Consistent progress in improving performance
Q1/2025 (year-on-year)
• Sales increased by 9% to EUR 2,362 (2,164) million, mainly due to higher prices and deliveries. The average sales growth (LTM YoY) was 4.6% (-23.8%).
• Adjusted EBIT increased, for the fourth consecutive quarter compared year-on-year, to EUR 175 (149) million. Adjusted EBIT margin increased to 7.4% (6.9%). Higher prices, volumes and positive impacts from net currency exchange rates and depreciations more than offset higher fiber costs.
• Operating result (IFRS) was EUR 171 (141) million, including items affecting comparability of EUR -11 million, and fair valuations and other non-operational items of EUR 7 million.
• Earnings per share were EUR 0.14 (0.10) and earnings per share excl. fair valuations (FV) were EUR 0.13 (0.08).
• The fair value of the forest assets increased to EUR 9.3 (8.6) billion, equivalent to EUR 11.74 per share.
• Cash flow from operations amounted to EUR 192 (269) million, impacted by higher sales increasing trade receivables, and build-up of inventories partly related to the ramp-up of the new consumer board line at the Oulu site.
• The net debt to adjusted EBITDA (LTM) ratio improved to 3.2 (4.0).
• Adjusted ROCE excluding the Forest division (LTM) increased to 3.8% (-0.1%), the target being above 13%.
Key highlights
• The new consumer packaging board line at the Oulu site in Finland started production ramp-up in March. The line is expected to reach EBITDA breakeven by the year-end 2025 and full capacity during 2027.
• Stora Enso has received regulatory approval from the competition authorities to proceed with the acquisition of the Finnish sawmill company Junnikkala Oy, announced in October 2024. The transaction is expected to be finalised by early May 2025.
• As announced today, Stora Enso plans to implement a new, leaner and flatter organisational structure as of 1 July 2025, dividing its packaging business into four main areas with a reinforced focus on renewable packaging as the core business; Food Service and Liquid Board, Cartonboard, Containerboard, and Packaging Solutions. The new structure would expand the total business areas from five to seven removing one management layer, and represents a further decentralisation of P&L responsibility closer to customers and operations.
• The Annual General Meeting decided to distribute a dividend of EUR 0.25 per share for the year 2024 in two instalments, on 2 April 2025 and 2 October 2025.
• Stora Enso intends to sell approximately 12% of its total forest assets of 1.4 million hectares in Sweden. The sales process is ongoing.
• Stora Enso was recognised for its leadership in corporate transparency and performance on climate action by environmental non-profit CDP, securing a place on 2024 Climate Change ‘A List’.
Stora Enso’s President and CEO Hans Sohlström comments on the first quarter 2025 results:
During the first quarter of 2025, we continued to make good progress in building a stronger and more profitable Stora Enso. We recorded a robust adjusted EBIT of 175 million euro, an 18% increase year-on-year, with an EBIT margin of 7.4%. This improvement primarily resulted from higher prices, alongside increased volumes, favourable foreign exchange rates, and the positive impact of cost-saving and value-creation initiatives, which helped mitigate continued high fiber costs.
This marks the fourth consecutive quarter with a year-on-year result improvement. Furthermore, in the first quarter, all divisions achieved positive adjusted EBIT for the first time since the third quarter of 2022. Group sales rose by 9% year-on-year, driven by higher deliveries and increased sales prices across most divisions.
In our Packaging Materials division, we saw a slight recovery in demand, albeit at low levels, particularly in Europe, where higher prices contributed positively. Our Packaging Solutions division also delivered increased sales and EBIT driven by larger volumes, but with price pressure caused by market overcapacity somewhat offsetting the positive volume impact.
Our Biomaterials division delivered stable results through higher volumes despite headwinds with lower pulp prices and volumes, along with higher variable costs both year-on-year and quarter-on-quarter. The Wood Products division reached a break-even adjusted EBIT. This progress was driven by strong efficiency improvement actions coupled with somewhat improved demand, while still from a low level due to a continued weak construction market. In our Forest division, the high demand and tight markets for wood and fresh fiber continued, leading to another record-high quarterly EBIT.
Overall, the markets remain volatile, with low consumer sentiment further fuelled by tariff announcements. What comes to US tariffs, we estimate that the direct impact at current tariff rates is limited given that our direct sales to the USA account for only just below 3% of total group sales (2024). Tariffs impacting global trade present both risks and opportunities to our business. However, the main risk, as it currently stands, is the overall impact on the economy.
I am proud of the resilience and hard work demonstrated by our team, and I remain optimistic and confident in our strategic direction, positioning, and the opportunities that lie ahead. We are beginning to see the significant impact of our efforts to control factors within our power, reflected in our improving results, operational efficiency, and close relationship with our customers.
Going forward, we continue to work diligently with pricing, cost and operational efficiencies, alongside numerous other ongoing value-creating actions which contribute to improved profit and cash flow. As part of this, we continue to reduce our indebtedness with net debt to EBITDA having come down from 4.0x to 3.2x in the last year. Operating working capital to sales came down from 9.7% to 7.0%. With the last remaining investments due in our integrated Oulu packaging board mill in Q2, we will reduce our capital expenditure as planned. The ramp-up is going according to plan with promising achieved product quality. Also, the sales process of 12% of our Swedish forest holding is proceeding.
Given the recent progress made, as announced today, we now take the next step on our path to build a stronger Stora Enso by further strengthening the strategic focus on our core business of renewable packaging. To reinforce this ambition, we plan to implement a more streamlined organisational structure, carefully designed to increase customer focus, drive operational efficiency and enhance our performance culture.
Following the planned change, our renewable packaging business will consist of four P&L responsible business areas accounting for approximately 60% of Stora Enso’s full year revenue: Food Service and Liquid Board, Cartonboard, Containerboard, and Packaging Solutions. The offering of these business areas helps customers and consumers reduce their environmental impact and benefit from strong sustainability growth trends, leading market positions and a high degree of innovation.
Our remaining three business areas, Biomaterials, Wood Products, and Forest, will in addition to their respective business, support renewable packaging operations through wood sourcing and supply of raw material.
This streamlined organisational setup will enable us to enhance business accountability, remove one management layer, and represents a further decentralisation of P&L responsibility closer to customers and operations. This will also enable us to capitalise on synergies, reduce complexity and overlap, and most importantly, make us more customer and business centric.
Thank you for your continued support and dedication. We are confidently navigating through volatile markets and building a stronger, better, resilient, and more profitable Stora Enso.
Source: Stora Enso
