#Finland #Helsinki #Stora Enso #Consumer Board #Junnikkala

Stora Enso's Q3 2025 Interim Report: Progress in a Volatile Market

In its latest interim report covering January to September 2025, Stora Enso has showcased its resilience by achieving a sales growth of 1%, reaching EUR 2,283 million despite a complex market landscape. This growth was largely attributed to the acquisition of Junnikkala and the gradual ramp-up of a new consumer board production line in Oulu, Finland.

Financial Highlights

Over the third quarter of 2025, the adjusted earnings before interest and taxes (EBIT) saw a notable decline of 28%, dropping to EUR 126 million. This decrease was mainly influenced by the start-up costs associated with the new production line, which negatively impacted profits by an estimated EUR 45 million. However, the overall operating results improved significantly, increasing to EUR 231 million from EUR 139 million in the previous year.

Earnings per share showcased a promising rise, moving from EUR 0.11 to EUR 0.25 year-on-year, a sign of improved profitability after adjustments. Cash flow from operations stood at EUR 223 million, reflecting a decrease due to lower overall profits. Remarkably, Stora Enso's net debt to adjusted EBITDA ratio improved from 3.1 to 2.7, indicating a healthier financial position.

Strategic Moves and Future Focus

A significant strategic decision was the divestment of 175,000 hectares of forest land located in Sweden, which formed about 12.4% of its Swedish forest assets. This sale, valued at roughly EUR 900 million, not only bolsters the company’s balance sheet but also aids in funding future projects. Stora Enso is simultaneously evaluating the remaining forest assets, considering opportunities for growth via a potential public listing.

Looking ahead, the company’s focus remains sharply on enhancing profitability. Stora Enso plans to undertake systematic improvements to operational efficiency, with a leaner organizational structure that emphasizes renewable packaging as its primary business area. This shift is expected to enhance both customer-centricity and operational efficiency.

The ongoing ramp-up of the consumer board line at the Oulu facility is projected to reach full capacity by 2027. While the delays in ramping up operations may exert negative pressure on current profitability, the company is determined to reach breakeven on EBITDA by year-end.

Market Outlook

Despite these internal improvements, the external market landscape presents continued challenges. Low consumer confidence and economic uncertainties are likely to sustain subdued market demand. Stora Enso's exposure to the U.S. market remains minimal, with domestic sales only comprising 3% of overall revenue.

The demand for pulp and wood products remains lackluster, leading to weakening order inflow particularly in the packaging sector. Price pressures continue as supply exceeds demand in many areas of the market.

Nonetheless, the company maintains a forward-looking perspective, having laid down a comprehensive strategy to navigate the current obstacles. As Stora Enso transitions into a more integrated model across its Nordic packaging board mills, the company is well-poised to leverage their significant investment in renewable resources for sustainable growth going forward.

Conclusion

As Stora Enso continues to roll out its ambitious strategies amid fluctuating market conditions, the recent quarterly report illustrates both the challenges and opportunities ahead. The commitment to improve operational efficiency, alongside proactive management of forest assets, underlines Stora Enso's resolve in fostering a resilient, forward-thinking enterprise. Stakeholders will be closely monitoring future developments as the company adapts to its evolving landscape, ensuring it remains a leader in the renewable packaging market.