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

HELSINKI, Oct. 24, 2024 /PRNewswire/ —

Q3/2024 (year-on-year)

• Gross sales higher via 6% to EUR 2,261 (2,127) million.
• Adjusted EBIT higher to EUR 175 (21) million*.
• Adjusted EBIT margin higher to 7.8% (1.0%).
• Running outcome (IFRS) used to be EUR 139 (-1) million*.
• Profits in step with percentage (EPS) had been EUR 0.11 (-0.04) and EPS excl. truthful valuations (FV) used to be EUR 0.10 (-0.05).
• The worth of the woodland belongings higher to EUR 8.8 (8.3) billion, an identical to EUR 11.11 in step with percentage.
• Money wave from operations amounted to EUR 271 (231) million. Money wave then making an investment actions used to be EUR 4 (38) million.
• Web debt higher via EUR 409 million to EUR 3,528 (3,120) million, basically because of the board funding on the Oulu website online.
• The web debt to adjusted EBITDA (LTM) ratio used to be 3.1 (2.4). The objective to store the ratio under 2.0 residue.

Q1–Q3/2024 (year-on-year)

• Gross sales had been EUR 6,727 (7,222) million.
• Adjusted EBIT used to be EUR 478 (292) million.
• Running outcome (IFRS) used to be EUR 372 (4) million.
• Profits in step with percentage (EPS) had been EUR 0.26 (-0.09) and EPS excl. truthful valuations (FV) used to be EUR 0.25 (-0.09).
• Money wave from operations amounted to EUR 863 (631) million. Money wave then making an investment actions used to be EUR -15 (-31) million.
• Adjusted ROCE with the exception of the Jungle section (LTM1) lowered to two.7% (4.7%), the objective being above 13%.

_{* The classification of the Beihai website online as belongings held on the market has been ceased. The up to now revealed adjusted EBIT and IFRS working outcome for January–June 2024 lowered via EUR 15 million because of the inclusion of the up to now suspended depreciation into the restated effects.}

Key highlights

• The worth inauguration programmes, centred on sourcing, operational and business efficiencies, are making just right journey throughout all categories.
• The benefit growth programme, initiated in Q1/2024 with a goal of EUR 120 million in fastened price financial savings, has advanced 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 belongings of one.4 million hectares in Sweden, valued at EUR 6.3 billion. A sale would leave 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 website online and forestry trade. Stora Enso is of the view that the price in personal importance of the belongings exceeds the achievable transaction price, and has subsequently selected to reserve those operations inside the Crew. On account of the reversal of classification as held on the market, Adjusted EBIT and IFRS working outcome for Q1 to Q3/24 lowered via EUR 7.5 million in step with each and every quarter, EUR 30 million for the whole yr 2024, because of the inclusion of up to now suspended depreciation into the restated effects.
• The shopper board funding on the Oulu website online in Finland is progressing on agenda. Manufacturing is predicted to start out in the second one quarter of 2025, with complete capability estimated to be reached throughout 2027.

Steerage
Stora Enso’s complete yr 2024 adjusted EBIT is predicted to be considerably greater than for the whole yr 2023, EUR 342 million.

Outlook

Marketplace and trade outlook
Stora Enso’s contemporary profitability growth projects have definitely impacted the income pattern over the year 4 quarters and diminished the Crew’s internet debt to EBITDA ratio within the latter two quarters. Stora Enso anticipates that the slow marketplace medication will decelerate for the remains 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 client board call for, corrugated board overcapacity, and an ongoing susceptible development sector. Moreover, tall log prices are prone to proceed compressing margins. Stora Enso anticipates continual marketplace volatility, together with tall inflation, attainable labour moves, and gradual retail expansion, at the side of alternative call for and worth fluctuations thru year-end.

Packaging Fabrics
The seasonally low fourth quarter is predicted to come upon demanding situations, together with lowered volumes because of weaker call for and annual repairs shutdowns. The typical value degree around the section is predicted to be reduce within the fourth quarter, in spite of value will increase in each client board and containerboard. That is because of product combine changes with the next portion of lower-priced containerboard in comparison to higher-priced client board merchandise. The deliberate annual shutdowns are at 5 of its manufacturing websites, of which 4 in client board together with two primary built-in websites, which will even carry fastened prices. The continual tall price of log residue a number one fear. Vulnerable form influx throughout 0.33 quarter makes the fourth-quarter outlook unsure. Call for for cartonboard, kraftliner, and testliner is predicted to reduce moderately, influenced via seasonal lows, life paper call for is forecasted to develop sequentially because of beneficial seasonal results.

Packaging Answers
Marketplace call for residue unpredictable and risky, influenced via weekly fluctuations and prevailing overcapacity. Volumes in Western Europe are prone to abatement sequentially because of seasonal results, with any important uplift from conventional height classes like “Black week” and Christmas now not expected. The Chinese language marketplace continues to attempt amid a susceptible financial atmosphere. Regardless of refuse primary expected price will increase within the fourth quarter, ongoing bills matching to higher containerboard costs and the continued ramp up of the corrugated packaging website online in De Lier, NL, are anticipated to constrain margin expansion.

Biomaterials
Call for will range throughout departments, however the section’s reasonable is predicted to stay unchanged quarter-on-quarter. In China, fourth-quarter call for is prepared to get up because of low inventories, beneficial seasonal call for, and reduce costs. Conversely, call for in Europe is predicted to weaken moderately, basically because of diminished call for for printing and writing paper merchandise, and tissue, even if call for for fluff is projected to stay solid. Plank costs within the Nordics are forecasted to be tall, life chemical costs are prone to stabilise at third-quarter ranges.

Plank 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 wood, is expected to force greater volumes. Uncooked subject material prices within the fourth quarter are anticipated to align with third-quarter ranges on reasonable, even if fastened prices would possibly build up with quantity expansion. Increased log prices are projected to proceed, with a year-on-year build up.

Jungle
Plank markets within the Baltic Rim are forecasted to stay constrained because of a lack of log, pushed via heightened call for for commercial log (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 expansion alternatives
Stora Enso maintains prominent marketplace positions in sectors located for long-term expansion, together with high-end client packaging, log development, and leading edge biomaterials. The Crew is about to capitalise on sustainability traits and regulatory developments which favour its product choices, bettering its marketplace presence and using steady journey.

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, buyers, and media
Analysts, buyers, 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 consequences will likely be offered via President and CEO Hans Sohlström and CFO Seppo Parvi. The presentation may also be adopted are living by the use of the hyperlink: stora-enso-oyj-q3-earnings-presentation-2024.open-exchange.net/registration

Right through the webcast presentation, analysts and buyers will even have the chance to invite questions. To take part within the teleconference, please select the “Teleconference” possibility at the homepage of the webcast. Recording of the webcast will likely be to be had in a while then the development on the identical cope with and at storaenso.com/en/investors/interim-report

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

This leave is a abstract of Stora Enso’s Intervening time Record January–September 2024. Your entire record is connected to this leave as a pdf document. It is usually to be had at the corporate web site at storaenso.com/en/investors/interim-report.

A part of the worldwide bioeconomy, Stora Enso is a prominent supplier of renewable merchandise in packaging, biomaterials, and wood development, and one of the crucial greatest non-public woodland house owners on the planet. Stora Enso has roughly 20,000 staff 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 Family members
tel. +46 70 210 7691

This data used to be dropped at 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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