In the first half of the year, Stora Enso has managed to bump its adjusted EBIT to €317m (£267m), despite a fall in sales from €5.095bn to €4.466bn, following continued efforts to improve cash flow, fix efficiency problems, and create better value from existing activities.
In Q2, year-on-year, these activities saw the company’s adjusted EBIT margin jump from 1.6% to 7%, with earnings per share likewise jumping from the red (€-0.29) to black (€0.06).
Stora Enso president and CEO Hans Sohlström said he was encouraged by the company’s ability to meet expectations, and pleased with progress in creating profitability.
“Advances in our profitability and cash flow improvement initiatives, coupled with more favourable market conditions in some segments, have supported an improved earnings trend for the third consecutive quarter.”
“Additionally, this has strengthened our leverage ratio in the quarter despite record high growth investments. This positive development is a testament to our team's dedication and sets a strong foundation for future success,” he said.
Stora Enso is investing heavily in a new consumer board site at Oulu in Finland, and has secured a €435m loan towards the €1bn overall investment from the European Investment Bank to help drive progress.
Sohlström added that the year-on–year dip in group sales of 3% was thanks to structural changes, with continuing operations growing by 1%.
The company’s continuing priority, he said, would be further reducing its net debt to adjusted EBITDA ratio. In Q1, this dropped from 4.0 to 3.5, though remains above Stora Enso’s target of 2.0.
“Our value creation programmes, centred on sourcing, operational and commercial efficiencies, are making good progress across all divisions, thanks to an analytical and structured approach. These efforts have had a significant impact on profits and cost competitiveness, with about 1,900 identified improvement initiatives led by approximately 500 project owners.
“Additionally, our profit improvement programme, which aims for an annual fixed cost saving of €120m, is advancing successfully. Together, these initiatives are contributing to sustained enhancements in profitability and competitiveness.”
Meanwhile, Stora Enso has replaced its outgoing chief financial officer, Seppo Parvi, with Niclas Rosenlew, who has moved to the company from Swedish industrial firm SKF.
Sohlström said he was delighted to have Rosenlew on board: “Niclas has extensive experience in leading, developing and reshaping large international organisations. His solid background in CFO and other senior positions in listed companies will be immensely valuable in Stora Enso’s continued growth transition, value creation and in reaching our financial targets.
“I would like to express our utmost gratitude to our current CFO Seppo Parvi for his dedicated service over the past decade and wish him success in his new professional role.”
At the same time, the company has taken on Carolyn Wagner as its executive vice president for its packaging solutions division.
Currently divisional CEO of German Klingele Paper & Packaging Group, Wagner has held senior positions at a number of European corrugated firms.
“Carolyn’s strong packaging industry insight will be important in developing and advancing our packaging solutions business. I would like to thank Ad Smit for his key role in integrating De Jong Packaging Group into our existing packaging solutions business after the acquisition, and wish him all the best for the future,” Sohlström said.
Both Rosenlew and Wagner will join Stora Enso’s group leadership team in January 2025.
