CEO Jouko Karvinen comments on first quarter 2012 results announced recently.
“Our first quarter earnings performance was overall in line with our guidance in February. However, the return on capital employed was below cost of capital, which shows the never-ending need to improve our cost position and operational performance. In addition to the expected price pressures and variable cost reductions only slowly improving our profit, we also had operational issues in several of our mills, for instance the Nordic mills of the Biomaterials Business Area. The good thing is that we can tackle these challenges ourselves,
instead of just waiting for external conditions to improve.
“The earlier announced efficiency improvement plans in specific Business Area – magazine paper efficiency measures, Swedish maintenance streamlining and general mill review – continued in the first quarter. It is important that these efforts set an example in every Business Area and every mill, and the sooner the better.
“Cash generation, including further improvement in working capital, remained relatively strong, with improved and very strong liquidity. Keeping our cash engines going strong has been and remains a key target to finance our growth investments in Uruguay and China. I am very excited about our most recent investment decision to build a world-class integrated consumer board and pulp mill in China based on locally grown renewable materials for the benefit of local Chinese consumers in the fastest-growing market. Both these announced
investments are significant steps in transforming our company into a value-creating renewable materials company in markets with significant growth. This is a journey that will take several years, but we are well on our way, and plan only to accelerate the pace of change.”
