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Promising start of the year

Q1 2018 results

Latest Interim Report

Q1/2018 (year-on-year)

Sales increased by 3.3% to EUR 2 579 (2 497) million, primarily due to favourable prices and the ramp-up of strategic investments in Beihai, Varkaus, and Murów sawmill.

Operational EBIT increased 72% to EUR 369 (215) million as announced on 13 April, mainly due to favourable prices and mix optimisation combined with continued successful ramp-ups of the strategic investments. The operational EBIT margin was 14.3% (8.6%), the highest for any quarter since 2001. 

EPS was EUR 0.35 (0.14). EPS excl. IAC increased to EUR 0.35 (0.17).

Cash flow from operations increased to EUR 229 (178) million, due to the good result. Cash flow after investing activities was EUR 113 (43) million.

Balance sheet strengthened further and net debt was reduced by EUR 485 million; the net debt to operational EBITDA ratio improved to 1.3 (1.9). 

Record high operational ROCE at 17.7% (10.0%), the highest since 2000. 

The profit improvement programme is being finalised. The expected savings of EUR 70 million are clearly exceeding the original target of EUR 50 million.


Q2/2018 sales are estimated to be similar to or slightly higher than the amount of EUR 2 579 million recorded in the first quarter of 2018, and operational EBIT is expected to be in line with or somewhat lower than the EUR 369 million recorded in the first quarter of 2018. 

The impact of annual maintenance shutdowns is expected to be approximately EUR 40 million higher than in the first quarter of 2018. The Nordic wood supply situation is expected to continue tight, as the inventory levels are relatively low after a mild winter. The impacts are expected to be at same level or lower than in the first quarter, approximately EUR 10 million. These impacts are included in the above outlook.

Stora Enso's CEO Karl-Henrik Sundström comments on the first quarter 2018 results: 
“As pre-announced on 13 April, we experience strong profitable growth resulting in a promising start of the year. Our transformation strategy goes from strength to strength. 

Sales increased 3.3%, primarily due to favourable prices and the ramp-up of strategic investments in Beihai, Varkaus, and Murów sawmill. I am very pleased that operational EBIT increased 72% to EUR 369 million, mainly due to favourable prices and a better product mix and continued strong operational performance. The operational EBIT margin was 14.3%, which is the highest quarter since 2001. We also report a record high operational ROCE at 17.7% (10.0%), the highest since 2000. All in all, we have experienced record sales, profit, or improved operational efficiency in all five divisions!

The strong financial performance has also given us the opportunity to continue to strengthen the balance sheet. We have decreased our net debt by nearly EUR 500 million compared to year ago and the net debt to EBITDA ratio has improved from 1.9 to 1.3. 

We continue to see good progress in our transformation projects. The ramp up of the production line for wooden building components (LVL) at Varkaus Mill continues and it is expected to be completed in mid-2018. We also move forward with the construction of the cross laminated timber (CLT) unit at Gruvön, Sweden. Production is scheduled to begin during the first quarter of 2019. These projects will strengthen our position in the bioeconomy even further. We have also kicked off the production of biocomposite granules at our Swedish Hylte Mill and, early summer, we will have a formal inauguration.

I am proud to say that we have won the Bio-Based Product of the Year for Lineo by Stora Enso. Lineo is made from lignin, one of the main building blocks of a tree, and it is one step towards replacing fossil-based products with renewable solutions. I am also pleased that we have been chosen as the provider of wooden material for a 14-storey wooden building in Joensuu, Finland. Once completed, the building will be Finland’s tallest wooden high-rise building. I am happy that Finland goes for new innovative solutions in massive wood – it is a responsible choice, not the least since wooden buildings store carbon during their lifecycle.

As always, I would like to thank our customers for their business, our employees for their dedication, and our investors for their trust.”

- Karl-Henrik Sundström-
Stora Enso's results for Q1/2018 were published on 27 April​​ 2018.