Stora Enso interim report January–March 2017: Transformation driving sales growth

STORA ENSO OYJ, Helsinki, Finland
INTERIM REPORT 27 April 2017 at 13.00 EET

Q1/2017 (year-on-year)

• Sales at EUR 2 497 (EUR 2 445) million increased for the first time in five years.
• Sales excluding the paper business increased 9.7%
• Operational EBIT decreased to EUR 215 (EUR 248) million. This is mainly due to lower hardwood pulp and paper prices, and transformational costs, such as innovation and investments to growth businesses.
• Balance sheet remained strong; net debt to operational EBITDA improved to 2.0 (2.2)
• The ramp-up of Beihai Mill is proceeding ahead of plan, and the first commercial volumes of liquid packaging board and CUK (coated unbleached kraftboard) were delivered to customers.

Key figures

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

“Year 2017 had a promising start and our transformation into a renewable materials growth company is progressing well. I am pleased that our sales have increased for the first time since 2012. Excluding the paper business, sales increased 9.7%, primarily due to the ramp-ups of Beihai consumer board, Murów and Varkaus (board and LVL) mills.

Operational EBIT decreased by EUR 33 million mainly due to lower hardwood pulp and paper prices, ramp-up of Beihai, Varkaus and Murów mills, and other transformational costs, such as innovation and growth investments. Looking beyond these temporary costs, the underlying business shows good progress and strong promise for the future. Our balance sheet continues to strengthen. Yes, we are on the right track towards our transformation to a renewable materials growth company.

The ramp-up of Beihai Mill is proceeding ahead of plan. An important step for us, the first commercial volumes of liquid packaging board and CUK (coated unbleached kraftboard) were delivered to our customers during the quarter. Additional transformation steps include the ramp-ups of kraftliner and the production line for wooden building components (LVL) at Varkaus Mill.

We continue to invest to meet growing customer demand globally. We are investing EUR 28 million in our Heinola Fluting Mill in Finland. The investment contributes to improved quality and production capacity of our AvantFlute SC by Stora Enso; a Semi-Chemical fluting which endure demanding conditions. The timing of this investment is ideal, as we expect increased demand for high quality fluting products used for food, fruit and vegetable packaging.

We have started co-determination negotiations with our employees at Kvarnsveden Mill in Sweden regarding the plan to reorganise the mill. As we have announced earlier, this includes a permanent closure of paper machine 8 by the end of the second quarter of 2017. The entire plan would result in annual cost savings of EUR 12 million, and contribute to the mill’s competitiveness.

During the quarter, we had a very positive experience as the main sponsor of the Centenary Nordic World Ski Championships in Lahti, Finland. It was a great opportunity for us to show, how everything that is made with fossil-based materials today can be made from a tree tomorrow. Renewable wood-based materials are one essential way to help reduce the carbon footprint of any event. We had 8 000 customers, suppliers, investors and employees on site, which contributed to a very memorable event celebrating Finland’s 100th anniversary year of independence.

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) Press conference in Helsinki at 13.15 Finnish time

Stora Enso’s CEO Karl-Henrik Sundström and CFO Seppo Parvi will present the results in a press conference hosted by EVP Communications Ulrika Lilja. The conference will be webcast live. The event will be held in English and take place at the Marina Congress Center, Katajanokanlaituri 6, Helsinki at 13.15 EEST (12.15 CEST). The webcast may be accessed at https://storaenso.videosync.fi/2017-04-27-q1 

2) Webcast and conference call for analysts and investors at 14.30 Finnish time 

The webcast and conference call for analysts and investors will take place at 14.30 EEST (13.30 CEST, 12.30 UK time, 07.30 EST). 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 http://edge.media-server.com/m/p/kyd2jb3r 

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: storaenso.com/investors 

Dial-in details for the analyst and investor conference call 

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–March 2017. The complete report is attached to this release as a pdf file. It is also available on the company website at storaenso.com/investors.

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). storaenso.com 

STORA ENSO OYJ 

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