2007-09-05

Company will account for an impairment charge of about EUR 1 300 million in third quarter of 2007

Stora Enso launches new Group organisation to improve long-term profitability 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.

Full press release

Information about the company: Stora Enso Oyj