HELSINKI, Sept. 18, 2019 /PRNewswire/ -- Stora Enso is
hosting its Forest and Wood Products Day for investors in
Stockholm tomorrow. The focus is
on recently acquired Swedish forest assets and the establishment of
a new Forest division. The Wood Products division will be also
covered, including a visit to the newly inaugurated CLT
(cross-laminated timber) mill in Gruvön. Stora Enso is now
publishing an illustrative statement of income and operating
capital for the new Forest division and the Group's capital
expenditure forecast for 2020.
To increase transparency, Stora Enso will establish a Forest
division and start reporting it separately at the beginning of
2020. The new Forest division will include Stora Enso's Swedish
forest assets (including the recently-acquired Bergvik Skog Väst
AB) and its 41% share of Tornator with the majority of its forest
assets located in Finland. The
Forest division will also include wood supply operations in
Finland, Sweden, Russia and Baltic countries. Tree plantations
in the southern hemisphere linked to local pulp mills continue to
be reported as before under the Biomaterials and Consumer Board
divisions. After establishing the new Forest division, segment
Other reporting will include Group functions, logistics and other
operations.
Stora Enso's CEO, Karl-Henrik
Sundström, says: "As a major player in the
bioeconomy, access to wood is critical for us. Taking forest assets
under direct ownership gives us more flexibility to optimise our
wood supply and operations. Furthermore, as wood is the single most
important raw material and the biggest share of our costs, as well
as a large part of the balance sheet, it will make sense to
increase the transparency of reporting now, when we have
successfully finalised the acquisition of Swedish forest
holdings."
Today, Stora Enso has forest assets valued at more than
EUR 4.1 billion (land and biological
assets) in its balance sheet, the highest value being of biological
assets of EUR 3.6 billion among
Nordic companies. In Sweden, Stora
Enso owns 1.4 million hectares of forest, of which 1.14 million
hectares are productive forest land with standing stock of 143
million m³.
Forest division segment reporting
The new
division will begin its segment reporting on 1 January 2020. The restated historical figures
will be published in the first quarter of 2020. Stora Enso is now
disclosing an illustrative statement of income and operating
capital for the new division for 2018 and first half of 2019.
Forest growth represents an important component of the annual
operative return for long-term rotation forest assets, where the
typical annual wood sales and related costs do not reflect the
total profitability of the forest assets. The long-term value
change of the standing forests is an important component of the
forestry business's profitability.
Under current presentation principles, all changes in fair
valuation of biological assets are excluded from Operational EBIT,
with the exception of depletion of capitalised silviculture costs
in southern tree plantations. From 1 January
2020 onwards, the changes in fair valuation of biological
assets will be categorised in two categories: non-operational fair
value changes and operational fair value changes. Non-operational
fair value changes of biological assets reflect changes made to
valuation assumptions and parameters, usually during the annual
valuation process. Operational fair value changes of biological
assets contain all other fair value changes, mainly due to
inflation and differences in actual harvesting levels compared to
the harvesting plan. Operational fair value changes will be
reported in Operational EBITDA, whereas non-operational fair value
changes will be excluded from Operational EBITDA.
In conjunction with the new segment reporting, Stora Enso will
reclassify the silviculture costs of the new Forest division from
Operational EBITDA to Operational EBIT. Silviculture costs mainly
relate to the replanting, tending and fertilisation of trees. As
per current presentation principles, the depletion of capitalised
silviculture costs in southern hemisphere tree plantations is
already included in Operational EBIT, so this change will align the
presentation of Nordic forests and southern hemisphere
plantations.
All of the above changes are related to non-IFRS alternative
performance measures. The Operating Profit (IFRS) remains
unchanged, with both operational and non-operational fair valuation
changes to be included in the line change in the net value of
biological assets.
Capital expenditure for 2020
In 2020, the
estimated capital expenditure will be EUR 800–850 million,
including EUR 200–230 million for the Oulu mill conversion and EUR
80–100 million for biological assets. The forecasted annual
depreciation is EUR 550–570 million and the operational decrease in
the value of biological assets is EUR 50–70 million. The
capital expenditure, depreciation and operational decrease in the
biological asset values forecasts also include the impact of IFRS
16 Leases. The capital expenditure spend has been raised
temporarily in order to accelerate Stora Enso's transformation into
a renewable materials company.
Investor Day webcast
Tomorrow, Stora Enso's
Investor Day will concentrate on the Forest and Wood Products
divisions with dedicated presentations. In addition, CEO
Karl-Henrik Sundström will give a strategy presentation and CFO
Seppo Parvi will give a financial
update. A live webcast will start at 12.45 Swedish time (13.45
Finnish/EEST time, 11.45 UK time). You are welcome to follow the
presentations at https://edge.media-server.com/mmc/p/uc32cwm6.
The illustrative figures for the Forest division and the changes
in Group presentation are presented in the attached tables.
For further information, please
contact:
Ulrika
Lilja
EVP Communications
tel. +46 72 221 9228
Investor enquiries:
Ulla Paajanen
SVP, Investor Relations
tel. +358 40 763 8767
Part of the bioeconomy, Stora Enso is a leading global provider
of renewable solutions in packaging, biomaterials, wooden
constructions and paper. We believe that everything that is made
from fossil-based materials today can be made from a tree tomorrow.
Stora Enso has some 26 000 employees in over 30 countries. Our
sales in 2018 were EUR 10.5 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
CONTACT:
For further information, please
contact:
Ulrika
Lilja
EVP Communications
tel. +46 72 221 9228
Investor enquiries:
Ulla Paajanen
SVP, Investor Relations
tel. +358 40 763 8767
This information was brought to you by Cision
http://news.cision.com
https://news.cision.com/stora-enso-oyj/r/stora-enso-s-investor-day--stora-enso-establishes-forest-division-and-reporting-segment-to-increase-,c2907705
The following files are available for download:
https://mb.cision.com/Public/13589/2907705/bc28568ff1ec3fbc.pdf
|
Illustrative figures
ENG
|