Stora Enso (STE) Q4 2024 earnings summary

Executive summary

• Achieved 75% year-over-year growth in adjusted EBIT for 2024, reaching EUR 598 million, driven by improved sourcing, operational efficiency, and commercial excellence despite challenging markets and rising wood costs.

• Reduced fixed costs by EUR 110 million and operating working capital by over EUR 700 million in 1.5 years, lowering working capital to sales from 14% to 7%.

• Full year sales declined by 4% to EUR 9,049 million due to prior capacity closures and divestments, but sales for continuing businesses rose 1%.

• Board proposes a dividend increase to EUR 0.25 per share, up from EUR 0.20, to be paid in two instalments in 2025.

• Preparing to sell approximately 12% of Swedish forest assets (EUR 6.3 billion fair value) and signed acquisition of a Finnish sawmill to secure wood supply.

Financial highlights

• Adjusted EBIT increased by EUR 256 million to EUR 598 million (6.6% margin), with Q4 adjusted EBIT up 139% year-over-year to EUR 121 million (5.2% margin).

• Cash flow from operations in 2024 reached EUR 1,187 million; cash flow after investing activities improved to EUR 88 million.

• Net debt rose to EUR 3,707 million due to Oulu investment, but net debt to adjusted EBITDA improved to 3.0x at year-end.

• Liquidity at year-end: EUR 1,993 million cash, EUR 800 million undrawn credit, and EUR 1.1 billion pension premium loans available.

• Operating result (IFRS) for 2024 was EUR 93 million, up from EUR -322 million in 2023.

Outlook and guidance

• Demand expected to remain subdued and volatile in Q1 2025 due to macroeconomic and geopolitical uncertainty.

• 2025 adjusted EBIT expected to be adversely impacted by EUR 100 million, mainly in H1, due to Oulu packaging board line ramp-up.

• Wood prices anticipated to stay high; margin pressures persist in Packaging Materials and Solutions.

• Price increases achieved in consumer board and announced in containerboard; Biomaterials expects price effects in Q2.

• Capital expenditure forecast for 2025 is EUR 730–790 million; maintenance costs expected to decrease in Q1 2025.