CEO Jouko Karvinen comments on the third quarter and company transformation:

“We finished the third quarter as we promised, and a little more. Markets overall varied from weak in Europe in printing and reading and wood products, to a mixed picture in renewable packaging. We finished the quarter at the upper end of our earnings expectations, and most important kept the cash generation rock solid as demonstrated by the improved quarter-end liquidity of EUR 1.7 billion,” says CEO Jouko Karvinen. 

“This is a path we must continue to move on with accelerating speed. Today’s announcements of new profitability action plans across all businesses will be difficult for our people, but also a prerequisite for implementing our transformation in a responsible way. The weak performance of Building and Living is clear evidence that we have much more to do.

“The growth investments at Skoghall, Ostrołęka and Montes del Plata are reaching their final months and quarters of completion – living proof points of the transformation of Stora Enso into a value-creating renewable materials growth company. In parallel, we continue the planning for our China investment, as we do planning integration of our new joint venture in Pakistan.”

Stora Enso’s new CFO Karl-Henrik Sundström comments on continuous improvement, speed of execution and risk mitigation:

“We want to be masters of our own destiny and therefore plan to take capacity action in media-driven European paper markets with overcapacity and a structural and cyclical decline of around 6% annually right now, and 4–6% in the coming years. We cannot afford to wait for a transformation in our markets, we need to act as we have done previously.

“We have maintained strong cash generation and secured all of our short-term maturities through a number of bond transactions. We have today a robust liquidity position and have covered all of our maturities until the end of 2014. In addition, we have today announced plans to further reduce costs and improve productivity, partly in response to the weak and uncertain economic growth in Europe. This is prudent as well as responsible.

“The profitability improvement action plans will not be easy since they will affect a number of businesses that have been impacted before, and will intensify some of the issues in this very hard hit European industry. To transform our company, we must redirect the deep knowledge we have in production and development to products and markets that will offer value-creating growth. This will not be an overnight process but the essence of our ongoing journey.

“As a company we are fortunate to have created a stable cash generating business in Europe, which we will use to finance the transformation our business. The most important task for us is to ensure that for years to come we continue to have the best cash engines in Europe, which means de-risking our transformation by a cost-efficient and profitable Printing and Reading business in Europe, a very efficient balance sheet and ample liquidity.” 

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