The accounting policies of the reportable segments are the same as those set out in Note 1 to the Consolidated Financial Statements. Segment sales include intersegment sales valued at arm’s length prices. The Group evaluates the performance of its operating segments and allocates resources to them based on their operating performance, which is equivalent to the segment result.
Stora Enso changed its organisational structure in 2003 to reflect its strategic principle of being operated and managed as one industrial group, the new structure being streamlined around the core product areas of Paper, Packaging Boards and Forest Products. For management purposes, Stora Enso’s business segments are organised worldwide by Product Area into operating divisions, these being the basis on which the Group reports its primary segment information.
• The Paper product area comprises Publication Paper, Fine Paper, and Merchants. The former Newsprint and Magazine Paper divisions were merged to form the Publication Paper segment, whilst Speciality Papers, which was part of Packaging Boards, formed a new business unit within Fine Paper.
• The Packaging Boards product area remained largely unchanged and comprises Consumer Boards, Corru-gated Packaging, Industrial Papers and Cores and Coreboards.
• Wood Products (formerly Timber), the Pulp Competence Centre and Wood Supply Europe (formerly Forest) were brought together as the new Forest Products.
Market Services, consisting of the Sales Network and Transport and Distribution, along with Energy and Head Office functions, comprise segment Other.
The activities of the reportable segments are:
Paper
• Publication Paper develops and manufactures both magazine paper and newsprint. It supplies uncoated and coated magazine paper grades to printers and publishers for use in magazines, catalogues, brochures and other printed advertising products. As for newsprint, it supplies standard and speciality grades to printers and publishers to be used in newspapers, supplements, advertising, directories and paperback books.
• Fine Paper develops, manufactures and supplies coated and uncoated fine paper grades for publishers and paper merchants. Coated fine paper is used for advertising material, brochures, high quality books and magazines, whereas uncoated fine paper products are copy and offset paper, envelopes, writing paper and continuous stationery paper.
• Merchants distribute paper to printers, merchants, offices and other agencies, acting as the link in the distribution of the Group’s fine paper products to the graphic industry.
Packaging Boards
• Packaging operations are split into business units for consumer board, corrugated packaging, industrial paper and cores and coreboard, all of which the Group develops, manufactures and supplies to industrial customers, the food industry in particular.
Forest Products
• Wood Products develops, manufactures and supplies sawn wood products used in the joinery, furniture and construction industry, including prefabricated houses; it also has an increasing amount of value added capacity for further processing of the basic sawn timber.
• Wood Supply Europe not only manages Stora Enso’s timberlands, but it also procures and supplies timber to Group mills.
Information on Stora Enso’s reportable segments as at and for the years ended 31 December 2002, 2003 and 2004 is shown in the following tables; comparatives have been restated for the above organisational changes and the restatement of prior year results in respect of the Finnish Statutory Pension Scheme.
Sales by Segment
Year Ended 31 December
2002
2003
2004
EUR million
External
Internal
Total
External
Internal
Total
External
Internal
Total
Publication Paper
4 599.2
116.4
4 715.6
4 179.3
116.4
4 295.7
4 222.3
121.0
4 343.3
Fine Paper
3 140.0
287.4
3 427.4
2 923.2
274.5
3 197.7
2 906.5
266.6
3 173.1
Merchants
718.8
1.8
720.6
625.8
1.8
627.6
628.3
9.6
637.9
Packaging Boards
2 571.9
148.3
2 720.2
2 562.5
199.1
2 761.6
2 552.5
219.0
2 771.5
Wood Products
1 139.4
95.8
1 235.2
1 294.6
105.4
1 400.0
1 446.8
120.0
1 566.8
Wood Supply Europe
444.0
1 514.7
1 958.7
492.6
1 581.7
2 074.3
549.7
1 931.8
2 481.5
Other
169.3
663.9
833.2
94.3
469.9
564.2
89.7
453.4
543.1
Elimination of internal sales
-
-2 828.3
-2 828.3
-
-2 748.8
-2 748.8
-
-3 121.4
-3 121.4
Group Total
12 782.6
-
12 782.6
12 172.3
-
12 172.3
12 395.8
-
12 395.8
Segment Share of Operating Profit and Associated Companies
Year Ended 31 December
2002
2003
2004
2002
2003
2004
2002
2003
2004
EUR million
Operating Profit
Share of Results in Associated Companies
Investment in Associated Companies
Publication Paper
-762.7
47.2
144.5
-
-16.3
5.1
67.5
57.2
61.5
Fine Paper
67.9
100.1
104.0
-1.0
-0.2
0.2
-
3.3
0.2
Merchants
-24.7
-8.9
9.9
-
-
-
-
-
-
Packaging Boards
332.3
280.5
339.7
5.3
-
-0.5
-
4.2
4.3
Wood Products
30.1
6.5
29.8
3.1
-0.9
1.3
13.4
7.6
8.1
Wood Supply Europe
120.5
116.5
158.6
-5.5
13.7
22.5
29.2
83.0
249.6
Other
58.9
-70.5
-80.4
12.7
-19.3
10.3
101.6
163.7
244.4
Group Total
-177.7
471.4
706.1
14.6
-23.0
38.9
211.7
319.0
568.1
Fixed Assets, Capital Expenditure and Depreciation & Impairment by Segment
Year Ended 31 December
2002
2003
2004
2002
2003
2004
2002
2003
2004
EUR million
Fixed Assets
Capital Expenditure
Depreciation/Impairment
Publication Paper
3 954.5
3 898.7
3 818.2
482.2
591.6
486.3
1 522.6
447.6
436.1
Fine Paper
4 005.9
3 569.7
3 366.7
134.6
219.1
198.6
532.8
340.5
356.1
Merchants
59.6
66.5
76.3
-
25.6
3.2
11.5
8.1
8.5
Packaging Boards
2 265.8
2 230.8
2 323.9
140.5
170.9
167.3
235.5
239.4
240.4
Wood Products
376.7
685.4
674.8
53.5
141.9
68.1
54.6
74.4
78.2
Wood Supply Europe
796.5
158.5
99.9
24.9
20.2
21.9
39.0
16.2
12.9
Other
481.8
337.9
291.0
41.9
78.9
29.7
45.9
74.2
39.8
Group Total
11 940.8
10 947.5
10 650.8
877.6
1 248.2
975.1
2 441.9
1 200.4
1 172.0
Goodwill by Segment (included in Fixed Assets above)
Year Ended 31 December
2002
2003
2004
2002
2003
2004
2002
2003
2004
EUR million
Goodwill
Acquisitions
Amortisation/Impairment
Publication Paper
176.4
153.0
130.0
-
-
-
851.9
34.4
23.2
Fine Paper
678.9
531.3
458.4
-
-
-
177.7
43.1
38.7
Merchants
16.0
9.1
13.8
-
-
6.8
5.2
2.2
2.2
Packaging Boards
44.3
36.0
30.7
25.1
2.5
0.1
12.9
11.9
4.9
Wood Products
123.7
173.2
155.0
-
71.1
-
14.5
20.0
21.2
Other
16.2
-
-
1.6
0.2
-
5.5
4.5
-
Group Total
1 055.5
902.6
787.9
26.7
73.8
6.9
1 067.7
116.1
90.2
Assets and Liabilities by Segment
As at 31 December
2002
2003
2004
2002
2003
2004
EUR million
Assets
Liabilities
Publication Paper
5 059.3
5 018.6
5 082.9
955.6
886.5
817.2
Fine Paper
4 869.9
4 421.9
4 347.2
566.1
547.0
509.9
Merchants
256.0
237.9
279.0
85.4
78.5
86.3
Packaging Boards
3 011.8
2 981.0
3 175.3
424.3
450.9
422.0
Wood Products
721.7
1 018.9
1 038.0
187.9
208.1
195.4
Wood Supply Europe
1 131.4
2 030.4
562.0
225.2
231.7
385.5
Other
3 164.1
2 233.4
1 927.5
7 704.5
7 526.2
5 808.4
Total
18 214.2
17 942.1
16 411.9
10 149.0
9 928.9
8 224.7
Operating Capital by Segment
As at 31 December
EUR million
2002
2003
2004
Publication Paper
4 103.7
4 132.1
4 265.7
Fine Paper
4 303.8
3 874.9
3 837.2
Merchants
170.6
159.5
192.7
Packaging Boards
2 587.4
2 530.0
2 753.3
Wood Products
533.8
811.9
842.5
Wood Supply Europe
906.2
1 798.8
176.5
Other
494.1
241.2
102.4
Total
13 099.6
13 548.4
12 170.3
Reconciliation to Total Assets
As at 31 December
EUR million
2002
2003
2004
Operating Capital
13 099.6
13 548.4
12 170.3
Gross-up for operating liabilities
2 698.3
2 624.9
2 525.0
Interest-bearing receivables
1 908.8
1 255.3
976.3
Associated companies
211.7
319.0
568.1
Tax receivables
295.8
194.5
172.2
Total Assets
18 214.2
17 942.1
16 411.9
Operating capital ("O" items) is designated thus on the Balance Sheet and represents the sum of fixed and biological assets, unlisted shares, other non-current assets, inventories, short-term operative receivables and liabilities, provisions and other long-term operative liabilities.
Average Personnel
Year Ended 31 December
Year Ended 31 December
Segment
2002
2003
2004
Location
2002
2003
2004
Publication Paper
13 241
12 903
12 317
Baltic States
382
1 561
1 630
Fine Paper
9 872
9 521
8 921
Finland
14 676
14 479
13 820
Merchants
1 411
1 254
1 296
Sweden
9 187
9 068
8 848
Packaging Boards
9 949
10 068
10 113
Germany
4 761
4 785
4 734
Wood Products
3 745
4 626
4 856
France
1 333
1 312
1 260
Wood Supply Europe
2 265
2 599
3 157
Russia
581
741
1 710
Other
3 370
3 293
3 119
Other Europe
5 378
5 267
5 349
Total
43 853
44 264
43 779
Europe
36 298
37 213
37 351
Canada
850
849
775
China
816
811
849
USA
5 731
5 182
4 644
Other
158
209
160
Year end personnel
42 461
42 814
*45 307
Total
43 853
44 264
43 779
* As a result of acquisitions in Poland and Russia in late 2004, which had year end personnel of 1 979 and 2 196 respectively, the number of employees at 31 December 2004 is
materially different from the average figure.
External Sales by Destination and Origin
Year Ended 31 December
2002
2003
2004
2002
2003
2004
EUR million
Sales by Destination
Sales by Origin
Austria
195.4
222.0
238.6
266.9
324.8
390.4
Belgium
301.3
267.2
258.4
244.3
182.7
263.4
Baltic States
28.3
89.3
135.5
163.6
280.1
310.7
Czech Republic
121.7
118.9
111.1
129.3
136.5
143.8
Denmark
297.9
276.1
262.2
79.0
68.6
66.8
Finland
780.6
786.9
808.5
4 205.5
4 048.9
4 085.5
France
965.5
862.7
835.2
432.6
378.6
347.1
Germany
1 673.6
1 616.1
1 624.6
1 505.1
1 475.6
1 500.9
Italy
391.5
380.7
369.1
0.1
0.1
0.1
Netherlands
488.4
491.9
508.8
209.2
187.7
211.2
Portugal
60.9
64.9
83.2
128.0
124.9
131.1
Spain
463.4
499.4
488.8
114.4
118.0
114.0
Sweden
1 034.2
994.4
1 040.5
2 870.1
2 814.1
2 820.3
UK
1 053.4
979.3
963.8
59.1
23.4
24.4
Russia
112.8
130.7
151.8
45.3
59.8
118.3
Other Europe
916.0
762.8
777.4
78.7
71.8
66.9
Total Europe
8 884.9
8 543.3
8 657.5
10 531.2
10 295.6
10 594.9
Africa
118.2
146.8
149.9
-
-
-
Australia/New Zealand
115.6
122.9
124.3
39.7
20.2
5.6
Canada
160.0
143.7
127.5
286.4
285.6
275.5
China (incl. Hong Kong)
257.3
267.0
281.4
120.1
107.4
107.8
Japan
340.6
323.2
346.2
1.1
0.5
-
Other Far East & South East Asia
272.6
310.6
382.5
14.2
11.5
12.6
Middle East
176.1
185.5
201.4
0.1
-
0.2
USA
2 267.3
1 918.3
1 904.9
1 789.7
1 451.5
1 398.7
Latin America
128.4
126.0
162.9
0.1
-
-
Others
61.6
85.0
57.3
-
-
0.5
Total
12 782.6
12 172.3
12 395.8
12 782.6
12 172.3
12 395.8
Total Assets, Capital Employed and Equity by Location
As at 31 December
2002
2003
2004
2002
2003
2004
2002
2003
2004
EUR million
Total Assets
Capital Employed
Shareholder's Equity
Austria
233.7
238.5
235.1
162.3
175.6
165.1
61.7
134.2
141.1
Baltic States
41.3
302.0
296.4
34.0
255.5
275.4
4.6
154.7
150.2
Belgium
525.8
650.0
625.1
325.7
584.6
570.2
235.1
255.0
258.8
Czech Republic
132.4
117.8
121.7
118.1
105.8
110.6
114.8
114.4
128.0
Denmark
40.9
89.5
53.1
28.5
46.8
44.5
125.0
126.7
200.8
Finland
5 625.1
5 219.4
5 056.9
3 682.9
3 384.8
3 356.9
3 418.9
2 931.6
2 106.8
France
367.7
364.5
389.0
235.0
245.6
275.7
230.6
185.3
138.1
Germany
1 754.4
1 750.7
1 778.6
783.8
893.4
878.2
622.8
642.5
648.6
Netherlands
144.0
121.1
181.7
91.0
87.6
130.9
387.4
272.5
195.7
Portugal
242.6
227.5
216.8
225.5
214.8
202.0
307.4
320.7
243.8
Spain
106.9
127.1
121.1
70.9
91.1
84.2
67.7
70.4
73.7
Sweden
3 727.7
4 328.9
3 270.0
1 886.7
2 582.4
1 571.1
813.5
1 396.3
1 865.7
Russia
36.6
96.6
127.8
32.8
82.0
119.3
8.2
25.7
33.5
Other Europe
180.9
83.4
326.1
52.7
42.0
174.4
57.8
61.4
209.0
Total Europe
13 160.0
13 717.0
12 799.4
7 729.9
8 792.0
7 958.5
6 455.5
6 691.4
6 393.8
Canada
561.0
488.1
484.2
491.1
491.7
475.1
559.0
472.2
445.6
China (incl. Hong Kong)
224.8
180.8
174.4
203.7
157.3
147.8
28.0
28.1
39.2
USA
4 166.7
3 385.1
2 725.2
2 654.0
2 143.6
2 079.2
962.6
665.4
984.5
Other
100.7
171.1
228.7
41.7
28.6
9.9
29.7
95.8
188.0
Total
18 214.2
17 942.1
16 411.9
11 120.3
11 613.2
10 670.5
8 034.8
7 952.9
8 051.1
Total capital employed represents operating capital less net tax liabilities.
The increase in "Other Europe" in 2004 was as a result of the year end acquisition of the Intercell Group in Poland.
Fixed Assets, Capital Expenditure and Depreciation & Impairment by Location
Year Ended 31 December
2002
2003
2004
2002
2003
2004
2002
2003
2004
EUR million
Fixed Assets
Capital Expenditure
Depreciation/Impairment
Austria
144.6
147.7
139.9
22.1
18.7
13.3
17.8
18.2
16.6
Baltic States
14.5
207.2
208.2
0.9
39.7
28.9
2.4
22.0
24.8
Belgium
377.7
557.1
506.0
290.6
209.7
-11.7
(1)
27.1
29.5
39.8
Czech Republic
108.6
97.2
100.2
3.1
2.8
10.5
12.8
-13.0
-13.0
Finland
3 164.7
3 224.9
3 086.3
211.7
371.5
239.3
391.6
367.0
369.2
France
186.6
187.8
199.6
13.9
36.3
37.7
28.8
34.9
24.0
Germany
1 127.0
1 154.6
1 177.9
55.1
126.8
187.0
138.0
155.2
163.1
Netherlands
61.0
55.7
80.6
6.4
4.3
5.2
10.5
9.7
9.9
Portugal
192.9
133.3
127.3
18.5
5.8
4.5
11.7
11.9
9.9
Spain
50.2
73.4
69.0
3.6
2.5
2.4
4.8
5.1
6.7
Sweden
2 660.6
1 965.0
1 959.8
141.0
197.3
283.8
208.8
220.6
207.9
Russia
23.5
63.9
82.2
9.9
45.5
12.3
1.8
3.2
5.4
Other Europe (2)
125.2
56.5
195.7
1.8
28.4
3.0
4.6
35.2
36.3
Total Europe
8 237.1
7 924.3
7 932.7
778.6
1 089.3
816.2
860.7
899.5
900.6
Canada
406.0
422.5
404.4
12.7
45.3
29.4
85.7
45.0
28.9
China (incl. Hong Kong)
179.5
138.1
121.5
4.7
1.3
3.7
14.8
13.1
11.1
USA
3 081.3
2 449.8
2 185.1
74.4
109.0
123.8
1 479.5
240.4
229.9
Other
36.9
12.8
7.1
7.2
3.3
2.0
1.2
2.4
1.5
Total
11 940.8
10 947.5
10 650.8
877.6
1 248.2
975.1
2 441.9
1 200.4
1 172.0
1) An EU subsidy of EUR 23.5 million was received on the Langerbrugge development for the total use of recycled paper.
2) Fixed assets amounting to EUR 147.2 million were acquired in the Intercell Group in Poland at the year end.
Goodwill by Location (included in Fixed Assets above)
