Stora Enso Interim Report January-March 2025: Consistent progress in improving performance

PR Newswire

HELSINKI, April 25, 2025

STORA ENSO OYJ INTERIM REPORT 25 April 2025 at 8:30 EEST

HELSINKI, April 25, 2025 /PRNewswire/ --

Q1/2025 (year-on-year)

   -- Sales increased by 9% to EUR 2,362 (2,164) million, mainly due to higher 
      prices and deliveries. The average sales growth (LTM YoY) was 4.6% 
      (-23.8%). 
 
   -- Adjusted EBIT increased, for the fourth consecutive quarter compared 
      year-on-year, to EUR 175 (149) million. Adjusted EBIT margin increased to 
      7.4% (6.9%). Higher prices, volumes and positive impacts from net 
      currency exchange rates and depreciations more than offset higher fiber 
      costs. 
 
   -- Operating result (IFRS) was EUR 171 (141) million, including items 
      affecting comparability of EUR -11 million, and fair valuations and other 
      non-operational items of EUR 7 million. 
 
   -- Earnings per share were EUR 0.14 (0.10) and earnings per share excl. fair 
      valuations $(FV)$ were EUR 0.13 (0.08). 
 
   -- The fair value of the forest assets increased to EUR 9.3 (8.6) billion, 
      equivalent to EUR 11.74 per share. 
 
   -- Cash flow from operations amounted to EUR 192 (269) million, impacted by 
      higher sales increasing trade receivables, and build-up of inventories 
      partly related to the ramp-up of the new consumer board line at the Oulu 
      site. 
 
   -- The net debt to adjusted EBITDA $(LTM)$ ratio improved to 3.2 (4.0). 
 
   -- Adjusted ROCE excluding the Forest division $(LTM.AU)$ increased to 3.8% 
      (-0.1%), the target being above 13%. 

Key highlights

   -- The new consumer packaging board line at the Oulu site in Finland started 
      production ramp-up in March. The line is expected to reach EBITDA 
      breakeven by the year-end 2025 and full capacity during 2027. 
 
   -- Stora Enso has received regulatory approval from the competition 
      authorities to proceed with the acquisition of the Finnish sawmill 
      company Junnikkala Oy, announced in October 2024. The transaction is 
      expected to be finalised by early May 2025. 
 
   -- As announced today, Stora Enso plans to implement a new, leaner and 
      flatter organisational structure as of 1 July 2025, dividing its 
      packaging business into four main areas with a reinforced focus on 
      renewable packaging as the core business; Food Service and Liquid Board, 
      Cartonboard, Containerboard, and Packaging Solutions. The new structure 
      would expand the total business areas from five to seven removing one 
      management layer, and represents a further decentralisation of P&L 
      responsibility closer to customers and operations. 
 
   -- The Annual General Meeting decided to distribute a dividend of EUR 0.25 
      per share for the year 2024 in two instalments, on 2 April 2025 and 2 
      October 2025. 
 
   -- Stora Enso intends to sell approximately 12% of its total forest assets 
      of 1.4 million hectares in Sweden. The sales process is ongoing. 
 
   -- Stora Enso was recognised for its leadership in corporate transparency 
      and performance on climate action by environmental non-profit CDP, 
      securing a place on 2024 Climate Change 'A List'. 

Outlook and focus for 2025

Stora Enso expects market demand to remain subdued and volatile, affected by heightened macroeconomic and geopolitical uncertainty due to trade-related tensions, and lower consumer sentiment.

Guidance

Stora Enso anticipates that its adjusted EBIT for the full year of 2025 will be adversely impacted by approximately EUR 100 million due to the ramp-up of the new packaging board line in Oulu, Finland. A majority of this is expected in Q2/2025.

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

In the second quarter of 2025, maintenance costs are expected to increase by approximately EUR 20 million from Q1/2025.

Fiber costs are expected to remain at high levels.

Focus for 2025

   -- Continue to build a leaner, more agile organisation to enhance customer 
      and business orientation, and operational efficiency. 
 
   -- Plan to implement organisational restructuring to streamline operations 
      and increase efficiency in core business areas, focusing on renewable 
      packaging. 
 
   -- Transition to a more integrated business model across Nordic packaging 
      board mills to improve the entire value chain and customer-centricity. 
 
   -- Enhance business accountability and reduce complexity by transitioning 
      from five autonomous divisions to seven streamlined business areas with 
      effective group-level support. 
 
   -- Ramp up production and leverage the 1-billion-euro investment in the new 
      packaging board line at the integrated mill in Oulu, Finland, to 
      strengthen Stora Enso's competitive position. 

Outlook from Q1/2025 to Q2/2025, across the divisions

In the Packaging Materials division, the containerboard market is expected to remain stable with ongoing price increases. Consumer board demand is expected to be seasonally stronger, and products from Stora Enso's new consumer packaging board line will gradually increase delivery volumes.

The Packaging Solutions division anticipates increased demand in Western Europe due to the seasonal fruit and vegetable market, while expectations for Asian demand suggest a return to lower seasonal norms.

The Biomaterials division predicts stable demand with higher prices driven by a tightening supply, partly offset by weaker USD.

For Wood Products, no structural demand improvement is expected, though seasonal factors and continued cost mitigation is expected to provide support.

The Forest division is expected to maintain robust financial performance.

Key figures

 
                                  Change %               Change % 
EUR million       Q1/25   Q1/24    Q1/25--Q1/24  Q4/24    Q1/25--Q4/24    2024 
----------------  ------  ------  -------------  ------  -------------  ------ 
Sales              2,362   2,164          9.1 %   2,322          1.7 %   9,049 
----------------  ------  ------  -------------  ------  -------------  ------ 
Adjusted EBITDA      320     298          7.3 %     285         12.1 %   1,223 
----------------  ------  ------  -------------  ------  -------------  ------ 
Adjusted EBIT(3)     175     149         17.7 %     121         45.5 %     598 
----------------  ------  ------  -------------  ------  -------------  ------ 
Adjusted EBIT 
 margin(3)         7.4 %   6.9 %                  5.2 %                  6.6 % 
----------------  ------  ------  -------------  ------  -------------  ------ 
Operating 
 result(3) 
 (IFRS)              171     141         21.7 %    -279        161.4 %      93 
----------------  ------  ------  -------------  ------  -------------  ------ 
Result before 
 tax(3) (IFRS)       132      94         40.8 %    -353        137.4 %    -118 
----------------  ------  ------  -------------  ------  -------------  ------ 
Net result for 
 the period(3) 
 (IFRS)              107      77         40.0 %    -379        128.3 %    -183 
----------------  ------  ------  -------------  ------  -------------  ------ 
Forest 
 assets(1,3)       9,260   8,625          7.4 %   8,894          4.1 %   8,894 
----------------  ------  ------  -------------  ------  -------------  ------ 
Adjusted return 
 on capital 
 employed 
 (ROCE), 
 LTM(2)(3)         4.4 %   1.8 %                  4.3 %                  4.3 % 
----------------  ------  ------  -------------  ------  -------------  ------ 
Adjusted ROCE 
 excl. Forest 
 division, 
 LTM(2)(3)         3.8 %  -0.1 %                  3.6 %                  3.6 % 
----------------  ------  ------  -------------  ------  -------------  ------ 
Earnings per 
 share (EPS) 
 excl. FV, 
 EUR(3)             0.13    0.08         59.0 %   -0.81        116.3 %   -0.56 
----------------  ------  ------  -------------  ------  -------------  ------ 
EPS (basic), 
 EUR(3)             0.14    0.10         43.5 %   -0.43        133.3 %   -0.17 
----------------  ------  ------  -------------  ------  -------------  ------ 
Net debt to 
 LTM(2) adjusted 
 EBITDA ratio        3.2     4.0                    3.0                    3.0 
----------------  ------  ------  -------------  ------  -------------  ------ 
Average number 
 of employees 
 (FTE)            18,512  19,412         -4.6 %  18,731         -1.2 %  19,233 
----------------  ------  ------  -------------  ------  -------------  ------ 
 
(1) Total forest assets value, including leased land and Stora Enso's share of 
Tornator. 
(2) LTM=Last 12 months 
(3) Q1 2024 restated in Q3 2024, please see the interim report for Q3 2024 for 
more details. 
 

Stora Enso's President and CEO Hans Sohlström comments on the first quarter 2025 results:

During the first quarter of 2025, we continued to make good progress in building a stronger and more profitable Stora Enso. We recorded a robust adjusted EBIT of 175 million euro, an 18% increase year-on-year, with an EBIT margin of 7.4%. This improvement primarily resulted from higher prices, alongside increased volumes, favourable foreign exchange rates, and the positive impact of cost-saving and value-creation initiatives, which helped mitigate continued high fiber costs.

This marks the fourth consecutive quarter with a year-on-year result improvement. Furthermore, in the first quarter, all divisions achieved positive adjusted EBIT for the first time since the third quarter of 2022. Group sales rose by 9% year-on-year, driven by higher deliveries and increased sales prices across most divisions.

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