Release Date: April 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sales grew by 9% in the first quarter, reaching EUR 2.4 billion.
- Achieved a robust adjusted EBIT of EUR 175 million, representing an 18% increase year-over-year.
- Successful production start of the new consumer board line at the Oulu Mill.
- Regulatory approval to proceed with the acquisition of Finnish sawmills, Junnikkala, enhancing operational synergies.
- Plans to implement a new leaner and flatter organizational structure to enhance efficiency and performance culture.
Negative Points
- Adjusted EBIT for the full year 2025 is expected to be adversely impacted by approximately EUR 100 million due to the ramp-up of the new packaging board line.
- Higher fiber costs negatively impacted results, with a total negative impact of EUR 131 million in the quarter.
- Cash flow after investing activities was negative at EUR 47 million, driven by the Oulu project.
- Wood costs remain at record high levels, impacting profitability.
- The Packaging Solutions division continues to face challenges due to market overcapacity and oversupply.
Q & A Highlights
Q: Can you explain the changes in the operational structure and what they imply for Stora Enso?
A: Hans Sohlstrom, President and CEO, explained that the company is removing one management layer and creating a flatter organization with seven P&L responsible business areas. This change involves integrating Nordic sawmills with the closest pulp and board integrates to enhance efficiencies. The new structure will have 21 P&L responsible business units, decentralizing P&L responsibility closer to operations and sales.
Q: Regarding the Oulu mill ramp-up, what are the expected sales and pricing assumptions for 2025?
A: Hans Sohlstrom stated that while specific volume targets for 2025 are not disclosed, the EUR800 million sales target is based on average long-term prices for folded boxboard and coated unbleached kraft. The ramp-up is progressing well, with prime quality customer trials underway.
Q: How are current US tariffs impacting Stora Enso's operations, and what are the opportunities?
A: Hans Sohlstrom noted that US tariffs have a limited impact as sales to the US account for less than 3% of total sales. The company is renegotiating contracts and pricing in the US and sees opportunities in markets implementing countermeasures to US tariffs. Stora Enso remains committed to the US market while exploring new opportunities globally.
Q: What is the outlook for wood costs and other input costs for the remainder of the year?
A: Hans Sohlstrom mentioned that wood costs are at record high levels but are expected to stabilize. The mills will be dedicated to specific business areas, with some exceptions like the Oulu mill, which will report into the carton board business area despite producing some containerboard.
Q: Can you provide an update on the forest sales process and its timeline?
A: Hans Sohlstrom confirmed that the forest sales process is proceeding as planned, with expectations to finalize in the first half of 2025. Despite market volatility, the stable forest asset remains attractive, and its value has increased since the deal was announced.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
