#Finland #Helsinki #Oulu #Stora Enso #Junnikkala

Stora Enso's Interim Report for January-September 2025

Stora Enso released its interim report for Q3 2025, showcasing its ability to navigate through challenging market conditions. Sales rose slightly by 1% compared to the previous year, reaching €2,283 million, largely attributed to the acquisition of Junnikkala and the ramp-up of consumer board production at the Oulu facility. However, despite this increase in sales, adjusted EBIT saw a 28% decrease due to costs associated with the new production line in Oulu, resulting in an adjusted EBIT margin of 5.5%.

Financial Performance Overview

The operating results for Q3 came in at €231 million, which includes significantly impactful items affecting comparability. For the first nine months of 2025, Stora Enso reported sales of €7,072 million, up from €6,727 million in 2024. The overall adjusted EBIT for this period decreased slightly to €427 million. The financial performance reflects both the persistent challenges in the market and the strategic decisions the company has made through divestments and acquisitions.

Earnings per share rose markedly to €0.25, a significant improvement from the previous year's €0.11, driven by effective cost management and strategic focus on core segments. Despite the difficulties faced, Stora Enso’s cash flow from operations was €223 million in Q3, indicating continued operational robustness amid the challenging landscape.

Strategic Developments

A critical component of the recent report is the completion of the divestment of approximately 175,000 hectares of forest land in Sweden, equivalent to 12.4% of its Swedish forest assets, generating an enterprise value of SEK 9.8 billion (€900 million). This strategic move is expected to enhance the company's financial flexibility and bolster its balance sheet.

Furthermore, the assessment of the remaining forest assets in Sweden is ongoing, with the potential for a public listing being explored. The Oulu site’s consumer board line ramp-up is another strategic focus, although it has come with short-term costs that impact profitability. Expectations are set for the line to reach full capacity by 2027, contributing significantly to future growth.

Environmental Commitment

In October, a collaboration between Stora Enso and the International Union for Conservation of Nature (IUCN) was announced to enhance the focus on biodiversity through a new framework aimed at promoting nature-positive forestry practices. This initiative underscores Stora Enso's commitment to sustainable practices and its role as a leader in renewable products.

Future Outlook

Looking ahead to the rest of 2025, Stora Enso anticipates that the market will remain challenging, primarily due to low consumer confidence and broader geopolitical uncertainties. The impact of U.S. tariffs has been limited, yet their indirect implications are closely monitored as they influence market conditions. The company aims to continue ramping up production efficiencies and improve profitability through its planned strategic initiatives across all business segments.

The forecasted EBIT impact for Q4 is projected to be more severe than initially expected due to the ongoing situation at the Oulu site, with estimates suggesting a negative EBIT impact ranging from €15-35 million. Despite these challenges, Stora Enso is committed to enhancing its operational efficiency and cash flow, focusing on fortifying its core renewable packaging business.

Conclusion

In summary, despite navigating through a challenging market phase, Stora Enso demonstrates resilience through strategic initiatives aimed at enhancing profitability and sustainability. The company’s focus on operational excellence and commitment to renewable products poise it well for the future, as it lays the groundwork for a stronger competitive position in the global market.