The Finnish packaging and paper giant revealed the move alongside the release of its Q4 and full-year 2023 results yesterday (1 February).
Stora Enso president and CEO Hans Sohlström said: “The employee reductions, efficiency improvements and synergy opportunities would impact all divisions and group functions. The majority of these savings would materialise in 2025.
“This plan does not include new production site closures. While difficult, it is necessary for the group’s long-term success. We remain committed to ensuring Stora Enso remains a leader in our industry through our strategy to improve profitability and cash flow.”
During 2023, Stora Enso said it had closed production units and reduced the number of employees within its group functions. These restructuring actions – to improve operational EBIT by approximately €110m annually – saw a reduction of employees by approximately 1,150.
The business also said the consumer board investment at its Oulu site in Finland was moving ahead according to schedule, with production expected to start during 2025; while the plan to divest its Beihai site in China is also proceeding according to plan, with the assets now classified as held-for-sale.
The business achieved full-year 2023 sales of €9.4bn, down 19.6% from €11.68bn a year ago. Its operational EBIT was €342m, down 81.9% from €1.891bn a year ago.
In Q4, Stora Enso’s sales decreased by 24.1% to €2.174bn, while its operational EBIT fell by 85.8% to €51m.
Stora Enso said its full-year 2024 operational EBIT is expected to be higher than for the full-year 2023. It expects market conditions to remain uncertain in 2024, with ongoing pressure on demand, prices, and margins.
“However, there are some positive signs such as increasing pulp prices, declining global pulp inventories, less customer destocking, and lower inflation and interest rates,” it stated.
“The first quarter is not expected to show a significant market improvement following a historical low fourth quarter in 2023 and a slow recovery.
“All variable costs continued to ease in the fourth quarter, except for wood, which are expected to follow similar trends also in the first quarter this year. The potential risk of logistical challenges from the Red Sea area could disrupt the flow of goods and increase costs.”
It added the Packaging Materials and Wood Products divisions were continuing to suffer from low demand, prices, and volume. In Biomaterials, it said the pulp market was showing signs of stabilising and that inventory levels were normalising.
The company said Packaging Solutions was expecting a stronger sequential demand in the first half of the year due to the greenhouse season. However, low demand leads to high price and margin pressure due to containerboard price reductions, inflation-driven fixed costs, and overcapacity.
The Forest division was expecting no major changes in outlook from the previous quarter, with wood demand expected to start rising gradually.
