Helsinki, Finland, July 19, 2019 /PRNewswire/ -- HALF-YEAR FINANCIAL
REPORT 19 July 2019 at 9.30 EEST
Fit for the future, protecting profit and cash flow
Bergvik Skog transaction completed
Q2/2019 (compared with Q2/2018)
- Sales decreased by 2.1% to EUR 2 608 (2 664)
million.
- Operational EBIT margin was 11.0% (12.3%), above 10% for the
eighth consecutive quarter. Operational EBIT was EUR 287 (327) million.
- Operating profit (IFRS) was EUR
142 (317) million.
- EPS decreased to EUR 0.08 (0.28)
and EPS excl. IAC was EUR 0.22
(0.31).
- Strong cash flow from operations amounted to EUR 548 (357)
million.
- The net debt to operational EBITDA ratio at 2.2 (1.3) increased
temporarily slightly over the target level of 2.0, due to the
restructuring of Bergvik Skog (impact 0.6) and the adoption of IFRS
16 Leases (impact 0.3).
- Operational ROCE was 11.3% (15.5%)
Q1–Q2/2019 (year-on-year)
- Sales were EUR 5 242 (5 243) million, similar to the
comparison period.
- Operational EBIT of EUR 610
million decreased by 12.3%, mainly due to increased wood
costs.
Outlook for 2019
Further deteriorating trading conditions caused by geopolitical
uncertainties related to trade wars and a possible hard Brexit are
expected to impact Stora Enso negatively. Demand growth is forecast
to slow down for Stora Enso's businesses in general and demand
decline is escalating for European paper. Costs are forecast to
increase in 2019 compared to 2018. Stora Enso will implement
additional Profit Protection measures to mitigate these cost
increases and the geopolitical uncertainties. Due to the current
uncertainties in the business environment Stora Enso will not
comment on estimated sales development in the outlook.
Guidance for Q3/2019
Q3/2019 operational EBIT is expected to be in the range of EUR
200–280 million. During the third quarter, there will be annual
maintenance shutdown at the Beihai, Imatra, Heinola, Ostrołęka,
Enocell and Veitsiluoto mills. The total maintenance impact is
estimated to be on the same level as in Q3/2018 and EUR 30 million more than in Q2/2019.
Key figures
EUR
million
|
Q2/19
|
Q2/18
|
Change %
Q2/19–Q2/18
|
Q1/19
|
Change %
Q2/19–Q1/19
|
Q1–Q2/19
|
Q1–Q2/18
|
Change %
Q1-Q2/19–Q1-Q2/18
|
2018
|
Sales
|
2 608
|
2 664
|
-2.1%
|
2 635
|
-1.0%
|
5 242
|
5 243
|
0.0%
|
10 486
|
Operational
EBITDA
|
435
|
466
|
-6.6%
|
471
|
-7.6%
|
907
|
970
|
-6.5%
|
1 878
|
Operational
EBIT
|
287
|
327
|
-12.3%
|
324
|
-11.4%
|
610
|
696
|
-12.3%
|
1 325
|
Operational EBIT
margin
|
11.0%
|
12.3%
|
|
12.3%
|
|
11.6%
|
13.3%
|
|
12.6%
|
Operating profit
(IFRS)
|
142
|
317
|
-55.3%
|
313
|
-54.7%
|
454
|
672
|
-32.4%
|
1 390
|
Profit before tax
excl. IAC
|
214
|
285
|
-25.0%
|
286
|
-25.2%
|
499
|
618
|
-19.2%
|
1 190
|
Profit before tax
(IFRS)
|
93
|
257
|
-63.8%
|
282
|
-66.9%
|
375
|
590
|
-36.5%
|
1 210
|
Net profit for the
period (IFRS)
|
52
|
213
|
-75.6%
|
226
|
-76.9%
|
278
|
486
|
-42.9%
|
988
|
Net interest-bearing
liabilities
|
3 973
|
2 442
|
62.7%
|
3 093
|
28.4%
|
3 973
|
2 442
|
62.7%
|
2 092
|
Operational
ROCE
|
11.3%
|
15.5%
|
|
14.0%
|
|
12.5%
|
16.5%
|
|
15.5%
|
Earnings per share
(EPS) excl. IAC, EUR
|
0.22
|
0.31
|
-27.5%
|
0.30
|
-25.8%
|
0.52
|
0.66
|
-21.7%
|
1.29
|
EPS (basic),
EUR
|
0.08
|
0.28
|
-73.2%
|
0.29
|
-74.5%
|
0.37
|
0.63
|
-41.2%
|
1.28
|
Net debt/last 12
months' operational EBITDA ratio
|
2.2
|
1.3
|
|
1.7
|
|
2.2
|
1.3
|
|
1.1
|
Average number of
employees
|
26 553
|
26 155
|
1.5%
|
26 036
|
2.0%
|
26 352
|
25 798
|
2.1%
|
26 067
|
Stora Enso's CEO Karl-Henrik Sundström comments on the second
quarter 2019 results:
"We continued our transformation with two major steps during the
quarter. Firstly, we finalised restructuring of our Swedish forest
holdings by dividing Bergvik Skog with its shareholders. Currently
we have a direct holding of 1.4 million hectares of forest in
Sweden. This transaction increased
our forestland holding by over 250 000 hectares and gives us
better access to competitive raw material supply for the future.
The direct ownership of forestlands improves our opportunities to
further develop sustainable forest management, thus strengthening
our competitiveness and self-sufficiency. This is important for us,
as we strongly believe in the bioeconomy and the future business
opportunities it offers to us. The average value per hectare in our
balance sheet is 2 000 euros in
Sweden. In the restructuring of
Bergvik Skog AB, we decided to increase our part of the Swedish
forest holdings, while one of the other major owners recently
decided to sell with the price of 3 700
euros per hectare. Further, using the price statistics from
LRF Konsult for smaller lots, the price per hectare has been 5
700 euros.
The second major step in the transformation was our announcement
of converting Oulu paper mill to kraftliner packaging board
production. This is another action that shows our determination to
grow in the packaging sector and reduce our exposure in the
declining paper business. We have quite recently completed a
similar project successfully when we converted one paper machine at
Varkaus Mill to kraftliner. We have a proven track record in
machine conversions.
We reached double-digit operational EBIT margin for the eighth
consecutive quarter, despite the further geopolitical uncertainty
that impacted Stora Enso's trading conditions. This materialised in
a sales decline, and we have decided to intensify our profit
protection measures. We increased the profit protection programme's
target from EUR 120 million to
EUR 200 million. I am impressed by
the actions we have taken throughout the organisation. The
programme is proceeding ahead of plan, and EUR 60 million of the cost savings have already
been achieved.
Our cash flow from operations was strong at EUR 548 million
and we will continue on this path. We have intensified working
capital management, addressing inventories is important in this
economic environment. The focus on profit protection and cash
generation is an opportunity to make us more fit for the
future.
The Consumer Board division improved its profitability
year-on-year mainly due to successful selling price increases. The
other divisions were clearly impacted by deteriorated trading
conditions and they are addressing costs vigorously. The
Biomaterials and Wood Products divisions were able to reach their
strategic operating capital targets during the quarter. This was an
especially great achievement as Stora Enso is facing challenging
markets.
We continue our proactive portfolio management and evaluate
expansion in Wood Products to respond to the renewable materials
construction demand in line with the global megatrend of green
building. Stora Enso has initiated a feasibility study for a
possible cross laminated timber (CLT) unit with 120 000 m³ capacity
in connection with our Ždírec sawmill in the Czech Republic and a new 60 000 m³
construction beam mill located at the Ybbs sawmill in Austria.
We are also investing in bio-based carbon materials for energy
storage in Biomaterials division at Sunila Mill in Finland. We are building a pilot facility for
producing bio-based carbon materials based on lignin. Wood-based
carbon can be utilised as a crucial component in batteries
typically used in consumer electronics, the automotive industry and
large-scale energy storage systems.
In Consumer Board we introduced DuraSense White and Cupforma
Natura Solo. DuraSense is a biocomposite with a lower carbon
footprint suitable for replacing plastic packaging components as
such caps, lids and other types of food contact closures. Cupforma
Natura Solo is a new renewable paperboard for paper cups. It is
applicable for hot and cold drinking cups, as well as for ice cream
packaging. It is produced without a traditional plastic coating
layer and designed for full fibre recovery in a recycling process.
These are two good examples of replacing fossil-based materials
with renewable ones in the bioeconomy.
As regards sustainability, Stora Enso was featured as a world
leader in societal impact in a report by BCG (Boston Consulting
Group).
As always, I would like to thank our customers for their
business, our employees for their dedication, and our investors for
their trust."
Events today
1) Webcast and press conference in Helsinki at 11.00 EEST
The webcast and press conference for media will take place at
11.00 EEST (10.00 CEST, 09.00 UK time, 04.00 EDT) at Stora Enso's
Head Office, Kanavaranta 1, Helsinki. The event will be held in English
and it will be hosted by CEO Karl-Henrik Sundström, CFO
Seppo Parvi, and SVP, Communications
Satu Härkönen. The webcast may be accessed at
https://storaenso.videosync.fi/2019-q2-results
2) Webcast and conference call for analysts and investors at
14.00 EEST
The webcast and conference call for analysts and investors will
take place at 14.00 EEST (13.00 CEST, 12.00 UK time, 07.00 EDT). It
will be hosted by CEO Karl-Henrik Sundström, CFO Seppo Parvi, and SVP, Head of Investor
Relations Ulla Paajanen, and may
be accessed at https://edge.media-server.com/m6/p/ueyp9oce.
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.
Live event at
14.00 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:
|
6959688
|
The links to the webcasts are also available on the Stora Enso
website:
storaenso.com/investors
.
This release is a summary of Stora Enso's Half-year Report
January–June 2019. The complete report is attached to this release
as a pdf file. It is also available on the company website at
storaenso.com/investors.
For further information, please contact:
Satu Härkönen
SVP, Communications
tel. +358-40-832-7458
Investor enquiries:
Ulla Paajanen
SVP, Investor Relations
tel. +358-40-763-8767
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 26 000 employees in over 30 countries. Our
sales in 2018 were EUR 10.5 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
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STORAENSO RESULTS
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Stora Enso
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