Stora Enso Oyj Class A · OMXHEX:STEAV
Stora Enso Oyj Class A — FY2006 Earnings Presentation
38 slides from Stora Enso Oyj Class A's earnings presentation, Feb 7, 2007
Slide 1: Financial Results 2006
Financial Results 2006 Jukka Härmälä, CEO Hannu Ryöppönen, CFO 7 February 2007
Slide 2: Forward-looking statements disclaimer
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
Slide 3: Contents
Contents • Year 2006 Review • Fourth Quarter 2006 Results • Shareholder Information • Summary 3 7 February 2007 Stora Enso full year results 2006
Slide 4: Year 2006 Review
STORAENSO Year 2006 Review
Slide 5: Key Annual Figures
Key Annual Figures 2004 2005 2006 Sales (1 000 tonnes) 14 410 14 150 14 618 Sales (EUR million) 12 396 13 188 14 594 EBITDA* (EUR million) 1 508 1 487 1 848 Operating profit* (EUR million) 427 ** 358 758 Operating profit (EUR million) 826 ** -60 624 Earnings per share*, EUR 0.25 0.28 0.55 Earnings p
Slide 6: Full year 2006 Highlights
Full year 2006 Highlights • Sales increased due to higher prices and increased deliveries: – Schneidersöhne and Arapoti acquisitions increased sales, offset partly by Grycksbo, Pankakoski, Celbi and Wolfsheck divestments • Operating profit improved: – Increased prices in Publication Paper and Wood P
Slide 7: Operating Profit
Operating Profit EUR million 1 800 1 600 1 400 1 200 1 000 800 600 400 200 0 2001 2002 2003 2004 2005 2006 Comparatives excluding amortisation excluding non-recurring items 7 7 February 2007 Stora Enso full year results 2006
Slide 8: Earnings per Share (EPS)
Earnings per Share (EPS) EUR 1,00 0,90 0,80 0,70 0,60 0,50 0,40 0,30 0,20 0,10 0,00 2001 2002 2003 2004 2005 2006 excluding non-recurring items 8 7 February 2007 Stora Enso full year results 2006
Slide 9: Change in EPS
Change in EPS 1-12/05 – 1-12/06 EUR 0,80 0.21 -0.03 0,70 -0.12 0,60 0.01 -0.04 0.02 -0.08 0.08 0.55 0,50 0.21 0.01 0,40 0,30 0.28 0,20 0,10 0,00 GROUP Sales Sales Variable Energy Fixed FX Associates Financing Fair Other GROUP TOTAL prices volume costs costs differenc valuation of TOTAL 2005 and mix
Slide 10: Operating Cash Flow
Operating Cash Flow EUR million 700 600 500 400 300 200 100 0 -100 -200 -300 Q103 Q203 Q303 Q403 Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Cash flow from operations Cash flow after investing activities 10 7 February 2007 Stora Enso full year results 2006
Slide 11: Debt/Equity
Debt/Equity 2005 – Q4/06 0,85 0,80 0,75 0,70 0,65 0,60 0,55 0,50 0,45 0,40 0,35 0,30 0,25 0,20 I/05 II/05 III/05 IV/05 I/06 II/06 III/06 IV/06 Target < 0.8 11 7 February 2007 Stora Enso full year results 2006
Slide 12: ROCE
ROCE % 13 12 11 10 9 8 7 6 5 4 3 2 1 0 2001 2002 2003 2004 2005 2006 Target > 13% over the cycle (current WACC 8.7 %) excluding non-recurring items 12 7 February 2007 Stora Enso full year results 2006
Slide 13: Capital Expenditure and Depreciation
Capital Expenditure and Depreciation 2002 – 2006 Capital expenditure EUR million Depreciation Capital expenditure as % of sales 1 600 12 1 400 10 1 200 8 1 000 800 6 80.1% 115.1% 90.6% 101.4% 600 4 53.5% 400 2 200 0 0 2002 2003 2004 2005 1-12 2006 13 7 February 2007 Stora Enso full year results 2006
Slide 14: Fourth Quarter 2006 Results
STORAENSO Fourth Quarter 2006 Results
Slide 15: Financial Highlights Q4 2006
Financial Highlights Q4 2006 IV/05 I/06 II/06 III/06 IV/06 Sales (EUR million) 3 636.1 3 607.7 3 616.3 3 638.1 3 731.8 Operating profit* (EUR million) 120.9 194.1 182.2 195.2 186.0 Operating profit (EUR million) -309.9 170.9 188.9 18.0 246.0 EPS (EUR) -0.30 0.29 0.05 0.07 0.33 EPS* (EUR) 0.13 0.20 0
Slide 16: Change in EPS Q3/06 – Q4/06
Change in EPS Q3/06 – Q4/06 EUR 0,25 0.01 -0.01 0.01 -0.03 0.02 0,20 0.18 -0.02 0.01 -0.05 0,15 0.01 0.13 0,10 0,05 0,00 GROUP Sales Sales Variable Energy Fixed FX Associates Fair Other GROUP TOTAL prices volume costs costs differen valuation of TOTAL Q3/06 and mix ce financial items Q4/06 Excluding
Slide 17: Shareholder Information
STORAENSO Shareholder Information
Slide 18: Earnings Per Share and Dividend
Earnings Per Share and Dividend EUR EPS, excluding non-recurring items Dividend Payout ratio % 0,60 200 % 180 % 0,50 160 % * 140 % 0,40 120 % 0,30 100 % 80 % 0,20 60 % 40 % 0,10 20 % 0,00 0% 2002 2003 2004 2005 2006 *) Board proposal 18 7 February 2007 Stora Enso full year results 2006
Slide 19: Dividend Proposal
Dividend Proposal • Dividend proposal: EUR 0.45 per share • Payout ratio: 82% excl. non-recurring items • Total dividend payment: about EUR 355 million (assuming 788.6 million shares outstanding) • Dividend yield: 3.8% (at a share price of EUR 12.00*) • Record date: 3 April 2007 • Dividend payment d
Slide 20: Profit 2007
Profit 2007 Profit improvement programme targets reached
Slide 21: Profit 2007
Profit 2007 EUR 300 million target reached EUR million Actual Plan 350 310 300 250 225 200 159 150 110 100 74 50 32 0 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 21 7 February 2007 Stora Enso full year results 2006
Slide 22: Profit 2007: Personnel reductions Q4 2006
Profit 2007 Personnel reductions Q4 2006 Cumulative reduction Quarterly reduction Plan Number of personnel 2 200 2 000 1 800 1600 1 600 1380 1 400 1 200 1160 1 000 800 800 600 480 400 240 200 320 360 240 220 220 0 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 In addition, 180 of the 600–700 potential personne
Slide 23: Summary
STORAENSO Summary
Slide 24: Summary
Summary • In 2006 sales and operating profit improved • Profit 2007 annual pre-tax profit improvement target of EUR 300 million was reached • APR-related closures and divestments implemented and decisions made • Operational cost inflation is forecasted to be 2–2.5% – Increased wood costs the main re
Slide 25: Appendix
STORAENSO Appendix
Slide 26: Summary Financials
Summary Financials EUR million 2005 2006 I/06 II/06 III/06 IV/06 Sales (EUR million) 13 188 14 594 3 608 3 616 3 638 3 732 EBITDA* (EUR million) 1 487 1 848 463 451 463 471 Operating profit* (EUR million) 358 758 194 182 195 186 Operating profit (EUR million) -60 623.8 171 189 18 246 Profit before t
Slide 27: Net Financial Items
Net Financial Items EUR million Q1/2006 Q2/2006 Q3/2006 Q4/2006 Interest income, deposits 4.8 5.0 5.2 6.5 Interest expenses, borrowings -66.5 -70.1 -69.6 -69.8 Interest rate swaps (incl. TRS interest) 17.5 5.4 4.0 2.8 Capitalised interest - - - - Net Interest Expense -44.2 -59.7 -60.4 -60.5 Foreign
Slide 28: Non-recurring Items Effect During 2006
Non-recurring Items Effect During 2006 Excluding Non-recurring non-recurring items IFRS items EBITDA (EUR million) 1 848.2 33.3 1 881.5 EBIT (EUR million) 757.5 -133.7 623.8 Profit after financial items 602.5 29.3 631.8 (EUR million) Tax effect -163.0 120.4 -42.6 Net profit* (EUR million) 435.3 149.
Slide 29: Composition of Costs in 2006, Excluding Non-Recurring Items
Composition of Costs in 2006, Excluding Non- Recurring Items Costs % of costs Variable costs 67 % Fibre 20 % Chemicals and Fillers 9% Energy 9% Production Service and Material 12 % Logistics & Commisions 13 % Other Variable 4% Fixed costs 25 % Personnel 16 % Other 9% Depreciation and impairment 8% T
Slide 30: Transaction Risk and Hedges in 2006
Transaction Risk and Hedges in 2006 EUR million EUR USD GBP SEK JPY Other Total Sales 2006 7 300 3 500 800 1 300 300 1 400 14 600 Costs 2006 -7 100 -2 000 -200 -2 300 0 -1 100 -12 700 Net operating cash flow 200 1 500 600 -1 000 300 300 1 900 Transaction hedges 250 194 -334 0 as at 31 Dec Hedging pe
Slide 31: Debt/Equity
Debt/Equity 0,85 0,80 0,75 0,70 0,65 0,60 0,55 0,50 0,45 0,40 0,35 0,30 0,25 0,20 2001 2002 2003 2004 2005 2006 Target < 0.8 31 7 February 2007 Stora Enso full year results 2006
Slide 32: Main Events in 2006
Main Events in 2006 First quarter: • Disposal of Grycksbo Fine Paper Mill and Linghed Sawmill as part of the Asset Performance Review (APR) • Decision to restart operations at Veitsiluoto Sawmill in Northern Finland at lower production volume in spring 2006 Second quarter: • The wholly owned subsidi
Slide 33: Main Events in 2006 (cont.)
Main Events in 2006 (cont.) Third quarter: • Pankakoski Mill sold to an international group of investors for EUR 20 million • Stora Enso reached an agreement to acquire 100% of the shares in Vinson Indústria de Papel Arapoti Ltda. and Vinson Empreendimentos Agricolas Ltda. from International Paper,
Slide 34: Publication Paper
Publication Paper % Change EUR million 2005 2006 I/06 II/06 III/06 IV/06 IV/III Sales 4 675.9 4 773.4 1 171.0 1 145.2 1 226.7 1 230.5 0.3 Operating profit* 193.3 251.6 70.3 55.3 57.0 69.0 21.1 % of sales 4.1 5.3 6.0 4.8 4.6 5.6 ROOC, %** 4.7 6.2 6.8 5.4 5.7 7.0 Deliveries, 1 000 t 7 008 6 929 1 666
Slide 35: Fine Paper
Fine Paper % Change EUR million 2005 2006 I/06 II/06 III/06 IV/06 IV/III Sales 2 690.3 2 956.3 776.3 738.9 722.8 718.3 -0.6 Operating profit* 62.2 166.0 52.7 46.3 32.4 34.6 6.8 % of sales 2.3 5.6 6.8 6.3 4.5 4.8 ROOC, %** 2.4 7.1 8.2 7.2 5.4 6.4 Deliveries, 1 000 t 3 521 3 839 994 945 954 946 -0.8 P
Slide 36: Packaging Boards
Packaging Boards % Change EUR million 2005 2006 I/06 II/06 III/06 IV/06 IV/III Sales 3 190.2 3 531.5 869.0 881.8 909.0 871.7 -4.1 Operating profit* 220.0 323.4 99.5 70.8 93.7 59.4 -36.6 % of sales 6.9 9.2 11.4 8.0 10.3 6.8 ROOC, %** 7.6 11.5 13.9 10.0 13.5 8.6 Deliveries, 1 000 t 3 621 3 850 959 971
Slide 37: Wood Products
Wood Products % Change EUR million 2005 2006 I/06 II/06 III/06 IV/06 IV/III Sales 1 588.3 1 676.4 377.1 437.8 418.5 443.0 5.9 Operating profit* -3.1 59.1 3.8 14.9 21.4 19.0 -11.2 % of sales -0.2 3.5 1.0 3.4 5.1 4.3 ROOC, %** -0.5 9.2 2.3 8.9 12.7 11.6 Deliveries, 1 000 m3 6 741 6 572 1 563 1 746 1 5
Slide 38: To view Stora Enso's full year results for 2006, visit www.storaenso.com
To view Stora Enso’s full year results for 2006, visit www.storaenso.com