STORA ENSO OYJ HALF-YEAR FINANCIAL REPORT
Strong execution underpins outstanding performance
Q2/2022 (year-on-year)
- Sales increased by 18% to
EUR 3,054 (2,592) million. -
Operational EBIT increased by 39% to
EUR 505 (364) million. - Operational EBIT margin increased to 16.5% (14.0%).
-
Operating profit (IFRS) increased to
EUR 399 (182) million. -
EPS was
EUR 0.38 (0.26) and EPS excl. fair valuations (FV) wasEUR 0.42 (0.27). -
Cash flow from operations amounted to
EUR 404 (463) million. Cash flow after investing activities wasEUR 247 (339) million. - The net debt to operational EBITDA ratio improved to 1.0 (1.8). The target is to keep the ratio below 2.0.
- Operational ROCE excluding the Forest division increased to 22.8% (18.1%), the target being >13%.
Q1-Q2/2022 (year-on-year)
- Sales were
EUR 5,852 (4,868) million. -
Operational EBIT was
EUR 1,008 (692) million.
Key highlights
- A feasibility study was launched at the Langerbrugge site in
Belgium for the conversion of one of the two paper lines into a high-volume recycled containerboard line. -
A feasibility study for the conversion of an idle paper machine at the Oulu site,
Finland is ongoing to explore expansion in renewable packaging board with an additional capacity of 750,000 tonnes. Stora Enso and Northvolt, the battery cells and systems supplier, have entered into a Joint Development Agreement to create a battery with wood-based components sourced sustainably and locally in the Nordic countries.Stora Enso 's three packaging sites inRussia were divested to local management. The divestment of the Group's two sawmills inRussia to local management has been completed. Minor formalities for the Russian legal entities in the wood supply operations, are expected to be completed during H2/2022. After the completion of these divestments,Stora Enso will no longer have any exposure toRussia .- The sales process is ongoing to divest four out of five paper production sites to focus on growth in the key strategic areas: renewable packaging, building solutions and biomaterials innovations.
Outlook
Global megatrends such as an increased awareness of sustainability, an accelerated focus on combatting climate change, and digitalisation underpin
There is sustained solid demand for
Guidance
On 13 June,
Key figures
EUR million | Q2/22 | Q2/21 | Change % Q2/22-Q2/21 | Q1/22 | Change % Q2/22-Q1/22 | Q1-Q2/22 | Q1-Q2/21 | Change%Q1-Q2/22-Q1-Q2/21 | 2021 |
Sales | 3,054 | 2,592 | 17.8% | 2,798 | 9.2% | 5,852 | 4,868 | 20.2% | 10,164 |
Operational EBITDA | 663 | 524 | 26.6% | 662 | 0.1% | 1,325 | 1,011 | 31.0% | 2,184 |
Operational EBIT | 505 | 364 | 38.9% | 503 | 0.5% | 1,008 | 692 | 45.7% | 1,528 |
Operational EBIT margin | 16.5% | 14.0% |
| 18.0% |
| 17.2% | 14.2% |
| 15.0% |
Operating profit (IFRS) | 399 | 182 | 119.6% | 394 | 1.5% | 793 | 343 | 131.2% | 1,568 |
Profit before tax (IFRS) | 370 | 152 | 144.0% | 374 | -1.1% | 745 | 277 | 168.7% | 1,419 |
Net profit for the period (IFRS) | 299 | 207 | 44.1% | 287 | 4.2% | 586 | 353 | 66.0% | 1,268 |
Net interest-bearing liabilities | 2,434 | 2,975 | -18.2% | 2,593 | -6.2% | 2,434 | 2,975 | -18.2% | 2,309 |
Operational ROCE excl. Forest division, % | 22.8% | 18.1% |
| 23.6% |
| 23.2% | 15.2% |
| 17.8% |
Earnings per share (EPS) excl. FV, EUR | 0.42 | 0.27 | 55.4% | 0.35 | 22.9% | 0.77 | 0.50 | 55.2% | 1.19 |
EPS (basic), EUR | 0.38 | 0.26 | 47.0% | 0.37 | 4.8% | 0.75 | 0.44 | 69.3% | 1.61 |
Net debt/last 12 months' operational EBITDA ratio | 1.0 | 1.8 |
| 1.1 |
| 1.0 | 1.8 |
| 1.1 |
Average number of employees | 22,327 | 23,509 | -5.0% | 22,211 | 0.5% | 22,248 | 23,293 | -4.5% | 23,071 |
"I am happy to report that our very strong start of the year continued in the second quarter, despite persisting macroeconomic and geopolitical turmoil. We once again demonstrate the agility and commitment of our organisation, our differentiated customer and product portfolio, and the power of the synergies across the breadth of the business. Our commitment to leverage the potential of our renewable materials and solutions has never been stronger.
We continue to grow by 21% excluding Paper year-on-year in our core businesses with margins and returns well above our long-term targets. During the quarter, the demand has been robust for our main segments but logistical challenges with low long haul vessel reliability and poor container availability has had an impact on our ability to fully serve our customers. We have high self-sufficiency in energy and wood supply which has supported and allowed us to secure our key raw materials and energy needs. Our pricing power allows us to mitigate inflationary pressures and our key priorities remain; to support our customers through inventory management and handling continued supply chain and logistical disruptions.
The humanitarian crisis in
We managed to achieve the highest quarterly result since the early 2000s, with an operational EBIT of
In June, we raised our full year guidance to be higher than our record year 2021 results.
In Wood Products, we have passed the demand peak from historically high levels for traditional sawn products. The construction market is slowing down due to elevated inflation and availability of other building components. However, our
Renewable packaging is one of our growth areas where we prioritise conversions of existing assets and incremental improvements of environmental performance, production efficiency and quality. In line with this, we initiated a feasibility study in our retained paper site in
We are constantly broadening our partnerships and collaborations in the value chain of wooden-based solutions for efficient and low-carbon construction. The French market is the biggest in growth and opportunities, supported by ambitious governmental policies to promote wooden based construction. Latest examples of our progress are our 35% shareholding in a wood processing company and business partnership with an industrial group, both in
Lastly, to make a difference and a positive climate impact, we must constantly innovate and challenge ourselves, pushing the boundaries of "what a tree can do". In Biomaterials Innovations, I am therefore very pleased that we now have our first partnership in place, a joint development agreement with Northvolt, one of
Our decisions are guided by our purpose: to do what is right for people and the planet by replacing fossil-based materials with renewable ones. We will continue our efforts to help our customers become 100% climate positive and circular, creating value for all our stakeholders long-term. We are committed to build the right ecosystem of customers, partners and passionate people that will deliver sustainable and profitable growth.
The renewable future grows in the forest."
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This release is a summary of
For further information, please contact:
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tel. +46 72 241 0349
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Part of the global bioeconomy,
For further information, please contact:
Press officer
tel. +46 72 241 0349
Investor enquiries:
Anna-Lena Åström
SVP Investor Relations
tel. +46 70 210 7691
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