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Solid performance: A step change in transformation

Q3 2017 results

Latest Interim Report

Q3/2017 (year-on-year)
  • Sales of EUR 2 509 (EUR 2 393) million increased 4.8%: the third consecutive quarter of sales growth. 
  • Sales excluding the paper business increased 11.1%.
  • Operational EBIT increased 32.4% to EUR 290 (EUR 219) million. This was mainly due to favourable sales prices and increased volumes from the recent strategic investments, and good cost management. 
  • Balance sheet continued strengthening; net debt to operational EBITDA was 1.8 (2.1).
  • The ramp-up of Beihai Mill continues to proceed ahead of plan, and it is expected to reach full production during the first half of 2018, and operational EBITDA break-even in Q4/2017. 
  • Stora Enso announced today investments of EUR 94 million to grow in renewable materials and to increase competitiveness in consumer board and biomaterials.
Q1–Q3/2017 (year-on-year)

Sales at EUR 7 534 (EUR 7 364) million increased 2.3%. Sales excluding the paper business increased 9.2%.

Operational EBIT at EUR 724 (EUR 693) million increased 4.5%, mainly due to higher volumes.

 


Stora Enso's CEO Karl-Henrik Sundström comments on the third quarter 2017 results:
“During the quarter, we have made a step change in our transformation towards a renewable materials growth company. I am very pleased to announce the third consecutive quarter of sales growth, with an increase of almost 5%. This is mainly driven by our steady progress in the transformation projects in China, Varkaus and Murów. Additionally, a favourable price development had a positive impact. If we look at sales excluding the paper business, it increased over 11%.
Operational EBIT increased over 32% to EUR 290 million, primarily due to favourable sales prices, increased volumes from strategic investments and efficient cost control. The balance sheet continued to strengthen, as net debt to operational EBITDA improved to 1.8 (2.1).
The transformation projects continue to deliver and contribute to solidifying our position in the bioeconomy. The ramp-up of Beihai Mill remains ahead of plan with a production volume of 105 000 (52 000) tonnes of consumer packaging board during the quarter. I am also satisfied that we have reached our targeted operational EBITDA run-rate for the Varkaus kraftliner mill. We expect full production in the fourth quarter this year. Another positive development is the turnaround in China Packaging, where we have seen increased deliveries coupled with operational improvements.
Today, we are happy to announce two important investments in Finland. We continue to invest in Finland, while expecting that the competitiveness of its export industry is ensured and further improved globally.
We will invest EUR 52 million to increase our total dissolving pulp capacity, from 150 000 tonnes to 430 000 tonnes annually at Enocell Mill. Our dissolving pulp is used in the production of viscose fibres for the textile industry. It is a renewable raw material which can replace fossil-based products, such as polyester.
We will also invest EUR 42 million to enhance our chemi-thermomechanical pulp (CTMP) annual production volume and drying capacity at Imatra Mills. This will boost our competitiveness in the liquid packaging board and food service board segments. It will also enable us to take the next steps in the commercialisation of micro-fibrillated cellulose (MFC). MFC can be used for lighter, more durable packaging that requires less raw material. The investments will support our competitiveness and contribute to sustainable growth.
I am proud that we have been top ranked in a study by Mistra Center for Sustainable Markets at the Stockholm School of Economics. The study explored how Sweden’s largest companies communicate their sustainability aspirations, implementation and evaluation.
As always, I would like to thank our customers for their business, our employees for their dedication, and our investors for their trust.”


Outlook 
Q4/2017 sales are estimated to be similar to or slightly higher than the amount of EUR 2 509 million recorded in the third quarter, and operational EBIT is expected to be somewhat lower than or even in line with the EUR 290 million recorded in Q3/2017. The operational EBIT estimate for Q4/2017 includes the negative EUR 7 million impact of the ramp-up of the Beihai operations.
As earlier announced, the Beihai Mill is expected to reach operational EBITDA-breakeven during Q4/2017. The impact of annual maintenance shutdowns is expected to be approximately EUR 10 million higher than in Q3/2017, and it is included in the above guidance.

- Karl-Henrik Sundström-

​​​​​The interim report January-September 2017 was published on 25 October ​​ 2017.