Stora Enso's new CEO Jouko Karvinen starts in office

Jukka Härmälä at the AGM:
"In 2006 profits rose as newsprint, uncoated fine paper and wood product prices increased, and we benefited from our internal profit improvement programmes. Profit 2007 and the Asset Performance Review (APR) are concluded ahead of schedule, but the returns are unsatisfactory as increases in energy costs last year and wood costs this year have eaten away a good lot of the benefits," says CEO Jukka Härmälä.

"I would like to take this opportunity to thank all personnel, shareholders and the Board of Directors for very stimulating and rewarding years in the industry, and to wish all of you the very best in the future," he concludes.

Stora Enso changes its strategic focus from growth to profitability
ROCE target remains 13%.

Jouko Karvinen at the AGM:
Stora Enso has accelerated its portfolio and strategy review. The key element in the new strategy is that the company will change its focus from growth to profitability. The ROCE target remains 13%.

"We have to make choices and focus on businesses that can earn double-digit returns on capital employed by allocating our resources to them," says new CEO Jouko Karvinen at today's Stora Enso Annual General Meeting.

The management of the company is not planning to initiate a new, specific profit improvement programme. Instead, the new CEO and his team will lead the company on an intensified improvement path. Decisions will be communicated when they have been made instead of announcing single multi-year plans.

"The good news is that the overall global economic situation is relatively healthy. However, that makes the distance to the 13% return on capital target over the cycle that much greater, so we have no time to lose," Karvinen continues.

"A reality for Stora Enso and the European forest products industry is the worsening shortage of wood supply resulting from announced higher Russian export duties, the increasing use of wood fibre as biofuel, and the rising environmental pressures to limit the procurement of wood raw material. As we have announced today, we have agreed not to buy wood from Metsähallitus from disputed areas in northern Finland for now, but there is no way we can produce pulp or sawn goods without sufficient wood supply. Some production curtailments are expected at Enocell Pulp Mill (part of Packaging Boards) in the second quarter of 2007 due to shortage of raw material. We are fast-tracking efforts to find alternative sources of wood - in parallel with initiatives to solve the issues of Russian duties and critical stakeholder dialogue will continue," Karvinen concludes.

For further information, please contact:
Jukka Härmälä, CEO, tel. +358 2046 21404
Jouko Karvinen, CEO, tel. +358 2046 21404
Kari Vainio, EVP, Corporate Communications, tel. +44 7799 348 197
Keith Russell, SVP, Investor Relations, tel. +44 7775 788 659

 

Source: Stora Enso