Stora Enso’s half-year financial report January–June 2018

Sustainable profitable growth continues despite temporary headwinds

STORA ENSO OYJ, Helsinki, Finland

Q2/2018 (year-on-year)

  • Sales increased 5.4% to EUR 2 664 (2 528) million, despite wood shortage, primarily due to favourable prices and active product mix management.
  • Operational EBIT increased 49.4% to EUR 327 (219) million, despite temporary headwinds in wood sourcing and Consumer Board production. The increase was due to favourable prices and active product mix management.
  • Balance sheet strengthened further despite increased dividend payout, and net debt was reduced by 10%. The net debt to operational EBITDA ratio improved to 1.3 (1.9).
  • Operational ROCE was 15.5% (10.3%), above the strategic target of 13% for the fourth consecutive quarter.
  • Stora Enso announced today new target levels for Net Debt / Operational EBITDA (< 2.0) and Debt/equity Ratio (< 0.6).

Q1–Q2/2018 (year-on-year)

  • Sales of EUR 5 243 million increased by 4.3%. Excluding the divested Puumerkki, sales increased 5.8%
  • Operational EBIT of EUR 696 million increased 60.4%, mainly due to favourable prices and active product mix management.

Q3/2018 sales are estimated to be similar to the amount of EUR 2 664 million recorded in the second quarter of 2018, and operational EBIT is expected to be in line with the EUR 327 million recorded in the second quarter of 2018.

The impact of annual maintenance shutdowns is expected to be approximately EUR 5 million lower than in the second quarter of 2018. The second quarter maintenance impact was EUR 15 million higher than initially forecast. The Nordic wood supply situation is expected to continue tight, due to the risk of forest fires affecting harvesting conditions. The wood supply impact is expected to be approximately EUR 10 million negative in the third quarter of 2018. These impacts are included in the above outlook.

Key figures

EUR million Q2/18 Q2/17 Change % Q2/18–Q2/17 Q1/18 Change % Q2/18–Q1/18 Q1–Q2/18 Q1–Q2/17 Change % Q1-Q2/18–Q1-Q2/17 2017
Sales 2 664 2 528 5.4% 2 579 3.3% 5 243 5 025 4.3% 10 045
Operational   EBITDA 466 359 29.8% 504 -7.5% 970 728 33.2% 1 587
Operational EBIT 327 219 49.4% 369 -11.3% 696 434 60.4% 1 004
Operational EBIT   margin 12.3% 8.7% 14.3% 13.3% 8.6% 10.0%
Operating profit   (IFRS) 317 205 54.5% 355 -10.8% 672 398 68.8% 904
Profit before tax   excl. IAC 285 153 86.2% 333 -14.4% 618 344 79.6% 826
Profit before tax 257 145 77.3% 333 -22.8% 590 309 91.0% 742
Net profit for   the period 213 143 49.0% 273 -21.9% 486 250 94.4% 614
Net   interest-bearing liabilities 2 442 2 724 -10.4% 2 226 9.7% 2 442 2 724 -10.4% 2 253
Operational ROCE 15.5% 10.3% 17.7% 16.5% 10.2% 11.9%
Earnings per   share (EPS) excl. IAC, EUR 0.31 0.19 64.7% 0.35 -10.6% 0.66 0.36 84.2% 0.89
EPS (basic), EUR 0.28 0.19 46.3% 0.35 -20.6% 0.63 0.33 90.3% 0.79
Net debt/last 12   months’ operational EBITDA ratio 1.3 1.9 1.3 1.3 1.9 1.4
Average number of   employees 26 155 26 581 -1.6% 25 442 2.8% 25 798 25 999 -0.8% 20 206

Stora Enso’s CEO Karl-Henrik Sundström comments on the second quarter 2018 results:

“Six consecutive quarters of sales growth prove that we have reached a level of sustainable profitable growth. Sales increased by more than 5% during the quarter and if we exclude the divested Puumerkki, the increase was 7%. This is primarily due to favourable prices and our management of the product mix.

I am proud of the strong increase in operational EBIT of 50% to EUR 327 million, despite the temporary headwinds that we have had during the quarter. Production related issues, higher maintenance and tight wood supply had negative impacts. If we look specifically at Consumer Board, even with headwinds in production effecting volumes substantially, the division reached all-time high in sales. All in all, we still have untapped potential to grab!

The Packaging Solutions division showed continued strong performance, Biomaterials delivered all-time high sales and profitability, Wood Products return on capital was at record level and the Paper division presented significant profitability improvements. I see great performance across the board.

Furthermore, I am pleased that our operational ROCE, close to 16%, was above our strategic target for the fourth consecutive quarter. Moreover, we continue to strengthen our balance sheet and net debt was reduced by more than 10%. All in all, we have delivered records or solid performance in all our divisions.

Our transformation projects are progressing well. The ramp-up of the LVL production at Varkaus Mill was completed during the quarter and the investment to a new cross laminated timber unit at Gruvön sawmill is proceeding as planned. Moreover, production is now up and running at the new fluff pulp line at Skutskär Mill.

The consumer board and packaging solutions businesses are growing and we have initiated a feasibility study to evaluate a potential conversion of Oulu paper mill into packaging board production. A potential conversion would enable us to take another step in our transformation journey. The other option is to continue the current fine paper production.

I am very pleased with our new, more ambitious, financial targets regarding net debt to EBITDA and debt to equity ratio. These are signalling our aim to reach an investment grade credit rating.

Our Accelerator programme is paying off. We have signed a joint development agreement with one of the programme participants, the Finnish start-up Sulapac. Together we contribute to combat the global problem of plastic waste by accelerating the use of fully renewable, recyclable and biodegradable materials in packaging.

In May, we gathered 150 guests to celebrate the launch of our wood fibre-based biocomposite plant. It is Europe’s largest and its products will contribute to gradually replace fossil-based materials.        

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

Events today:

1) Webcast for media
at 11.00 Finnish time (10.00 CEST)
The webcast for media will take place at 11.00 EEST (10.00 CEST, 09.00 UK time, 04.00 EDT). The event will be held in English and it will be hosted by CEO Karl-Henrik Sundström, CFO Seppo Parvi, and EVP, Communications Ulrika Lilja. The webcast may be accessed at

 2) Webcast and conference call for analysts and investors at 14.00 Finnish time
The webcast and conference call for analysts and investors will take place at 14.00 EEST (13.00 CEST, 12.00 UK time, 07.00 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.

Dial-in details for the analyst and investor conference call 

Live event at 14.00 EEST 
UK +44 (0)330 336   9125 
Finland +358 (0)9 7479   0361 
Sweden +46 (0)8 5033   6574 
USA +1 929 477   0324 
Confirmation Code: 5039731 

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

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 Half-year financial report January–June 2018. The complete report is attached to this release as a pdf file. It is also available on the company website at

Part of the bioeconomy, Stora Enso is a leading global provider of renewable solutions in packaging, biomaterials, wooden constructions and paper. We believe that everything that is made from fossil-based materials today can be made from a tree tomorrow. Stora Enso has some 26 000 employees in over 30 countries. Our sales in 2017 were EUR 10 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).