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Creating value in the face of difficult markets
Despite the decline in paper demand and prices the financial results were satisfactory. Production was adjusted to market demand in order to avoid excess inventories. Curtailments resulting from weak markets amounted to 1 540 000 tonnes, some 10% of the Group's total capacity.
Key ratios were in line with targets
Return on capital employed (ROCE) excluding non-recurring items was 10.8%, the target over the cycle being 13%. The debt/equity ratio was 0.53, well below the 0.8 target. Capital expenditure totalled EUR 857.1 million, which was less than depreciation and consistent with the Company's objective.
Synergies from the Consolidated Papers, Inc. acquisition amounted to USD 66 million (EUR 74 million), 25% less than initially calculated since recessionary market conditions severely limited productivity-related synergy gains.
Dividend EUR 0.45
The Board of Directors proposes to the Annual General Meeting a dividend per share of EUR 0.45, giving a payout ratio of 48%.
Integration and productivity improvements
Productivity improvements continued in the form of merger synergies, benchmarking and best practice. The main investment decision was to build a newsprint production line in Langerbrugge, Belgium as part of the programme to restructure the newsprint and magazine paper businesses, and to carry out strategic rebuilds at the Oulu, Uetersen and Imatra mills in order to improve quality, raise productivity and improve the financial results.
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