Endured enlargement and income growth

STORA ENSO OYJ INTERIM REPORT 24 October 2024 at 8:30 EEST

HELSINKI, Oct. 24, 2024 /PRNewswire/ —

Q3/2024 (year-on-year)

• Gross sales greater via 6% to EUR 2,261 (2,127) million.
• Adjusted EBIT greater to EUR 175 (21) million*.
• Adjusted EBIT margin greater to 7.8% (1.0%).
• Running consequence (IFRS) was once EUR 139 (-1) million*.
• Income according to proportion (EPS) had been EUR 0.11 (-0.04) and EPS excl. honest valuations (FV) was once EUR 0.10 (-0.05).
• The price of the woodland property greater to EUR 8.8 (8.3) billion, similar to EUR 11.11 according to proportion.
• Money wave from operations amounted to EUR 271 (231) million. Money wave nearest making an investment actions was once EUR 4 (38) million.
• Internet debt greater via EUR 409 million to EUR 3,528 (3,120) million, principally because of the board funding on the Oulu web page.
• The web debt to adjusted EBITDA (LTM) ratio was once 3.1 (2.4). The objective to accumulation the ratio underneath 2.0 left-overs.

Q1–Q3/2024 (year-on-year)

• Gross sales had been EUR 6,727 (7,222) million.
• Adjusted EBIT was once EUR 478 (292) million.
• Running consequence (IFRS) was once EUR 372 (4) million.
• Income according to proportion (EPS) had been EUR 0.26 (-0.09) and EPS excl. honest valuations (FV) was once EUR 0.25 (-0.09).
• Money wave from operations amounted to EUR 863 (631) million. Money wave nearest making an investment actions was once EUR -15 (-31) million.
• Adjusted ROCE aside from the Jungle category (LTM1) diminished to two.7% (4.7%), the objective being above 13%.

_{* The classification of the Beihai web page as property held on the market has been ceased. The up to now revealed adjusted EBIT and IFRS running consequence for January–June 2024 diminished via EUR 15 million because of the inclusion of the up to now suspended depreciation into the restated effects.}

Key highlights

• The price starting programmes, centred on sourcing, operational and industrial efficiencies, are making just right go throughout all categories.
• The benefit growth programme, initiated in Q1/2024 with a goal of EUR 120 million in mounted price financial savings, has improved neatly, complete have an effect on is predicted from 2025.
• In October, Stora Enso introduced that it’s getting ready to promote roughly 12% of its overall woodland property of one.4 million hectares in Sweden, valued at EUR 6.3 billion. A sale would loose debt, confirming the monetary price of the Corporate’s woodland holdings.
• Stora Enso determined in October to discontinue the divestment procedure for its Beihai packaging board manufacturing web page and forestry industry. Stora Enso is of the view that the worth in personal utility of the property exceeds the achievable transaction price, and has subsequently selected to secure those operations throughout the Team. On account of the reversal of classification as held on the market, Adjusted EBIT and IFRS running consequence for Q1 to Q3/24 diminished via EUR 7.5 million according to every quarter, EUR 30 million for the entire yr 2024, because of the inclusion of up to now suspended depreciation into the restated effects.
• The patron board funding on the Oulu web page in Finland is progressing on time table. Manufacturing is predicted to start out in the second one quarter of 2025, with complete capability estimated to be reached throughout 2027.

Steering
Stora Enso’s complete yr 2024 adjusted EBIT is predicted to be considerably larger than for the entire yr 2023, EUR 342 million.

Outlook

Marketplace and industry outlook
Stora Enso’s contemporary profitability growth projects have definitely impacted the income pattern over the time 4 quarters and decreased the Team’s internet debt to EBITDA ratio within the endmost two quarters. Stora Enso anticipates that the sluggish marketplace medication will decelerate for the extra of the yr, which is predicted to adversely have an effect on its income within the fourth quarter. This sequential slowdown is attributed to elements comparable to susceptible shopper board call for, corrugated board overcapacity, and an ongoing susceptible development sector. Moreover, imposing plank prices are prone to proceed compressing margins. Stora Enso anticipates chronic marketplace volatility, together with imposing inflation, attainable labour moves, and sluggish retail enlargement, along side alternative call for and worth fluctuations thru year-end.

Packaging Fabrics
The seasonally low fourth quarter is predicted to come across demanding situations, together with diminished volumes because of weaker call for and annual repairs shutdowns. The common value stage around the category is predicted to be abase within the fourth quarter, regardless of value will increase in each shopper board and containerboard. That is because of product combine changes with the next portion of lower-priced containerboard in comparison to higher-priced shopper board merchandise. The deliberate annual shutdowns are at 5 of its manufacturing websites, of which 4 in shopper board together with two primary built-in websites, which will even raise mounted prices. The chronic imposing price of plank left-overs a number one worry. Vulnerable line influx throughout 0.33 quarter makes the fourth-quarter outlook unsure. Call for for cartonboard, kraftliner, and testliner is predicted to leave somewhat, influenced via seasonal lows, year paper call for is forecasted to develop sequentially because of beneficial seasonal results.

Packaging Answers
Marketplace call for left-overs unpredictable and risky, influenced via weekly fluctuations and customery overcapacity. Volumes in Western Europe are prone to abate sequentially because of seasonal results, with any vital uplift from conventional height classes like “Black week” and Christmas no longer expected. The Chinese language marketplace continues to try amid a susceptible financial circumstance. In spite of refuse primary expected price will increase within the fourth quarter, ongoing bills matching to greater containerboard costs and the continued ramp up of the corrugated packaging web page in De Lier, NL, are anticipated to constrain margin enlargement.

Biomaterials
Call for will range throughout areas, however the category’s reasonable is predicted to stay unchanged quarter-on-quarter. In China, fourth-quarter call for is i’m ready to get up because of low inventories, beneficial seasonal call for, and abase costs. Conversely, call for in Europe is predicted to weaken somewhat, essentially because of decreased call for for printing and writing paper merchandise, and tissue, even though call for for fluff is projected to stay strong. Timber costs within the Nordics are forecasted to be imposing, year chemical costs are prone to stabilise at third-quarter ranges.

Timber Merchandise
Call for for traditional sawn merchandise and pellets, in particular for heating, is predicted to get up sequentially within the fourth quarter because of seasonal elements. Call for for development answers, comparable to development beams and cross-laminated log, is predicted to power larger volumes. Uncooked subject material prices within the fourth quarter are anticipated to align with third-quarter ranges on reasonable, even though mounted prices would possibly building up with quantity enlargement. Increased plank prices are projected to proceed, with a year-on-year building up.

Jungle
Timber markets within the Baltic Rim are forecasted to stay constrained because of a lack of plank, pushed via heightened call for for business plank (pulpwood and sawlogs). A powerful and sustainable monetary efficiency is predicted to proceed from the primary 3 quarters into the fourth quarter. Normal price inflation, in particular affecting logistics and harvesting prices from the 0.33 quarter, may be anticipated to have an effect on the fourth quarter.

Lengthy-term enlargement alternatives
Stora Enso maintains well-known marketplace positions in sectors located for long-term enlargement, together with high-end shopper packaging, plank development, and leading edge biomaterials. The Team is ready to capitalise on sustainability tendencies and regulatory developments which favour its product choices, bettering its marketplace presence and riding steady go.

Key figures

Stora Enso’s President and CEO Hans Sohlström feedback at the 0.33 quarter 2024 effects:
“I am pleased to report that our value creation and profit improvement programmes are progressing well across all divisions. These initiatives, designed to optimise our processes and enhance our competitive edge, remain on track. Improvements in profitability, along with more favourable market conditions in some segments during the third quarter, continued to support a positive earnings trend. Our team is diligently managing operations, sales, sourcing, working capital, and refining processes to ensure operational efficiency, cost competitiveness and financial strength. And our profit improvement programme, initiated earlier this year with a goal of 120 million euro in fixed cost savings, is set to deliver its full impact from 2025.

We have seen a strong increase in our Group financial performance this quarter compared to last year, driven by higher prices and volumes, particularly in Packaging Materials. The Biomaterials division demonstrated strong performance, though demand weakened during the quarter with rapidly decreasing pulp prices. Our Forest division delivered a record high third quarter result, driven by increased wood prices. This resulted in a Group sales increase to 2,261 million euro from 2,127 million euro. The adjusted EBIT rose for the fourth consecutive quarter, reaching 175 million euro, up from 21 million euro in 2023, due to price hikes and cost cuts. This improved our margin to 7.8% from 1%. Challenges persist in the Wood Products division due to a weak construction sector and our Packaging Solutions face price lags and market overcapacity. Despite these challenges, our cost-saving measures have effectively reduced both fixed and variable costs.

On 23 October, we announced that after a thorough review and negotiations, we decided to stop the divestment process and instead retain our Beihai packaging production site and forestry business, recognising that the value in own use of these assets exceeds achievable sale proceeds. This decision supports our strategic aim to strengthen our leadership in the fiber-based packaging market and by optimising the product mix, this site will continue to enhance our position as a leading global supplier, especially in the Asia Pacific region. We are committed to financial prudence, with no significant capital expenditure expected in the mid-term as we pursue these strategic enhancements.

In our continuous pursuit of financial stability, we are preparing for the sale of approximately 12% of our forest assets in Sweden, covering 1.4 million hectares valued at 6.3 billion euro. This divestment aims to strengthen our balance sheet, underscoring the economic value and resilience of our forest holdings.

In our ongoing commitment to prioritise financial stability through strategic decisions such as the divestment of forest assets in Sweden, we remain equally dedicated to maintaining the highest environmental standards in all operational areas.

Looking ahead, we are intensifying our focus on capital allocation and asset strategy in growing market segments, laying the foundation for enhanced competitiveness and profitable growth across the Group. Our focused profitability improvement initiatives over the past year have strengthened Stora Enso’s financial standing. However, we anticipate a slower market recovery for the remainder of the year to adversely impact profits due to the effect from declining pulp prices, subdued board demand and a changed mix of packaging products, together with continued high wood costs. We confirm our annual guidance for adjusted EBIT to be significantly higher than for the full year 2023 and remain committed to delivering exceptional service to our customers and robust value growth for our shareholders.”

Webcast for analysts, traders, and media
Analysts, traders, and media are invited to take part within the webcast with a teleconference as of late at 11:30 am EEST (10:30 CEST, 9:30 BST, 4:30 EDT). The effects might be introduced via President and CEO Hans Sohlström and CFO Seppo Parvi. The presentation can also be adopted are living by the use of the hyperlink: stora-enso-oyj-q3-earnings-presentation-2024.open-exchange.net/registration

Throughout the webcast presentation, analysts and traders will even have the likelihood to invite questions. To take part within the teleconference, please make a choice the “Teleconference” possibility at the homepage of the webcast. Recording of the webcast might be to be had in a while nearest the development on the similar deal with and at storaenso.com/en/investors/interim-report

Media representatives who want to ask questions nearest the e-newsletter of the file would possibly touch Carl Norell, SVP Company Communications at Stora Enso on +46 72 241 0349.

This let go is a abstract of Stora Enso’s Meantime Record January–September 2024. The whole file is connected to this let go as a pdf document. It’s also to be had at the corporate web page at storaenso.com/en/investors/interim-report.

A part of the worldwide bioeconomy, Stora Enso is a well-known supplier of renewable merchandise in packaging, biomaterials, and wood development, and probably the most biggest personal woodland house owners on the earth. Stora Enso has roughly 20,000 workers and our gross sales in 2023 had been EUR 9.4 billion. Stora Enso stocks are indexed on Nasdaq Helsinki Oy (STEAV, STERV) and Nasdaq Stockholm AB (STE A, STE R). As well as, the stocks are traded within the USA on OTC Markets (OTCQX) as ADRs and familiar stocks (SEOAY, SEOFF, SEOJF). storaenso.com/investors

STORA ENSO OYJ

CONTACT:

Media enquiries:
Carl Norell
SVP Company Communications
tel. +46 72 241 0349

Investor enquiries:
Anna-Lena Åström
SVP Investor Members of the family
tel. +46 70 210 7691

This knowledge was once delivered to you via Cision http://news.cision.com

https://news.cision.com/stora-enso-oyj/r/stora-enso-interim-report-january-september-2024–continued-growth-and-earnings-improvement,c4055798

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SOURCE Stora Enso Oyj

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