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) 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
EUR million
Q1/25
Q1/24
Change %
Q1/25–Q1/24
Q4/24
Change %
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 EBIT³
175
149
17.7 %
121
45.5 %
598
Adjusted EBIT margin³
7.4 %
6.9 %
5.2 %
6.6 %
Operating result³ (IFRS)
171
141
21.7 %
-279
161.4 %
93
Result before tax³ (IFRS)
132
94
40.8 %
-353
137.4 %
-118
Net result for the period³ (IFRS)
107
77
40.0 %
-379
128.3 %
-183
Forest assets1,3
9,260
8,625
7.4 %
8,894
4.1 %
8,894
Adjusted return on capital employed (ROCE), LTM²³
4.4 %
1.8 %
4.3 %
4.3 %
Adjusted ROCE excl. Forest division, LTM²³
3.8 %
-0.1 %
3.6 %
3.6 %
Earnings per share (EPS) excl. FV, EUR³
0.13
0.08
59.0 %
-0.81
116.3 %
-0.56
EPS (basic), EUR³
0.14
0.10
43.5 %
-0.43
133.3 %
-0.17
Net debt to LTM² 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.
In our Packaging Materials division, we saw a slight recovery in demand, albeit at low levels, particularly in Europe, where higher prices contributed positively. Our Packaging Solutions division also delivered increased sales and EBIT driven by larger volumes, but with price pressure caused by market overcapacity somewhat offsetting the positive volume impact.
Our Biomaterials division delivered stable results through higher volumes despite headwinds with lower pulp prices and volumes, along with higher variable costs both year-on-year and quarter-on-quarter. The Wood Products division reached a break-even adjusted EBIT. This progress was driven by strong efficiency improvement actions coupled with somewhat improved demand, while still from a low level due to a continued weak construction market. In our Forest division, the high demand and tight markets for wood and fresh fiber continued, leading to another record-high quarterly EBIT.
Overall, the markets remain volatile, with low consumer sentiment further fuelled by tariff announcements. What comes to US tariffs, we estimate that the direct impact at current tariff rates is limited given that our direct sales to the USA account for only just below 3% of total group sales (2024). Tariffs impacting global trade present both risks and opportunities to our business. However, the main risk, as it currently stands, is the overall impact on the economy.
I am proud of the resilience and hard work demonstrated by our team, and I remain optimistic and confident in our strategic direction, positioning, and the opportunities that lie ahead. We are beginning to see the significant impact of our efforts to control factors within our power, reflected in our improving results, operational efficiency, and close relationship with our customers.
Going forward, we continue to work diligently with pricing, cost and operational efficiencies, alongside numerous other ongoing value-creating actions which contribute to improved profit and cash flow. As part of this, we continue to reduce our indebtedness with net debt to EBITDA having come down from 4.0x to 3.2x in the last year. Operating working capital to sales came down from 9.7% to 7.0%. With the last remaining investments due in our integrated Oulu packaging board mill in Q2, we will reduce our capital expenditure as planned. The ramp-up is going according to plan with promising achieved product quality. Also, the sales process of 12% of our Swedish forest holding is proceeding.
Given the recent progress made, as announced today, we now take the next step on our path to build a stronger Stora Enso by further strengthening the strategic focus on our core business of renewable packaging. To reinforce this ambition, we plan to implement a more streamlined organisational structure, carefully designed to increase customer focus, drive operational efficiency and enhance our performance culture.
Following the planned change, our renewable packaging business will consist of four P&L responsible business areas accounting for approximately 60% of Stora Enso's full year revenue: Food Service and Liquid Board, Cartonboard, Containerboard, and Packaging Solutions. The offering of these business areas helps customers and consumers reduce their environmental impact and benefit from strong sustainability growth trends, leading market positions and a high degree of innovation.
Our remaining three business areas, Biomaterials, Wood Products, and Forest, will in addition to their respective business, support renewable packaging operations through wood sourcing and supply of raw material.
This streamlined organisational setup will enable us to enhance business accountability, remove one management layer, and represents a further decentralisation of P&L responsibility closer to customers and operations. This will also enable us to capitalise on synergies, reduce complexity and overlap, and most importantly, make us more customer and business centric.
Thank you for your continued support and dedication. We are confidently navigating through volatile markets and building a stronger, better, resilient, and more profitable Stora Enso.
Webcast for analysts, investors, and media
Analysts, investors, and media are invited to participate in the webcast with a teleconference today at 11:00 am EET (10:00 CET, 9:00 BST, 4:00 EDT). The results will be presented by President and CEO Hans Sohlström and CFO Niclas Rosenlew. The presentation can be followed live via the link: https://stora-enso-oyj-q1-earnings-presentation-2025.open-exchange.net/
During the webcast presentation, analysts and investors will also have the possibility to ask questions. To participate in the teleconference, please choose the "Teleconference" option on the homepage of the webcast. Recording of the webcast will be available shortly after the event at the same address and at storaenso.com/en/investors/interim-report
Media representatives who wish to ask questions after the publication of the report may contact Carl Norell, SVP Corporate Communications at Stora Enso on +46 72 241 0349.
This release is a summary of Stora Enso's Interim Report January–March 2025. The complete report is attached to this release as a pdf file. It is also available on the company website at storaenso.com/en/investors/interim-report.
The forest is at the heart of Stora Enso and we believe that everything made from fossil-based materials today can be made from a tree tomorrow. We are the leading provider of renewable products in packaging, biomaterials, and wooden construction, and one of the largest private forest owners in the world. Stora Enso has approximately 19,000 employees and our sales in 2024 were EUR 9 billion. Stora Enso shares are listed on Nasdaq Helsinki Oy (STEAV, STERV) and Nasdaq Stockholm AB (STE A, STE R). In addition, the shares are traded in the USA on OTC Markets (OTCQX) as ADRs and ordinary shares (SEOAY, SEOFF, SEOJF). storaenso.com/investors
STORA ENSO OYJ
CONTACT:
Media enquiries: Carl Norell SVP Corporate Communications tel. +46 72 241 0349
