Stora Enso Financial Statement Release 2024: Improved results in challenging markets

PR Newswire

HELSINKI, Feb. 11, 2025

STORA ENSO OYJ FINANCIAL STATEMENT RELEASE 11 February 2025 at 8:30 EET

HELSINKI, Feb. 11, 2025 /PRNewswire/ --

Q4/2024 (year-on-year)

   -- Sales increased by 7% to EUR 2,322 (2,174) million. 
 
   -- Adjusted EBIT increased to EUR 121 (51) million. 
 
   -- Adjusted EBIT margin increased to 5.2% (2.3%). 
 
   -- Operating result (IFRS) was EUR -279 (-326) million, including items 
      affecting comparability of EUR -768 million related mainly to impairments 
      booked as part of the annual impairment review, and fair valuations and 
      other non-operational items of EUR 368 million mostly from increase in 
      the fair value of the standing growing trees (biological assets). 
 
   -- Earnings per share (EPS) were EUR -0.43 (-0.36) and EPS excl. fair 
      valuations $(FV)$ was EUR -0.81 (-0.64). 
 
   -- The fair value of the forest assets increased to EUR 8.9 (8.7) billion, 
      equivalent to EUR 11.28 per share. 
 
   -- Cash flow from operations amounted to EUR 325 (323) million. Cash flow 
      after investing activities was EUR 88 (-9) million. 
 
   -- Net debt increased by EUR 540 million to EUR 3,707 (3,167) million, 
      mainly due to the board investment at the Oulu site. 
 
   -- The net debt to adjusted EBITDA $(LTM)$ ratio improved to 3.0 (3.2). The 
      target to keep the ratio below 2.0 remains. 

Year 2024 (year-on-year)

   -- Sales were EUR 9,049 (9,396) million. 
 
   -- Adjusted EBIT was EUR 598 (342) million. 
 
   -- Operating result (IFRS) was EUR 93 (-322) million. 
 
   -- Earnings per share (EPS) were EUR -0.17 (-0.45) and EPS excl. fair 
      valuations (FV) was EUR -0.56 (-0.73). 
 
   -- Cash flow from operations amounted to EUR 1,187 (954) million. Cash flow 
      after investing activities was EUR 74 (-40) million. 
 
   -- Adjusted ROCE excluding the Forest division increased to 3.6% (1.0%), the 
      target being above 13%. 

Key highlights

   -- The profit improvement programme, initiated in Q1/2024 with a target of 
      EUR 120 million in annual gross fixed cost savings, progressed well, with 
      the full impact realised from the start of 2025. During the year, fixed 
      costs decreased by EUR 110 million. 
 
   -- Stora Enso signed an agreement to acquire the Finnish sawmill company 
      Junnikkala Oy to secure a cost-efficient wood supply to the packaging 
      board site in Oulu, Finland, and to support the wood products business 
      with new production assets. 
 
   -- Stora Enso achieved a 53% reduction in Scope 1 and 2 greenhouse gas 
      emissions by year-end, surpassing the 2030 target of a 50% reduction from 
      the 2019 base year. 
 
   -- The consumer board investment at the Oulu site in Finland is progressing 
      on schedule. Production is estimated to start in the coming months with 
      full capacity estimated to be reached during 2027. 
 
   -- Stora Enso intends to sell approximately 12% of its total forest assets 
      of 1.4 million hectares in Sweden, with a fair value of EUR 6.3 billion. 
      The sales process is ongoing. 

Proposed dividend

The Board of Directors will propose a dividend of EUR 0.25 (EUR 0.20) per share at the Annual General Meeting on 20 March 2025. The Board of Directors proposes that the dividend be paid in two instalments, during the second and fourth quarter of 2025.

Outlook

NB: As a change to prior practices, Stora Enso will continue to provide comments on its outlook but not a specific annual EBIT guidance. This aligns with international practice.

We expect demand to remain subdued and volatile, affected by macroeconomic confidence and continued geopolitical uncertainty. Wood prices are expected to remain at high levels. Throughout 2025, we continue with our actions to reduce costs and strengthen operational and commercial excellence with the aim to improve operational performance and competitiveness.

In the first quarter of 2025, maintenance costs are expected to decrease to EUR 64 million from EUR 118 million in Q4/2024, due to no major planned maintenance activities in the quarter.

During the full year 2025, the Group's adjusted EBIT is anticipated to be adversely impacted by approximately EUR 100 million, primarily in H1/2025, due to the ramp-up in the coming months of the new packaging board line in Oulu, Finland.

The Group's capital expenditure forecast for the full year 2025 is EUR 730--790 million.

Packaging Materials

The fiber packaging market is currently challenged by soft demand due to slow economic recovery, low operating rates and uncertain visibility. Consumer board volumes in Q1/2025 are anticipated to increase following planned maintenance stops and seasonally low demand in Q4/2024. With continued weak demand and excess capacity, containerboard operating rates in fresh fiber are expected to improve but still remain at a relatively low level. Recycled containerboard volumes are expected to remain stable. High wood fiber costs continue to put pressure on margins. The division's average price level is expected to remain stable quarter-on-quarter.

Packaging Solutions

Market demand continues to be unpredictable and volatile with vast overcapacity. The first quarter typically represents a low season for the division. Volumes in Q1/2025 in Central, Northern and Western Europe are anticipated to be stable quarter-on-quarter, while the Chinese market is expected to return to normal levels following their peak season at year-end. High containerboard costs and the ongoing ramp up of the corrugated packaging site in De Lier, in the Netherlands are expected to continue to constrain margin growth beyond Q1/2025.

Biomaterials

The pulp market is currently positioned near its cyclical low. Leading pulp producers have announced price increases, with potential effects likely becoming more apparent in Q2/2025. Demand outlook is uncertain driven by economic activity and geopolitical risks.

Wood Products

The overall outlook for Q1/2025 is expected to remain relatively unchanged from Q4/2024, characterised by low and stable demand for classic sawn in Europe and overseas, alongside some price increases driven by high raw material costs. Raw material costs are projected to continue at a stable level, with an upward trend in log cost. Construction activity is expected to remain low.

Forest

Wood demand in the Nordics is expected to remain robust in Q1/2025, despite reductions in pulpwood consumption from curtailments in packaging and pulp markets, as forest companies are minimising costly imports.

Key figures

 
EUR                         Change %              Change %                      Change % 
million     Q4/24   Q4/23   Q4/24--Q4/23  Q3/24   Q4/24--Q3/24  2024    2023    2024--2023 
----------  ------  ------  ------------  ------  ------------  ------  ------  ---------- 
Sales       2,322   2,174   6.8 %         2,261   2.7 %         9,049   9,396   -3.7 % 
----------  ------  ------  ------------  ------  ------------  ------  ------  ---------- 
Adjusted 
 EBITDA     285     212     34.4 %        328     -13.1 %       1,223   989     23.6 % 
----------  ------  ------  ------------  ------  ------------  ------  ------  ---------- 
Adjusted 
 EBIT       121     51      138.6 %       175     -31.3 %       598     342     74.8 % 
----------  ------  ------  ------------  ------  ------------  ------  ------  ---------- 
Adjusted 
 EBIT 
 margin     5.2 %   2.3 %                 7.8 %                 6.6 %   3.6 % 
----------  ------  ------  ------------  ------  ------------  ------  ------  ---------- 
Operating 
 result 
 (IFRS)     -279    -326    14.4 %        139     n/m           93      -322    128.8 % 
----------  ------  ------  ------------  ------  ------------  ------  ------  ---------- 
Result 
 before 
 tax 
 (IFRS)     -353    -378    6.6 %         98      n/m           -118    -495    76.2 % 
----------  ------  ------  ------------  ------  ------------  ------  ------  ---------- 
Net result 
 for the 
 period 
 (IFRS)     -379    -325    -16.5 %       84      n/m           -183    -431    57.4 % 
----------  ------  ------  ------------  ------  ------------  ------  ------  ---------- 
Net debt    3,707   3,167   17.1 %        3,528   5.1 %         3,707   3,167   17.1 % 
----------  ------  ------  ------------  ------  ------------  ------  ------  ---------- 
Forest 
 assets(1)  8,894   8,731   1.9 %         8,758   1.6 %         8,894   8,731   1.9 % 
----------  ------  ------  ------------  ------  ------------  ------  ------  ---------- 
Adjusted 
 return on 
 capital 
 employed 
 (ROCE), 
 LTM(2)     4.3 %   2.4 %                 3.7 %                 4.3 %   2.4 % 
----------  ------  ------  ------------  ------  ------------  ------  ------  ---------- 
Adjusted 
 ROCE 
 excl. 
 Forest 
 division, 
 LTM(2)     3.6 %   1.0 %                 2.7 %                 3.6 %   1.0 % 
----------  ------  ------  ------------  ------  ------------  ------  ------  ---------- 
Earnings 
 per share 
 (EPS) 
 excl. FV, 
 EUR        -0.81   -0.64   -26.4 %       0.10    n/m           -0.56   -0.73   23.1 % 
----------  ------  ------  ------------  ------  ------------  ------  ------  ---------- 
EPS 
 (basic), 
 EUR        -0.43   -0.36   -18.5 %       0.11    n/m           -0.17   -0.45   62.0 % 
----------  ------  ------  ------------  ------  ------------  ------  ------  ---------- 
Net debt 
 to LTM(2) 
 adjusted 
 EBITDA 
 ratio      3.0     3.2                   3.1                   3.0     3.2 
----------  ------  ------  ------------  ------  ------------  ------  ------  ---------- 
Average 
 number of 
 employees 
 (FTE)      18,731  20,047  -6.6 %        19,364  -3.3 %        19,233  20,822  -7.6 % 
----------  ------  ------  ------------  ------  ------------  ------  ------  ---------- 
 

(MORE TO FOLLOW) Dow Jones Newswires

February 11, 2025 02:15 ET (07:15 GMT)