 March 16 | |
|---|---|---|---|
| Social forestland leased, ha | 29 856 | 30 500 | 32 125 |
| Leased area without contractual defects, ha | 16 333 | 16 480 | 16 642 |
| Lease contracts without contractual defects, % of all contracts | 66% | 66% | 64% |
In contracts without defects the ownership of land is clear or solved, and the contracting procedure is proven to be legal, authentic and valid. The contract correction process includes a desktop documentation review, field investigations, legal and operational risk analysis, stakeholder consultations, the collection of missing documentation and the signing of new agreements or amendments directly with the villages or households concerned, or in some cases contract termination.
Stora Enso leases a total of 82 916 hectares of land in various regions of Guangxi, of which 36% (38%) is social land leased from village collectives, individual households, and local forest farms.
In cases of conflict that the contract correction procedures cannot resolve, Stora Enso will terminate the contracts in a responsible way. During the first quarter, all remaining irreconcilable or economically unviable contracts were terminated, corresponding to 631 hectares.
As announced on 19 January, Stora Enso is reconsidering its plans to build a chemical pulp mill in Beihai, and decrease the area of its leased forestland in the Guangxi region. As part of this process, all contracts will be evaluated and Stora Enso aims to have only land leased that is free of contractual defects.
| 31 March 17 | 31 Dec 16 | 31 March 16 | |
|---|---|---|---|
| Area occupied by social movements not involved in | |||
| the Sustainable Settlement Initiative, ha | 3 616 | 3 499 | 4 592 |
As of the end of the first quarter, 3 616 hectares of land owned by Veracel were occupied by social landless movements not involved in the Sustainable Settlement Initiative. During the quarter, the occupied area increased by 117 hectares due to a land occupation by a group which has not declared to be part of the already known social movements in the region. Veracel has reserved 16 500 hectares to support the Sustainable Settlement Initiative. At the end of 2016 the total land area owned by Veracel was 215 000 hectares, of which 73 000 hectares are planted with eucalyptus for pulp production.
| Q1/17 | Q1/16 | Q4/16 | 2016 | Target | Target to be reached by |
|
|---|---|---|---|---|---|---|
| Reduction of fossil CO₂ emissions per saleable tonne of pulp, paper and board (kg/t) |
-37% | -33% | -41% | -41% | -35% | end of 2025 |
1From baseline year 2006. Covering direct fossil CO₂ emissions from production and indirect fossil CO₂ emissions related to purchased electricity and heat (Scope 1 and 2). Historical figures for Q4 2016 and full year 2016 restated (-2%). Excluding joint operations.
For over a decade, Stora Enso has actively reduced the energy intensity of its operations, and in many places also its dependency on fossil fuels. Today, over 75% of the energy the group generates and uses comes from Carbon Neutral sources inside and outside the company. It is Stora Enso's firm intention to drive down fossil fuel use even more over the next ten years to get as close to zero as possible using technically and commercially feasible means.
Despite being ahead of the 2025 target at present, the full adverse impact on the group's fossil CO2 emissions from coal use for energy production at Beihai Mill is yet to be seen in the data. This will become clear as the year progresses. Work has already begun to define a long-term strategy to migrate away from coal at Beihai.
Increasing competition and supply and demand balances in the paper, pulp, packaging, wood products and roundwood markets may have an impact on our market share and profitability. Changes in the global economic and political environment, sharp market corrections, increasing volatility in foreign exchange rates and deteriorating economic conditions in our main markets could all have impacts on Stora Enso's profits, cash flows and financial position. A more detailed description of risks is available in Stora Enso's Annual Report at storaenso.com/annualreport.
Energy sensitivity analysis: the direct effect of a 10% increase in electricity, heat, oil and other fossil fuel market prices would have a negative impact of approximately EUR 14 million on operational EBIT for the next 12 months, after the effect of hedges.
Wood sensitivity analysis: the direct effect of a 10% increase in wood prices would have a negative impact of approximately EUR 180 million on operational EBIT for the next 12 months.
Pulp sensitivity analysis: the direct effect of a 10% increase in pulp market prices would have a positive impact of approximately EUR 120 million on operational EBIT for the next 12 months.
Chemical and filler sensitivity analysis: the direct effect of a 10% increase in chemical and filler prices would have a negative impact of approximately EUR 35 million on operational EBIT for the next 12 months.
A decrease of energy, wood, pulp or chemical and filler prices would have the opposite impact.
Foreign exchange rates sensitivity analysis for the next twelve months: the direct effect on operational EBIT of a 10% strengthening in the value of the US dollar, the Swedish crown and the British pound against the euro would be about positive EUR 125 million, negative EUR 86 million and positive EUR 31 million annual impact, respectively. Weakening of the currencies would have the opposite impact. These numbers are before the effect of hedges and assuming no changes occur other than a single currency exchange rate movement.
The Group incurs annual unhedged net costs worth approximately EUR 150 million in Brazilian real (BRL) in its operations in Brazil. For these flows, a 10% strengthening in the value of BRL would have a EUR 15 million negative impact on operational EBIT.
Fibria and Stora Enso each own 50% of Veracel, and the joint ownership is governed by a shareholder agreement. In May 2014, Fibria initiated arbitration proceedings against Stora Enso claiming that Stora Enso was in breach of certain provisions of the shareholder agreement. Fibria has estimated that the interest to be paid regarding the dispute should be approximately USD 54 (EUR 51) million. Stora Enso denies any breach of contract and disputes the method for calculating the interest to be paid. No provisions have been made in Stora Enso's accounts for this case.
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 joint operations company 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 fine of BRL 20 (EUR 6) million. 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 relevant authorities. In November 2008, a Federal Court suspended the effects of the decision. No provisions have been recorded in Veracel's or Stora Enso's accounts for the reforestation or the possible fine.
In December 2009, the Finnish Market Court fined Stora Enso for competition law infringements in the market for roundwood in Finland from 1997 to 2004. Stora Enso did not appeal against the ruling. In March 2011 Metsähallitus of Finland initiated legal proceedings against Stora Enso, UPM and Metsäliitto claiming compensation for damages allegedly suffered due to competition law infringements. The total claim against the defendants amounted to approximately EUR 160 million and the secondary claim against Stora Enso to approximately EUR 87 million. In its ruling issued in June 2016, the Helsinki District Court dismissed Metsähallitus' claim for damages against Stora Enso, Metsäliitto and UPM. Metsähallitus has appealed this ruling.
In addition, certain Finnish municipalities and private forest owners initiated similar legal proceedings. The total amount claimed from the defendants amounts to approximately EUR 24 million, the secondary claims solely against Stora Enso amount to approximately EUR 5 million. Stora Enso denies that the plaintiffs suffered any damages whatsoever and will forcefully defend itself. No provisions have been made in Stora Enso's accounts for these lawsuits.
In July and August 2016, six Swedish Insurance companies filed lawsuits against Stora Enso. The claimed amount is approximately SEK 300 million (EUR 31 million) attributable to insurance compensation paid to injured parties in connection with the forest fire in Västmanland, Sweden in 2014. Stora Enso denies liability and will respond within the frame of the legal proceedings.
During the first quarter of 2017, the conversion of 20 A shares into R shares was recorded in the Finnish trade register.
On 31 March 2017, Stora Enso had 176 507 070 A shares and 612 112 917 R shares in issue. The company did not hold its own shares. The total number of Stora Enso shares in issue was 788 619 987 and the total number votes was at least 237 718 362.
Stora Enso Oyj's Annual General Meeting (AGM) will be held today, Thursday 27 April 2017, at 16.00 (Finnish time) at the Marina Congress Center, Katajanokanlaituri 6, Helsinki, Finland.
The Board of Directors proposes to the AGM that a dividend of EUR 0.37 per share be distributed for the year 2016.
The dividend would be paid to shareholders who on the record date of the dividend payment, 2 May 2017, are recorded in the shareholders' register maintained by Euroclear Finland Oy or in the separate register of shareholders maintained by Euroclear Sweden AB for Euroclear Sweden registered shares. Dividends payable to Euroclear Sweden registered shares will be forwarded by Euroclear Sweden AB and paid in Swedish crowns. Dividends payable to ADR holders will be forwarded by Citibank N.A. and paid in US dollars.
The Board of Directors proposes to the AGM that the dividend be paid on or about 9 May 2017.
This release has been prepared in Finnish, English and Swedish. If there are any variations in the content between the versions, the English version shall govern. This report is unaudited.
Helsinki, 27 April 2017 Stora Enso Oyj Board of Directors
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 Financial Report for 2016.
All figures in this Interim Report have been rounded to the nearest million, unless otherwise stated.
The group's key non-IFRS performance metric is operational EBIT, which is used to evaluate the performance of its operating segments and to steer allocation of resources to them. Operational EBIT comprises the operating profit excluding items affecting comparability (IAC) and fair valuations from the segments and Stora Enso's share of the operating profit of equity accounted investments (EAI), also excluding items affecting comparability and fair valuations.
Items affecting comparability are exceptional transactions that are not related to recurring business operations. The most common items affecting comparability are capital gains, additional write-downs or reversals of write-downs, provisions for planned restructuring and penalties. Items affecting comparability are normally disclosed individually if they exceed one cent per share.
Fair valuations and non-operational items include equity incentive schemes and related hedges, CO2 emission rights, valuations of biological assets and the group's share of income tax and net financial items of EAI.
Cash flow from operations (non-IFRS) is a group specific way to present operative cash flow without hedging result from OCI and starting from operational EBITDA instead of operating profit.
Cash flow after investing activities (non-IFRS) is calculated as follows: cash flow from operations (non-IFRS) excluding cash spent on intangible assets, property, plant and equipment, and biological assets and acquisitions of EAIs.
The full list of the non-IFRS measures is presented at the end of this report.
Stora Enso changed its reporting regarding the costs related to the growth of biological assets (i.e. growing trees) starting from the fourth quarter of 2016.
Costs related to the development of biological assets are capitalised on the balance sheet during the growth cycle (i.e. until the time of harvesting). At harvesting, the capitalised costs are transferred from biological assets to inventory. Prior to the change, Stora Enso has included the costs related to the growth of biological assets in its operational EBITDA.
From the fourth quarter of 2016 onwards, these growth costs are excluded from operational EBITDA and presented as Operational decrease in the value of biological assets. This change affects the following non-IFRS key figures: operational EBITDA, operational EBITDA margin, and net debt to last 12 months' operational EBITDA ratio. The historical figures are restated according to the new reporting structure. Restated figures are presented in Stora Enso Oyj stock exchange release, published on 8 December 2016.
There is no impact on operational EBIT, the subtotals of the official Condensed Consolidated Income Statement or the group's other IFRS figures.
Amendments to IFRS 10, IFRS 12 and IAS 28: Investment entities – Applying the consolidation Exception. The amendments provide an exemption from consolidation of subsidiaries for entities that meet the definition of investment entity. This change is not relevant to the group.
As disclosed in Stora Enso's Financial Report 2016, we do not expect that the following standards would have any significant impact on the group:
| EUR million | Q1/17 | Q1/16 | Q4/16 | 2016 |
|---|---|---|---|---|
| Sales | 2 497 | 2 445 | 2 438 | 9 802 |
| Other operating income | 24 | 30 | 29 | 123 |
| Change in inventories of finished goods and WIP | 23 | 36 | 24 | 9 |
| Materials and services | -1 498 | -1 463 | -1 515 | -5 833 |
| Freight and sales commissions | -245 | -231 | -218 | -920 |
| Personnel expenses | -325 | -342 | -319 | -1 334 |
| Other operating expenses | -145 | -146 | -155 | -561 |
| Share of results of equity accounted investments | 16 | -3 | 124 | 156 |
| Change in net value of biological assets | -12 | -7 | -202 | -261 |
| Depreciation, amortisation and impairment charges | -142 | -125 | -61 | -398 |
| Operating Profit | 193 | 194 | 145 | 783 |
| Net financial items | -29 | -39 | -69 | -242 |
| Profit before Tax | 164 | 155 | 76 | 541 |
| Income tax | -57 | -41 | -20 | -134 |
| Net Profit for the Period | 107 | 114 | 56 | 407 |
| Attributable to: | ||||
| Owners of the Parent | 114 | 118 | 91 | 463 |
| Non-controlling interests | -7 | -4 | -35 | -56 |
| Net Profit for the Period | 107 | 114 | 56 | 407 |
| Earnings per Share | ||||
| Basic earnings per share, EUR | 0.14 | 0.15 | 0.12 | 0.59 |
| Diluted earnings per share, EUR | 0.14 | 0.15 | 0.12 | 0.59 |
| EUR million | Q1/17 | Q1/16 | Q4/16 | 2016 |
|---|---|---|---|---|
| Net profit for the period | 107 | 114 | 56 | 407 |
| Other Comprehensive Income (OCI) | ||||
| Items that will Not be Reclassified to Profit and Loss | ||||
| Actuarial gains and losses on defined benefit plans | 0 | 0 | -52 | -62 |
| Income tax relating to items that will not be reclassified | 0 | 0 | 15 | 15 |
| 0 | 0 | -37 | -47 | |
| Items that may be Reclassified Subsequently to Profit and Loss | ||||
| Share of OCI of EAIs that may be reclassified | 1 | -3 | 4 | 0 |
| Currency translation movements on equity net investments (CTA) | 7 | -32 | 123 | 124 |
| Currency translation movements on non-controlling interests | 0 | -5 | 2 | -3 |
| Net investment hedges | 4 | 14 | -19 | -11 |
| Cash flow hedges | -3 | 23 | -13 | 13 |
| Non-controlling interests' share of items that may be reclassified | -1 | 0 | 0 | 0 |
| Available-for-sale investments | -14 | 0 | 30 | 138 |
| Income tax relating to items that may be reclassified | 1 | -8 | 5 | -1 |
| -5 | -11 | 132 | 260 | |
| Total Comprehensive Income | 102 | 103 | 151 | 620 |
| Attributable to: | ||||
| Owners of the Parent | 110 | 112 | 184 | 679 |
| Non-controlling interests | -8 | -9 | -33 | -59 |
| Total Comprehensive Income | 102 | 103 | 151 | 620 |
CTA = Cumulative Translation Adjustment
OCI = Other Comprehensive Income
EAI = Equity Accounted Investments
| EUR million | 31 Mar 17 | 31 Dec 16 | 31 Mar 16 |
|---|---|---|---|
| Assets | |||
| Goodwill O |
237 | 238 | 246 |
| Other intangible assets O |
180 | 180 | 148 |
| Property, plant and equipment O |
5 550 | 5 611 | 5 591 |
| 5 967 | 6 029 | 5 985 | |
| Biological assets O |
495 | 489 | 636 |
| Emission rights O |
27 | 14 | 35 |
| Equity accounted investments O |
1 602 | 1 594 | 1 545 |
| Available-for-sale: Listed securities I |
42 | 42 | 24 |
| Available-for-sale: Operative O |
239 | 253 | 138 |
| Non-current loan receivables I |
6 | 7 | 68 |
| Deferred tax assets T |
197 | 214 | 245 |
| Other non-current assets O |
60 | 57 | 61 |
| Non-current Assets | 8 635 | 8 699 | 8 737 |
| Inventories O |
1 438 | 1 346 | 1 403 |
| Tax receivables T |
11 | 9 | 8 |
| Operative receivables O |
1 337 | 1 273 | 1 334 |
| Interest-bearing receivables I |
31 | 46 | 74 |
| Cash and cash equivalents I |
932 | 953 | 605 |
| Current Assets | 3 749 | 3 627 | 3 424 |
| Total Assets | 12 384 | 12 326 | 12 161 |
| Equity and Liabilities | |||
| Owners of the Parent | 5 914 | 5 806 | 5 500 |
| Non-controlling Interests | 54 | 62 | 112 |
| Total Equity | 5 968 | 5 868 | 5 612 |
| Post-employment benefit provisions O |
431 | 436 | 371 |
| Other provisions O |
112 | 114 | 108 |
| Deferred tax liabilities T |
202 | 203 | 267 |
| Non-current debt I |
2 334 | 2 655 | 3 173 |
| Other non-current operative liabilities O |
53 | 61 | 46 |
| Non-current Liabilities | 3 132 | 3 469 | 3 965 |
| Current portion of non-current debt I |
821 | 552 | 237 |
| Interest-bearing liabilities I |
559 | 563 | 545 |
| Bank overdrafts I |
8 | 4 | 1 |
| Other provisions O |
29 | 20 | 42 |
| Other operative liabilities O |
1 791 | 1 774 | 1 715 |
| Tax liabilities T |
76 | 76 | 44 |
| Current Liabilities | 3 284 | 2 989 | 2 584 |
| Total Liabilities | 6 416 | 6 458 | 6 549 |
| Total Equity and Liabilities | 12 384 | 12 326 | 12 161 |
Items designated with "O" comprise Operating Capital
Items designated with "I" comprise Net Interest-bearing Liabilities
Items designated with "T" comprise Net Tax Liabilities
| EUR million | Q1/17 | Q1/16 |
|---|---|---|
| Cash Flow from Operating Activities | ||
| Operating profit | 193 | 194 |
| Hedging result from OCI | -2 | -4 |
| Adjustments for non-cash items | 152 | 156 |
| Change in net working capital | -167 | -61 |
| Cash Flow Generated by Operations | 176 | 285 |
| Net financial items paid | -63 | -78 |
| Income taxes paid, net | -30 | -36 |
| Net Cash Provided by Operating Activities | 83 | 171 |
| Cash Flow from Investing Activities | ||
| Acquisitions of available-for-sale investments | - | -2 |
| Proceeds from disposal of subsidiary shares and business operations, net of disposed cash | 4 | 13 |
| Proceeds and advances from disposal of intangible assets and property, plant and equipment |
38 | - |
| Income taxes paid on disposal of property | -15 | - |
| Capital expenditure | -135 | -193 |
| Proceeds from non-current receivables, net | 3 | -5 |
| Net Cash Used in Investing Activities | -105 | -187 |
| Cash Flow from Financing Activities | ||
| Proceeds from issue of new long-term debt | 29 | 1 |
| Repayment of long-term debt | -68 | -108 |
| Change in short-term borrowings | 37 | -18 |
| Buy-out of interest in subsidiaries from non-controlling interests | - | -46 |
| Equity injections from, less dividends to, non-controlling interests | - | -2 |
| Purchase of own shares1 | -3 | -2 |
| Net Cash Used in Financing Activities | -5 | -175 |
| Net Change in Cash and Cash Equivalents | -27 | -191 |
| Translation adjustment | 2 | -13 |
| Net cash and cash equivalents at the beginning of period | 949 | 808 |
| Net Cash and Cash Equivalents at Period End | 924 | 604 |
| Cash and Cash Equivalents at Period End | 932 | 605 |
| Bank Overdrafts at Period End | -8 | -1 |
| Net Cash and Cash Equivalents at Period End | 924 | 604 |
| Disposals | ||
| Cash and cash equivalents | - | 1 |
| Working capital | - | 20 |
| Non-controlling interests | - | -4 |
| Net Assets in Divested Companies | - | 17 |
| Gain on sale | - | - |
| Total Disposal Consideration | - | 17 |
| Cash part of consideration | - | 14 |
| Non-cash/not received part of consideration | - | 3 |
| Total Disposal Consideration | - | 17 |
| Cash Received Regarding Previous Year Disposals | 4 | - |
1 Own shares purchased for the group's share award programme. The group did not hold any of its own shares at the end of March 2017.
| EUR million | Q1/17 | Q1/16 | 2016 |
|---|---|---|---|
| Carrying value at 1 January | 6 518 | 6 671 | 6 671 |
| Additions in tangible and intangible assets | 88 | 167 | 638 |
| Additions in biological assets | 20 | 21 | 91 |
| Costs related to growth of biological assets | -12 | -7 | -141 |
| Disposals | -8 | - | -253 |
| Disposals of subsidiary companies | - | - | -39 |
| Depreciation and impairment | -142 | -125 | -398 |
| Fair valuation of biological assets | - | - | -120 |
| Translation difference and other | -2 | -106 | 69 |
| Statement of Financial Position Total | 6 462 | 6 621 | 6 518 |
| EUR million | 31 Mar 17 | 31 Dec 16 | 31 Mar 2016 |
|---|---|---|---|
| Bond loans | 1 684 | 1 705 | 1 819 |
| Loans from credit institutions | 1 404 | 1 434 | 1 502 |
| Finance lease liabilities | 56 | 56 | 61 |
| Other non-current liabilities | 11 | 12 | 28 |
| Non-current Debt including Current Portion | 3 155 | 3 207 | 3 410 |
| Short-term borrowings | 481 | 452 | 471 |
| Interest payable | 32 | 54 | 23 |
| Derivative financial liabilities | 46 | 57 | 51 |
| Bank overdrafts | 8 | 4 | 1 |
| Total Interest-bearing Liabilities | 3 722 | 3 774 | 3 956 |
| EUR million | Q1/17 | 2016 | Q1/16 |
| Carrying value at 1 January | 3 774 | 4 197 | 4 197 |
| Proceeds of new long-term debt | 29 | 368 | 1 |
| Repayment of long-term debt | -68 | -781 | -108 |
| Change in short-term borrowings and interest payable | 7 | -50 | -62 |
| Change in derivative financial liabilities | -11 | -13 | -19 |
| Translation differences and other | -9 | 53 | -53 |
| Total Interest-bearing Liabilities | 3 722 | 3 774 | 3 956 |
| Fair Valuation Reserve | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| EUR million | Share Capital |
Share Premium and Reserve Fund |
Invested Non Restricted Equity Fund |
Treasury Shares |
Step Acquisition Revaluation Surplus |
Available-for Sale Investments |
Cash Flow Hedges |
OCI of Equity Accounted Investments |
CTA and Net Investment Hedges |
Retained Earnings |
Attributable to Owners of the Parent |
Non controlling Interests |
Total |
| Balance at 31 December 2015 | 1 342 | 77 | 633 | - | 4 | 27 | -24 | -19 | -147 | 3 495 | 5 388 | 125 | 5 513 |
| Profit/loss for the period | - | - | - | - | - | - | - | - | - | 118 | 118 | -4 | 114 |
| OCI before tax | - | - | - | - | - | - | 23 | -3 | -18 | - | 2 | -5 | -3 |
| Income tax relating to components of OCI | - | - | - | - | - | - | -5 | - | -3 | - | -8 | - | -8 |
| Total Comprehensive Income | - | - | - | - | - | - | 18 | -3 | -21 | 118 | 112 | -9 | 103 |
| Acquisitions and disposals | - | - | - | - | - | - | - | - | - | - | - | -4 | -4 |
| Purchase of treasury shares | - | - | - | -2 | - | - | - | - | - | - | -2 | - | -2 |
| Share-based payments | - | - | - | 2 | - | - | - | - | - | - | 2 | - | 2 |
| Balance at 31 March 2016 | 1 342 | 77 | 633 | - | 4 | 27 | -6 | -22 | -168 | 3 613 | 5 500 | 112 | 5 612 |
| Profit/loss for the period | - | - | - | - | - | - | - | - | - | 345 | 345 | -52 | 293 |
| OCI before tax | - | - | - | - | - | 138 | -10 | 3 | 131 | -62 | 200 | 2 | 202 |
| Income tax relating to components of OCI | - | - | - | - | - | -3 | 5 | - | 5 | 15 | 22 | - | 22 |
| Total Comprehensive Income | - | - | - | - | - | 135 | -5 | 3 | 136 | 298 | 567 | -50 | 517 |
| Dividend | - | - | - | - | - | - | - | - | - | -260 | -260 | - | -260 |
| Acquisitions and disposals | - | - | - | - | - | - | - | - | - | -1 | -1 | - | -1 |
| Purchase of treasury shares | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Share-based payments | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Balance at 31 December 2016 | 1 342 | 77 | 633 | - | 4 | 162 | -11 | -19 | -32 | 3 650 | 5 806 | 62 | 5 868 |
| Profit/loss for the period | - | - | - | - | - | - | - | - | - | 114 | 114 | -7 | 107 |
| OCI before tax | - | - | - | - | - | -14 | -3 | 1 | 11 | - | -5 | -1 | -6 |
| Income tax relating to components of OCI | - | - | - | - | - | - | 1 | - | - | - | 1 | - | 1 |
| Total Comprehensive Income | - | - | - | - | - | -14 | -2 | 1 | 11 | 114 | 110 | -8 | 102 |
| Acquisitions and disposals | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Purchase of treasury shares | - | - | - | -3 | - | - | - | - | - | - | -3 | - | -3 |
| Share-based payments | - | - | - | 3 | - | - | - | - | - | -2 | 1 | - | 1 |
| Balance at 31 March 2017 | 1 342 | 77 | 633 | - | 4 | 148 | -13 | -18 | -21 | 3 762 | 5 914 | 54 | 5 968 |
CTA = Cumulative Translation Adjustment
OCI = Other Comprehensive Income
NCI = Non-controlling Interests
| EUR million | 31 Mar 17 | 31 Dec 16 | 31 Mar 16 |
|---|---|---|---|
| On Own Behalf | |||
| Mortgages | 9 | 9 | 4 |
| On Behalf of Equity Accounted Investments | |||
| Guarantees | 4 | 4 | 10 |
| On Behalf of Others | |||
| Guarantees | 33 | 34 | 29 |
| Other Commitments, Own | |||
| Operating leases, in next 12 months | 85 | 86 | 82 |
| Operating leases, after next 12 months | 722 | 747 | 782 |
| Pension liabilities | 1 | 1 | 1 |
| Other commitments | 10 | 9 | 10 |
| Total | 864 | 890 | 918 |
| Mortgages | 9 | 9 | 4 |
| Guarantees | 37 | 38 | 39 |
| Operating leases | 807 | 833 | 864 |
| Pension liabilities | 1 | 1 | 1 |
| Other commitments | 10 | 9 | 10 |
| Total | 864 | 890 | 918 |
The group's direct capital expenditure contracts amounted to EUR 173 million (compared with EUR 147 million on 31 March 2016 and EUR 171 million on 31 December 2016). These amounts include the group's share of direct capital expenditure contracts in joint operations.
| EUR million | Q1/17 | 2016 | Q4/16 | Q3/16 | Q2/16 | Q1/16 |
|---|---|---|---|---|---|---|
| Consumer Board | 611 | 2 342 | 580 | 599 | 599 | 564 |
| Packaging Solutions | 290 | 1 044 | 282 | 259 | 258 | 245 |
| Biomaterials | 369 | 1 376 | 349 | 334 | 342 | 351 |
| Wood Products | 416 | 1 595 | 395 | 385 | 433 | 382 |
| Paper | 748 | 3 245 | 760 | 792 | 839 | 854 |
| Other | 651 | 2 477 | 641 | 559 | 629 | 648 |
| Inter-segment sales | -588 | -2 277 | -569 | -535 | -574 | -599 |
| Total | 2 497 | 9 802 | 2 438 | 2 393 | 2 526 | 2 445 |
| EUR million | Q1/17 | 2016 | Q4/16 | Q3/16 | Q2/16 | Q1/16 |
|---|---|---|---|---|---|---|
| Consumer Board | 61 | 254 | 38 | 67 | 76 | 73 |
| Packaging Solutions | 24 | 64 | 19 | 21 | 17 | 7 |
| Biomaterials | 53 | 224 | 40 | 43 | 57 | 84 |
| Wood Products | 22 | 88 | 17 | 22 | 33 | 16 |
| Paper | 42 | 211 | 64 | 53 | 43 | 51 |
| Other | 13 | 43 | 13 | 13 | 0 | 17 |
| Operational EBIT | 215 | 884 | 191 | 219 | 226 | 248 |
| Fair valuations and non-operational items1 | 5 | -67 | -12 | -14 | -15 | -26 |
| Items affecting comparability | -27 | -34 | -34 | -9 | 37 | -28 |
| Operating Profit (IFRS) | 193 | 783 | 145 | 196 | 248 | 194 |
| Net financial items | -29 | -242 | -69 | -35 | -99 | -39 |
| Profit before Tax | 164 | 541 | 76 | 161 | 149 | 155 |
| Income tax expense | -57 | -134 | -20 | -42 | -31 | -41 |
| Net Profit | 107 | 407 | 56 | 119 | 118 | 114 |
1 Fair valuations and non-operational items include equity incentive schemes and related hedges, CO2 emission rights, valuations of biological assets, and the group's share of income tax and net financial items of EAI.
| EUR million | Q1/17 | 2016 | Q4/16 | Q3/16 | Q2/16 | Q1/16 |
|---|---|---|---|---|---|---|
| Impairments and reversals of intangible assets, PPE and biological assets |
-3 | -133 | -167 | -6 | 41 | -1 |
| Restructuring costs excluding fixed asset impairments | -14 | -19 | 0 | -3 | -16 | 0 |
| Disposals | 0 | 144 | 155 | 0 | 16 | -27 |
| Other | -10 | -26 | -22 | 0 | -4 | 0 |
| Total IAC | -27 | -34 | -34 | -9 | 37 | -28 |
| Fair valuations and non-operational items | 5 | -67 | -12 | -14 | -15 | -26 |
| Total | -22 | -101 | -46 | -23 | 22 | -54 |
| EUR million | Q1/17 | 2016 | Q4/16 | Q3/16 | Q2/16 | Q1/16 |
|---|---|---|---|---|---|---|
| Consumer Board | -3 | -77 | -77 | 0 | 0 | 0 |
| Packaging Solutions | -3 | -21 | -12 | -9 | 0 | 0 |
| Biomaterials | -3 | 0 | 0 | 0 | 0 | 0 |
| Wood Products | 0 | 0 | 0 | 0 | 0 | 0 |
| Paper | -18 | 78 | 69 | 0 | 37 | -28 |
| Other | 0 | -14 | -14 | 0 | 0 | 0 |
| IAC on Operating Profit | -27 | -34 | -34 | -9 | 37 | -28 |
| IAC on tax | 6 | -22 | -11 | 1 | -10 | -2 |
| IAC on Net Profit | -21 | -56 | -45 | -8 | 27 | -30 |
| Attributable to: | ||||||
| Owners of the Parent | -21 | -47 | -37 | -8 | 27 | -29 |
| Non-controlling interests | 0 | -9 | -8 | 0 | 0 | -1 |
| IAC on Net Profit | -21 | -56 | -45 | -8 | 27 | -30 |
| EUR million | Q1/17 | 2016 | Q4/16 | Q3/16 | Q2/16 | Q1/16 |
|---|---|---|---|---|---|---|
| Consumer Board | -1 | -110 | -102 | -2 | -4 | -2 |
| Packaging Solutions | -1 | -1 | 0 | 0 | 0 | -1 |
| Biomaterials | -1 | -13 | -5 | -3 | -2 | -3 |
| Wood Products | -1 | 0 | 0 | 0 | 0 | 0 |
| Paper | 0 | 0 | 0 | 0 | 0 | 0 |
| Other | 9 | 57 | 95 | -9 | -9 | -20 |
| FV and Non-operational Items on Operating Profit | 5 | -67 | -12 | -14 | -15 | -26 |
1 Fair valuations (FV) and non-operational items include equity incentive schemes and related hedges, CO2 emission rights, valuations of biological assets, and the group's share of income tax and net financial items of EAI.
| EUR million | Q1/17 | 2016 | Q4/16 | Q3/16 | Q2/16 | Q1/16 |
|---|---|---|---|---|---|---|
| Consumer Board | 57 | 67 | -141 | 65 | 72 | 71 |
| Packaging Solutions | 20 | 42 | 7 | 12 | 17 | 6 |
| Biomaterials | 49 | 211 | 35 | 40 | 55 | 81 |
| Wood Products | 21 | 88 | 17 | 22 | 33 | 16 |
| Paper | 24 | 289 | 133 | 53 | 80 | 23 |
| Other | 22 | 86 | 94 | 4 | -9 | -3 |
| Operating Profit (IFRS) | 193 | 783 | 145 | 196 | 248 | 194 |
| Net financial items | -29 | -242 | -69 | -35 | -99 | -39 |
| Profit before Tax | 164 | 541 | 76 | 161 | 149 | 155 |
| Income tax expense | -57 | -134 | -20 | -42 | -31 | -41 |
| Net Profit | 107 | 407 | 56 | 119 | 118 | 114 |
| One Euro is | Closing Rate | Average Rate | ||
|---|---|---|---|---|
| 31 Mar 17 | 31 Dec 16 | 31 Mar 17 | 31 Dec 16 | |
| SEK | 9.5322 | 9.5525 | 9.5050 | 9.4673 |
| USD | 1.0691 | 1.0541 | 1.0647 | 1.1066 |
| GBP | 0.8555 | 0.8562 | 0.8598 | 0.8189 |
| EUR million | USD | SEK | GBP |
|---|---|---|---|
| Estimated annual operating cash flow exposure | 1 250 | -860 | 310 |
| Transaction hedges as at 31 March 2017 | -640 | 420 | -160 |
| Hedging percentage as at 31 March 2017 for the next 12 months | 51% | 49% | 52% |
| Operational EBIT: Currency Strengthening of + 10% | EUR million |
|---|---|
| USD | 125 |
| SEK | -86 |
| GBP | 31 |
The sensitivity is based on the estimated net operating cash flow for the next 12 months. The calculation does not take into account currency hedges, and it assumes that no changes occur other than exchange rate movement in a currency. A currency weakening would have the opposite impact.
The group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
The valuation techniques are described in more detail in the group's Financial Report.
| EUR million | Loans and Receivables |
Financial Items at Fair Value through Income Statement |
Hedging Derivatives |
Available for-Sale Investments |
Carrying Amounts |
Fair Value |
|---|---|---|---|---|---|---|
| Financial Assets | ||||||
| Available-for-sale | - | - | - | 281 | 281 | 281 |
| Non-current loan receivables | 6 | - | - | - | 6 | 6 |
| Trade and other operative receivables | 962 | 1 | - | - | 963 | 963 |
| Interest-bearing receivables | 8 | 6 | 17 | - | 31 | 31 |
| Cash and cash equivalents | 932 | - | - | - | 932 | 932 |
| Carrying Amount by Category | 1 908 | 7 | 17 | 281 | 2 213 | 2 213 |
| EUR million | Financial Items at Fair Value through Income Statement |
Hedging Derivatives |
Measured at Amortised Cost |
Carrying Amounts |
Fair Value | |
|---|---|---|---|---|---|---|
| Financial Liabilities | ||||||
| Non-current debt | - | - | 2 334 | 2 334 | 2 635 | |
| Current portion of non-current debt | - | - | 821 | 821 | 821 | |
| Interest-bearing liabilities | 7 | 39 | 513 | 559 | 559 | |
| Trade and other operative payables | 22 | - | 1 470 | 1 492 | 1 492 | |
| Bank overdrafts | - | - | 8 | 8 | 8 | |
| Carrying Amount by Category | 29 | 39 | 5 146 | 5 214 | 5 515 | |
| EUR million | Level 1 | Level 2 | Level 3 | Total | ||
| Derivative financial assets | - | 23 | - | 23 | ||
| Trade and other operative receivables | - | 1 | - | 1 | ||
| Available-for-sale investments | 42 | - | 239 | 281 | ||
| Derivative financial liabilities | - | 46 | - | 46 | ||
| Trade and other operative liabilities | - | - | 22 | 22 |
| Loans and | Financial Items at Fair Value through Income |
Hedging | Available for-Sale |
Carrying | ||
|---|---|---|---|---|---|---|
| EUR million | Receivables | Statement | Derivatives | Investments | Amounts | Fair Value |
| Financial Assets | ||||||
| Available-for-sale | - | - | - | 295 | 295 | 295 |
| Non-current loan receivables | 7 | - | - | - | 7 | 7 |
| Trade and other operative receivables | 870 | 3 | - | - | 873 | 873 |
| Interest-bearing receivables | 5 | 12 | 29 | - | 46 | 46 |
| Cash and cash equivalents | 953 | - | - | - | 953 | 953 |
| Carrying Amount by Category | 1 835 | 15 | 29 | 295 | 2 174 | 2 174 |
| EUR million | Financial Items at Fair Value through Income Statement |
Hedging Derivatives |
Measured at Amortised Cost |
Carrying Amounts |
Fair Value | |
|---|---|---|---|---|---|---|
| Financial Liabilities | ||||||
| Non-current debt | - | - | 2 655 | 2 655 | 2 974 | |
| Current portion of non-current debt | - | - | 552 | 552 | 552 | |
| Interest-bearing liabilities | 7 | 50 | 506 | 563 | 563 | |
| Trade and other operative payables | 23 | - | 1 468 | 1 491 | 1 491 | |
| Bank overdrafts | - | - | 4 | 4 | 4 | |
| Carrying Amount by Category | 30 | 50 | 5 185 | 5 265 | 5 584 | |
| EUR million | Level 1 | Level 2 | Level 3 | Total | ||
| Derivative financial assets | - | 41 | - | 41 | ||
| Trade and other operative receivables | - | 3 | - | 3 | ||
| Available-for-sale investments | 42 | - | 253 | 295 | ||
| Derivative financial liabilities | - | 57 | - | 57 | ||
| Trade and other operative liabilities | - | - | 23 | 23 |
| EUR million | Q1/17 | 2016 | Q1/16 |
|---|---|---|---|
| Opening balance at 1 January | 253 | 131 | 131 |
| Gains/losses recognised in income statement | - | 5 | - |
| Gains/losses recognised in Available-for-sale investments reserve | -14 | 125 | 4 |
| Additions | - | 2 | 3 |
| Disposals | - | -10 | - |
| Closing Balance | 239 | 253 | 138 |
The level 3 financial assets consist mainly of PVO shares for which the valuation method is described in more detail in the Annual Report. The valuation is most sensitive to changes in electricity prices and discount rates. The discount rate of 3.36% used in the valuation model is determined using the weighted average cost of capital method. A +/- 5% change in the electricity price used in the DCF would change the valuation by EUR +35 million and -35 million, respectively. A +/- 1% change in the discount rate would change the valuation by EUR -25 million and +33 million, respectively.
| Helsinki | Stockholm | |||
|---|---|---|---|---|
| A share | R share | A share | R share | |
| January | 128 390 | 48 700 741 | 212 048 | 12 959 489 |
| February | 100 646 | 53 226 549 | 303 272 | 16 213 205 |
| March | 104 732 | 49 285 459 | 205 358 | 13 035 785 |
| Total | 333 768 | 151 212 749 | 720 678 | 42 208 479 |
| Helsinki, EUR | Stockholm, SEK | |||
|---|---|---|---|---|
| A share | R share | A share | R share | |
| January | 11.04 | 10.52 | 104.90 | 99.50 |
| February | 10.84 | 10.14 | 103.20 | 97.20 |
| March | 11.83 | 11.08 | 112.80 | 106.10 |
| Million | Q1/17 | Q1/16 | Q4/16 | 2016 |
|---|---|---|---|---|
| Periodic | 788.6 | 788.6 | 788.6 | 788.6 |
| Cumulative | 788.6 | 788.6 | 788.6 | 788.6 |
| Cumulative, diluted | 789.9 | 790.0 | 790.0 | 789.9 |
| Calculation of key figures | ||||
|---|---|---|---|---|
| Operational return on capital employed, operational ROCE (%) |
100 x | Operational EBIT Capital employed1 2 |
||
| Operational return on operating capital, 100 x operational ROOC (%) |
Operational EBIT Operating capital 2 |
|||
| Return on equity, ROE (%) | 100 x | Net profit/loss for the period Total equity2 |
||
| Net interest-bearing liabilities | Interest-bearing liabilities – interest-bearing assets | |||
| Debt/equity ratio | Net interest-bearing liabilities Equity3 |
|||
| EPS | Net profit/loss for the period3 Average number of shares |
|||
| Operational EBIT | Operating profit/loss excluding items affecting comparability (IAC) and fair valuations of the segments and Stora Enso's share of operating profit/loss excluding IAC and fair valuations of its equity accounted investments (EAI) |
|||
| Operational EBITDA | Operating profit/loss excluding operational decrease in the value of biological assets, fixed asset depreciation and impairment, share of results of equity accounted investments, IAC and fair valuations. |
|||
| Net debt to operational EBITDA ratio | Net interest-bearing liabilities LTM operational EBITDA |
|||
| Fixed costs | Maintenance, personnel and other administration type of costs, excluding IAC and fair valuations |
|||
| Last 12 months (LTM) | 12 months prior to the reporting date | |||
| TRI | Total recordable incident rate = number of incidents per one million hours worked | |||
| LTA | Lost-time accident rate = number of lost-time accidents per one million hours worked | |||
1 Capital employed = Operating capital – Net tax liabilities
2 Average for the financial period
3 Attributable to the owners of the Parent
| List of non-IFRS measures | |||
|---|---|---|---|
| Operational EBITDA | Depreciation and impairment charges excl. IAC |
|---|---|
| Operational EBITDA margin | Operational ROCE |
| Operational EBIT | Earnings per share (EPS), excl. IAC |
| Operational EBIT margin | Net debt/last 12 months' operational EBITDA ratio |
| Profit before tax excl. IAC | Fixed costs to sales |
| Capital expenditure | Operational ROOC |
| Capital expenditure excl. investments in biological assets | Cash flow from operations |
| Capital employed | Cash flow after investing activities |
FI-00101 Helsinki, Finland SE-107 24 Stockholm, Sweden Tel. +358 2046 131 Klarabergsviadukten 70
For further information, please contact: Seppo Parvi, CFO, tel. +358 2046 21205 Ulla Paajanen-Sainio, SVP, Investor Relations, tel. +358 40 763 8767 Ulrika Lilja, EVP, Communications, tel. +46 72 221 9228
Stora Enso's Q2/2017 results will be published on
Stora Enso is a leading provider of renewable solutions in packaging, biomaterials, wood and paper on global markets. Our aim is to replace non-renewable materials by innovating and developing new products and services based on wood and other renewable materials. We employ some 25 000 people in more than 35 countries, and our sales in 2016 were EUR 9.8 billion. Stora Enso shares are listed on Nasdaq Helsinki (STEAV, STERV) and Nasdaq Stockholm (STE A, STE R). In addition, the shares are traded in the USA as ADRs (SEOAY). storaenso.com
It should be noted that Stora Enso and its business are exposed to various risks and uncertainties and 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. 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. All statements are based on management's best assumptions and beliefs in light of the information currently available to it and Stora Enso assumes no obligation to publicly update or revise any forward-looking statement except to the extent legally required.
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