- Solid performance continues in challenging business
environment
- Focus on cash flow and profit protection
HELSINKI, Oct. 20, 2020 /PRNewswire/ --
Q3/2020 (compared with
Q3/2019)
- Sales decreased by 13.5% to EUR 2 079 (2 402)
million, due to lower deliveries and
prices.
- Operational EBIT decreased to EUR
175 (245) million. The impact of lower sales was partly
offset by continued cost
management.
- Operational EBIT margin was 8.4%
(10.2%).
- Operating profit (IFRS) was EUR
145 (170)
million.
- EPS was EUR 0.11 (0.09) and EPS
excl. IAC and fair valuations was EUR
0.14
(0.18).
- Cash flow from operations amounted to EUR 399 million, cash flow after investing
activities was EUR 250
million.
- The net debt to operational EBITDA ratio at 2.4 was above the
target level of less than
2.0.
- Operational ROCE was 6.7% (9.2%), below the strategic target of
more than 13%.
Q1-Q3/2020
(year-on-year)
- Sales were EUR 6 400 (7 644) million, mainly as a
result of the impact of the Covid-19 pandemic, and the Finnish
union strikes during the first
quarter.
- Operational EBIT was EUR 532
(879) million.
Managing uncertainties
The health and safety of Stora Enso's employees is a key priority.
Thanks to Stora Enso's proactive approach during Covid-19 thus far,
there has been minimal impact on the Group's ability to serve
customers and run operations.
The upcoming maintenance shutdowns in Q4 are well prepared to
ensure the health and safety of the Group's employees, contractors
and communities in which it operates.
The Group also continues to focus on sales and customer service as
well as cost and working capital management, ensuring liquidity and
cash flow to remain resilient and ensure quick recovery.
Stora Enso has taken all necessary precautions to manage a possible
"no-deal" Brexit in order to avoid negative impacts to its
business.
Guidance and outlook
Stora Enso has discontinued its quarterly guidance and annual
outlook until further notice, due to the uncertainty in the global
economy. The Covid-19 crisis has created mixed market conditions
for the Group's products.
The Oulu Mill conversion from coated fine paper to kraftliner
packaging material is planned to be completed during Q4 within
budget. The packaging production is expected to start around the
New Year. This conversion is estimated to have EUR 30-40 million negative impact on the
Packaging Materials Q4/2020 operational EBIT. The mill is planned
to reach designed capacity by the end of Q2/2021 and
commercialisation of product portfolio by the end of 2021.
Paper production at the Oulu Mill stopped during Q3/2020. Paper
division is planning to complete the sale of the mill's coated fine
paper inventories during Q4/2020. Therefore, Oulu Mill is still
expected to have a EUR 5-10 million
negative impact on the Paper division Q4/2020 operational EBIT.
During Q4/2020 there will be annual maintenance shutdowns at seven
mills. The total negative impact of maintenance is estimated to be
EUR 10 million less compared to
Q3/2020 and EUR 15 million less
compared to Q4/2019.
Key figures
EUR
million
|
Q3/20
|
Q3/19
|
Change %
Q3/20-Q3/19
|
Q2/20
|
Change %
Q3/20-Q2/20
|
Q1-Q3/20
|
Q1-Q3/19
|
Change %
Q1-Q3/20-Q1-Q3/19
|
2019
|
Sales
|
2 079
|
2 402
|
-13.5%
|
2 114
|
-1.7%
|
6 400
|
7 644
|
-16.3%
|
10 055
|
Operational
EBITDA
|
330
|
397
|
-17.0%
|
332
|
-0.7%
|
997
|
1 337
|
-25.4%
|
1 614
|
Operational
EBIT
|
175
|
245
|
-28.6%
|
178
|
-1.5%
|
532
|
879
|
-39.4%
|
1 003
|
Operational EBIT
margin
|
8.4%
|
10.2%
|
|
8.4%
|
|
8.3%
|
11.5%
|
|
10.0%
|
Operating profit
(IFRS)
|
145
|
170
|
-14.6%
|
226
|
-35.6%
|
633
|
624
|
1.3%
|
1 305
|
Profit before tax
excl. IAC and FV
|
144
|
191
|
-24.3%
|
142
|
1.7%
|
413
|
745
|
-44.6%
|
835
|
Profit before tax
(IFRS)
|
115
|
115
|
-0.7%
|
190
|
-39.6%
|
513
|
490
|
4.6%
|
1 137
|
Net profit for the
period (IFRS)
|
86
|
59
|
46.9%
|
144
|
-40.1%
|
380
|
336
|
12.9%
|
856
|
Net interest-bearing
liabilities
|
3 008
|
3 745
|
-19.7%
|
3 289
|
-8.5%
|
3 008
|
3 745
|
-19.7%
|
3 209
|
Operational ROCE,
%
|
6.7%
|
9.2%
|
|
6.8%
|
|
6.8%
|
12.1%
|
|
10.3%
|
Earnings per share
(EPS) excl. IAC and FV, EUR
|
0.14
|
0.18
|
-19.3%
|
0.14
|
2.2%
|
0.40
|
0.77
|
-47.5%
|
0.84
|
EPS (basic),
EUR
|
0.11
|
0.09
|
26.1%
|
0.19
|
-40.3%
|
0.49
|
0.46
|
7.2%
|
1.12
|
Net debt/last 12
months' operational EBITDA ratio
|
2.4
|
2.1
|
|
2.5
|
|
2.4
|
2.1
|
|
2.0
|
Average number of
employees
|
24 428
|
26 414
|
-7.5%
|
25 077
|
-2.6%
|
24 817
|
26 347
|
-5.8%
|
26 096
|
Stora Enso's President and CEO Annica
Bresky comments on the third quarter 2020 results:
"We have delivered a solid result for the quarter and I am
satisfied with our performance, considering the unprecedented
uncertainty and volatility on markets around the world.
Although we report a decreased operational EBIT of EUR 175
million compared to last year, excluding Paper, operational EBIT
remained at the same level due to strong results in the Packaging
Materials, Wood Products and Forest divisions. The pandemic's
biggest effect continues to be on our Paper business. I was very
glad to see a return to positive cash flow for the quarter. The
market also remains challenging for Biomaterials, with low pricing.
On a positive note, excluding Paper, our operational EBIT margin
increased to 11.8%, a sign of the resilience of our growth
businesses and good cost management.
We have been successful in our focus on working capital and we
delivered a good cash flow amounting to close to EUR 400 million. We continue to stay focused on
what we can influence through these challenging times: ensuring the
health of our employees, serving and supporting our customers,
running our operations as efficiently as possible, securing our
financial resilience and building our future businesses through our
innovation agenda. We want to be in a strong position when the tide
turns.
I am satisfied that our major maintenance stops during the quarter
have been well managed. We continue our normal safety work and our
performance has improved compared to last year, even if we are not
yet reaching our target level. Since we have several maintenance
shutdowns planned for the last quarter of the year, we will
continue our diligent work together with our partners and
suppliers, with the target to protect our people, contractors and
the local communities from Covid-19 outbreaks.
We have decided to start using a valuation method for our forest
assets in the Nordics based on market transaction data and change
the accounting policy from the fourth quarter of 2020 onwards. This
method provides a more transparent, and less subjective valuation
basis of the total value of the forest assets. Preliminary
estimations indicate that the value of our forest assets is
expected to be between EUR 6.5
billion and EUR 7.0 billion,
compared with the end of Q3/2020 book value of EUR 5.4 billion.
Regarding our transformation projects, our proactive Oulu Mill
conversion to packaging board proceeds according to plan and
production will begin around New Year. On the note of the
structural decline in paper, it was with regret that we announced
the plans to shut down one paper machine at Hylte Mill in
Sweden. Closures are always tough
decisions impacting many people, but through this action we ensure
the competitiveness of the mill. Stora Enso is committed to support
the employees who will be affected by the closure. And at the same
time, we have started the production of formed fiber food service
products in Hylte. PureFiberTM by Stora Enso is an
eco-product range produced without e.g. plastic. We have a positive
momentum and see strong demand for these products.
To further strengthen our position as a global provider of
high-quality engineered wooden elements, we invest close to
EUR 80 million in a new production
line for cross laminated timber in the Czech Republic. It further improves our
capabilities to offer a high-quality range of building solutions
for customers around the world. It also supports our market leading
position in CLT.
As additional steps in our innovation agenda, we invest around
EUR 10 million in dispersion barrier
technology in Sweden. This enables
the development and production of paperboard with sustainable
barrier properties that are easier to recycle, have a lower carbon
footprint and can be compostable. Moreover, we will build a pilot
facility for producing biofoam, a lightweight, fiber-based foam
material for protective packaging and cushioning. It replaces the
widely used oil-based polymer foams in packaging. With these
investments, we help our customers and consumers become more
eco-friendly while creating value in the circular bioeconomy.
Unfortunately, in the short-term outlook, we can see the pandemic
increasing and once again creating uncertainty in the pace and
strength of the global financial recovery. I am convinced that the
poor visibility of the market conditions will continue. In this
environment, we don't give guidance, but it is fair to say that the
outlook for our businesses remains mixed. Therefore, when I look at
our resilience going forward, I am pleased that our liquidity is
secured, and our profit protection programme is moving ahead with
speed. We have also identified additional savings opportunities and
will increase the saving target further to EUR 400 million.
The winners as I see it, will be companies that have long-term
sustainable businesses, from environmental, social and financial
perspective; that stay close to their customers and innovate based
on the consumer future needs; that can manage volatility and are
agile in adapting to this changed reality. This is Stora Enso's
competitive edge.
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 CEST, 13.00 UK time, 08.00
EDT). 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/ex8fdjfo.
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 conference call
Live event at
15.00 EEST
|
UK
|
+44 (0) 2071 928
338
|
Finland
|
+358 (0) 923 113
291
|
Sweden
|
+46 (0) 856 618
467
|
USA
|
+1 6467 413
167
|
Confirmation
Code:
|
9182064
|
Replay Dial-In
#:
|
|
UK/International
|
+44 (0)3333 009
785
|
Access
Code:
|
9182064
|
The conference call replay will be available until Tuesday
27 October 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-September 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-september-2020,c3218705
The following files are available for download:
https://mb.cision.com/Public/13589/3218705/9bc1e722d7fc7d87.pdf
|
STORAENSO RESULTS
Q320 ENG
|