Steady performance as a result of our own actions
Dividend proposal EUR 0.30 per share
Q4/2020 (year-on-year)
Year 2020 (year-on-year)
Outlook for 2021
Stora Enso resumes an annual outlook even though the uncertainties due to the ongoing pandemic in the global economy are expected to remain in 2021. Provided that the vaccination programmes progress as planned and the virus is contained, there are expectations of economic recovery. Until then, demand for our products remains mixed.
Operational EBIT in 2021 is expected to be higher than the 2020 operational EBIT.
Stora Enso will conclude its EUR 400 million profit protection programme by the end of 2021. The expected fixed and variable cost savings for the year are approximately EUR 80 million. The Group will continue to focus on customer service and cash flow generation in 2021.
The Oulu Mill conversion is estimated to have approximately EUR 20 million negative impact on the Packaging Materials Q1/2021 operational EBIT. The total impact on operational EBIT is forecasted to be approximately EUR 45-55 million negative for the full year 2021. The mill is planned to reach designed capacity by the end of Q2/2021, commercialisation of product portfolio by the end of 2021 and operational EBITDA break-even in Q1/2022.
Key figures
| EUR million | Q4/20 | Q4/19 | Change % Q4/20-Q4/19 | Q3/20 | Change % Q4/20-Q3/20 | 2020 | 2019 | Change % 2020-2019 |
| Sales | 2 154 | 2 411 | -10.7% | 2 079 | 3.6% | 8 553 | 10 055 | -14.9% |
| Operational EBITDA | 274 | 277 | -1.3% | 330 | -17.0% | 1 270 | 1 614 | -21.3% |
| Operational EBIT | 118 | 124 | -5.1% | 175 | -32.8% | 650 | 1 003 | -35.2% |
| Operational EBIT margin | 5.5% | 5.1% | 8.4% | 7.6% | 10.0% | |||
| Operating profit (IFRS) | 289 | 680 | -57.5% | 145 | 99.1% | 922 | 1 305 | -29.3% |
| Profit before tax excl. IAC and FV | 88 | 90 | -2.0% | 144 | -39.1% | 501 | 835 | -40.0% |
| Profit before tax (IFRS) | 260 | 646 | -59.8% | 115 | 126.3% | 773 | 1 137 | -32.0% |
| Net profit for the period (IFRS) | 237 | 519 | -54.3% | 86 | 175.0% | 617 | 856 | -27.9% |
| Net interest-bearing liabilities | 2 921 | 3 209 | -9.0% | 3 008 | -2.9% | 2 921 | 3 209 | -9.0% |
| Operational ROCE excl. Forest division, % | 4.6% | 5.0% | 8.0% | 7.0% | 12.8% | |||
| Earnings per share (EPS) excl. FV, EUR | 0.09 | 0.04 | 127.5% | 0.12 | -22.2% | 0.45 | 0.61 | -26.7% |
| EPS (basic), EUR | 0.30 | 0.66 | -53.9% | 0.11 | 173.9% | 0.79 | 1.12 | -28.9% |
| Net debt/last 12 months’ operational EBITDA ratio | 2.3 | 2.0 | 2.4 | 2.3 | 2.0 | |||
| Average number of employees | 23 406 | 25 403 | -7.9% | 24 428 | -4.2% | 24 455 | 26 096 | -6.3% |
Stora Enso’s President and CEO Annica Bresky comments on the fourth quarter 2020 results:
“Looking back at 2020, my first year as CEO for Stora Enso, I can undoubtedly say that it has been extremely eventful. The year has been marked by the global pandemic and slowdown of the global economy, but also by geopolitical unrest, Brexit and – for Stora Enso during the first quarter – the strikes in Finland. So, concluding with the fourth quarter, in an environment that is still volatile, I am very satisfied that we deliver steady results in line with Q4/2019. If we exclude Paper, operational EBIT increased to EUR 122 (80) million. Sequentially quarter on quarter, we can see improved sales, an indication that the markets are moving in the right direction. We are delivering on our EUR 400 million savings promise and we have further reduced working capital to record low levels, enhancing our cash flow. Our own actions have made all the difference.
The main parts of our businesses have performed well during a quarter that is maintenance heavy. We see increased activity on the market and continued good development in Packaging Materials and Packaging Solutions. Results for the Forest division are strong, and Wood Products delivered the second best Q4 results ever. For Biomaterials, there are positive signs of price recovery, as the supply and demand situation is more balanced, and China continues to recover. The accelerated structural decline persists in the paper business, leading to overcapacity and severe price pressure. Despite this, Paper delivered good cash flow.
The conversion of Oulu Mill is in a start-up phase. Its new products will strengthen our offering in the growing packaging business. This is a major step forward in our transformation. To further establish Stora Enso as a provider of high-quality, renewable packaging materials, we have also started a feasibility study for expanding pulp and board capacity at our production site in Skoghall. Moreover, we are investing EUR 80 million to modernise the wood handling capacity at Imatra Mills, where we are one of the world’s largest producers of liquid packaging board, serving customers globally. These investments strengthen our capabilities for premium solutions for food, beverage and luxury packaging. And they are in line with our strategy: to accelerate growth in the packaging business, allowing us to meet the increasing demand for sustainable packaging among consumers.
Lignin is one of our key innovation areas for delivering growth in new applications, such as energy storage, binders and carbon fiber. As the largest producer in the world, we are investing EUR 14 million to build a granulation and packing plant for lignin. In addition to reducing both packaging and transportation costs, granulated lignin is easier to handle for our customers.
The real value of our forests, the foundation for our renewable raw material, has also been brought to light. After the new market based valuation method for our Nordic forest assets, the total value of our forest assets is over EUR 7 billion, an increase of almost EUR 2 billion. As part of our active forest management, we divested over 5 000 hectares of non-core forest for approximately EUR 90 million. This is a clear proof point of the value that the forest represents.
Following the green bonds issued in 2019 and 2020 in the Swedish market, I am also pleased that we have now issued our first euro green bond, and the interest from the market was big. This will allow us to continue strengthening our position as the leading renewable materials company and fits our sustainable finance strategy well.
On the note of sustainability and enabling a circular economy, I’d like to mention that we are joining forces with our customer Tetra Pak to explore the possibility of building a new recycling line in Poland. This would significantly increase the recycling of used beverage cartons in Europe and support in making our customers’ brands circular.
Lastly, in 2020 our Board of Directors changed the 2019 dividend proposal due to business impact uncertainties related to Covid-19. In Q4, the Board decided on a second dividend installment. It was paid in December to our valued shareholders, bringing the total 2019 dividend to EUR 0.30 per share. For the financial year 2020, the Board of Directors proposes to the Annual General Meeting a dividend of 0.30 euros per share. This is aligned with our new policy to pay half of the EPS excluding fair valuations as dividend over the cycle.
To summarise, I’m proud of our achievements and how our people have not only adjusted, but also stepped up to meet the challenges. We have renewed our strategy and long-term financial targets, shaping our business for accelerated growth and value. Now I am excited to continue executing our chosen direction with the whole Stora Enso team, our customers and partners.
The renewable future grows in the forest.”
Webcast and conference call for analysts, investors and media today at 14.30 EET
The webcast and conference call for analysts, investors and media will take place at 14.30 EET (13.30 CET, 12.30 UK time, 07.30 EST). It will be hosted by President and CEO Annica Bresky, CFO Seppo Parvi, and SVP, Head of Investor Relations Ulla Paajanen, and may be accessed at https://edge.media-server.com/mmc/p/hvatibwr.
Those analysts and investors who wish to ask questions should join the conference call (details below). All participants can follow the presentation over the webcast.
Media representatives who wish to ask questions after the Financial Statement Release is published, may contact Carl Norell, press officer at Stora Enso at +46 72 2410349.
The link to the webcast will be also available on the Stora Enso website: storaenso.com/investors
Dial-in details for the conference call
| Live event at 14.30 EET | |
| UK | +44 (0) 2071 928 338 |
| Finland | +358 (0) 923 113 291 |
| Sweden | +46 (0) 856 618 467 |
| USA | +1 6467 413 167 |
| Confirmation Code: | 5491385 |
| Replay Dial-In #: | |
| UK/International | +44 (0)3333 009 785 |
| Access Code: | 5491385 |
The conference call replay will be available until Friday 5 February 2021. The webcast will be archived on storaenso.com/en/investors/reports-and-presentations.
This release is a summary of Stora Enso’s Financial Statement Release 2020. The complete report is attached to this release as a pdf file. It is also available on the company website at storaenso.com/investors.
For further information, please contact:
Ulrika Lilja
EVP, Communications and Marketing
tel. +46 72 221 9228
Investor enquiries:
Ulla Paajanen
SVP, Investor Relations
tel. +358 40 763 8767
Part of the bioeconomy, Stora Enso is a leading global provider of renewable solutions in packaging, biomaterials, wooden constructions and paper. We believe that everything that is made from fossil-based materials today can be made from a tree tomorrow. Stora Enso has some 23 000 employees, and sales in over 50 countries. Our sales in 2020 were EUR 8.6 billion. Stora Enso shares are listed on Nasdaq Helsinki Oy (STEAV, STERV) and Nasdaq Stockholm AB (STE A, STE R). storaenso.com/investors
STORA ENSO OYJ
For further information, please contact:
Ulrika Lilja
EVP, Communications and Marketing
tel. +46 72 221 9228
Investor enquiries:
Ulla Paajanen
SVP, Investor Relations
tel. +358 40 763 8767