Stora Enso half-year report January–June 2017: Positive contribution from transformation projects accelerates

STORA ENSO OYJ, Helsinki, Finland
HALF-YEAR REPORT 26 June 2017 at 9.31 EEST

Q2/2017 (year-on-year)

  • Sales of EUR 2 528 (EUR 2 526) million increased marginally despite the divestment of paper mills.
  • Sales excluding the paper business increased 7.1%.
  • Operational EBIT decreased from EUR 226 million to EUR 219 million. This was mainly due to the impact of higher maintenance costs of EUR 15 million compared to a year ago. The operational EBIT margin was 8.7% (8.9%).
  • Balance sheet strengthened further; net debt to operational EBITDA was 2.0 (2.2) despite a dividend payment.
  • The ramp-up of Beihai Mill continues to proceed ahead of plan, and it is expected to reach operational EBITDA break-even in Q4/2017, one quarter earlier than previously forecast.
  • Varkaus kraftliner mill is expected to reach full production during the second half of 2017. A positive quarterly operational EBIT was achieved in Q2/2017.
  • Stora Enso signed today an agreement to divest its holding in the equity accounted investment Bulleh Shah Packaging Ltd. to the main owner Packages Ltd.

Q1–Q2/2017 (year-on-year)

  • Sales of EUR 5 025 million increased 1.1%. Sales excluding the paper business increased 8.3%.
  • Operational EBIT of EUR 434 million decreased 8.4%, mainly due to increased maintenance costs.

Key figures

EUR million Q2/17 Q2/16 Change %
Q1/17 Change %
Q1–Q2/17 Q1–Q2/16 Change % Q1–Q2/17–Q1–Q2/16 2016
Sales 2 528 2 526 0.1% 2 497 1.2% 5 025 4 971 1.1% 9 802
Operational EBITDA 341 355 -3.9% 352 -3.1% 693 718 -3.5% 1 371
Operational EBIT 219 226 -3.1% 215 1.9% 434 474 -8.4% 884
Operational EBIT margin 8.7% 8.9% 8.6% 8.6% 9.5% 9.0%
Operating profit (IFRS) 205 248 -17.3% 193 6.2% 398 442 -10.0% 783
Profit before tax excl. IAC 153 112 36.6% 191 -19.9% 344 295 16.6% 575
Profit before tax 145 149 -2.7% 164 -11.6% 309 304 1.6% 541
Net profit for the period 143 118 21.2% 107 33.6% 250 232 7.8% 407
Net interest-bearing liabilities 2 724 3 178 -14.3% 2 711 0.5% 2 724 3 178 -14.3% 2 726
Operational ROCE 10.3% 10.3% 10.0% 10.2% 10.8% 10.2%
Earnings per share (EPS) excl. IAC, EUR 0.19 0.12 0.17 0.36 0.31 0.65
EPS (basic), EUR 0.19 0.16 0.14 0.33 0.31 0.59
Net debt/last 12 months’ operational EBITDA ratio 2.0 2.2 2.0 2.0 2.2 2.0
Average number of employees 26 581 26   088 1.9% 25 591 3.9% 25 999 25 911 0.3% 26   269

Stora Enso's CEO Karl-Henrik Sundström comments on the second quarter 2017 results: 

Our transformation towards a renewable materials growth company accelerates, and I am confident in our progress. Sales increased marginally, and excluding the paper business sales increased 7.1%. This is primarily due to the ramp-up of strategic investments – the Beihai, Murów and Varkaus mills – and higher pulp and containerboard prices.

Operational EBIT decreased from EUR 226 million to EUR 219 million. This is mainly related to extensive maintenance and a change of maintenance calendar compared to last year, amounting to EUR 15 million. The balance sheet continued to strengthen further, net debt to operational EBITDA has gone from 3.2 to 2.0 during the last four years.

The positive contribution from the transformation projects continues. I am very pleased that we continue to be ahead of plan with the ramp-up of Beihai Mill. We expect the consumer board machine to reach operational EBITDA break-even in the fourth quarter 2017, which is one quarter earlier than previously forecast. We have also made good progress in the ramp-up of the Varkaus kraftliner mill. This quarter, we reached a positive operational EBIT.

During the period, Paper Machine 8 at Kvarnsveden Mill in Sweden was permanently shut down. Our restructuring plan for Kvarnsveden Mill is anticipated to result in annual cost savings of EUR 12 million.

In July, we announced exciting news: we will invest EUR 45 million in a new cross-laminated timber production unit at Gruvön sawmill in Sweden. This investment supports our strategy to grow in the construction industry and increase the use of wood as a building material. We are investing to meet growing customer demand globally, and expect this investment to generate annual sales of approximately EUR 50 million when run at full capacity. Over time, this investment will significantly enable the Wood Products division to exceed its profitability target.

Today, we announce that we have signed an agreement to divest our 35% holding in the minority investment Bulleh Shah Packaging Ltd. to the main owner Packages Ltd. Due to the changing business environment in Pakistan, the Bulleh Shah Packaging asset with its product mix and related future outlook is a non-strategic fit in our consumer board roadmap. Our focus is on high quality virgin-fibre products. We are committed to making a responsible divestment and intend to leave a positive contribution to the society.

As always, I would like to thank our customers for their business, our employees for their dedication, and our investors for their trust.” 


Q3/2017 sales are estimated to be similar to the amount of EUR 2 528 million recorded in the second quarter, and operational EBIT is expected to be somewhat or even clearly higher than the EUR 219 million recorded in Q2/2017. The operational EBIT estimate for Q3/2017 includes the negative EUR 17 million impact of the ramp-up of the Beihai operations. The impact of annual maintenance shutdowns is expected to be approximately EUR 10 million lower than in Q2/2017, and it is included in the above guidance.

The consumer board machine in Beihai is expected to reach operational EBITDA break-even in Q4/2017, one quarter earlier than previously forecast.

Events today:

1) Webcast for media at 11.00 Finnish time

Stora Enso’s CEO Karl-Henrik Sundström and CFO Seppo Parvi will present the results in a live webcast hosted by EVP Communications Ulrika Lilja. The event will be held in English. The webcast may be accessed at
2) Webcast and conference call for analysts and investors at 15.00 Finnish time 

The webcast and conference call for analysts and investors will take place at 15.00 EEST (14.00 CEST, 13.00 UK time, 08.00 EDT). It will be hosted by CEO Karl-Henrik Sundström, CFO Seppo Parvi, and SVP Head of Investor Relations Ulla Paajanen-Sainio, and may be accessed at 

Those analysts and investors who wish to ask questions should join the conference call (details below). All participants can follow the presentation over the webcast. 

The links to the webcasts are also available on the Stora Enso website: 

Dial-in details for the analyst and investor conference call 

Live event at 15.00 EEST
UK   +44(0)20 3427 1906
Finland   +358 (0)9 6937 9543
Sweden   +46 (0)8 5065 3936
USA   +1 646 254 3365
Confirmation Code: 9241862

For further information, please contact:
Seppo Parvi, CFO, tel. +358 2046 21205
Ulla Paajanen-Sainio, SVP, Investor Relations, tel.
+358 40 763 8767
Ulrika Lilja, EVP, Communications, tel.
+46 72 221 9228

This release is a summary of Stora Enso’s Interim Report January–June 2017. The complete report is attached to this release as a pdf file. It is also available on the company website at


Stora Enso is a leading provider of renewable solutions in packaging, biomaterials, wooden constructions and paper on global markets. Our aim is to replace fossil-based materials by innovating and developing new products and services based on wood and other renewable materials. We employ some 25 000 people in more than 35 countries, and our sales in 2016 were EUR 9.8 billion. Stora Enso shares are listed on Nasdaq Helsinki (STEAV, STERV) and Nasdaq Stockholm (STE A, STE R). In addition, the shares are traded in the USA as ADRs (SEOAY).