Q3/2024 (year-on-year)
- Sales increased by 6% to EUR 2,261 (2,127) million.
- Adjusted EBIT increased to EUR 175 (21) million*.
- Adjusted EBIT margin increased to 7.8% (1.0%).
- Operating result (IFRS) was EUR 139 (-1) million*.
- Earnings per share (EPS) were EUR 0.11 (-0.04) and EPS excl. fair valuations (FV) was EUR 0.10 (-0.05).
- The value of the forest assets increased to EUR 8.8 (8.3) billion, equivalent to EUR 11.11 per share.
- Cash flow from operations amounted to EUR 271 (231) million. Cash flow after investing activities was EUR 4 (38) million.
- Net debt increased by EUR 409 million to EUR 3,528 (3,120) million, mainly due to the board investment at the Oulu site.
- The net debt to adjusted EBITDA (LTM) ratio was 3.1 (2.4). The target to keep the ratio below 2.0 remains.
Q1–Q3/2024 (year-on-year)
- Sales were EUR 6,727 (7,222) million.
- Adjusted EBIT was EUR 478 (292) million.
- Operating result (IFRS) was EUR 372 (4) million.
- Earnings per share (EPS) were EUR 0.26 (-0.09) and EPS excl. fair valuations (FV) was EUR 0.25 (-0.09).
- Cash flow from operations amounted to EUR 863 (631) million. Cash flow after investing activities was EUR -15 (-31) million.
- Adjusted ROCE excluding the Forest division (LTM1) decreased to 2.7% (4.7%), the target being above 13%.
* The classification of the Beihai site as assets held for sale has been ceased. The previously published adjusted EBIT and IFRS operating result for January–June 2024 decreased by EUR 15 million due to the inclusion of the previously suspended depreciation into the restated results.
Stora Enso’s President and CEO Hans Sohlström comments on the third quarter 2024 results:
“I am pleased to report that our value creation and profit improvement programmes are progressing well across all divisions. These initiatives, designed to optimise our processes and enhance our competitive edge, remain on track. Improvements in profitability, along with more favourable market conditions in some segments during the third quarter, continued to support a positive earnings trend. Our team is diligently managing operations, sales, sourcing, working capital, and refining processes to ensure operational efficiency, cost competitiveness and financial strength. And our profit improvement programme, initiated earlier this year with a goal of 120 million euro in fixed cost savings, is set to deliver its full impact from 2025.
We have seen a strong increase in our Group financial performance this quarter compared to last year, driven by higher prices and volumes, particularly in Packaging Materials. The Biomaterials division demonstrated strong performance, though demand weakened during the quarter with rapidly decreasing pulp prices. Our Forest division delivered a record high third quarter result, driven by increased wood prices. This resulted in a Group sales increase to 2,261 million euro from 2,127 million euro. The adjusted EBIT rose for the fourth consecutive quarter, reaching 175 million euro, up from 21 million euro in 2023, due to price hikes and cost cuts. This improved our margin to 7.8% from 1%. Challenges persist in the Wood Products division due to a weak construction sector and our Packaging Solutions face price lags and market overcapacity. Despite these challenges, our cost-saving measures have effectively reduced both fixed and variable costs.
On 23 October, we announced that after a thorough review and negotiations, we decided to stop the divestment process and instead retain our Beihai packaging production site and forestry business, recognising that the value in own use of these assets exceeds achievable sale proceeds. This decision supports our strategic aim to strengthen our leadership in the fiber-based packaging market and by optimising the product mix, this site will continue to enhance our position as a leading global supplier, especially in the Asia Pacific region. We are committed to financial prudence, with no significant capital expenditure expected in the mid-term as we pursue these strategic enhancements.
In our continuous pursuit of financial stability, we are preparing for the sale of approximately 12% of our forest assets in Sweden, covering 1.4 million hectares valued at 6.3 billion euro. This divestment aims to strengthen our balance sheet, underscoring the economic value and resilience of our forest holdings.
In our ongoing commitment to prioritise financial stability through strategic decisions such as the divestment of forest assets in Sweden, we remain equally dedicated to maintaining the highest environmental standards in all operational areas.
Looking ahead, we are intensifying our focus on capital allocation and asset strategy in growing market segments, laying the foundation for enhanced competitiveness and profitable growth across the Group. Our focused profitability improvement initiatives over the past year have strengthened Stora Enso's financial standing. However, we anticipate a slower market recovery for the remainder of the year to adversely impact profits due to the effect from declining pulp prices, subdued board demand and a changed mix of packaging products, together with continued high wood costs. We confirm our annual guidance for adjusted EBIT to be significantly higher than for the full year 2023 and remain committed to delivering exceptional service to our customers and robust value growth for our shareholders”.
Source: Stora Enso