Stora Enso (STE) Q4 2024 earnings summary

Executive summary

• Achieved 75% year-on-year growth in adjusted EBIT for 2024, 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%.

• Announced plans to sell approximately 12% of Swedish forest assets (fair value EUR 6.3 billion) to strengthen the balance sheet and highlight asset value.

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

• Surpassed 2030 climate target with a 53% reduction in Scope 1 and 2 emissions by year-end 2024.

Financial highlights

• Full year sales declined by 4% to EUR 9,049 million due to 2023 capacity closures and divestments, but sales for continuing businesses rose 1%.

• Adjusted EBIT increased by 75% to EUR 598 million, with margin rising to 6.6% from 4% year-over-year.

• Q4 2024 sales increased 7% year-over-year to EUR 2,322 million; adjusted EBIT up 139% to EUR 121 million (5.2% margin).

• Net debt increased to EUR 3,707 million due to Oulu investment, but net debt to adjusted EBITDA improved to 3.0x.

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

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 market near cyclical low with price increases expected to impact Q2.

• Continued focus on cost reduction and operational excellence to improve competitiveness in 2025.