- Note 1 Accounting principles
- Note 2 Critical accounting estimates and judgements
- Note 3 Segment information
- Note 4 Acquisitions and disposals
- Note 5 Other operating income and expense
- Note 6 Personnel expenses
- Note 7 Board and executive remuneration
- Note 8 Net financial items
- Note 9 Income taxes
- Note 10 Depreciation, amortisation and impairment charges
- Note 11 Intangible assets and property, plant and equipment
- Note 12 Biological assets
- Note 13 Equity accounted investments
- Note 14 Available-for-sale investments
- Note 15 Other non-current assets
- Note 16 Inventories
- Note 17 Receivables
- Note 18 Shareholders’ equity
- Note 19 Non-controlling interests
- Note 20 Post-employment benefits
- Note 21 Employee variable compensation and equity incentive schemes
- Note 22 Other provisions
- Note 23 Operative liabilities
- Note 24 Financial risk management
- Note 25 Fair values
- Note 26 Debt
- Note 27 Derivatives
- Note 28 Cumulative translation adjustment and equity hedging
- Note 29 Commitments and contingencies
- Note 30 Principal subsidiaries and joint operations
- Note 31 Related party transactions
- Note 32 Earnings per share and equity per share
Note 26 Debt
Debt is recognised initially at fair value, net of transaction costs incurred. In subsequent periods, it is stated at amortised cost using the effective interest method; any difference between proceeds, net of transaction costs, and redemption value is recognised in the Consolidated income statement over the period of the borrowings. Interest expenses are accrued for and recorded in the Consolidated income statement for each period.
Debt with an original maturity greater than 12 months is classified as non-current debt in the Consolidated statement of financial position, though repayments falling due within 12 months are presented in current liabilities under the current portion of non-current debt. Short-term commercial paper, bank and other interest-bearing borrowings for which the original maturity is less than 12 months are presented in current liabilities under interest-bearing liabilities.
Leases of property, plant and equipment for which the Group has substantially all the rewards and risks of ownership are classified as finance leases. Finance leases are capitalised at the commencement of the lease at the lower of the fair value of the leased property or the estimated present value of the minimum lease payments. Each lease payment is allocated between the capital liability and finance charges so as to achieve a constant interest rate on the outstanding finance balance. The corresponding rental obligations, and net of finance charges are included in interest-bearing liabilities with the interest element of the finance charge being taken onto the Consolidated income statement over the lease period. Property, plant and equipment acquired under finance leasing contracts are depreciated over the lesser of the useful life of the asset or lease period.
The below table includes a breakdown of the Group’s interest-bearing liabilities and the related changes in the balances.
Borrowings have various maturities, details of which are set out in Note 24 Financial risk management, the longest being in 2036, and have either fixed or floating interest rates ranging from 0.6% (0.6%) to 8.6% (8.6%). The majority of Group loans are denominated in euros and US dollars. At 31 December 2017 unused committed credit facilities were at EUR 600 (EUR 700) million. The EUR 600 million committed credit facility agreement with a syndicate of 13 banks matures in January 2023. The facility is used as a backup for general corporate purposes. In addition, Stora Enso has access to various long-term sources of funding up to EUR 950 (EUR 1 000) million mainly from Finnish pension funds.
During 2017, Stora Enso has successfully issued a new bond under its EMTN (Euro Medium Term Note) programme. The EUR 300 million ten-year bond pays a fixed coupon of 2.5% and matures in June 2027.
In June 2017, Stora Enso repurchased in a public tender fixed rate notes with a nominal value of EUR 83 million from the 2018 bond, and of EUR 216 million from the 2019 bond, issued in 2012.
In June 2016, Stora Enso repurchased in a public tender fixed rate notes with a nominal value of EUR 285 million from the 2018 bond, and of EUR 67 million from the 2019 bond, issued in 2012.
Including the previously mentioned repayments, Stora Enso’s total repayments of EUR and SEK bond notes amounted to a nominal of EUR 609 (EUR, SEK and USD bond notes EUR 427) million during 2017.
In 2017, net interest-bearing liabilities decreased by EUR 473 million to EUR 2 253 million. Net interest-bearing liabilities are equal to total interest-bearing liabilities less total interest-bearing assets. Cash and cash equivalents net of overdrafts decreased by EUR 346 million to EUR 603 million at 31 December 2017.
|Bond loans in non-current debt|
|Issue/ Maturity Dates||Description of Bond||Interest Rate %||Currency of Bond||Nominal Value Issued||Outstanding As at 31 December||Carrying Value As at 31 December|
|All Liabilities are Held by the Parent Company||Currency million||EUR million|
|1993-2019||Series C Senior Notes 2019||8.600||USD||50||50||50||44||47|
|2006-2036||Global 7.250% Notes 2036||7.250||USD||300||300||300||247||281|
|2012-2017||Euro Medium Term Note||5.750||SEK||500||-||480||-||50|
|2012-2018||Euro Medium Term Note||5.000||EUR||500||112||212||112||212|
|2012-2019||Euro Medium Term Note||5.500||EUR||500||178||428||178||427|
|2016-2023||Euro Medium Term Note||2.125||EUR||300||300||300||298||298|
|2017-2027||Euro Medium Term Note||2.500||EUR||300||300||-||298||-|
|Total Fixed Rate Bond Loans||1 177||1 315|
|2006-2018||Euro Medium Term Note||Euribor+0.96||EUR||25||25||25||25||25|
|2012-2017||Euro Medium Term Note||Stibor+3.90||SEK||2 200||-||2 060||-||215|
|2015-2025||Euro Medium Term Note||Euribor+2.25||EUR||125||125||125||125||125|
|2015-2027||Euro Medium Term Note||Euribor+2.35||EUR||25||25||25||25||25|
|Total Floating Rate Bond Loans||175||390|
|Total Bond Loans||1 352||1 705|
Finance lease liabilities
At 31 December 2017 Stora Enso had a small number of finance leasing agreements for machinery and buildings for which capital costs of EUR 14 (EUR 21) million were included in property, plant and equipment and buildings; the depreciation and impairment thereon was EUR 7 (EUR 8) million. The aggregate leasing payments for the year amounted to EUR 28 (EUR 8) million, the interest element being EUR 1 (EUR 1) million.
|Finance lease liabilities|
|As at 31 December|
|Minimum Lease Payments|
|Less than 1 year||29||29|
|Over 5 years||1||1|
|Future finance charges||-1||-2|
|Present Value of Finance Lease Liabilities||29||56|
|Present Value of Finance Lease Liabilities|
|Less than 1 year||28||28|
|Over 5 years||1||1|