5.9.2007: Meldung: Stora Enso Oyj: new Group organisation
Company will account for an impairment charge of about EUR 1 300 million in third quarter of 2007.
Stora Enso Oyj Stock Exchange Release 5 September 2007 at 06.00 GMT
Stora Enso is reorganising its operations from the current four divisions into eight separate business areas: Fine Paper, Merchants, Consumer Board, Industrial Packaging, Magazine Paper, Newsprint, North America and Wood Products. An impairment charge totalling about EUR 1 300 million will be accounted for as a non-recurring item without cash impact in the third quarter of 2007.
"The main objectives of the reorganisation are to give business area leaders and their teams clear responsibility for improving financial performance, remove layers of management and to speed up decision-making. These changes will also improve our external transparency through enhanced reporting. The new structure will further focus the portfolio analysis work and facilitate scalability for the future, strengthening Stora Enso"s position with regard to potential industry consolidation," says Stora Enso CEO Jouko Karvinen.
"Through these organisational changes, we also seek to improve the performance of our North American operations by reorganising them into a separate entity with full profit and loss responsibility reporting directly to me. Key criteria for defining the new business structure were identifying entities with strong synergies within the business and to a large extent their own customer base, while keeping customer interfaces simple and sharing relevant Group-level synergies."
The new organisational structure is effective immediately. Financial reporting in the third quarter results to be published on 25 October 2007 will be based on the new eight business areas. Historical figures based on the new business areas will be reported separately by 15 October 2007.
Executive Management Appointments
"I am delighted to be bringing several experienced Stora Enso leaders into the Group Executive Team (GET). As a team, we have one objective - to strengthen the company and improve profitability. The new Group Executive Team has a good balance of pulp, paper and board expertise combined with experience from outside the industry in Hannu Ryöppönen and myself. We need to speed up decision-making and implementation of our cost-reduction programmes, while continuing to provide excellent customer service. This is what I need from the new team, and all the teams around them," says CEO Karvinen.
All members other than the CEO and Deputy CEO are Executive Vice Presidents (EVP).
*John Gillen will continue heading Stora Enso"s North America business area through a transitional period. Details of the North American business and organisational structure will be announced in due course.
Financial impact of the impairment charge
The impairment charge will comprise about EUR 300 million on goodwill and about EUR 1 000 million on fixed assets. The fixed asset impairment will have a one-time positive tax impact of about EUR 100 million. The estimated distribution of the impairment between the business areas will be announced by 15 October 2007. The impairment charge arises from a number of factors including the reorganisation into eight separate business areas, increased wood costs mainly driven by export duties on wood from Russia, the poor outlook for magazine papers, rising interest rates and adverse currency movements.
The impact of the impairment charge on the Group"s financial figures will be as follows:
For further information, please contact:
Jouko Karvinen, CEO, tel. +358 2046 21410, +44 20 7016 3120
Hannu Ryöppönen, CFO, tel. +358 2046 21450, +44 20 7016 3114
Kari Vainio, EVP, Corporate Communications, tel. +44 7799 348 197
Keith B Russell, SVP, Investor Relations, tel. +44 20 7 016 3146
Ulla Paajanen-Sainio, VP, Investor Relations and Financial Communications,
tel. +358 40 763 8767