Stora Enso strengthens its strategic leverage targets
STORA ENSO OYJ INVESTOR NEWS 20 July 2018 at 9.29 EEST
Stora Enso sets new target levels for Net Debt / Operational EBITDA and Debt/equity Ratio.
Stora Enso’s transformation into a renewable materials growth company has been successful. Strong cash flow generation combined with sale of non-core assets has strengthened the balance sheet considerably. The Group also continues to keep its annual capital expenditure at or below the level of depreciation and the operational decrease in the value of biological assets over the business cycle, as announced earlier. Even with the new, more rigorous financial policy, Stora Enso expects to maintain the level of strategic flexibility needed.
To enforce its commitment to the efficient management of capital, the Group has decided to introduce new, stricter targets for Net Debt / Operational EBITDA and Debt/equity Ratio, reducing the target levels from < 3.0 to < 2.0 and from < 0.8 to < 0.6 respectively, thus reflecting the Group’s strong cash flow generation capabilities and higher profitability levels.
Other strategic targets remain unchanged. The policy will be effective immediately.
Stora Enso’s Financial Targets
| Target | Old target | ||
| Group | ROCE | >13% | >13% |
| Net debt / operational EBITDA | NEW < 2.0x | < 3.0x | |
| Dividend | To distribute 50% of net income over the cycle | To distribute 50% of net income over the cycle | |
| Net debt/equity ratio | NEW < 0.6 | < 0.8 | |
| Net sales growth excl. Paper | To grow faster than the relevant market | To grow faster than the relevant market | |
| Fixed costs / sales | < 20% | < 20% | |
| Consumer Board | ROOC | >20% | >20% |
| Packaging Solutions | ROOC | >20% | >20% |
| Biomaterials | ROOC | >15% | >15% |
| Wood Products | ROOC | >20% | >20% |
| Paper | Cash flow after investing activities / sales | >7% | >7% |
ROCE = Operative Return on Capital Employed
ROOC = Operative Return on Operating Capital
For further information, please contact:
Ulrika Lilja, EVP, Communications, tel. +46 72 221 9228
Investor enquiries:
Ulla Paajanen-Sainio, SVP, Investor Relations, tel. +358 40 763 8767
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). storaenso.com
STORA ENSO OYJ
For further information, please contact:
Ulrika Lilja
EVP, Communications
tel. +46 72 221 9228
Investor enquiries:
Ulla Paajanen-Sainio
SVP, Investor Relations
tel. +358 40 763 8767