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Extract from the Parent Company Stora Enso Oyj Financial Statements
Accounting principles
The Parent Company Financial Statements are prepared according to Generally Accepted Accounting Principles in Finland (Finnish GAAP); see Group Consolidated Financial Statements Note 1, Accounting Principles. The main differences between the accounting policies of the Group and the Parent Company relate to:
Accounting of amortisation of capitalised goodwill
The valuation of certain financial assets, financial liabilities, financial instruments and securities
Accounting of post-employment Defined Benefit Plans
The presentation and accounting of deferred tax
Accounting of equity incentive schemes
Accounting of financial leases.
Change in the presentation method
The amended Accounting Act came into effect on 1 January 2016. With the amendment, the group containing extraordinary income and expenses was removed from the income statement. The merger loss of EUR 18.1 million that was recognised in extraordinary expenses in 2015 was transferred to other operating expenses. Consequently, operating profit for 2015 were decreased by the same amount. The Group contribution of EUR 0.2 million that was recognised in extraordinary income in 2015 was transferred to appropriations. The corresponding changes were also made to the cash flow statement.

The company has changed its presentation of derivatives in accordance with Finnish Accounting Board’s opinion 13.12.2016 1963/2016. Hedge accounted derivatives that are hedging parent company’s own highly probable cash flows are now measured at fair value in the balance sheet according to IFRS standards with effective hedge result being recognised in the fair value reserve in equity. The fair values of such derivatives were previously presented as off-balance sheet items. At the end of the period, the fair value reserve was EUR 16.6 million negative (EUR 10.6 million negative in 2015). The company has also changed presentation of certain non-hedge accounted derivatives with unrealised losses being immediately recognised in the Income Statement while any unrealised gains only being recognized at maturity or when derivative result otherwise realises. In 2016 the change had a negative impact of EUR 35.5 million on the Income Statement (EUR 13.9 million negative in 2015). As a consequence the negative impact on parent company’s equity totaled EUR 52.1 million (EUR 22.8 million negative in 2015). Comparative periods have not been restated due to the change.
Parent Company income statement Year Ended 31 December
EUR million 2016 2015
Sales 3 453 3 440
Changes in inventories of finished goods and work in progress -9 -
Production for own use 1 -
Other operating income 174 199
Materials and services -2 167 -2 187
Personnel expenses -318 -313
Depreciation and value adjustments -145 -126
Other operating expenses -741 -744
Operating Profit 248 269
Net financial items -73 1
Profit before Appropriations and Taxes 175 270
Appropriations -43 -76
Income tax expense - -1
Net Profit for the Period 132 193
Parent Company statement of financial position
Assets
As at 31 December
EUR million 2016 2015
Fixed Assets and Non-current Investments
Intangible assets 85 63
Tangible assets 926 940
Shares in Group companies 6 179 6 192
Other investments 782 1 292
7 972 8 487
Current Assets
Inventories 442 445
Long-term receivables 1 -
Short-term receivables 947 1 388
Cash and cash equivalents 2 259 1 123
3 649 2 956
Total Assets 11 621 11 443
Equity and Liabilities
As at 31 December
EUR million 2016 2015
Share capital 1 342 1 342
Share premium 3 639 3 639
Fair value reserve -17 -
Invested non-restricted equity fund 633 633
Retained earnings 722 789
Net profit for the period 132 193
6 451 6 596
Appropriations 180 136
Provisions 17 21
Non-current Liabilities 1 752 2 347
Current Liabilities 3 221 2 343
Total Equity and Liabilities 11 621 11 443
The presentation of Intangible assets and Tangible assets has been further specified with regard to the comparison period.
Parent Company cash flow statement
Year Ended 31 December
EUR million 2016 2015
Cash Provided by Operating Activities
Net profit for the period 132 193
Taxes - 1
Appropriations 43 76
Depreciation and value adjustments 145 126
Unrealised foreign exchange wins and losses -29 70
Other non-cash items -6 -2
Financial income and expenses 73 -1
Interest received 61 71
Interest paid net of amounts capitalised -122 -130
Dividends received 133 246
Other financial items paid net -116 -106
Income taxes paid -1 -1
Change in net working capital 110 63
Net Cash Provided by Operating Activities 423 606
Net Cash from Investing Activities
Capital expenditure -154 -237
Proceeds from sale of fixed assets 3 5
Purchases of other investments -5 -9
Investment in subsidiary shares -91 -12
Proceeds from disposal of subsidiary shares - 326
Proceeds from disposal of shares in other companies 11 -
Proceeds from long-term receivables net 964 51
Net Cash Provided in Investing Activities 728 124
Cash Flow from Financing Activities
Proceeds from (payment of) long-term liabilities net -587 -461
Proceeds from (payment of) short-term borrowings net 827 -433
Capital repayment / dividend per share paid/declared -260 -237
Group contributions paid and received - 40
Net Cash Used in Financing Activities -20 -1 091
Net Increase (Decrease) in Cash and Cash Equivalents 1 131 -361
Translation adjustment 5 -10
Cash and cash equivalents at start of year 1 123 1 494
Cash and Cash Equivalents at Year End 2 259 1 123

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