Stora Enso Oyj Interim Report January–March 2019

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STORA ENSO OYJ, Helsinki, Finland
INTERIM REPORT 25 April 2019 at 9.30 EEST

A promising start of the year, supported by the profit protection programme

Q1/2019 (compared with Q1/2018)

  • Sales increased 2.2% to EUR 2 635 (2 579) million, the highest first quarter since 2013 and the ninth consecutive quarter of growth.
  • Operational EBIT decreased to EUR 324 (369) million which was in the upper end of our guidance range of EUR 260–350 million.
  • The operational EBIT margin was 12.3% (14.3%), above 10% for the seventh consecutive quarter.
  • Operating profit (IFRS) was EUR 313 (355) million.
  • EPS decreased by 16.0% to EUR 0.29 (0.35) and EPS excl. IAC was EUR 0.30 (0.35).
  • Cash flow from operations decreased slightly to EUR 223 (229) million. Cash flow after investing activities amounted to EUR 94 (113) million.
  • The net debt to operational EBITDA ratio increased to 1.7 (1.3), due to the adoption of IFRS 16 Leases (impact 0.3) and dividend payment.
  • Operational ROCE was 14.0% (17.7%), above the strategic target of 13%.

Outlook for 2019
Stora Enso's year 2019 is expected to be largely in line with 2018, provided that the current trading conditions do not significantly change. Demand growth is expected to continue for Stora Enso’s other businesses except for European Paper, for which demand is forecast to continue to decline in 2019. Group’s sales are expected to be higher and costs are forecast to increase in 2019 compared to 2018. Stora Enso will implement measures to mitigate these cost increases and the increased uncertainties with the profit protection programme. 

Guidance for Q2/2019
Q2/2019 operational EBIT is expected to be in the range of EUR 270–350 million. During the second quarter, there will be annual maintenance shutdown at the Nymölla paper mill. The total negative impact of maintenance is estimated to be EUR 35 million less compared to Q2/2018.

Key figures

EUR million Q1/19 Q1/18 Change % Q1/19-Q1/18 Q4/18 Change % Q1/19-Q4/18 2018
Sales 2 635 2 579 2.2% 2 657 -0.9% 10 486
Operational EBITDA 471 504 -6.5% 405 16.3% 1 878
Operational EBIT 324 369 -12.3% 271 19.5% 1 325
Operational EBIT margin 12.3% 14.3% 10.2% 12.6%
Operating profit (IFRS) 313 355 -11.9% 356 -12.1% 1 390
Profit before tax excl. IAC 286 333 -14.2% 267 6.9% 1 190
Profit before tax (IFRS) 282 333 -15.4% 315 -10.5% 1 210
Net profit for the period (IFRS) 226 273 -17.4% 299 -24.4% 988
Net interest-bearing liabilities 3 093 2 226 38.9% 2 092 47.8% 2 092
Operational ROCE 14.0% 17.7% 12.4% 15.5%
Earnings per share (EPS) excl. IAC, EUR 0.30 0.35 -14.9% 0.33 -8.3% 1.29
EPS (basic), EUR 0.29 0.35 -16.0% 0.39 -23.6% 1.28
Net debt/last 12 months’ operational EBITDA ratio 1.7 1.3 1.1 1.1
Average number of employees 26 036 25 442 2.3% 26 151 -0.4% 26 067

Stora Enso’s CEO Karl-Henrik Sundström comments on the first quarter 2019 results:

“We have had a promising start of the year and I am pleased to see that the profit protection programme is already supporting our development. Given the potential market weakness, we are convinced that the timing for activating the programme is right. During the first quarter of 2019, we focused on the balance between value creation and profit protection. It has obviously paid off. Sales continue to grow and profitability is on a good level. The sales increase of roughly 2% was primarily due to higher prices in all divisions and improved product mix, despite lower volumes. Operational EBIT decreased, while keeping a double-digit operational margin for the seventh consecutive quarter. Operational ROCE remains above our strategic target of 13%, despite additional capital of nearly EUR 300 million due to the implementation of IFRS 16.

Looking at our divisions, we had first quarter records in four out of five: Packaging Solutions and Biomaterials had record sales, while Wood Products and Paper delivered record profitability. Moreover, it is satisfying that our price increases are coming through gradually in Consumer Board.

We continue to drive our transformation projects forward and take active steps to contribute to a renewable future. Our recent investment in Hylte will enable manufacturing of formed fiber products that are designed for circularity. These products are renewable, recyclable, biodegradable and do not contain any plastic. Also, the first commercial volumes were produced during the quarter from our new cross laminated timber (CLT) investment at Gruvön. Wooden elements store carbon dioxide and substitute fossil based building materials, making them suitable for the development of green and sustainable cities.

On the note of sustainability, I am pleased that we have successfully issued our first Green Bonds to finance our ongoing transaction in Bergvik Skog. The aim is to complete the transaction during the second quarter of 2019. We have also completed our feasibility study of the potential conversion of the Oulu paper mill into packaging board production. The decision on the potential conversion is planned to be made by the Board of Directors during the first half of 2019 after the co-determination process has been completed.

I find it is important to support initiatives that can help to drive economics and society towards a plastic free future and we have joined the New Plastics Economy Global Commitment to eliminate plastic waste and pollution. This is led by the Ellen MacArthur Foundation, in collaboration with UN Environment. We contribute with our customers and suppliers by developing circular and low carbon solutions to replace plastic.

All in all, we have made good progress in increasing our share of the bioeconomy!

I am very proud that Stora Enso received the highest score in a recent diversity report in Finland. We believe diversity strengthens innovation and drives competitiveness, and we aim to reflect the societies in which we operate.

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 11.00 EEST
The webcast and press conference for media will take place at 11.00 EEST (10.00 CEST, 09.00 UK time, 04.00 EDT) at Stora Enso’s Head Office, Kanavaranta 1, Helsinki. 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 15.00 EEST
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, 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.

Live event at 15.00 EEST
UK                                       +44 (0)2071 928 000
Finland                                +358 (0)9 4245 0806
Sweden                               +46 (0)8 5069 2180
USA                                     +1 631 510 7495
Confirmation code:               7742658

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

This release is a summary of Stora Enso’s Interim Report January–March 2019. The complete report is attached to this release as a pdf file. It is also available on the company website at 

For further information, please contact:
Ulrika Lilja
EVP, Communications
tel. +46 72 221 9228

Investor enquiries:
Ulla Paajanen
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 2018 were EUR 10.5 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). 


For further information, please contact:
Ulrika Lilja
EVP, Communications
tel. +46 72 221 9228

Investor enquiries:
Ulla Paajanen
SVP, Investor Relations
tel. +358 40 763 8767