Key financial targets
Return on capital employed
Return on capital employed (ROCE) is a key indicator of performance for a capital-intensive company such as Stora Enso. The Group’s ROCE target is 13% over the business cycle.
Acquisitions
Acquisitions will only be made if they meet Stora Enso’s financial targets and make a positive contribution to earnings per share (EPS) and cash earnings per share (CEPS) after one year, excluding synergies.
Cash flow
Enhancing cash flow from operations is a high priority at a time of low profitability. To improve the efficiency of the management of its working capital, Stora Enso has set an internal benchmark that cash flow should exceed average capital expenditure and dividends on a three-year rolling basis.
Capital expenditure
Stora Enso’s capital expenditure (Capex) policy is to keep Capex at or below depreciation over the business cycle.
Reaching key financial targets
| |
Target |
2006* |
2007* |
2008* |
2009 |
2010 |
| ROCE, %** |
13 |
8.7 |
11.3 |
3.4 |
3.9 |
10.3 |
| Debt/Equity ratio |
at or below 0.8 |
0.54 |
0.39 |
0.56 |
0.51 |
0.39 |
|
Dividend and distribution/share
|
|
0.45 |
0.45 |
0.20 |
0.20 |
0.25 |
|
Payout ratio, %**
|
50 |
82 |
51 |
105 |
105.0 |
31.6 |
* Figures for 2005, 2006, 2007 and 2008 are for continuous operations, except for Debt/equity ratio and dividend/share, which are calcluated for total operations.
** Excluding non-recurring items.
