- Strengthening our resilience for the headwinds
- Dividend proposal EUR 0.15 per
share, additional max. EUR 0.35 to be
decided later
HELSINKI, April 21, 2020 /PRNewswire/ --
Q1/2020 (compared with
Q1/2019)
- Sales decreased by 16.2% to EUR 2 207 (2 635)
million, due to significantly lower prices and
volumes.
- Operational EBIT decreased to EUR
180 (335)
million.
- Operational EBIT margin was 8.1%
(12.7%).
- Operating profit (IFRS) was EUR
262 (313)
million.
- EPS was EUR 0.19 (0.29) and EPS
excl. IAC and fair valuations was EUR
0.12
(0.32).
- Cash flow from operations amounted to EUR 146 (223)
million. Cash flow after investing activities was EUR -32 (94)
million.
- The net debt to operational EBITDA ratio at 2.3 (1.6) was above
the target level of less than
2.0.
- Operational ROCE was 6.8% (14.5%), below the strategic target
of over 13%.
Managing uncertainties
The health and safety of Stora Enso's employees is a key
priority. A healthy workforce ensures uninterrupted operations and
customer deliveries. Stora Enso has secured the health and safety
of its workforce by imposing a global travel ban since early
February, prohibiting all physical meetings, strongly advising
personnel to work remotely whenever feasible, restricting access to
mill sites, quarantining the affected workforce, and closely
monitoring the COVID-19 situation within Stora Enso. Thanks to
Stora Enso's proactive approach so far, there has been minimal
impact on the Group's ability to run mills and serve
customers.
Stora Enso's liquidity and funding position is strong. At the
end of Q1/2020, cash and cash equivalents were at EUR 756 million. Additionally, the Company has a
fully undrawn EUR 600 million
Revolving Credit Facility and access to EUR
950 million statutory pension premium loans in Finland. Furthermore, during April, Stora Enso
signed bilateral loan and credit facility agreements for
EUR 400 million to increase
liquidity. There are no financial covenants on Stora Enso Oyj's
debt.To address costs and mitigate negative market demand impacts,
Stora Enso has started to implement additional cost reduction
actions including capital expenditure and recruitment restrictions,
as well as co-determination negotiations on possible temporary
layoffs currently in all the divisions and Group functions in
various countries following local labour laws and regulations.
Due to the cross-border travel restrictions and safety concerns
associated with COVID-19, most of Stora Enso's annual mill
maintenance shutdowns have been postponed to the second half of
2020. Only Heinola Mill annual maintenance shutdown is scheduled
for the second quarter of 2020.
Guidance and outlook
Stora Enso is discontinuing its quarterly guidance and annual
outlook until further notice due to the uncertainty in the global
economy. The current situation has accelerated the decline in
demand for European paper, and the market conditions for the
Group's other products continue to be mixed.
The Group continues to put focus on ensuring liquidity and cash
flow, cost and working capital management to stay resilient and
ensure quick recovery after the pandemic is over.
Key figures
EUR
million
|
Q1/20
|
Q1/19
|
Change %
Q1/20-Q1/19
|
Q4/19
|
Change %
Q1/20-Q4/19
|
2019
|
Sales
|
2 207
|
2 635
|
-16.2%
|
2 411
|
-8.5%
|
10 055
|
Operational
EBITDA
|
335
|
484
|
-30.8%
|
277
|
20.8%
|
1 614
|
Operational
EBIT
|
180
|
335
|
-46.3%
|
124
|
45.0%
|
1 003
|
Operational EBIT
margin
|
8.1%
|
12.7%
|
|
5.1%
|
|
10.0%
|
Operating profit
(IFRS)
|
262
|
313
|
-16.2%
|
680
|
-61.5%
|
1 305
|
Profit before tax
excl. IAC
|
220
|
286
|
-22.8%
|
678
|
-67.5%
|
1 329
|
Profit before tax
(IFRS)
|
209
|
282
|
-26.0%
|
646
|
-67.7%
|
1 137
|
Net profit for the
period (IFRS)
|
149
|
226
|
-33.9%
|
519
|
-71.3%
|
856
|
Net interest-bearing
liabilities
|
3 399
|
3 093
|
9.9%
|
3 209
|
5.9%
|
3 209
|
Operational
ROCE
|
6.8%
|
14.5%
|
|
4.7%
|
|
10.3%
|
Earnings per share
(EPS) excl. IAC and FV1, EUR
|
0.12
|
0.32
|
-62.4%
|
0.07
|
63.5%
|
0.84
|
EPS (basic),
EUR
|
0.19
|
0.29
|
-34.4%
|
0.66
|
-70.7%
|
1.12
|
Net debt/last 12
months' operational EBITDA ratio
|
2.3
|
1.6
|
|
2.0
|
|
2.0
|
Average number of
employees
|
25 037
|
26 036
|
-3.8%
|
25 403
|
-1.4%
|
26 096
|
1 Earnings per share (EPS) excl. IAC and FV was
added to the list of non-IFRS measures replacing the key figure of
EPS excl. IAC. Comparatives are recalculated.
Stora Enso's President and CEO Annica
Bresky comments on the first quarter 2020 results:
"The first quarter of the year has been marked by challenging
harvesting conditions, strikes in Finland and the start of the COVID-19
pandemic. Lower prices and volumes during the quarter had a
negative impact on sales and operational EBIT, compared to the
record levels in the first quarter of last year. Under these
conditions, "a new normal" where historical references are no
longer valid, I am satisfied with our performance for the quarter.
We delivered a result of EUR 180
million, in the upper end of our guidance range. Our
continued focus is on building business resilience and putting our
efforts in the areas we can impact, that is serving our customers
by keeping our operations running and mitigating supply chain
challenges, securing liquidity and managing costs, margins and cash
flow. Ultimately, we want to ensure our ability for a quick
recovery once the tide turns.
We were out early with actions related to COVID-19, including a
global travel ban, social distancing and appointed work streams to
keep business momentum. So far, our operations have been running
normally on a global level. We have built a strong liquidity
position amounting to EUR 1.4
billion, for a potentially longer and deeper recession. We
have actions in place to enhance our cash flow going forward by
active working capital management and cost savings. Our profit
protection programme is delivering ahead of plan and we have
increased our savings target to EUR 350
million (earlier EUR 275
million) by the end of 2021. During this first quarter of
2020, we achieved cost savings amounting to EUR 40 million, including one-time cost savings.
In regards to managing a potential demand decrease, we have started
preparations for potential temporary layoffs or shorter working
time if and when needed.
Naturally, it is fair to say that there are currently high
macroeconomic uncertainties and low visibility relating to demand
development. So far, our Paper and Wood Products divisions have
been affected the most, while there is less impact in our packaging
divisions. Biomaterials division is affected by the structural
decline in paper end uses and high inventories in China, although the end uses within hygiene
and tissue have good demand.
In just a short time, the COVID-19 pandemic has forced us to
rethink many everyday things we have previously taken for granted.
And yet, even in the most difficult of times, basic needs must be
met; people need food, medicine and hygiene products. In many
countries, packaging, and especially food packaging, is defined as
a key or critical industry. The role and purpose of packaging -
ensuring hygienic conditions and protecting e.g. food and
pharmaceuticals during transportation and on the store shelves - is
now as important as ever. This is among the areas where we have a
solid offering.
Due the COVID-19 pandemic and its impact on trading conditions,
Stora Enso's Board of Directors (BOD) has decided to change its
dividend proposal to EUR 0.15 per
share. In addition, the BOD proposes to the AGM that the BOD be
authorised to decide at its discretion on a dividend payment of a
maximum of EUR 0.35 to be distributed
in one or several instalments at a later stage when it is possible
to make a more reliable estimate on the impacts of the COVID-19
pandemic on Stora Enso's business and liquidity.
Our transformation projects are progressing well. The conversion
of Oulu Mill into kraftliner is proceeding according to plan. In
our constant endeavors for sustainability, we continue to launch
renewable products with our customers. Unilever Finland introduced
Ingman ice cream in a newly designed carton made of Performa Cream™
by Stora Enso with a plant-based PE Green™ barrier coating.
Moreover, I am pleased that we were selected as the provider of
wooden materials for 491 building projects around the world, using
41 000 m3 cross laminated
timber (CLT) and 500 m3
laminated veneer lumber (LVL). Trees absorb CO2, and
wood stores it and keeps it out of the atmosphere!
Going forward, we will concentrate on what we can impact, stay
close to our customers, drive innovation and continue building on
our growth strategy to be ready when the market turns. I am proud
to work with the committed Stora Enso team in these challenging
times, as well as with our dedicated customers and partners
globally. Together, we will ensure that we are prepared for a more
profitable future when the cycle turns.
The future grows in the forest."
Webcast and conference call for analysts, investors and media
today at 15.00 EEST
The webcast and conference call for analysts, investors and media
will take place at 15.00 EEST (14.00 CET, 13.00 UK time, 08.00
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/477ufvo3.
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 Interim
Report 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 analyst and investor conference
call
Live event at
15.00 EEST
|
|
UK
|
+44 (0)2071 928
000
|
Finland
|
+358 (0)9 4245
0806
|
Sweden
|
+46 (0)8 5069
2180
|
USA
|
+1 631 510
7495
|
Confirmation
Code:
|
7864996
|
Replay Dial-In
#:
|
|
UK/International
|
+44 (0)3333 009
785
|
Access
Code:
|
7864996
|
The conference call replay will be available until Tuesday
28 April 2020. The webcast will be
archived on
storaenso.com/en/investors/reports-and-presentations.
This release is a summary of Stora Enso's Interim Report
January-March 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.
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 25 000 employees in over 30 countries. Our
sales in 2019 were EUR 10.1 billion.
Stora Enso shares are listed on Nasdaq Helsinki (STEAV, STERV) and
Nasdaq Stockholm (STE A, STE R). In addition, the shares are traded
in the USA as ADRs (SEOAY).
storaenso.com
CONTACT:
For further information, please contact:
Ulrika Lilja
EVP, Communications
tel. +46-72-221-9228
Investor enquiries:
Ulla Paajanen
SVP, Investor Relations
tel. +358-40-763-8767
This information was brought to you by Cision
http://news.cision.com
https://news.cision.com/stora-enso-oyj/r/stora-enso-oyj-interim-report-january-march-2020,c3092966
The following files are available for download:
https://mb.cision.com/Public/13589/3092966/9923cf28566a9431.pdf
|
STORAENSO RESULTS
Q120 ENG
|