Consumables

Stora Enso CEO Jouko Karvinen comments on second quarter 2012 results announced today

Friday 20. July 2012 - "We close the second quarter of 2012 with a mixed report. Both cash flow and liquidity continued to improve year-on-year whereas operational EBIT remained at about the level of the first quarter, as we also guided in April.

“In operations we had significant scheduled maintenance stoppages in
Biomaterials, and late in the quarter we added production curtailments in
Printing and Reading and Building and Living to fight the clearly weakening
market conditions. It is clear that the continuing issues in the eurozone
started to have a more material impact on our key markets during the later part
of the second quarter, especially in the Building and Living and Printing and
Reading Business Areas. In Printing and Reading the cyclical weakness is
amplified by the ongoing structural change towards digitalisation of media and
advertising that we have seen in Europe since 2007.
“The reality, as for most of the past five years since 2007, is that the
environment is not going to get any easier. We need to double our own efforts
to get through the short-term and long-term challenges. Operationally, every
Business Area needs not only to complete the announced restructuring
programmes, and the literally hundreds of cost and productivity improvement
efforts, but also to add more of them and implement them faster. We also must
and will continue to adjust our manufacturing capacity to the market demand, as
we have been doing since late in the second quarter. This is crucial not only
to maximise our margins with a focused market and product mix, but also to
further demonstrate that we can get through the market cycles with continued
solid cash generation.
“This cash flow is critical for us to continue to move the Group into
higher-return growth markets with strong and defendable competitive positions.
Completion of the Ostro??ka light-weight board machine, Skoghall Mill upgrade
and Montes del Plata Pulp Mill are all steps on this transformation path. They
will be followed by the strategic consumer board investment in Guangxi, China.
This is our road into a new, growth market future.”