#Finland #Helsinki #Stora Enso #forest assets #Oulu production

Stora Enso Q1 2026 Interim Report: Focus on Performance

Stora Enso Oyj's Interim Report for the first quarter of 2026 reveals a consistent sales performance at EUR 2,358 million, compared to EUR 2,362 million for the same period in 2025. This stability comes despite facing pressures from fluctuating foreign exchange rates and ongoing geopolitical challenges. The company's strategic response to these issues is gathering momentum, emphasizing operational excellence and market adaptability.

Financial Overview

In the financial summary, the company's adjusted EBIT saw a decline of 9%, dropping to EUR 159 million from EUR 175 million year-on-year. This decrease reflects improvements in wood cost management but was offset by adverse net foreign exchange impacts and an ongoing ramp-up of the new consumer board line at the Oulu site in Finland. The adjusted EBIT margin followed suit, reducing to 6.7% from 7.4% in the previous year.

The operating income, based on IFRS, significantly decreased to EUR 85 million from EUR 171 million, marking a notable decline in profitability alongside pressures from external factors like geopolitical tensions. Despite these challenges, earnings per share (EPS) fell to EUR 0.04 compared to EUR 0.14 in Q1 2025, illustrating the financial pressure on Stora Enso as it navigates through complex market dynamics.

Through these difficulties, cash flow from operations has also been impacted, reducing to EUR 125 million from EUR 192 million. However, cash flow after investing activities showed improvement, moving to EUR -22 million from EUR -47 million, which is mainly attributed to decreased investments in fixed assets.

Strategic Initiatives and Market Outlook

Stora Enso is actively progressing with its plans for the separation of its Swedish forest assets, anticipated to culminate in a newly listed company by the first half of 2027. This initiative, known as Bergslagets Skogar, is in line with the company's long-term strategy to enhance operational focus and resource efficiency. Furthermore, ongoing strategic assessments of their sawmills and building solutions operations are in progress, which reflects a proactive approach to market changes and operational efficiency.

The Oulu site continues to ramp up its consumer board production line, gradually increasing output as the company aims for full capacity by 2027. Although this expansion comes with immediate financial pressure, the long-term prospects remain promising, with confidence in achieving operational targets.

Looking ahead to Q2 2026, Stora Enso faces challenging market conditions, impacted by low consumer confidence and increased geopolitical volatility, particularly concerning the Middle East. These factors are anticipated to elevate costs associated with logistics, chemicals, and energy, which the company must navigate carefully.

Closing Remarks by Leadership

Hans Sohlström, Stora Enso's President and CEO, acknowledged the stable performance amid challenging conditions, highlighting the company's commitment to driving business results through operational and cost efficiencies. He noted the importance of managing geopolitical risks and the impact on operational costs while thanking employees for their relentless focus on performance.

The company retains its strategic priorities that include creating customer value through innovation and efficiency, aiming to outpace market growth while expanding margins and maintaining a strong cash generation capability. Stora Enso's leadership remains optimistic about future prospects, stressing the importance of focus and effectiveness in overcoming external pressures as they work towards building a more sustainable business model.

Stora Enso's services and commitment to replacing non-renewable materials with renewable solutions are central to its mission, and the continued emphasis on developing sustainable packaging materials aligns with its overarching goals of supporting a circular bioeconomy.