Stora Enso (STE) Q3 2024 earnings summary

Executive summary

• Q3 2024 marked the fourth consecutive quarter of adjusted EBIT growth, driven by price increases, cost-saving actions, and profit improvement programmes targeting €120 million in fixed cost savings with full impact expected from 2025.

• Strong performance in Packaging Materials, Biomaterials, and Forest segments, while Packaging Solutions and Wood Products faced market challenges.

• Decision to sell approximately 12% of Swedish forest assets (valued at €6.3 billion) to reduce debt and highlight asset value.

• Retained Beihai site in China due to its strategic value and improved cost competitiveness amid global wood and logistics cost escalation.

• Oulu site investment is on schedule, with production expected to start in Q2 2025.

Financial highlights

• Q3 2024 sales increased by 6% year-over-year to €2,261 million, with adjusted EBIT rising to €175 million from €21 million last year; adjusted EBIT margin improved to 7.8% from 1.0%.

• Cash flow from operations was €271 million; cash flow after investing activities was €4 million.

• Net debt to adjusted EBITDA improved to 3.1, though still above the target of 2.0.

• Net result for Q3: €84 million (vs. -€34 million YoY); EPS: €0.11 (vs. -€0.04).

• Dividend of €0.10/share paid in April 2024, with a proposal for an additional €0.20/share by year-end.

Outlook and guidance

• Full-year 2024 adjusted EBIT expected to be over 50% higher than 2023’s €342 million.

• Q4 profits expected to decline sequentially due to market volatility, high inflation, high wood costs, and potential labor strikes.

• Packaging Materials to face lower volumes and average prices in Q4 due to maintenance shutdowns and product mix.

• Packaging Solutions and Wood Products segments to remain challenged by weak demand and overcapacity.

• Biomaterials demand stable overall, with regional variations; wood costs to remain high.