Stora Enso (STE) Q1 2025 earnings summary

Executive summary

• Achieved fourth consecutive quarter of year-over-year financial improvement, with sales up 9% to EUR 2,374 million and adjusted EBIT rising 18% to EUR 175 million, reflecting robust operational execution and cost-saving initiatives.

• All divisions posted positive adjusted EBIT for the first time since Q3 2022.

• Successfully started production at the new Oulu consumer board line, with full capacity expected by 2027; regulatory approval received for Junnikkala Oy sawmill acquisition.

• Announced transition to a leaner, more customer-focused organizational structure, decentralizing P&L responsibility to 21 business units across seven business areas, with a strong focus on renewable packaging.

• Net result for the period increased 40% to EUR 107 million compared to Q1/2024.

Financial highlights

• Sales reached EUR 2.4 billion in Q1 2025, up 9% year-over-year, driven by higher prices and improved deliveries in all divisions except biomaterials.

• Adjusted EBIT increased to EUR 175 million (7.4% margin), with all divisions posting positive adjusted EBIT.

• Operating working capital ratio to sales stable at 7%.

• Cash flow from operations was EUR 192 million, but cash flow after investing activities was negative due to high CapEx for the Oulu project.

• Net debt rose to EUR 3.9 billion, but net debt/EBITDA improved to 3.2x from 4.0x a year ago.

Outlook and guidance

• Adjusted EBIT for full year 2025 expected to be negatively impacted by about EUR 100 million due to Oulu ramp-up, with most of the impact in Q2; EBITDA break-even for the new line expected by year-end and full capacity by 2027.

• Capital expenditure is expected to decrease after Q2 as the Oulu project concludes; full-year 2025 CapEx forecasted at EUR 730–790 million.

• Maintenance costs in Q2/2025 expected to rise by EUR 20 million from Q1; wood and fiber costs anticipated to stay high.

• Dividend of EUR 0.25 per share for 2024 to be paid in two installments in 2025.

• Market demand expected to remain subdued and volatile due to macroeconomic and geopolitical uncertainty.