Annual Report • Feb 1, 2024
Annual Report
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Q4
Focus on profit improvement, competitiveness, and cash flow
| Summary | 2 |
|---|---|
| CEO comment | 5 |
| Events | 6 |
| Results | 6 |
| Divisions | 9 |
| Capital structure | 14 |
| Cash flow | 15 |
| Capital expenditure | 15 |
| Sustainability | 16 |
| Short-term risks | 18 |
| Sensitivity analysis | 18 |
| Legal proceedings | 19 |
| Changes in management | 19 |
| AGM 2024 | 20 |
| Dividend proposal | 20 |
| Financials | 21 |
| IFRS section | 21 |
| Alternative performance measures | 32 |
| Contacts | 39 |
President and CEO Hans Sohlström:
"We have faced unprecedented market conditions and focus our efforts on what we can control to improve our competitiveness and prepare for an uncertain future."
Forest valuation The fair value of Stora Enso's forest assets increased by EUR 393 million to EUR 8.7 billion, due to higher market transaction prices for the Group's own forest assets in Sweden and for Tornator in Finland.
Net-zero target Stora Enso committed to reaching net-zero CO2 emissions by 2040 through signing The Climate Pledge.
New profit improvement programme
Stora Enso has initiated a new profit improvement programme targeting annualised EUR 80 million improvement of the operational EBIT.
The Board of Directors will propose a dividend of EUR 0.10 (EUR 0.60) per share at the Annual General Meeting on 20 March 2024. In addition, the Board of Directors proposes that the AGM would authorise the Board of Directors to decide at its discretion on the payment of an additional dividend up to a maximum of EUR 0.20 per share.
Stora Enso's full year 2024 operational EBIT is expected to be higher than for the full year 2023, EUR 342 million.
Sales EUR 2,174 million (Q4/2022: 2,864)
Net debt to operational EBITDA (LTM) 3.2 (Q4/2022: 0.7)
Operational EBIT margin
2.3% (Q4/2022: 12.4%)
EPS (basic) EUR -0.36 (Q4/2022: 0.74)
Operational ROCE excl. the Forest division (LTM)
1.0% (Q4/2022: 20.4%)
Cash flow from operations EUR 323 million (Q4/2022: 429)
Stora Enso expects market conditions to remain uncertain in 2024, with ongoing pressure on demand, prices and margins. However, there are some positive signs such as increasing pulp prices, declining global pulp inventories, less customer destocking, and lower inflation and interest rates.
The first quarter is not expected to show a significant market improvement following a historical low fourth quarter in 2023 and a slow recovery. All variable costs continued to ease in the fourth quarter, except for wood, which are expected to follow similar trends also in the first quarter this year. The potential risk of logistical challenges from the Red Sea area could disrupt the flow of goods and increase costs.
The Packaging Materials and Wood Products divisions continue to suffer from low demand, prices and volume. Although demand for Wood Products remains stable, it is weak due to the ongoing continued slowdown in the construction industry. While there has been a slight improvement in demand for Wood Products from Europe, it is mostly driven by customer inventory build-up. Value chain destocking for Packaging Materials is coming to an end during the first half of 2024, which may support a slight recovery especially in the consumer board segment.
In Biomaterials, the pulp market is showing signs of stabilising and inventory levels are normalising. And while new capacity is ramping up in Latin America, downstream demand remains fragile. There are signs of improvement in Europe, while demand in China has weakened slightly due to oversupply and low season. Packaging grades demand is still struggling, while the tissue sector continues to perform solidly.
Packaging Solutions expects a stronger sequential demand in the first half of the year due to the greenhouse season. However, low demand leads to high price and margin pressure due to containerboard price reductions, inflationdriven fixed costs, and overcapacity. The Forest division expects no major changes in outlook from the previous quarter, with wood demand expected to start rising gradually.
During the second half of 2023, Stora Enso implemented significant restructuring measures to enhance its financial performance going forward. These included the closure of sites and production lines, the sale of assets, the adoption of a more decentralised operating model, and a reduction of employees by approximately 1,150. These actions are expected to improve the Group's cost competitiveness and streamline its organisation, leading to a stronger financial performance in the years to come.
Building on last year's cost-saving initiative, Stora Enso will further pursue profit turnaround and cash flow improvements to reduce costs and improve competitiveness. A new profit improvement programme targeting annualised EUR 80 million improvement of the operational EBIT has been initiated. This could lead to a potential reduction of approximately 1,000 employees.
| Q1/2024 market demand outlook quarter-on-quarter | |
|---|---|
| Packaging Materials | Demand for consumer board and containerboard expected to remain stable. Value chain destocking is coming to an end during the first half of 2024. |
| Packaging Solutions | Demand for corrugated packaging in Europe expected to be stronger mainly due to the seasonally high greenhouse season. |
| Biomaterials | Demand for pulp expected to be slightly stronger, improving European operating rates. Slightly weaker demand in China due to oversupply and low season. |
| Wood Products | Demand for sawn wood expected to be stable with some potential improvement due to increasing customer inventories. Weaker demand expected for building solutions. |
| Forest | Demand for pulpwood expected to be weaker, demand for pulpwood for energy use remains strong. Sawlog demand in Europe expected to be weaker, tight Swedish sawlog market continues. |
| Change | Change | Change | ||||||
|---|---|---|---|---|---|---|---|---|
| EUR million | Q4/23 | Q4/22 | % Q4/23– Q4/22 |
Q3/23 | % Q4/23– Q3/23 |
2023 | 2022 | % 2023– 2022 |
| Sales | 2,174 | 2,864 | -24.1 % | 2,127 | 2.2 % | 9,396 | 11,680 | -19.6 % |
| Operational EBITDA | 212 | 515 | -58.8 % | 180 | 17.9 % | 989 | 2,529 | -60.9 % |
| Operational EBITDA margin | 9.8 % | 18.0 % | 8.5 % | 10.5 % | 21.7 % | |||
| Operational EBIT | 51 | 355 | -85.8 % | 21 | 142.0 % | 342 | 1,891 | -81.9 % |
| Operational EBIT margin | 2.3 % | 12.4 % | 1.0 % | 3.6 % | 16.2 % | |||
| Operating result (IFRS) | -326 | 705 | -146.2 % | -1 | n/m | -322 | 2,009 | -116.0 % |
| Result before tax (IFRS) | -378 | 666 | -156.8 % | -41 | n/m | -495 | 1,858 | -126.7 % |
| Net result for the period (IFRS) | -325 | 584 | -155.7 % | -34 | n/m | -431 | 1,536 | -128.0 % |
| Cash flow from operations | 323 | 429 | -24.7 % | 231 | 39.8 % | 954 | 1,873 | -49.1 % |
| Cash flow after investing activities | -9 | 202 | -104.3 % | 38 | -123.0 % | -40 | 1,162 | -103.4 % |
| Capital expenditure | 422 | 368 | 14.6 % | 242 | 74.2 % | 1,125 | 778 | 44.6 % |
| Capital expenditure excluding investments in biological assets |
401 | 346 | 15.9 % | 227 | 76.8 % | 1,054 | 701 | 50.3 % |
| Depreciation and impairment charges excl. IAC |
133 | 130 | 2.4 % | 130 | 2.6 % | 534 | 527 | 1.2 % |
| Net debt | 3,167 | 1,853 | 70.9 % | 3,120 | 1.5 % | 3,167 | 1,853 | 70.9 % |
| Forest assets1 | 8,731 | 8,338 | 4.7 % | 8,256 | 5.8 % | 8,731 | 8,338 | 4.7 % |
| Operational return on capital employed (ROCE), LTM2 |
2.4% | 13.7% | 4.5% | 2.4% | 13.7% | |||
| Operational ROCE excl. Forest division, LTM2 |
1.0% | 20.4% | 4.7% | 1.0% | 20.4% | |||
| Earnings per share (EPS) excl. FV, EUR | -0.64 | 0.32 | n/m | -0.05 | n/m | -0.73 | 1.55 | -147.0 % |
| EPS (basic), EUR | -0.36 | 0.74 | -148.9 % | -0.04 | n/m | -0.45 | 1.97 | -123.0 % |
| Return on equity (ROE), LTM2 | -3.8% | 13.3% | 4.1% | -3.8% | 13.3% | |||
| Net debt/equity ratio | 0.29 | 0.15 | 0.28 | 0.29 | 0.15 | |||
| Net debt to LTM2 operational EBITDA ratio |
3.2 | 0.7 | 2.4 | 3.2 | 0.7 | |||
| Equity per share, EUR | 13.93 | 15.89 | -12.3 % | 14.03 | -0.7 % | 13.93 | 15.89 | -12.3 % |
| Average number of employees (FTE) | 20,047 | 21,004 | -4.6 % | 21,132 | -5.1 % | 20,822 | 21,790 | -4.4 % |
Operational key figures, items affecting comparability and other non-IFRS measures: A list of Stora Enso's non-IFRS measures, and the calculation and definitions of the key figures are presented in the section Alternative performance measures.
IAC = Items affecting comparability, FV = Fair valuations and non-operational items
1 Total forest assets value, including leased land, assets held for sale and Stora Enso's share of Tornator.
2 LTM = Last 12 months – change in the calculation method explained in the section Alternative performance measures.
| Change % Q4/23– |
Change % Q4/23– |
Change % | ||||||
|---|---|---|---|---|---|---|---|---|
| Q4/23 | Q4/22 | Q4/22 | Q3/23 | Q3/23 | 2023 | 2022 | 2023–2022 | |
| Board deliveries1 , 1,000 tonnes |
891 | 1,010 | -11.8 % | 971 | -8.3 % | 3,927 | 4,294 | -8.6 % |
| Board production1 , 1,000 tonnes |
954 | 1,094 | -12.8 % | 1,049 | -9.1 % | 4,185 | 4,682 | -10.6 % |
| Corrugated packaging European deliveries, million m2 |
279 | 166 | 68.7 % | 304 | -8.0 % | 1,167 | 741 | 57.5 % |
| Corrugated packaging European production, million m2 |
258 | 171 | 50.6 % | 273 | -5.6 % | 1,094 | 771 | 41.9 % |
| Market pulp deliveries, 1,000 tonnes | 550 | 632 | -13.0 % | 555 | -1.0 % | 2,220 | 2,374 | -6.5 % |
| Wood products deliveries, 1,000 m3 | 957 | 1,043 | -8.3 % | 863 | 10.8 % | 3,897 | 4,397 | -11.4 % |
| Wood deliveries, 1,000 m3 | 3,435 | 3,335 | 3.0 % | 3,003 | 14.4 % | 13,667 | 13,304 | 2.7 % |
| Paper deliveries, 1,000 tonnes | 173 | 396 | -56.3 % | 173 | 0.1 % | 761 | 1,924 | -60.5 % |
| Paper production, 1,000 tonnes | 170 | 407 | -58.3 % | 180 | -6.0 % | 752 | 1,926 | -60.9 % |
1 Includes consumer board and containerboard volumes. The comparative figures for corrugated packaging European deliveries Q3/2023 have been adjusted.
Expected and historical impact as lost value of sales and maintenance costs
| EUR million | Q1/20241 | Q4/20232 | Q3/2023 | Q2/2023 | Q1/2023 | Q4/2022 |
|---|---|---|---|---|---|---|
| Total maintenance impact | 73 | 123 | 110 | 146 | 119 | 180 |
1 Estimated
2 The estimate for Q4/2023 was EUR 120 million.
In a world being rapidly reshaped, we must adapt, streamline, and develop our business to meet the evolving needs of our customers. We have faced unprecedented market conditions and focus our efforts on what we can control to improve our competitiveness and prepare for an uncertain future.
Stora Enso's financial performance in the fourth quarter of last year was affected by continued market headwinds. This especially impacted our Packaging and Wood Products businesses. Group sales decreased year-on-year by 24% to 2.2 billion euro, with low demand leading to reduced deliveries and lower sales prices across all divisions, except for the Forest division. This resulted in an operational EBIT of 51 million euro, down from 355 million euro a year ago and with an operational EBIT margin decreasing to 2.3%, down from 12.4%. However, on a sequential basis, the operational EBIT improved with an increase of 30 million euro. The forest valuation increased to 8.7 from 8.3 billion euro which is equivalent to 11 euro per share.
Our Board is proposing a dividend distribution of 0.10 euro per share, to be paid in April. Additionally, it is proposed that the Board is authorised, at its discretion, to decide on a second instalment of up to 0.20 euro per share. The authorisation would be valid until 31 December 2024. This is lower than last year's dividend. We understand the significance of dividends to our shareholders and have worked to find a solution that aligns with the current circumstances.
Despite the challenging markets in 2023, I am proud that our teams have taken significant steps to drive competitiveness and improve our current unsatisfactory profitability. We have successfully completed a series of restructuring actions aimed at strengthening our positions in the market, which is expected to increase our operational EBIT by about 110 million euro annually. While this has been accompanied by a decrease in sales of approximately 250 million euro based on 2023 numbers, we believe that this is a necessary step to ensure long-term profitable growth. To achieve this, we have had to make some difficult decisions. We have reduced our workforce by about 1,150 employees. And after the new year, we have announced a plan to permanently close one of our production sites for corrugated board in Sweden due to weakened demand.
We have focused on the cash flow generation by reducing operating working capital and reviewing our capital expenditure priorities. A significant reduction was achieved towards the end of last year, reducing operating working capital by 650 million euro from the peak in the first quarter in 2023. Our liquidity remains strong at 2.5 billion euro in cash and cash equivalents. Cash flow from operations amounted to 323 million euro in the fourth quarter and 954 million euro for the full-year 2023.
To remain competitive and drive growth, Stora Enso will launch a profit improvement programme targeting an annualised 80 million euro improvement of our operational EBIT. This could lead to a potential reduction of approximately 1,000 employees. The employee reductions, efficiency improvements and synergy opportunities would impact all divisions and Group functions. The majority of these savings would materialise in 2025. This plan does not include new production site closures. While difficult, it is necessary for the Group's long-term success. We remain committed to ensuring Stora Enso remains a leader in our industry through our strategy to improve profitability and cash flow.
The long-term value growth of our forest assets and the potential to further monetise our land by developing renewable energy, underpins our future growth potential. Our recent agreement with OX2 on one joint wind power development project on our forest land in Sweden, is a step towards this. Our recent commitment to becoming net zero carbon positive by 2040 and offering 100% regenerative products and solutions by 2050 reflects our long-term ambition for sustainability.
Despite ongoing market volatility, we see some signs of normalisation and expect a higher operational EBIT in 2024 than in 2023, supported by our cost reduction and growth initiatives.
We continue our determined work to build a stronger, more competitive, better, and more valuable Stora Enso. Thank you for your continued support and collaboration.
Sincerely, Hans Sohlström President and CEO
The restructuring actions announced in June 2023 are completed. The De Hoop containerboard unit in the Netherlands and one paper machine in the Anjalankoski unit in Finland were permanently closed during the quarter.
The restructuring actions will improve Stora Enso's operational EBIT by approximately EUR 110 million annually. Annual sales will decrease by approximately EUR 250 million, based on the 2023 numbers. The number of employees was reduced by approximately 1,150.
Stora Enso plans to permanently close Packaging Solutions' corrugated board operations in Vikingstad at the end of November 2024. The planned closure would affect 56 employees. Demand for corrugated board in Sweden has decreased during the past two years, and Stora Enso believes that overcapacity needs to be reduced to remain competitive.
Stora Enso finalised the divestment of its biocomposite business to Hylte Paper AB, which also owns the paper production at Hylte. The biocomposite business was part of the segment Other.
The expansion of board production capacity, announced in 2021, at the Skoghall site in Sweden is completed. Following the investment, the annual packaging board production was increased by approximately 100,000 tonnes to over 900,000 tonnes. The site started to deliver liquid packaging board (LPB) and coated unbleached kraft (CUK) according to plan during the quarter.
Stora Enso and the Swedish renewable energy solutions company OX2 are jointly developing onshore wind power on Stora Enso's land in Sweden. The cooperation covers a potential of approximately 1,000 MW of onshore wind power, as well as the possibility of developing solar power and energy storage in the form of batteries. This partnership is in an early phase and is part of the ambition to start ramping up to 5–10 TWh of wind power production from 2030.
Stora Enso will launch a profit improvement programme targeting annualised EUR 80 million improvement of the operational EBIT. This could lead to a potential reduction of approximately 1,000 employees. The majority of savings would materialise in 2025 without production site closures. The reductions will reflect division sizes and are in response to the ongoing weak and uncertain market environment. The majority of the reductions are expected to occur in H1 2024. The initiative follows last year's restructuring programme, which identified overlaps and inefficiencies reflecting division sizes.
Sales MEUR 2,174
(Q4/2022: 2,864)
Operational EBIT margin
2.3% (Q4/2022:12.4%) Earnings per share EUR -0.36 (Q4/2022: 0.74)
Group sales decreased by 24%, or EUR 690 million, to EUR 2,174 (2,864) million. Sales prices were lower in all divisions, except Forest, despite the positive impact from active mix management. Lower demand decreased deliveries in all divisions. The sales contribution from the acquired De Jong Packaging Group was more than offset by the negative impact of other structural changes. These related to the paper site divestments at Nymölla and Hylte in Sweden, and Maxau in Germany, and the closures of the De Hoop board unit in the Netherlands, the Sunila pulp production site in Finland and the Näpi sawmill in Estonia.
Group operational EBIT decreased to EUR 51 (355) million, and the operational EBIT margin decreased to 2.3% (12.4%). Lower sales prices in all divisions except for Forest decreased profitability by EUR 287 million. Lower
volumes in all divisions reduced operational profitability by EUR 103 million. Apart from wood costs, many variable cost categories started to decline; however, costs still increased by EUR 43 million. Fixed costs decreased by EUR 112 million due to a lower maintenance impact and active cost management. Net foreign exchange rates had a positive EUR 12 million impact on operational EBIT. The impact from the structural changes, depreciations, associated companies and other was a positive EUR 5 million on operational EBIT.
Fair valuations and non-operational items (FV) had a positive net impact on the operating result of EUR 229 (381) million.
Items affecting comparability (IAC) had a negative impact of EUR 605 (31) million on the operating result. The main
IAC items are related to impairments in Packaging Materials and Biomaterials. More details of the items affecting comparability and fair valuation items are included in the sections for each division and in the section Items affecting comparability (IAC), fair valuations and nonoperational items (FV). Operating result (IFRS) was EUR -326 (705) million.
Net financial expenses of EUR 52 million were EUR 13 million higher than a year ago. Net interest expenses of EUR 30 million increased by EUR 9 million. Other net financial expenses increased to EUR 31 (9) million and include a EUR 11 million write-down of receivables related to the disposed Russian entities. The net foreign exchange impact in respect of cash equivalents, interest-bearing assets and liabilities, and related foreign-currency hedges amounted to a gain of EUR 9 (loss of EUR 9) million.
Earnings per share decreased to EUR -0.36 (0.74), and earnings per share excluding fair valuations were EUR -0.64 (0.32).
The operational return on capital employed LTM (ROCE) was 2.4% (13.7%). Operational ROCE excluding the Forest division LTM was 1.0% (20.4%).
LTM = Last 12 months, the calculation method is explained in the section Alternative performance measures.
| Sales Q4/2022, EUR million | 2,864 |
|---|---|
| Price and mix | -11 % |
| Currency | -1 % |
| Volume | -4 % |
| Other sales1 | -1 % |
| Total before structural changes | -17 % |
| Structural changes2 | -7 % |
| Total | -24 % |
| Sales Q4/2023, EUR million | 2,174 |
1 Energy, paper for recycling (PfR), by-products etc.
2 Asset closures, major investments, divestments and acquisitions
| Capital employed 31 December 2022, EUR million | 14,356 |
|---|---|
| Capital expenditure excl. investments in biological assets less depreciation |
521 |
| Investments in biological assets less depletion of capitalised silviculture costs |
-5 |
| Impairments and reversal of impairments | -770 |
| Fair valuation of forest assets | 241 |
| Unlisted securities (mainly PVO) | -627 |
| Associated companies | 94 |
| Net liabilities in defined benefit plans | -31 |
| Operative working capital and other interest-free items, net |
-344 |
| Emission rights | -85 |
| Net tax liabilities | 170 |
| Acquisition of subsidiaries | 818 |
| Disposal of subsidiaries | -227 |
| Translation difference | -60 |
| Other changes | 4 |
| Capital employed 31 December 2023 | 14,056 |
Group sales decreased by 20%, or EUR 2,284 million to EUR 9,396 (11,680) million, mainly due to weaker demand and lower deliveries in all divisions. Lower sales prices despite the positive impact from active mix management decreased topline in all other divisions except Forest. The sales contribution from the acquired De Jong Packaging Group was more than offset by the negative impact of other structural changes. These related to the paper site divestments at Nymölla and Hylte in Sweden and Maxau in Germany, and closures of the De Hoop board site in the Netherlands, the Sunila pulp mill in Finland and the Näpi sawmill in Estonia, as well as the exit from Russian operations.
Operational EBIT decreased to EUR 342 (1,891) million and the operational EBIT margin decreased to 3.6% (16.2%). Lower sales prices, in all other divisions except Forest, decreased profitability by EUR 742 million. Lower volumes decreased operational EBIT by EUR 441 million due to weaker market demand. Higher variable costs decreased operational EBIT by EUR 556 million, especially due to increased pulpwood costs.
Fixed costs were EUR 57 million lower, positively impacted by lower maintenance activity. Net foreign exchange rates increased profitability by EUR 119 million. The impact from the structural changes, depreciations, associated companies and other, was positive EUR 14 million on operational EBIT. Operating result (IFRS) was EUR -322 (2,009) million.
Fair valuations and nonoperational items (FV) had a positive net impact on the operating result of EUR 231 (363) million. Items affecting comparability (IAC) had a negative impact of EUR 895 (245) million on the operating result. The main IAC and FV items are presented in the section Items affecting comparability (IAC), fair valuations and non-operational items (FV).
3.6% (2022: 16.2%)
Group sales increased by 2%, or EUR 47 million, to EUR 2,174 (2,127) million. Higher sales prices, especially in Biomaterials and Forest increased the topline. Weaker demand and deliveries, especially in Packaging Materials, was offset by seasonally higher deliveries in Wood Products and Forest.
Operational EBIT increased to EUR 51 (21) million and the margin to 2.3% (1.0%). The sales prices increased operational EBIT by EUR 22 million, especially due to Biomaterials and Forest. Variable costs decreased by EUR 4 million as most input costs, apart from pulpwood, continued to support profitability.
Volumes had a negative EUR 6 million impact, mainly due to Packaging Materials. Net foreign exchange rates had a positive EUR 7 million impact on operational EBIT. Fixed costs were EUR 19 million lower supported by lower maintenance costs. The impact from structural changes, depreciations, associated companies and other was a negative EUR 18 million.
Operating result (IFRS) was EUR -326 (-1) million. More details of the items affecting comparability (IAC) and fair valuations (FV) are included in the sections for each division.
-1.6%
(Target: >20%)
| 2023 | 2024 | |
|---|---|---|
| Q1 | — | — |
| Q2 | Beihai, Ostrołęka, Langerbrugge | Beihai, Langerbrugge |
| Q3 | Anjalankoski, Heinola, Ostrołęka, Oulu, Varkaus |
Ostrołęka, Oulu, Varkaus, Heinola |
| Q4 | Fors, Imatra, Skoghall | Anjalankoski, Fors, Imatra, Skoghall |
• Operational ROOC (LTM) was -1.6% (18.6%), below the longterm target of >20%.
| Change % | Change % | |||||||
|---|---|---|---|---|---|---|---|---|
| EUR million | Q4/23 | Q4/22 | Q4/23– Q4/22 |
Q3/23 | Q4/23– Q3/23 |
2023 | 2022 | Change % 2023–2022 |
| Sales | 1,045 | 1,335 | -21.7 % 1,057 | -1.1 % 4,557 | 5,496 | -17.1 % | ||
| Operational EBITDA | 35 | 142 | -75.0 % | 46 | -23.4 % | 267 | 993 | -73.1 % |
| Operational EBITDA margin | 3.4 % | 10.6 % | 4.4 % | 5.9 % | 18.1 % | |||
| Operational EBIT | -43 | 59 | -172.4 % | -34 | -25.0 % | -57 | 655 | -108.8 % |
| Operational EBIT margin | -4.1 % | 4.4 % | -3.2 % | -1.3 % | 11.9 % | |||
| Fair valuations and non-operational items1 | 12 | 17 | -27.5 % | 0 | n/m | 12 | 7 | 75.3 % |
| Items affecting comparability (IAC)1 | -474 | -2 | n/m | -4 | n/m | -597 | -9 | n/m |
| Operating result (IFRS) | -504 | 74 | n/m | -38 | n/m | -642 | 653 | -198.3 % |
| Operational EBIT, LTM | -57 | 655 | -108.8 % | 44 | -229.3 % | -57 | 655 | -108.8 % |
| Operating capital, LTM average | 3,580 | 3,512 | 1.9 % 3,640 | -1.7 % 3,580 | 3,512 | 1.9 % | ||
| Operational ROOC, LTM | -1.6 % | 18.6 % | 1.2 % | -1.6 % | 18.6 % | |||
| Cash flow from operations | 155 | 168 | -7.7 % | 140 | 10.4 % | 370 | 823 | -55.1 % |
| Cash flow after investing activities | -59 | 61 | -196.9 % | 20 | n/m | -235 | 488 | -148.2 % |
| Board and paper deliveries, 1,000 tonnes | 1,176 | 1,273 | -7.6 % | 1,215 | -3.2 % | 4,963 | 5,425 | -8.5 % |
| Board and paper production, 1,000 tonnes | 1,124 | 1,286 | -12.6 % | 1,230 | -8.6 % | 4,843 | 5,502 | -12.0 % |
1 The IAC for Q4/23 included impairments of fixed assets of EUR -228 million for the Oulu containerboard unit, EUR -202 million for China operations, EUR -12 million for the Anjala site's paper assets, EUR -26 million of goodwill impairments related to the Anjala and De Hoop sites and EUR -6 million for other cases. The fair valuations for Q4/23 included non-operational fair valuation changes of biological assets of EUR 12 (17) million. LTM = Last 12 months Comparative figures have been restated as described in the release from 29 March 2023.
| Product | Market | Demand Q4/23 compared with Q4/22 |
Demand Q4/23 compared with Q3/23 |
Price Q4/23 compared with Q4/22 |
Price Q4/23 compared with Q3/23 |
|---|---|---|---|---|---|
| Consumer board | Europe | Significantly weaker | Weaker | Slightly lower | Slightly lower |
| Kraftliner | Global | Stable | Weaker | Significantly lower | Stable |
| Testliner | Europe | Stable | Slightly weaker | Significantly lower | Slightly lower |
| Paper | Europe | Slightly weaker | Stronger | Slightly lower | Slightly lower |
Source: Fastmarket RISI, Fastmarket FOEX, CEPI, Numera Analytics, Stora Enso. Consumer board prices include FBB only.
Sales, EUR million Operational EBIT, %
| Operational ROOC (LTM) 4.9% (Target: >15%) |
Sales YoY +40% |
Operational EBIT margin 2.3% (Q4/2022: 2.9%) |
||||
|---|---|---|---|---|---|---|
| • | Sales increased by 40% or EUR 70 million to EUR 247 million, driven by the acquisition of De Jong Packaging Group, i.e. Business Unit Western Europe. |
• | Operational ROOC (LTM) was 4.9%, below the long-term target of >15%. |
300 250 200 |
Sales and operational EBIT margin | 12% 10% 8% |
| • | Operational EBIT increased slightly to EUR 6 million. All geographical markets, except the seasonally driven fresh produce segment in Western |
150 100 50 0 |
Q1/23 Q1/22 Q2/22 Q2/23 Q3/23 Q3/22 Q4/22 |
6% 4% 2% 0% Q4/23 |
| Change % | Change % | |||||||
|---|---|---|---|---|---|---|---|---|
| EUR million | Q4/23 | Q4/22 | Q4/23– Q4/22 |
Q3/23 | Q4/23– Q3/23 |
2023 | 2022 | Change % 2023–2022 |
| Sales | 247 | 177 | 39.8 % | 266 | -7.1 % 1,077 | 727 | 48.2 % | |
| Operational EBITDA | 25 | 11 | 120.0 % | 31 | -21.0 % | 111 | 42 | 167.3 % |
| Operational EBITDA margin | 10.0 % | 6.3 % | 11.7 % | 10.3 % | 5.7 % | |||
| Operational EBIT | 6 | 5 | 11.3 % | 14 | -60.4 % | 43 | 16 | 164.8 % |
| Operational EBIT margin | 2.3 % | 2.9 % | 5.4 % | 4.0 % | 2.2 % | |||
| Items affecting comparability (IAC)1 | -1 | 0 | -17.8 % | 0 | -7.3 % | -26 | -98 | 73.3 % |
| Operating result (IFRS) | 5 | 5 | 10.7 % | 14 | -62.7 % | 17 | -81 | 120.9 % |
| Operational EBIT, LTM | 43 | 16 | 164.8 % | 42 | 1.4 % | 43 | 16 | 164.8 % |
| Operating capital, LTM average | 874 | 204 | n/m | 709 | 23.3 % | 874 | 204 | n/m |
| Operational ROOC, LTM | 4.9 % | 7.9 % | 6.0 % | 4.9 % | 7.9 % | |||
| Cash flow from operations | 47 | 17 | 178.8 % | 40 | 17.3 % | 145 | 11 | n/m |
| Cash flow after investing activities | 26 | 9 | 182.7 % | 21 | 26.8 % | 62 | -14 | n/m |
| Corrugated packaging European deliveries, million m2 |
278 | 170 | 63.8 % | 304 | -8.4 % | 1,178 | 767 | 53.7 % |
| Corrugated packaging European production, million m2 |
258 | 171 | 50.6 % | 273 | -5.6 % | 1,094 | 771 | 41.9 % |
1 The IAC for Q4/22 included EUR -2 million of fixed asset write downs and EUR 2 million item related to disposal of Russian operations. LTM = Last 12 months
Comparative figures have been restated as described in the release from 29 March 2023. The comparative figures for corrugated packaging European deliveries have been adjusted.
Europe, improved. Proactive cost mitigation actions supported the result development.
| Product | Market | Demand Q4/23 compared with Q4/22 |
Demand Q4/23 compared with Q3/23 |
Price Q4/23 compared with Q4/22 |
Price Q4/23 compared with Q3/23 |
|---|---|---|---|---|---|
| Corrugated packaging | Europe | Stable | Slightly stronger | Significantly lower | Slightly lower |
Source: Fastmarket RISI
4.5% (Target: >15%)
| 2023 | 2024 | |
|---|---|---|
| Q1 | Veracel | — |
| Q2 | Montes del Plata, Skutskär | Montes del Plata, Skutskär |
| Q3 | — | Enocell, Veracel |
| Q4 | Enocell | — |
| Change % |
Change % |
Change % |
||||||
|---|---|---|---|---|---|---|---|---|
| EUR million | Q4/23 | Q4/22 | Q4/23– Q4/22 |
Q3/23 | Q4/23– Q3/23 |
2023 | 2022 | 2023– 2022 |
| Sales | 375 | 649 | -42.3 % | 345 | 8.7 % | 1,587 | 2,180 | -27.2 % |
| Operational EBITDA | 70 | 284 | -75.5 % | 38 | 81.3 % | 256 | 822 | -68.9 % |
| Operational EBITDA margin | 18.6 % | 43.8 % | 11.1 % | 16.1 % | 37.7 % | |||
| Operational EBIT | 35 | 249 | -86.1 % | 5 | n/m | 118 | 687 | -82.8 % |
| Operational EBIT margin | 9.3 % | 38.4 % | 1.4 % | 7.4 % | 31.5 % | |||
| Fair valuations and non-operational items1 | 24 | -9 | n/m | -3 | n/m | 25 | -17 | 248.9 % |
| Items affecting comparability (IAC)1 | -105 | 0 | -100.0 % | -17 | n/m | -224 | -2 | n/m |
| Operating result (IFRS) | -46 | 240 | -119.3 % | -15 | -204.6 % | -81 | 668 | -112.1 % |
| Operational EBIT, LTM | 118 | 687 | -82.8 % | 333 | -64.5 % | 118 | 687 | -82.8 % |
| Operating capital, LTM average | 2,625 | 2,715 | -3.3 % | 2,716 | -3.4 % | 2,625 | 2,715 | -3.3 % |
| Operational ROOC, LTM | 4.5 % | 25.3 % | 12.2 % | 4.5 % | 25.3 % | |||
| Cash flow from operations | 71 | 213 | -66.7 % | 73 | -3.0 % | 431 | 682 | -36.7 % |
| Cash flow after investing activities | 26 | 168 | -84.5 % | 25 | 1.9 % | 234 | 536 | -56.4 % |
| Pulp deliveries, 1,000 tonnes | 567 | 693 | -18.2 % | 580 | -2.3 % | 2,277 | 2,554 | -10.8 % |
1The IAC for Q4/23 included impairments of fixed assets of EUR -59 million for the Enocell site, an impairment of goodwill of EUR -44 million for the Nordic Mills, and EUR -2 million for other cases. The fair valuations for Q4/23 included non-operational fair valuation changes of biological assets of EUR 24 (-9) million. LTM = Last 12 months
| Market | Demand Q4/23 compared with Q4/22 |
Demand Q4/23 compared with Q3/23 |
Price Q4/23 compared with Q4/22 |
Price Q4/23 compared with Q3/23 |
|---|---|---|---|---|
| Europe | Significantly weaker | Stable | Significantly lower | Slightly higher |
| Europe | Significantly weaker | Stable | Significantly lower | Higher |
| China | Significantly stronger | Stable | Significantly lower | Significantly higher |
Source: PPPC, Fastmarket FOEX, Fastmarket RISI, Stora Enso
| Operational ROOC (LTM) | Sales YoY | Operational EBIT margin |
|---|---|---|
| -9.3% | -28% | -7.8% |
| (Target: >20%) | (Q4/2022: -2.9%) |
| Change % |
Change % |
Change % |
||||||
|---|---|---|---|---|---|---|---|---|
| EUR million | Q4/23 | Q4/22 | Q4/23– Q4/22 |
Q3/23 | Q4/23– Q3/23 |
2023 | 2022 | 2023– 2022 |
| Sales | 341 | 471 | -27.7 % | 349 | -2.5 % 1,580 | 2,195 | -28.0 % | |
| Operational EBITDA | -15 | -1 | n/m | -10 | -55.6 % | -17 | 356 | -104.6 % |
| Operational EBITDA margin | -4.4 % | -0.1 % | -2.8 % | -1.0 % | 16.2 % | |||
| Operational EBIT | -27 | -14 | -94.7 % | -21 | -23.6 % | -64 | 309 | -120.8 % |
| Operational EBIT margin | -7.8 % | -2.9 % | -6.1 % | -4.1 % | 14.1 % | |||
| Items affecting comparability (IAC)1 | -13 | -6 | -112.6 % | -1 | n/m | -22 | -56 | 60.5 % |
| Operating result (IFRS) | -40 | -20 | -100.3 % | -22 | -79.5 % | -86 | 253 | -134.0 % |
| Operational EBIT, LTM | -64 | 309 | -120.8 % | -51 | -25.2 % | -64 | 309 | -120.8 % |
| Operating capital, LTM average | 687 | 714 | -3.8 % | 713 | -3.5 % | 687 | 714 | -3.8 % |
| Operational ROOC, LTM | -9.3 % | 43.2 % | -7.2 % | -9.3 % | 43.2 % | |||
| Cash flow from operations | 15 | 54 | -71.2 % | 38 | -58.9 % | 43 | 346 | -87.5 % |
| Cash flow after investing activities | -1 | 28 | -103.7 % | 31 | -103.3 % | 3 | 264 | -98.9 % |
| Wood products deliveries, 1,000 m3 | 915 | 999 | -8.5 % | 822 | 11.2 % | 3,727 | 4,235 | -12.0 % |
1The IAC for Q4/23 included impairments of fixed assets of EUR -7 million for the Veitsiluoto site, EUR -4 million for the Launkalne site, EUR -5 million for the Honkalahti site, a EUR 4 million impact from the disposal of the Näpi site and a EUR -3 million impact from other cases. TheIAC for Q4/22 were in total related to the disposal of the Russian operations.
LTM = Last 12 months
| Product | Market | Demand Q4/23 compared with Q4/22 |
Demand Q4/23 compared with Q3/23 |
Price Q4/23 compared with Q4/22 |
Price Q4/23 compared with Q3/23 |
|---|---|---|---|---|---|
| Wood products | Europe | Weaker | Stronger | Significantly lower | Lower |
| Wood products | Overseas | Slightly weaker | Significantly stronger | Significantly lower | Lower |
Source: Stora Enso
• Operational ROCE (LTM), at 4.4% (3.7%), was above the 3.5% longterm target.
Sales YoY -2%
• The fair value of Stora Enso's forest assets increased by EUR 393 million year-on-year to EUR 8.7 billion, due to higher market transaction prices for the Group's forest assets in Sweden and for Tornator in Finland.
(Q4/2022: EUR 8.3 billion)
| Change % |
Change % |
Change % |
||||||
|---|---|---|---|---|---|---|---|---|
| EUR million | Q4/23 | Q4/22 | Q4/23– Q4/22 |
Q3/23 | Q4/23– Q3/23 |
2023 | 2022 | 2023– 2022 |
| Sales1 | 650 | 664 | -2.1 % | 534 | 21.8 % | 2,490 | 2,519 | -1.2 % |
| Operational EBITDA | 90 | 79 | 13.6 % | 72 | 25.7 % | 305 | 256 | 18.8 % |
| Operational EBITDA margin | 13.9 % | 11.9 % | 13.4 % | 12.2 % | 10.2 % | |||
| Operational EBIT | 75 | 62 | 21.7 % | 59 | 27.2 % | 253 | 204 | 24.0 % |
| Operational EBIT margin | 11.6 % | 9.3 % | 11.1 % | 10.2 % | 8.1 % | |||
| Fair valuations and non-operational items2 | 221 | 401 | -44.9 % | -5 | n/m | 206 | 367 | -43.7 % |
| Items affecting comparability (IAC)2 | 4 | 1 | n/m | 3 | 30.7 % | 2 | -48 | 103.9 % |
| Operating result (IFRS) | 300 | 463 | -35.3 % | 57 | n/m | 461 | 523 | -11.7 % |
| Operational EBIT, LTM | 253 | 204 | 24.0 % | 240 | 5.6 % | 253 | 204 | 24.0 % |
| Capital employed, LTM average | 5,740 | 5,518 | 4.0 % | 5,620 | 2.1 % | 5,740 | 5,518 | 4.0 % |
| Operational ROCE, LTM | 4.4 % | 3.7 % | 4.3 % | 4.4 % | 3.7 % | |||
| Cash flow from operations | 54 | 20 | 169.7 % | -12 | n/m | 70 | 146 | -52.0 % |
| Cash flow after investing activities | 40 | -3 | n/m | -24 | 263.2 % | 19 | 91 | -78.6 % |
| Wood deliveries, 1,000 m3 | 7,848 | 9,136 | -14.1 % | 7,069 | 11.0 % | 32,401 | 38,217 | -15.2 % |
| Operational fair value change of biological assets |
34 | 22 | 58.0 % | 27 | 24.6 % | 120 | 87 | 38.5 % |
1 In Q4/2023, internal wood sales to Stora Enso's divisions represented 58% of net sales and external sales to other forest companies represented 42%.
2The IAC for Q4/23 included a reversal of land related impairment of EUR 4 million. The IAC for Q4/22 included a land related impairment of EUR -5 million and a EUR 6 million related to the disposal of Russian operations. The fair valuations for Q4/23 included non-operational fair valuation changes of biological assets of EUR 162 (261) million and non-operational items of associated companies of EUR 59 (142) million. The fair valuations in Q4/22 additionally included a EUR -3 million impact from adjustments for differences between the fair value and acquisition cost of forest assets upon disposal. LTM = Last 12 months
The segment Other includes the reporting of the emerging businesses (including Formed Fiber and Selfly Store), as well as Stora Enso's shareholding in the energy company Pohjolan Voima (PVO), and the Group's shared services and administration.
| Change % | Change % | |||||||
|---|---|---|---|---|---|---|---|---|
| EUR million | Q4/23 | Q4/22 | Q4/23– Q4/22 |
Q3/23 | Q4/23– Q3/23 |
2023 | 2022 | Change % 2023–2022 |
| Sales | 207 | 528 | -60.7 % | 179 | 16.0 % | 964 | 2,150 | -55.2 % |
| Operational EBITDA | 2 | 20 | -88.8 % | -11 | 120.4 % | 18 | 102 | -82.5 % |
| Operational EBITDA margin | 1.1 % | 3.8 % | -6.1 % | 1.9 % | 4.7 % | |||
| Operational EBIT | -1 | 14 | -110.0 % | -15 | 91.0 % | 1 | 63 | -98.8 % |
| Operational EBIT margin | -0.7 % | 2.6 % | -8.5 % | 0.1 % | 2.9 % | |||
| Fair valuations and non-operational items1 | -28 | -27 | -3.3 % | 12 | n/m | -13 | 6 | n/m |
| Items affecting comparability (IAC)1 | -16 | -23 | 30.5 % | -6 | -151.2 % | -28 | -33 | 14.4 % |
| Operating result (IFRS) | -46 | -37 | -23.7 % | -10 | n/m | -41 | 36 | -213.1 % |
| Cash flow from operations | -20 | -42 | 54.0 % | -47 | 58.9 % | -105 | -136 | 22.4 % |
| Cash flow after investing activities | -40 | -61 | 33.8 % | -35 | -14.8 % | -123 | -203 | 39.5 % |
1The IAC for Q4/23 included impairments of fixed assets of EUR -14 million for Group operations, EUR -4 million related to disposals of Kvarnsveden, Hylte and Biocomposite business, and EUR 2 million related to provision reversals. The IAC in Q4/22 included EUR -38 million related to impairments in former paper site Hylte, Nymolla and Maxau, EUR 19 million related the disposal of Kvarnsveden site, EUR -1 million related to provision increases and EUR -3 million related to other cases. The fair valuations for Q4/23 included non-cash income and expenses related to CO2 emission rights and liabilities of EUR -28 (-27) million. Comparative figures have been restated as described in the release from 29 March 2023.
| EUR million | 31 Dec 2023 | 30 Sep 2023 | 30 Jun 2023 | 31 Mar 2023 | 31 Dec 2022 |
|---|---|---|---|---|---|
| Operative fixed assets1 | 14,206 | 14,014 | 13,803 | 14,503 | 14,368 |
| Associated companies | 926 | 865 | 850 | 820 | 832 |
| Operative working capital, net | 488 | 752 | 893 | 949 | 862 |
| Non-current interest-free items, net | -252 | -184 | -198 | -211 | -255 |
| Operating Capital Total | 15,368 | 15,447 | 15,348 | 16,061 | 15,806 |
| Net tax liabilities | -1,312 | -1,321 | -1,309 | -1,488 | -1,451 |
| Capital Employed2 | 14,056 | 14,126 | 14,039 | 14,573 | 14,356 |
| Equity attributable to owners of the Parent | 10,985 | 11,067 | 11,066 | 11,688 | 12,532 |
| Non-controlling interests | -97 | -61 | -58 | -31 | -30 |
| Net debt | 3,167 | 3,120 | 3,030 | 2,917 | 1,853 |
| Financing Total2 | 14,056 | 14,126 | 14,039 | 14,573 | 14,356 |
1 Operative fixed assets include goodwill, other intangible assets, property, plant and equipment, right-of-use assets, forest assets, emission rights, and unlisted securities.
2 Including assets held for sale and related liabilities.
Cash and cash equivalents net of overdrafts increased by EUR 411 million to EUR 2,464 million.
Net debt increased by EUR 47 million to EUR 3,167 (3,120) million during the fourth quarter. The ratio of net debt to the last 12 months' operational EBITDA was at 3.2 (2.4). The net debt/equity ratio on 31 December 2023 increased to 0.29 (0.28). The average interest expense rate on borrowings at the reporting date was 4.0% (3.8%).
During the fourth quarter, Stora Enso issued SEK 6,525 million of new green bonds and private placements. The bonds feature several tranches, with maturities ranging from 2025 to 2033. In addition, the maturity of the revolving credit facility of EUR 700 million was extended by one year to 2028.
Stora Enso had in total EUR 800 million committed undrawn credit facilities as per 31 December 2023. Additionally, the Company has access to EUR 1,100 million statutory pension premium loans in Finland.
The value of total forest assets, including leased land, Stora Enso's share of Tornator's forest assets and assets held for sale in China, increased by EUR 476 million to EUR 8,731 (8,256) million. The increase is mainly an effect of foreign exchange rate impact and an increase in the Swedish and Finnish forest market transaction prices. The fair value of biological assets, including Stora Enso's share of Tornator and assets held for sale, increased by EUR 479 million to EUR 6,123 (5,644) million.
The value of forest land, including leased land, Stora Enso's share of Tornator and assets held for sale, decreased by EUR 3 million to EUR 2,608 (2,611) million.
| Rating agency | Long/short-term rating | Valid from |
|---|---|---|
| Fitch Ratings | BBB- (stable) | 4 August 2023 |
| Moody's | Baa3 (stable) / P-3 | 17 November 2023 |
| Change % Q4/23– |
Change % Q4/23– |
Change % | ||||||
|---|---|---|---|---|---|---|---|---|
| EUR million | Q4/23 | Q4/22 | Q4/22 | Q3/23 | Q3/23 | 2023 | 2022 | 2023–2022 |
| Operational EBITDA | 212 | 515 | -58.8 % | 180 | 17.9 % | 989 | 2,529 | -60.9 % |
| IAC on operational EBITDA | -6 | 8 | -170.1 % | -11 | 47.7 % | -126 | -133 | 5.2 % |
| Other adjustments | -91 | -77 | -17.9 % | -37 | -147.4 % | -210 | -62 | -236.2 % |
| Change in working capital | 207 | -18 | n/m | 99 | 109.7 % | 300 | -461 | 165.1 % |
| Cash flow from operations | 323 | 429 | -24.7 % | 231 | 39.8 % | 954 | 1,873 | -49.1 % |
| Cash spent on fixed and biological assets | -328 | -225 | -46.1 % | -193 | -69.8 % | -989 | -705 | -40.4 % |
| Acquisitions of associated companies | -3 | -2 | -92.1 % | 0 | n/m | -5 | -7 | 32.0 % |
| Cash flow after investing activities | -9 | 202 | -104.3 % | 38 | -123.0 % | -40 | 1,162 | -103.4 % |
Cash flow after investing activities was EUR -9 (38) million. Working capital decreased by EUR 207 million, mainly due to lower inventories and trade receivables, and was partly offset by lower trade payables. Cash spent on fixed and biological assets was EUR 328 million. Payments related to the previously announced provisions amounted to EUR 22 million. Cash flow from operations was strong despite lower operational EBITDA. In Q4/2023, EUR 323 million and in 2023 EUR 954 million, mainly due to working capital reduction.
Additions to fixed and biological assets totalled EUR 422 (368) million, of which EUR 401 (346) million were fixed assets and EUR 21 (22) million biological assets.
Depreciations and impairment charges excluding IACs totalled EUR 133 (130) million. Additions in fixed and biological assets had a cash outflow impact of EUR 328 (225) million.
| EUR million | Q4/23 | 2023 | Investment to be finalised |
|
|---|---|---|---|---|
| Packaging Materials | 287 | 663 | Oulu consumer board investment in Finland Board machine 8 capacity increase at Skoghall in Sweden |
2025 2024 |
| Packaging Solutions | 26 | 161 De Lier site expansion in the Netherlands | 2023 | |
| Biomaterials | 64 | 204 | Skutskär bleach plant upgrade in Sweden Enocell unbleached kraft pulp (UKP) |
2024 2024 |
| Wood Products | 27 | 51 | n/a | |
| Forest | 13 | 31 | n/a | |
| Other | 5 | 15 | n/a | |
| Total | 422 | 1,125 |
| EUR million | Forecast 2024 |
|---|---|
| Capital expenditure | 1,000–1,100 |
| Depreciation and depletion of capitalised silviculture costs | 620–670 |
Stora Enso's capital expenditure forecast includes approximately EUR 75 million for the Group's forest assets. The depletion of capitalised silviculture costs is forecast to be EUR 75–85 million.
Stora Enso contributes to the circular bioeconomy transition in the three areas in which it has the biggest impact and opportunities: climate change, circularity, and biodiversity. The foundation for these is the conduct of everyday business in a responsible manner.
Stora Enso's science-based target is to reduce absolute Scope 1, 2 and 3 greenhouse gas (CO2e) emissions by 50% by 2030 from the 2019 baseline, in line with the 1.5-degree scenario.
By the end of the year, the Scope 1 and 2 CO2e emissions were 1.52 million tonnes or 41% less than in the base year (2022: 1.88 million tonnes or 27% less). During 2023, the decrease in emissions was mainly a consequence of lower production volumes as well as site and production line closures. Stora Enso continues to further reduce emissions by improving energy efficiency, replacing fossil fuels with renewables, and increasing the share of non-fossil electricity.
In 2023, Stora Enso's estimated Scope 3 CO2e emissions along the value chain were 4.95 million tonnes or 34% less than in the baseline (2022: 5.69 million tonnes or 24% less). The decrease in emissions was mainly a result of lower production volumes as well as production site and line closures. Stora Enso continues to further improve its Scope 3 performance by enhancing efficiency and lowering carbon intensity in the value chain, collaborating with raw material suppliers, logistics suppliers, and customers.
Stora Enso committed to achieving net-zero CO2 emissions by 2040 by signing The Climate Pledge during the last quarter of 2023. The commitment is a logical step for Stora Enso in its longterm ambition to become net carbon positive, and to offer 100% regenerative products and solutions by 2050. Stora Enso remains committed to its target for 2030, approved by the Science Based Targets initiative.
1 Calculated as rolling four quarters. For more on definitions, see Calculation of key figures.
2 Comparative figures are restated due to structural changes or additional data after previous interim reports.
Stora Enso's target is to reach 100% recyclable products by 2030. By the end of 2023, 94% (2022: 94%) of the Group's products were recyclable. Stora Enso aims to ensure the recyclability of products through an increased focus on circularity in innovation processes and collaborates actively with customers and partners to set up infrastructure to improve the actual recycling of products.
One of the key collaborations on improving the actual recycling of products is led by Stora Enso and Tetra Pak in Poland. The new fiber recycling line for post-consumer beverage cartons began operations in Ostrołęka during 2023. The line is set to triple the country's annual recycling capacity of post-consumer beverage cartons and has the potential to recycle the entire volume of beverage cartons sold in Poland, along with additional volumes from Central and Eastern Europe.
1 As of 31 December 2023 2 For definitions, see the section Calculation of key figures.
Stora Enso is committed to achieving a net-positive impact on biodiversity in its own forests and plantations by 2050 through active biodiversity management. The Group steers its biodiversity actions through a Biodiversity Leadership Programme to improve biodiversity at species, habitat and landscape levels. Progress is monitored with sciencebased impact indicators reported on the Group's website.
Throughout the year, Stora Enso, Tornator, and WWF continued their collaboration to enhance forest streams in Finland. Together, the organisations built 30 spawning grounds for endangered trout and restored hundreds of metres of freshwater habitats, an essential environment for freshwater species. Nearly 90 volunteers from Stora Enso participated in the restoration activities. The collaboration is integral to Stora Enso's biodiversity action programme, focusing on conservation, restoration, and water protection.
Biodiversity is an integral part of forest certifications including protection of valuable ecosystems. Stora Enso's target is to maintain a forest certification coverage level of at least 96% for the Group's own and leased forest lands. The forest certification coverage has remained stable and amounted to 99% in 2023 (2022: 99%).
1 For definitions, see the section Calculation of key figures.
Stora Enso reports on the sustainability indicators below on a quarterly basis. For full annual overview of Stora Enso's sustainability targets and 2023 performance, see storaenso.com.
| Key performance indicators (KPIs) | 31 Dec 2023 | 30 Sep 2023 31 Dec 2022 | Target | |
|---|---|---|---|---|
| Occupational safety: TRI rate, year-to-date1 | 4.7 | 4.8 | 5.9 | 4.9 by the end of 2023 |
| Gender balance: % of female managers among all managers | 24% | 25% | 23% | 25% by the end of 2024 |
| Water: total water withdrawal per saleable tonne (m3 /tonne)2 |
61 | 60 | 57 | Decreasing trend from 2016 baseline (60m3 /tonne) |
| Water: process water discharges per saleable tonne, (m3 /tonne)1,2 |
35 | 35 | 34 | 17% reduction by 2030 from 2019 baseline (36m3 /tonne) |
| Sustainable sourcing: % of supplier spend covered by the Supplier Code of Conduct (SCoC)1 |
95% | 96% | 96% | 95% or above |
1The figures exclude De Jong Packaging Group. 2Comparative figures are restated due to structural changes. For definitions, see Calculation of key figures.
At the end of the year, the Group's TRI rate was 4.7, exceeding the 2023 target of 4.9. Focus was placed on preventive safety measures and reinforcing divisions' accountability on improving performance. A new leading indicator, the ´Safety Engagement Rate`, was introduced to monitor proactive safety reporting and further improve safety culture and performance. In 2023, no fatal injuries occurred at Stora Enso's sites.
Stora Enso promotes a diverse and inclusive working environment throughout the organisation to enhance performance, collaboration, and innovation. At the end of 2023, the share of female managers was 24%, progressing in line with the target set for 2024. Similarly, the share of female representation was 25% among all employees and 36% within the Group Leadership Team.
While water is relatively abundant at the Group's production sites, water stress may still impact operations locally and through wider supply chains. Stora Enso uses the WRI Aqueduct Water Risk Atlas to assess water-related risks. According to this tool, six of the Group's production units operate in regions with High Baseline Water Stress. Approximately 96% of water is recycled back into the environment while only 4% is consumed in production processes. Lower production volumes are currently adversely affecting the performance per saleable tonne, as a regular water flow needs to be maintained, particularly in wastewater treatment.
Stora Enso continuously works to maintain a high coverage rate for the Supplier Code of Conduct, outlining common requirements for all suppliers. In 2023, the coverage rate decreased slightly but remains on target.
Stora Enso actively participates in the following ESG assessment schemes:
| ESG rating | Stora Enso score / best possible score | Rating compared to peers |
|---|---|---|
| CDP | Climate A-/A Forest B/A Water B/A |
Above the industry average |
| FTSE Russell | 4.4/5 | Among highest rank in the industry |
| ISS Corporate Rating | B/A+ | Among highest rank in the industry |
| ISS QualityScore | Governance 2/1 Social 1/1 Environment 1/1* |
Among highest rank in the industry |
| MSCI | AAA/AAA | Among highest rank in the industry |
| Sustainalytics | 14.4/0** | Among highest rank in the industry |
| VigeoEiris | 71/100 | Among highest rank in the industry |
*1 to 10 (1 indicating the lowest risk) **0 to 100 (0 indicating the lowest risk)
Stora Enso's Sustainability Report 2022 was, for the sixth consecutive year, recognised as one of the top ten sustainability reports by the World Business Council for Sustainable Development (WBCSD).
Risk is characterised by both threats and opportunities, which may affect future performance and the financial results of Stora Enso, reputation, as well as its ability to meet certain social and environmental objectives.
The geopolitical unrest could have an adverse impact on the Group. Retaliatory measures, conflict-related risks to people, operations, trade credit, cyber security, supply, and demand, could also affect the Group negatively.
The risk of a prolonged global economic downturn and recession, continued high inflation, as well as sudden interest rate increases, currency fluctuations, trade union strike actions, and logistical chain disruptions could all adversely affect the Group's profits, cash flow and financial position, as well as access to material, flow of goods and transport.
The challenging and rapidly changing macroeconomic and geopolitical disruption may increase cost, add complexity and lower short-term visibility. A slow market recovery might further impact market demand, prices, profit margin and volumes of the Group's products. New capacity and volume entering the market might distort demand, volumes, inventories and pricing, with the risk of a deepening margin squeeze. Moreover, forced capacity cuts might further impact on profitability.
There is a risk of continued high interest rates along with increased price volatility for raw materials such as wood, chemicals, other components and energy in Europe. The continued tight wood market could cause increased costs, limit harvesting and cause disruptions such as delays and/ or lack of wood supply to the Group's production sites.
Stora Enso was also ranked as the top leader in the Financial Times Diversity Leaders index.
Regulatory or similar initiatives might challenge the Group's strategy, growth and operations.
Other risks and uncertainties include, but are not limited to; general industry conditions, unanticipated expenditures related to the cost of compliance with existing and new environmental and other governmental regulations, and related to actual or potential litigation; material process disruption at Stora Enso's manufacturing facilities with operational or environmental impacts; risks inherent in conducting business through joint ventures; and other factors.
Stora Enso has been granted various investment subsidies and has given certain investment commitments in several countries e.g., Finland, China and Sweden. If commitments to planning conditions are not met, local officials may pursue administrative measures to reclaim some of the formerly granted investment subsidies or to impose penalties on Stora Enso, the outcome of such a process could result in adverse financial impact on Stora Enso.
A more detailed risk description will be included in Stora Enso's Annual Report 2023, to be published on 13 February 2024 at storaenso.com/annualreport.
Energy sensitivity analysis: the direct effect of a 10% change in electricity and fossil fuel market prices would have an impact of approximately EUR 5 million on operational EBIT for the next 12 months.
Wood sensitivity analysis: the direct effect of a 10% change in wood prices would have an impact of approximately EUR 200 million on operational EBIT for the next 12 months.
Pulp sensitivity analysis: the direct effect of a 10% change in pulp market prices would have an impact of approximately EUR 120 million on operational EBIT for the next 12 months.
Chemical and filler sensitivity analysis: the direct effect of a 10% change in chemical and filler prices would have an impact of approximately EUR 54 million on operational EBIT for the next 12 months.
Foreign exchange rates transaction risk sensitivity analysis for the next twelve months: the direct effect on operational EBIT of a 10% strengthening in the value of the US dollar, Swedish krona and British pound would be approximately positive EUR 81 million, negative EUR 9 million and positive EUR 9 million annual impact, respectively. Weakening of the currencies would have the opposite impact. These numbers are net of hedges and assuming no changes occur other than a single currency exchange rate movement in an exposure currency.
The Group's consolidated income statement on operational EBIT level is exposed to a foreign-currency translation risk worth approximately EUR 179 million expense exposure in Brazilian real (BRL) and approximately EUR 67 million income exposure in Chinese Renminbi (CNY). These exposures arise from the foreign subsidiaries and joint operations located in Brazil and China, respectively. For these exposures a 10% strengthening in the value of a foreign currency would have a negative EUR 18 million and a positive EUR 7 million impact on operational EBIT, respectively.
Stora Enso has undertaken significant restructuring actions in recent years which have included the divestment of companies, sale of assets and mill closures. These transactions include a risk of possible environmental or other obligations the existence of which would be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. A provision has been recognised for obligations for which the related amount can be estimated reliably and for which the related future cost is considered to be at least probable.
Stora Enso is party to legal proceedings that arise in the ordinary course of business and which primarily involve claims arising out of commercial law. The management does not consider that liabilities related to such proceedings before insurance recoveries, if any, are likely to be material to the Group's financial condition or results of operations.
On 11 July 2008, Stora Enso announced that a federal judge in Brazil had issued a decision claiming that the permits issued by the State of Bahia for the operations of Stora Enso's joint operations company Veracel were not valid. The judge also ordered Veracel to take certain actions, including reforestation with native trees on part of Veracel's plantations and a possible fine of, at the time of the decision, BRL 20 (EUR 4) million. Veracel disputes the decision and has filed an appeal against it. Veracel operates in full compliance with all Brazilian laws and has obtained all the necessary environmental and operating licences for its industrial and forestry activities from the relevant authorities. In November 2008, a Federal Court suspended the effects of the decision. No provisions have been recorded in Veracel's or Stora Enso's accounts for the reforestation or the possible fine.
Annette Stube, Executive Vice President Sustainability, and a member of the Group Leadership Team, left her role at Stora Enso in December 2023 to assume a position in another company.
Minna Björkman, Executive Vice President Sourcing and Logistics, and a member of the Group Leadership Team (GLT), left her position in the GLT to assume a business leadership role in Stora Enso's Packaging Materials division in November 2023.
Ad Smit was appointed Executive Vice President of the Packaging Solutions division and a member of the Group Leadership Team in October. He started on 1 December 2023. He led the Business Unit Western Europe within Stora Enso's Packaging Solutions division since January 2023. David Ekberg left his position as Executive Vice President of the Packaging Solutions division on 30 November 2023.
Katariina Kravi, EVP, People and Communication, has assumed the responsibility of the Brand and Communications function as of 1 February 2024, in addition to the People and Culture function. She was acting Head of Brand and Communications since May 2023.
Tobias Bäärnman, EVP, Strategy and Sustainability, has assumed the responsibility of the Sustainability function as of 1 February 2024, in addition to the Strategy and Innovation function. He was acting Head of Sustainability since 1 January 2024.
Stora Enso Oyj's Annual General Meeting was held on 16 March 2023 in Helsinki, Finland. The AGM adopted the accounts for 2022, reviewed the Remuneration Report 2022 and granted the Company's Board of Directors and Chief Executive Officer discharge from liability for the period.
The AGM approved the proposal by the Board of Directors that the Company distribute a dividend of EUR 0.60 per share for the year 2022. It was paid on 27 March 2023.
Astrid Hermann was elected new member of the Board of Directors. The AGM elected Kari Jordan as Chair of the Board of Directors and Håkan Buskhe as Vice Chair.
More information about the AGM in 2023 is available in the release Stora Enso's Annual General Meeting and decisions by the Board of Directors.
Stora Enso's Shareholders' Nomination Board was established in September. The Shareholders' Nomination Board consists of the following members: Kari Jordan (Chair of Stora Enso's Board of Directors), Håkan Buskhe (Vice Chair of Stora Enso's Board of Directors), Jouko Karvinen (Solidium Oy), and Marcus Wallenberg (FAM AB). The Shareholders' Nomination Board elected Marcus Wallenberg as its Chair.
The Shareholders' Nomination Board will propose to the Annual General Meeting to be held on 20 March 2024 that the Company's Board of Directors shall have eight (8) members.
The Shareholders' Nomination Board proposes that of the current members of the Board of Directors, Håkan Buskhe, Elisabeth Fleuriot, Helena Hedblom, Astrid Hermann, Kari Jordan, Christiane Kuehne and Richard Nilsson be reelected members of the Board of Directors until the end of the following AGM and that Reima Rytsölä be elected new member of the Board of Directors for the same term of office.
The Shareholders' Nomination Board proposes that Kari Jordan be elected Chair and Håkan Buskhe be elected Vice Chair of the Board of Directors. Antti Mäkinen has announced that he is not available for re-election to the Board of Directors.
Stora Enso Oyj's Annual General Meeting (AGM) will be held on Wednesday 20 March 2024 at 4:00 p.m. EET at the Marina Congress Center, Katajanokanlaituri 6, Helsinki, Finland.
The proposals for decisions relating to the agenda of the AGM and the AGM notice will be available on Stora Enso Oyj's website at storaenso.com/agm on 2 February 2024. Stora Enso Oyj's annual accounts, the report of the Board of Directors and the auditor's report for 2023 will be published on Stora Enso Oyj's website storaenso.com/ annualreport on 13 February 2024. The proposals for decisions and the other meeting documents will also be available at the AGM.
The Board of Directors proposes to the AGM that a dividend of EUR 0.10 per share be distributed on the basis of the balance sheet adopted for the year 2023. In addition, the Board of Directors proposes that the AGM would authorise the Board of Directors to decide at its discretion on the payment of an additional dividend up to a maximum of EUR 0.20 per share. The authorisation would be valid until 31 December 2024.
The Board of Directors has assessed the Company's financial situation and liquidity before making the proposal. There have been no material changes in the parent company's financial position since 31 December 2023, the liquidity of the parent company remains good and the proposed dividend does not risk the solvency of the company. Stora Enso's policy is to distribute 50% of earnings per share (EPS) excluding fair valuations over the cycle. In 2023, EPS excluding fair valuations was EUR -0.73.
The dividend would be paid to shareholders who on the record date of the dividend payment, 22 March 2024, are recorded in the shareholders' register maintained by Euroclear Finland Oy or in the separate register of shareholders maintained by Euroclear Sweden AB for Euroclear Sweden registered shares. Dividends payable to Euroclear Sweden registered shares will be forwarded by Euroclear Sweden AB and paid in Swedish crowns. Dividends payable to ADR holders will be forwarded by Citibank N.A. and paid in US dollars.
The Board of Directors proposes to the AGM that the dividend be paid on or about 4 April 2024.
This report has been prepared in English and Finnish. If there are any variations in the content between the versions, the English version shall govern. This report is unaudited.
Helsinki, 1 February 2024 Stora Enso Oyj Board of Directors
This unaudited interim financial report has been prepared in accordance with the accounting policies set out in International Accounting Standard 34 on Interim Financial Reporting and in the Group's Financial Report for 2022 with the exception of new and amended standards applied to the annual periods beginning on 1 January 2023 and changes in accounting principles described below.
Due to the divestments and reorganisation of retained Paper division operations, Stora Enso's segment reporting was changed as of 1 January 2023. The Paper division was discontinued and not reported as a separate segment from 1 January 2023 onwards. The paper sites divested in 2023 (Maxau, Nymölla and Hylte) together with all previously sold and closed sites are reported as part of segment Other. The retained sites Langerbrugge and Anjala are reported as part of the Packaging Materials division.
All figures in this Interim Report have been rounded to the nearest million, unless otherwise stated. Therefore, percentages and figures in this report may not add up precisely to the totals presented and may vary from previously published financial information.
As of 1 January 2023, emerging business related units in the Packaging Solutions division were moved to segment Other. These units include Formed Fiber, Circular Solutions (biocomposites) and Selfly Store.
Comparative figures have been restated accordingly. As of 1 January 2023, the reportable segments are Packaging Materials, Packaging Solutions, Biomaterials, Wood Products, Forest, and segment Other.
In September 2022, Stora Enso signed an agreement to acquire De Jong Packaging Group and the transaction was completed at the beginning of January 2023. De Jong Packaging Group is based in the Netherlands and is one of the largest corrugated packaging producers in the Benelux countries. De Jong Packaging Group is also active in containerboard production through the acquisition of the De Hoop mill in the Netherlands in 2021. De Jong Packaging Group has 16 sites in the Netherlands, Belgium, Germany and the UK and employs approximately 1,300 people. The acquisition will advance Stora Enso's strategic direction, increase its corrugated packaging capacity, accelerate revenue growth and build market share in renewable packaging in Europe. De Jong Packaging Group's product portfolio and geographic presence will complement and enhance Stora Enso's offering. The acquisition is expected to generate synergies over the cycle, mainly through sourcing, containerboard integration optimisation and commercial opportunities.
The shares of the acquired companies are mainly 100% owned, with certain units having minor non-controlling interests. The non-controlling interest is measured on basis of the proportionate share of the identifiable net assets.
The cash purchase consideration was EUR 612 million, excluding a contingent earn-out component. The maximum amount of the earn-out component is EUR 45 million. It will be settled in cash in 2024 and it is subject to De Jong Packaging Group achieving certain earnings thresholds. The contingent consideration is measured at its fair value and estimated at EUR 0 million on the date of acquisition.
The fair values of the identifiable assets and liabilities as of the acquisition date are presented in the table below.
| EUR million | Q4/2023 |
|---|---|
| Net assets acquired | |
| Cash and cash equivalents | 27 |
| Property, plant and equipment | 200 |
| Intangible assets | 222 |
| Right-of-use assets | 99 |
| Working capital | 5 |
| Tax assets and liabilities | -56 |
| Interest-bearing assets and liabilities | -233 |
| Fair value of net assets acquired | 265 |
| Purchase consideration, cash part | 612 |
| Purchase consideration, contingent | 0 |
| Total purchase consideration | 612 |
| Fair value of net assets acquired | -265 |
| Non-controlling interest | 2 |
| Goodwill | 349 |
| Cash outflow on acquisitions | -612 |
| Cash and cash equivalents of acquired subsidiaries | 27 |
| Cash flow on acquisition, net of acquired cash | -584 |
The post combination review was completed at the end of 2023 and therefore the acquisition accounting is considered to be final. There were no significant measurement period adjustments in Q4 2023. The goodwill represents the expected synergies, mainly through sourcing, containerboard integration optimisation and commercial opportunities. The goodwill is allocated to the divisions benefiting from the acquisition, Packaging Solutions and Packaging Materials. None of the goodwill recognised is expected to be deductible for tax purposes.
For Q1–Q4/2023, De Jong Packaging Group contributed sales of EUR 598 million and an IFRS net loss of EUR 88 million on the Group's results, which mainly relate to the De Hoop unit closure impairment and provision charges with approximately EUR -58 million net result impact. Excluding De Hoop containerboard site in the Netherlands, that was permanently closed during the fourth quarter of 2023, De
In Q4/2023 Stora Enso completed the transaction for the biocomposite business, the transaction did not have significant impact to the Group. The following table reflects the net assets of the companies sold in 2023, including Nymölla, Maxau, Hylte and Wood Products DIY site disposals.
Jong clearly contributed positively to Group's operational EBIT. The acquired units are included in Stora Enso Group's consolidated sales and net result from the beginning of 2023. The related transaction costs amounted to EUR 6 million and are presented in other operating expenses. The acquired units are reported in the Packaging Solutions and Packaging Materials divisions.
| EUR million | Q1-Q4/23 | Q1-Q4/22 |
|---|---|---|
| Net assets sold | ||
| Cash and cash equivalents | 29 | 90 |
| Property, plant and equipment | 271 | 8 |
| Intangible assets | 60 | 0 |
| Working capital | -5 | -1 |
| Tax assets and liabilities | -28 | 6 |
| Interest-bearing assets and liabilities | -96 | -19 |
| Net assets in disposed companies | 233 | 85 |
| Total disposal consideration | 266 | 70 |
As announced in December 2022, Stora Enso has initiated a sales process for divesting its consumer board production site and forestry operations in Guangxi, China.
Assets are classified as held for sale, if their carrying amounts will be recovered mainly through a sale transaction rather than through continuing use. The assets must be available for immediate sale in their present condition subject only to terms that are usual and customary for the sale of such assets. In addition, the sale must be highly probable and expected to be completed within one year after the date of classification.
• Amended standards and interpretations did not have material effect on the Group.
• No future standard changes endorsed by the EU which would have material effect on the Group.
These assets and related liabilities are presented separately in the consolidated statement of financial position and are measured at the lower of the carrying amount and fair value less costs to sell. Comparative information is not restated. Assets classified as held for sale are not depreciated.
In accordance with the progress in the ongoing divestment process, the Guangxi operations have been classified as held for sale at the end of Q4/2023. Assets held for sale include mainly fixed assets, forest assets, inventories and operative receivables, whereas related liabilities consist mainly of non-current and current interest bearing liabilities and operative liabilities.
| EUR million | Q4/23 | Q4/22 | Q3/23 | 2023 | 2022 |
|---|---|---|---|---|---|
| Sales | 2,174 | 2,864 | 2,127 | 9,396 | 11,680 |
| Other operating income | 81 | 89 | 62 | 378 | 326 |
| Change in inventories of finished goods and WIP | -83 | 1 | -75 | -209 | 258 |
| Materials and services | -1,431 | -1,757 | -1,394 | -6,133 | -6,979 |
| Freight and sales commissions | -198 | -288 | -195 | -883 | -1,148 |
| Personnel expenses | -319 | -330 | -283 | -1,275 | -1,315 |
| Other operating expenses | -104 | -134 | -113 | -638 | -594 |
| Share of results of associated companies | 82 | 156 | 15 | 136 | 221 |
| Change in net value of biological assets | 204 | 268 | 1 | 209 | 195 |
| Depreciation, amortisation and impairment charges | -733 | -165 | -145 | -1,303 | -635 |
| Operating result | -326 | 705 | -1 | -322 | 2,009 |
| Net financial items | -52 | -39 | -40 | -173 | -151 |
| Result before tax | -378 | 666 | -41 | -495 | 1,858 |
| Income tax | 53 | -82 | 7 | 64 | -322 |
| Net result for the period | -325 | 584 | -34 | -431 | 1,536 |
| Attributable to | |||||
| Owners of the Parent | -287 | 586 | -33 | -357 | 1,550 |
| Non-controlling interests | -38 | -2 | -1 | -74 | -13 |
| Net result for the period | -325 | 584 | -34 | -431 | 1,536 |
| Earnings per share | |||||
| Basic earnings per share, EUR | -0.36 | 0.74 | -0.04 | -0.45 | 1.97 |
| Diluted earnings per share, EUR | -0.36 | 0.74 | -0.04 | -0.45 | 1.96 |
| EUR million | Q4/23 | Q4/22 | Q3/23 | 2023 | 2022 |
|---|---|---|---|---|---|
| Net result for the period | -325 | 584 | -34 | -431 | 1,536 |
| Other comprehensive income (OCI) | |||||
| Items that will not be reclassified to profit and loss | |||||
| Equity instruments at fair value through OCI | 171 | -175 | -85 | -645 | 519 |
| Actuarial gains and losses on defined benefit plans | -72 | -101 | 3 | -52 | 147 |
| Revaluation of forest land | -67 | -149 | 0 | -49 | 259 |
| Share of OCI of associated companies | -24 | 58 | 0 | -23 | 58 |
| Income tax relating to items that will not be reclassified | 28 | 41 | -2 | 22 | -77 |
| 36 | -326 | -84 | -748 | 906 | |
| Items that may be reclassified subsequently to profit and loss | |||||
| Cumulative translation adjustment (CTA) | 134 | -262 | 115 | 56 | -197 |
| Net investment hedges and loans | 2 | 3 | 8 | -15 | -27 |
| Cash flow hedges and cost of hedging | 41 | 55 | -8 | -1 | 52 |
| Share of OCI of Non-controlling Interests (NCI) | 2 | 3 | -2 | 5 | 0 |
| Income tax relating to items that may be reclassified | -10 | -14 | 2 | -1 | -6 |
| 170 | -216 | 115 | 44 | -177 | |
| Total comprehensive income | -120 | 42 | -3 | -1,135 | 2,265 |
| Attributable to | |||||
| Owners of the parent | -84 | 41 | 0 | -1,066 | 2,278 |
| Non-controlling interests | -36 | 0 | -3 | -69 | -13 |
| Total comprehensive income | -120 | 42 | -3 | -1,135 | 2,265 |
CTA = Cumulative translation adjustment
OCI = Other comprehensive income
| EUR million | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Assets | ||
| Goodwill O |
505 | 244 |
| Other intangible assets O |
283 | 121 |
| Property, plant and equipment O |
4,544 | 4,860 |
| Right-of-use assets O |
323 | 418 |
| 5,656 | 5,643 | |
| Forest assets O |
6,921 | 6,846 |
| Biological assets O |
4,652 | 4,531 |
| Forest land O |
2,269 | 2,315 |
| Emission rights O |
108 | 123 |
| Investments in associated companies O |
926 | 832 |
| Listed securities I |
9 | 8 |
| Unlisted securities O |
810 | 1,437 |
| Non-current interest-bearing receivables I |
76 | 120 |
| Deferred tax assets T |
134 | 74 |
| Other non-current assets O |
58 | 38 |
| Non-current assets | 14,699 | 15,120 |
| Inventories O |
1,466 | 1,810 |
| Tax receivables T |
31 | 11 |
| Operative receivables O |
1,191 | 1,473 |
| Interest-bearing receivables I |
64 | 77 |
| Cash and cash equivalents I |
2,464 | 1,917 |
| Current assets | 5,216 | 5,287 |
| Assets held for sale | 839 | 514 |
| Total assets | 20,754 | 20,922 |
| Equity and liabilities | ||
| Owners of the Parent | 10,985 | 12,532 |
| Non-controlling Interests | -97 | -30 |
| Total equity | 10,889 | 12,502 |
| Post-employment benefit obligations O |
217 | 159 |
| Provisions O |
83 | 81 |
| Deferred tax liabilities T |
1,433 | 1,443 |
| Non-current interest-bearing liabilities I |
4,446 | 2,792 |
| Non-current operative liabilities O |
11 | 11 |
| Non-current liabilities | 6,190 | 4,486 |
| Current portion of non-current debt I |
286 | 667 |
| Interest-bearing liabilities I |
476 | 513 |
| Provisions O |
85 | 43 |
| Operative liabilities O |
2,112 | 2,410 |
| Tax liabilities T |
45 | 64 |
| Current liabilities | 3,004 | 3,697 |
| Liabilities related to assets held for sale | 671 | 237 |
| Total liabilities | 9,865 | 8,419 |
| Total equity and liabilities | 20,754 | 20,922 |
Items designated with "O" comprise Operating Capital Items designated with "I" comprise Net debt Items designated with "T" comprise Net Tax Liabilities
| EUR million | 2023 | 2022 |
|---|---|---|
| Cash flow from operating activities | ||
| Operating result | -322 | 2,009 |
| Adjustments for non-cash items | 976 | 325 |
| Change in net working capital | 300 | -461 |
| Cash flow from operations | 954 | 1,873 |
| Net financial items paid | -116 | -114 |
| Income taxes paid, net | -85 | -178 |
| Net cash provided by operating activities | 752 | 1,582 |
| Cash flow from investing activities | ||
| Acquisition of subsidiary shares and business operations, net of acquired cash | -584 | 0 |
| Acquisitions of associated companies | -5 | -7 |
| Acquisitions of unlisted securities | -18 | -11 |
| Cash flow on disposal of subsidiary shares and business operations, net of disposed cash | 237 | -77 |
| Cash flow on disposal of shares in equity accounted investments | 0 | 10 |
| Cash flow on disposal of forest and intangible assets and property, plant and equipment | 47 | 17 |
| Capital expenditure | -989 | -705 |
| Proceeds from/payment of non-current receivables, net | -1 | 31 |
| Net cash used in investing activities | -1,313 | -742 |
| Cash flow from financing activities | ||
| Proceeds from issue of new long-term debt | 2,006 | 366 |
| Repayment of long-term debt and lease liabilities | -716 | -390 |
| Change in short-term interest-bearing liabilities | 272 | 9 |
| Dividends paid | -472 | -434 |
| Purchase of own shares1 | -6 | -1 |
| Net cash provided by financing activities | 1,084 | -450 |
| Net change in cash and cash equivalents | 523 | 389 |
| Translation adjustment | 24 | 48 |
| Net cash and cash equivalents at the beginning of period | 1,917 | 1,480 |
| Net cash and cash equivalents at period end | 2,464 | 1,917 |
| Cash and cash equivalents at period end | 2,464 | 1,917 |
| Bank overdrafts at period end | 0 | 0 |
| Net cash and cash equivalents at period end | 2,464 | 1,917 |
1 Own shares purchased for the Group's share award programme. The Group did not hold any of its own shares on 31 December 2023.
| Fair value reserve | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| EUR million | Share capital |
Share premium and reserve fund |
Invested non restricted equity fund |
Treasury shares |
Equity instruments through OCI |
Cash flow hedges |
Revaluation reserve |
OCI of associated companies |
CTA and net investment hedges and loans |
Retained earnings |
Attributable to owners of the parent |
Non controlling interests |
Total |
| Balance at 1 January 2022 | 1,342 | 77 | 633 | — | 778 | -4 | 1,373 | 29 | -195 | 6,650 | 10,683 | -16 | 10,666 |
| Net result for the period | — | — | — | — | — | — | — | — | — | 1,550 | 1,550 | -13 | 1,536 |
| OCI before tax | — | — | — | — | 519 | 52 | 259 | 58 | -224 | 147 | 812 | — | 812 |
| Income tax relating to OCI | — | — | — | — | 1 | -9 | -53 | — | 3 | -25 | -83 | — | -83 |
| Total comprehensive income | — | — | — | — | 520 | 43 | 206 | 58 | -220 | 1,672 | 2,278 | -13 | 2,265 |
| Dividend | — | — | — | — | — | — | — | — | — | -434 | -434 | — | -434 |
| Acquisitions and disposals | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Purchase of treasury shares | — | — | — | -1 | — | — | — | — | — | — | -1 | — | -1 |
| Share-based payments | — | — | — | 1 | — | — | — | — | — | 5 | 6 | — | 6 |
| Balance at 31 December 2022 | 1,342 | 77 | 633 | — | 1,298 | 39 | 1,579 | 87 | -415 | 7,893 | 12,532 | -30 | 12,502 |
| Net result for the period | — | — | — | — | — | — | — | — | — | -357 | -357 | -74 | -431 |
| OCI before tax | — | — | — | — | -645 | -1 | -49 | -23 | 41 | -52 | -730 | 5 | -726 |
| Income tax relating to OCI | — | — | — | — | 0 | — | 10 | — | — | 12 | 22 | — | 22 |
| Total comprehensive income | — | — | — | — | -645 | -1 | -39 | -23 | 41 | -397 | -1,066 | -69 | -1,135 |
| Dividend | — | — | — | — | — | — | — | — | — | -473 | -473 | — | -473 |
| Acquisitions and disposals | — | — | — | — | — | — | — | — | — | — | — | 2 | 2 |
| Purchase of treasury shares | — | — | — | -6 | — | — | — | — | — | — | -6 | — | -6 |
| Share-based payments | — | — | — | 6 | — | — | — | — | — | -8 | -2 | — | -2 |
| Balance at 31 December 2023 | 1,342 | 77 | 633 | — | 653 | 38 | 1,540 | 63 | -375 | 7,015 | 10,985 | -97 | 10,889 |
CTA = Cumulative Translation Adjustment OCI = Other Comprehensive Income NCI = Non-controlling Interests
| EUR million | 2023 | 2022 |
|---|---|---|
| Carrying value at 1 January | 12,489 | 12,654 |
| Additions in tangible and intangible assets | 946 | 656 |
| Additions in right-of-use assets | 108 | 45 |
| Additions in biological assets | 71 | 77 |
| Depletion of capitalised silviculture costs | -81 | -75 |
| Acquisition of subsidiaries | 859 | 0 |
| Disposals and classification as held for sale1 | -727 | -312 |
| Depreciation and impairment | -1,303 | -640 |
| Fair valuation of forest assets | 241 | 529 |
| Translation difference and other | -27 | -445 |
| Statement of Financial Position Total | 12,577 | 12,489 |
1Including company disposals.
| EUR million | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Bond loans | 3,601 | 2,460 |
| Loans from credit institutions | 794 | 623 |
| Lease liabilities | 334 | 375 |
| Long-term derivative financial liabilities | 1 | 0 |
| Other non-current liabilities | 2 | 2 |
| Non-current interest-bearing liabilities including current portion | 4,733 | 3,459 |
| Short-term borrowings | 418 | 429 |
| Interest payable | 52 | 35 |
| Short-term derivative financial liabilities | 6 | 49 |
| Total Interest-bearing Liabilities | 5,209 | 3,972 |
| EUR million | 2023 | 2022 |
|---|---|---|
| Carrying value at 1 January | 3,972 | 3,938 |
| Additions in long-term debt, companies acquired | 131 | 0 |
| Proceeds of new long-term debt | 2,006 | 366 |
| Repayment of long-term debt | -619 | -351 |
| Additions in lease liabilities, companies acquired | 99 | 0 |
| Additions in lease liabilities | 109 | 45 |
| Repayment of lease liabilities and interest | -87 | -73 |
| Change in short-term borrowings | 177 | 75 |
| Change in interest payable | 40 | 19 |
| Change in derivative financial liabilities | -41 | -19 |
| Disposals and classification as held for sale | -575 | -5 |
| Other | 26 | 8 |
| Translation differences | -29 | -32 |
| Total Interest-bearing Liabilities | 5,209 | 3,972 |
| EUR million | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| On Own Behalf | ||
| Guarantees | 18 | 14 |
| Other commitments | 6 | 0 |
| On Behalf of associated companies | ||
| Guarantees | 5 | 5 |
| On Behalf of Others | ||
| Guarantees | 16 | 5 |
| Other commitments | 0 | 36 |
| Total | 44 | 60 |
| Guarantees | 38 | 24 |
| Other commitments | 6 | 36 |
| Total | 44 | 60 |
The Group announced its intention in December 2022 to divest its consumer board production and forest operations sites in Beihai, China. As previously disclosed, Stora Enso has been granted investment subsidies and has given certain investment commitments in China. There is a risk that the majority owned local Chinese company may be subject to a claim based on alleged costs resulting from certain uncompleted investment commitments. Given the specific mitigating circumstances surrounding the investment case as a whole, Stora Enso does not consider it to be probable that this situation would result in an outflow of economic benefits that would be material to the Group. The Company continues to monitor the situation as the divestment process proceeds.
| EUR million | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Total | 683 | 593 |
The Group's direct capital expenditure contracts include the Group's share of direct capital expenditure contracts in joint operations.
| One Euro is | Closing Rate | Average Rate (Year-to-date) | |||
|---|---|---|---|---|---|
| 31 Dec 2023 | 31 Dec 2022 | 31 Dec 2023 | 31 Dec 2022 | ||
| SEK | 11.0960 | 11.1218 | 11.4728 | 10.6274 | |
| USD | 1.1050 | 1.0666 | 1.0816 | 1.0539 | |
| GBP | 0.8691 | 0.8869 | 0.8699 | 0.8526 |
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
The valuation techniques are described in more detail in the Group's Financial Report. The instruments carried at fair value in the following tables are measured at fair value on a recurring basis.
| Amortised | Fair value through |
Fair value through |
Total | Fair value hierarchy | ||||
|---|---|---|---|---|---|---|---|---|
| EUR million | cost | OCI | income statement |
carrying amount |
Fair value | Level 1 | Level 2 | Level 3 |
| Financial assets | ||||||||
| Listed securities | — | 9 | — | 9 | 9 | 9 | — | — |
| Unlisted securities | — | 794 | 15 | 810 | 810 | — | — | 810 |
| Non-current interest-bearing receivables | 62 | 14 | — | 76 | 76 | — | 15 | — |
| Derivative assets | — | 14 | — | 15 | 15 | — | 15 | — |
| Loan receivables | 62 | — | — | 62 | 62 | — | — | — |
| Trade and other operative receivables | 835 | 30 | — | 865 | 865 | — | 30 | — |
| Current interest-bearing receivables | 21 | 39 | 4 | 64 | 64 | — | 43 | — |
| Derivative assets | — | 39 | 4 | 43 | 43 | — | 43 | — |
| Other short-term receivables | 21 | — | — | 21 | 21 | — | — | — |
| Cash and cash equivalents | 2,464 | — | — | 2,464 | 2,464 | — | — | — |
| Total | 3,382 | 887 | 19 | 4,288 | 4,288 | 9 | 87 | 810 |
| Amortised | Fair value through |
Fair value through income |
Total carrying |
Fair value hierarchy | ||||
|---|---|---|---|---|---|---|---|---|
| EUR million | cost | OCI | statement | amount | Fair value | Level 1 | Level 2 | Level 3 |
| Financial liabilities | ||||||||
| Non-current interest-bearing liabilities | 4,445 | 1 | — | 4,446 | 5,071 | — | 1 | — |
| Derivative liabilities | — | 1 | — | 1 | 1 | — | 1 | — |
| Non-current debt | 4,445 | — | — | 4,445 | 5,069 | — | — | — |
| Current portion of non-current debt | 286 | — | — | 286 | 286 | — | — | — |
| Current interest-bearing liabilities | 469 | 4 | 2 | 476 | 476 | — | 6 | — |
| Derivative liabilities | — | 4 | 2 | 6 | 6 | — | 6 | — |
| Current debt | 469 | — | — | 469 | 469 | — | — | — |
| Trade and other operative payables | 1,806 | — | — | 1,806 | 1,806 | — | — | — |
| Bank overdrafts | — | — | — | — | — | — | — | — |
| Total | 7,006 | 6 | 2 | 7,014 | 7,639 | — | 8 | — |
In accordance with IFRS, derivatives are classified as fair value through income statement. In the above tables for financial assets and liabilities the cash flow hedge accounted derivatives are however presented as fair value through OCI, in line with how they are booked for the effective portion.
| Amortised | Fair value through |
Fair value through income |
Total carrying |
Fair value hierarchy | ||||
|---|---|---|---|---|---|---|---|---|
| EUR million | cost | OCI | statement | amount | Fair value | Level 1 | Level 2 | Level 3 |
| Financial assets | ||||||||
| Listed securities | — | 8 | — | 8 | 8 | 8 | — | — |
| Unlisted securities | — | 1,423 | 14 | 1,437 | 1,437 | — | — | 1,437 |
| Non-current interest-bearing receivables | 92 | 28 | — | 120 | 120 | — | 28 | — |
| Derivative assets | — | 28 | — | 28 | 28 | — | 28 | — |
| Loan receivables | 92 | — | — | 92 | 92 | — | — | — |
| Trade and other operative receivables | 1,138 | 66 | — | 1,204 | 1,204 | — | 66 | — |
| Current interest-bearing receivables | 10 | 50 | 16 | 77 | 77 | — | 67 | — |
| Derivative assets | — | 50 | 16 | 67 | 67 | — | 67 | — |
| Other short-term receivables | 10 | — | — | 10 | 10 | — | — | — |
| Cash and cash equivalents | 1,917 | — | — | 1,917 | 1,917 | — | — | — |
| Total | 3,157 | 1,576 | 30 | 4,763 | 4,763 | 8 | 161 | 1,437 |
| Amortised | Fair value through |
Fair value through income |
Total carrying |
Fair value hierarchy | ||||
|---|---|---|---|---|---|---|---|---|
| EUR million | cost | OCI | statement | amount | Fair value | Level 1 | Level 2 | Level 3 |
| Financial liabilities | ||||||||
| Non-current interest-bearing liabilities | 2,792 | — | — | 2,792 | 2,749 | — | — | — |
| Derivative liabilities | — | — | — | — | — | — | — | — |
| Non-current debt | 2,792 | — | — | 2,792 | 2,748 | — | — | — |
| Current portion of non-current debt | 667 | — | — | 667 | 667 | — | — | — |
| Current interest-bearing liabilities | 462 | 30 | 20 | 513 | 513 | — | 50 | — |
| Derivative liabilities | — | 30 | 20 | 50 | 50 | — | 50 | — |
| Current debt | 462 | — | — | 462 | 462 | — | — | — |
| Trade and other operative payables | 2,076 | — | — | 2,076 | 2,076 | — | — | — |
| Bank overdrafts | — | — | — | — | — | — | — | — |
| Total | 5,998 | 30 | 20 | 6,048 | 6,005 | — | 51 | — |
In accordance with IFRS, derivatives are classified as fair value through income statement. In the above tables for financial assets and liabilities the cash flow hedge accounted derivatives are however presented as fair value through OCI, in line with how they are booked for the effective portion.
| EUR million | 2023 | 2022 |
|---|---|---|
| Financial assets | ||
| Opening balance at 1 January | 1,437 | 905 |
| Reclassifications | 0 | -1 |
| Gains/losses recognised in other comprehensive income | -646 | 523 |
| Additions | 18 | 10 |
| Closing balance | 810 | 1,437 |
The Group did not have level 3 financial liabilities as at 31 December 2023.
At period end, Level 3 financial assets included EUR 778 million of Pohjolan Voima Oy (PVO) shares for which the valuation method is described in more detail in the Annual Report. The valuation decreased by EUR 645 million versus December 2022, mainly due to lower electricity market prices. The valuation is most sensitive to changes in electricity prices and discount rates. The discount rate of 6.93% used in the valuation model is determined using the weighted average cost of capital method. A +/- 5% change in the electricity price used in the DCF would change the valuation by EUR +92 million and -92 million, respectively. A +/- percentage point change in the discount rate would change the valuation by EUR -140 million and +183 million, respectively.
During the fourth quarter of 2023, the conversions of 1,030 A shares into R shares were recorded in the Finnish trade register.
During 2023, a total of 7,364 A shares converted into R shares were recorded in the Finnish trade register.
On 31 December 2023, Stora Enso had 176,230,916 A shares and 612,389,071 R shares in issue. The company
did not hold its own shares. The total number of Stora Enso shares in issue was 788,619,987 and the total number votes at least 237,469,823.
On 15 January 2024, the conversion of 24,348 A shares into R shares was recorded in the Finnish trade register.
| Helsinki | Stockholm | |||
|---|---|---|---|---|
| A share | R share | A share | R share | |
| October | 70,208 | 43,439,469 | 54,653 | 8,913,866 |
| Novermber | 47,165 | 35,854,044 | 59,917 | 4,587,086 |
| December | 126,516 | 35,869,767 | 117,443 | 5,228,204 |
| Total | 243,889 | 115,163,280 | 232,013 | 18,729,156 |
| Helsinki, EUR | Stockholm, SEK | |||
|---|---|---|---|---|
| A share | R share | A share | R share | |
| October | 11.55 | 11.33 | 136.60 | 133.50 |
| Novermber | 12.05 | 11.91 | 140.00 | 136.00 |
| December | 12.45 | 12.53 | 139.00 | 139.10 |
| Million | Q4/23 | Q4/22 | Q3/23 | 2022 |
|---|---|---|---|---|
| At period end | 788.6 | 788.6 | 788.6 | 788.6 |
| Average | 788.6 | 788.6 | 788.6 | 788.6 |
| Average, diluted | 789.9 | 789.5 | 789.8 | 789.4 |
| EUR million | 2023 | Q4/23 | Q3/23 | Q2/23 | Q1/23 | 2022 | Q4/22 | Q3/22 | Q2/22 | Q1/22 |
|---|---|---|---|---|---|---|---|---|---|---|
| Packaging Materials | 4,557 | 1,045 | 1,057 | 1,155 | 1,300 | 5,496 | 1,335 | 1,421 | 1,424 | 1,317 |
| Packaging Solutions | 1,077 | 247 | 266 | 288 | 276 | 727 | 177 | 176 | 186 | 189 |
| Biomaterials | 1,587 | 375 | 345 | 379 | 488 | 2,180 | 649 | 567 | 522 | 442 |
| Wood Products | 1,580 | 341 | 349 | 436 | 454 | 2,195 | 471 | 520 | 631 | 573 |
| Forest | 2,490 | 650 | 534 | 620 | 687 | 2,519 | 664 | 581 | 649 | 626 |
| Other | 964 | 207 | 179 | 213 | 364 | 2,150 | 528 | 575 | 568 | 481 |
| Inter-segment sales | -2,859 | -691 | -603 | -717 | -848 | -3,589 | -959 | -876 | -925 | -828 |
| Total | 9,396 | 2,174 | 2,127 | 2,374 | 2,721 | 11,680 | 2,864 | 2,963 | 3,054 | 2,798 |
Comparative figures have been restated as described in the release from 29 March 2023.
| EUR million | 2023 | Q4/23 | Q3/23 | Q2/23 | Q1/23 | 2022 | Q4/22 | Q3/22 | Q2/22 | Q1/22 |
|---|---|---|---|---|---|---|---|---|---|---|
| Packaging Materials | 4,362 | 1,006 | 1,012 | 1,103 | 1,242 | 5,257 | 1,277 | 1,362 | 1,359 | 1,258 |
| Packaging Solutions | 1,066 | 244 | 264 | 285 | 273 | 704 | 171 | 170 | 179 | 184 |
| Biomaterials | 1,363 | 322 | 297 | 321 | 423 | 1,798 | 522 | 471 | 435 | 370 |
| Wood Products | 1,453 | 313 | 322 | 400 | 416 | 2,058 | 436 | 487 | 595 | 540 |
| Forest | 989 | 266 | 218 | 246 | 258 | 848 | 223 | 195 | 219 | 211 |
| Other | 162 | 22 | 14 | 18 | 108 | 1,014 | 234 | 279 | 267 | 234 |
| Total | 9,396 | 2,174 | 2,127 | 2,374 | 2,721 | 11,680 | 2,864 | 2,963 | 3,054 | 2,798 |
Comparative figures have been restated as described in the release from 29 March 2023.
| EUR million | 2023 | Q4/23 | Q3/23 | Q2/23 | Q1/23 | 2022 | Q4/22 | Q3/22 | Q2/22 | Q1/22 |
|---|---|---|---|---|---|---|---|---|---|---|
| Product sales | 9,317 | 2,153 | 2,109 | 2,348 | 2,707 | 11,521 | 2,841 | 2,927 | 3,000 | 2,753 |
| Service sales | 79 | 21 | 18 | 25 | 15 | 159 | 23 | 37 | 54 | 45 |
| Total | 9,396 | 2,174 | 2,127 | 2,374 | 2,721 | 11,680 | 2,864 | 2,963 | 3,054 | 2,798 |
Definitions and purpose for alternative performance measures can be found at the end of this section.
| EUR million | Q4/23 | Q4/22 | Change % Q4/23– Q4/22 |
Q3/23 | Change % Q4/23– Q3/23 |
2023 | 2022 | Change % 2023–2022 |
|---|---|---|---|---|---|---|---|---|
| Operational EBITDA | 212 | 515 | -58.8 % | 180 | 17.9 % | 989 | 2,529 | -60.9 % |
| Depreciation and silviculture costs of associated companies |
-4 | -3 | -55.3 % | -3 | -56.4 % | -11 | -11 | -4.1 % |
| Silviculture costs1 | -24 | -27 | 10.4 % | -27 | 8.4 % | -102 | -100 | -1.9 % |
| Depreciation and impairment excl. IAC | -133 | -130 | -2.4 % | -130 | -2.6 % | -534 | -527 | -1.2 % |
| Operational EBIT | 51 | 355 | -85.8 % | 21 | 142.0 % | 342 | 1,891 | -81.9 % |
| Fair valuations and non-operational items | 229 | 381 | -40.0 % | 5 | n/m | 231 | 363 | -36.4 % |
| Items affecting comparability (IAC) | -605 | -31 | n/m | -26 | n/m | -895 | -245 | -265.2 % |
| Operating result (IFRS) | -326 | 705 | -146.2 % | -1 | n/m | -322 | 2,009 | -116.0 % |
1Including damages to forests
| EUR million | 2023 | Q4/23 | Q3/23 | Q2/23 | Q1/23 | 2022 | Q4/22 | Q3/22 | Q2/22 | Q1/22 |
|---|---|---|---|---|---|---|---|---|---|---|
| Packaging Materials | -57 | -43 | -34 | -22 | 41 | 655 | 59 | 188 | 200 | 208 |
| Packaging Solutions | 43 | 6 | 14 | 15 | 8 | 16 | 5 | 4 | 2 | 5 |
| Biomaterials | 118 | 35 | 5 | -13 | 91 | 687 | 249 | 197 | 123 | 117 |
| Wood Products | -64 | -27 | -21 | -6 | -11 | 309 | -14 | 70 | 134 | 118 |
| Forest | 253 | 75 | 59 | 62 | 57 | 204 | 62 | 47 | 47 | 49 |
| Other | 1 | -1 | -15 | -9 | 27 | 63 | 14 | 29 | 14 | 6 |
| Inter-segment eliminations | 49 | 5 | 13 | 9 | 21 | -42 | -20 | -7 | -15 | 0 |
| Operational EBIT | 342 | 51 | 21 | 37 | 234 | 1,891 | 355 | 527 | 505 | 503 |
| Fair valuations and non-operational items | 231 | 229 | 5 | -14 | 11 | 363 | 381 | 6 | -45 | 21 |
| Items affecting comparability | -895 | -605 | -26 | -276 | 12 | -245 | -31 | -22 | -61 | -130 |
| Operating result (IFRS) | -322 | -326 | -1 | -253 | 258 | 2,009 | 705 | 511 | 399 | 394 |
| Net financial items | -173 | -52 | -40 | -51 | -29 | -151 | -39 | -63 | -29 | -19 |
| Result before Tax | -495 | -378 | -41 | -304 | 228 | 1,858 | 666 | 448 | 370 | 374 |
| Income tax expense | 64 | 53 | 7 | 47 | -43 | -322 | -82 | -81 | -71 | -88 |
| Net result | -431 | -325 | -34 | -257 | 185 | 1,536 | 584 | 367 | 299 | 287 |
Comparative figures have been restated as described in the release from 29 March 2023.
| EUR million | Q4/23 | 2023 |
|---|---|---|
| Impairments - Packaging Materials | -468 | -468 |
| Impairments - Biomaterials | -103 | -103 |
| Impairments - Wood Products | -16 | -16 |
| Impairments - Segment Other | -14 | -14 |
| Impairment reversal - Forest | 3 | 5 |
| Disposal of Nymölla | 0 | -30 |
| Disposal of Hylte | 2 | -45 |
| Disposal of Maxau | 0 | 52 |
| Disposal of biocomposite business | -1 | -15 |
| Disposal of Wood Products DIY unit | -1 | -4 |
| Disposals related transaction costs | -1 | -6 |
| Acquisition of De Jong Packaging Group | 0 | -16 |
| Closure of Sunila pulp mill | 1 | -116 |
| Closure of De Hoop | 1 | -79 |
| Restructuring - Anjala | 0 | -26 |
| Restructuring - Packaging Materials | -4 | -21 |
| Restructuring - Packaging Solutions | -1 | -10 |
| Restructuring - Wood Products | 3 | -5 |
| Restructuring - Biomaterials | -2 | -4 |
| Restructuring - Group functions | -3 | -15 |
| Restructuring (2021 announced) - Kvarnsveden |
1 | 29 |
| Restructuring (2021 announced) - Veitsiluoto | 0 | 9 |
| Updates in environmental provisions | -1 | -5 |
| Other items | -1 | -2 |
| Total | -605 | -895 |
| EUR million | Q4/22 | 2022 |
|---|---|---|
| Disposal of Russian operations - Packaging Solutions |
1 | -93 |
| Disposal of Russian operations - Wood Products |
-5 | -56 |
| Disposal of Russian operations - Forest | 7 | -43 |
| Disposal of Russian operations - other divisions |
-1 | -6 |
| Impairments, transaction costs and other items related to the upcoming paper site disposals (Nymölla, Hylte |
||
| and Maxau) | -38 | -28 |
| Disposal of Kvarnsveden site | 8 | 8 |
| Impairments - Forest | -5 | -5 |
| Impairments - Segment Other | -2 | -2 |
| Restructuring (2021 announced) - Kvarnsveden |
12 | 13 |
| Restructuring (2021 announced) - Veitsiluoto | -1 | -10 |
| Restructuring - Packaging Materials | -1 | -4 |
| Restructuring - Packaging Solutions | -2 | -5 |
| Restructuring - Biomaterials | 0 | -4 |
| Updates in environmental provisions (mainly closed Finnish sites |
-2 | -13 |
| Other items | -2 | 3 |
| Total | -31 | -245 |
| EUR million | Q4/23 | 2023 | Q4/22 | 2022 |
|---|---|---|---|---|
| Non-operational fair valuation changes of biological assets, Packaging Materials | 12 | 12 | 17 | 7 |
| Non-operational fair valuation changes of biological assets, Biomaterials | 24 | 25 | -9 | -17 |
| Non-operational fair valuation changes of biological assets, Forest | 162 | 156 | 261 | 201 |
| Non-cash income and expenses related to CO2 emission rights and liabilities, Other | -28 | -13 | -27 | 6 |
| Non-operational items of associated companies, Forest | 59 | 56 | 142 | 169 |
| Adjustments for differences between fair value and acquisition cost of forest assets upon disposal, Forest | 0 | -5 | -3 | -3 |
| Total | 229 | 231 | 381 | 363 |
| EUR million | 2023 | Q4/23 | Q3/23 | Q2/23 | Q1/23 | 2022 | Q4/22 | Q3/22 | Q2/22 | Q1/22 |
|---|---|---|---|---|---|---|---|---|---|---|
| Packaging Materials | -597 | -474 | -4 | -98 | -21 | -9 | -2 | -3 | 2 | -6 |
| Packaging Solutions | -26 | -1 | 0 | -5 | -20 | -98 | 0 | -5 | -57 | -36 |
| Biomaterials | -224 | -105 | -17 | -101 | 0 | -2 | 0 | 0 | 0 | -2 |
| Wood Products | -22 | -13 | -1 | -8 | 0 | -56 | -6 | -21 | -2 | -27 |
| Forest | 2 | 4 | 3 | -2 | -3 | -48 | 1 | -6 | 0 | -43 |
| Other | -28 | -16 | -6 | -61 | 56 | -33 | -23 | 12 | -4 | -17 |
| IAC on operating result | -895 | -605 | -26 | -276 | 12 | -245 | -31 | -22 | -61 | -130 |
| Tax on IAC | 100 | 53 | 6 | 43 | -3 | 9 | 3 | 1 | 1 | 4 |
| IAC on net result | -795 | -552 | -20 | -233 | 10 | -236 | -29 | -21 | -60 | -126 |
Comparative figures have been restated as described in the release from 29 March 2023.
| EUR million | 2023 | Q4/23 | Q3/23 | Q2/23 | Q1/23 | 2022 | Q4/22 | Q3/22 | Q2/22 | Q1/22 |
|---|---|---|---|---|---|---|---|---|---|---|
| Packaging Materials | 12 | 12 | 0 | 0 | 0 | 7 | 17 | 1 | 2 | -12 |
| Packaging Solutions | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Biomaterials | 25 | 24 | -3 | 5 | -1 | -17 | -9 | 0 | -6 | -2 |
| Wood Products | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Forest | 206 | 221 | -5 | 0 | -9 | 367 | 401 | 2 | -47 | 10 |
| Other | -13 | -28 | 12 | -19 | 21 | 6 | -27 | 2 | 6 | 25 |
| FV on operating result | 231 | 229 | 5 | -14 | 11 | 363 | 381 | 6 | -45 | 21 |
| Tax on FV | -25 | -24 | -1 | 4 | -3 | -38 | -46 | -1 | 13 | -4 |
| FV on net result | 206 | 205 | 3 | -10 | 8 | 324 | 335 | 5 | -32 | 17 |
Comparative figures have been restated as described in the release from 29 March 2023.
| EUR million | 2023 | Q4/23 | Q3/23 | Q2/23 | Q1/23 | 2022 | Q4/22 | Q3/22 | Q2/22 | Q1/22 |
|---|---|---|---|---|---|---|---|---|---|---|
| Packaging Materials | -642 | -504 | -38 | -120 | 21 | 653 | 74 | 185 | 204 | 190 |
| Packaging Solutions | 17 | 5 | 14 | 10 | -12 | -81 | 5 | -1 | -54 | -31 |
| Biomaterials | -81 | -46 | -15 | -109 | 90 | 668 | 240 | 198 | 117 | 113 |
| Wood Products | -86 | -40 | -22 | -14 | -11 | 253 | -20 | 49 | 133 | 91 |
| Forest | 461 | 300 | 57 | 60 | 44 | 523 | 463 | 43 | 0 | 16 |
| Other | -41 | -46 | -10 | -89 | 104 | 36 | -37 | 43 | 16 | 14 |
| Inter-segment eliminations | 49 | 5 | 13 | 9 | 21 | -42 | -20 | -7 | -15 | 0 |
| Operating result (IFRS) | -322 | -326 | -1 | -253 | 258 | 2,009 | 705 | 511 | 399 | 394 |
| Net financial items | -173 | -52 | -40 | -51 | -29 | -151 | -39 | -63 | -29 | -19 |
| Result before tax | -495 | -378 | -41 | -304 | 228 | 1,858 | 666 | 448 | 370 | 374 |
| Income tax expense | 64 | 53 | 7 | 47 | -43 | -322 | -82 | -81 | -71 | -88 |
| Net result | -431 | -325 | -34 | -257 | 185 | 1,536 | 584 | 367 | 299 | 287 |
Comparative figures have been restated as described in the release from 29 March 2023.
| EUR million | Q4/23 | Q4/22 | Q3/23 |
|---|---|---|---|
| Operational EBIT, LTM | 342 | 1,891 | 647 |
| Capital employed, LTM average | 14,230 | 13,795 | 14,336 |
| Operational ROCE, LTM | 2.4% | 13.7% | 4.5% |
| Operational EBIT excl. Forest division, LTM | 89 | 1,687 | 407 |
| Capital employed excl. Forest division, LTM average | 8,490 | 8,276 | 8,715 |
| Operational ROCE excl. Forest division, LTM | 1.0% | 20.4% | 4.7% |
| Net result for the period, LTM | -431 | 1,536 | 478 |
| Total equity, LTM average | 11,413 | 11,532 | 11,727 |
| Return on equity (ROE), LTM | -3.8% | 13.3% | 4.1% |
| Net debt | 3,167 | 1,853 | 3,120 |
| Operational EBITDA, LTM | 989 | 2,529 | 1,292 |
| Net debt to LTM operational EBITDA ratio | 3.2 | 0.7 | 2.4 |
LTM = Last 12 months. The change in the calculation method is explained in the section Alternative performance measures.
| EUR million | Q4/2023 | Q4/2022 | Q3/2023 | 2023 | 2022 |
|---|---|---|---|---|---|
| Earnings per share (EPS) excl. FV EUR | |||||
| Net profit for the period attributable to owners of the Parent |
-287 | 586 | -33 | -357 | 1,550 |
| FV on Net profit for the period attributable to owners of the Parent |
217 | 335 | 3 | 218 | 324 |
| Net profit for the period attributable to owners of the parent excl. FV |
-504 | 251 | -37 | -575 | 1,225 |
| Average number of shares | 789 | 789 | 789 | 789 | 789 |
| Earnings per share (EPS) excl. FV EUR | -0.64 | 0.32 | -0.05 | -0.73 | 1.55 |
| EUR million | 31 Dec 2023 | 31 Dec 2022 | 30 Sep 2023 |
|---|---|---|---|
| Listed securities | 9 | 8 | 7 |
| Non-current interest-bearing receivables | 76 | 120 | 104 |
| Current interest-bearing receivables | 64 | 77 | 27 |
| Cash and cash equivalents | 2,464 | 1,917 | 2,077 |
| Interest-bearing assets | 2,613 | 2,122 | 2,216 |
| Non-current interest-bearing liabilities | 4,446 | 2,792 | 4,182 |
| Current portion of non-current debt | 286 | 667 | 489 |
| Current interest-bearing liabilities | 476 | 513 | 640 |
| Bank overdrafts | 0 | 0 | 24 |
| Interest-bearing liabilities held-for-sale | 571 | 4 | 0 |
| Interest-bearing liabilities | 5,780 | 3,976 | 5,335 |
| Net debt | 3,167 | 1,853 | 3,120 |
According to the European Securities and Markets Authority (ESMA) Guidelines, an alternative performance measure is understood as a financial measure of historical or future financial performance, financial position, or cash flows, not defined under IFRS. Used together with the IFRS measures, alternative performance measures provide meaningful supplemental information to the management, investors, analysts and other parties with regards to the financial development of the business operations.
| Alternative performance measures | Definition | Purpose |
|---|---|---|
| Operating result (IFRS) | Net result for the period excluding income tax and net financial items (finance costs). |
Used in combination with below measures to determine the profitability of the Group. |
| Operational EBIT | Operating result (IFRS) excluding items affecting comparability (IAC) and fair valuations and non-operational items (FV) of the line-by-line consolidated entities and Stora Enso's share of operating result excluding IAC and FV of its associated companies. |
The Group's key non-IFRS performance metric, which is used to evaluate the performance of operating segments and, in combination with below ratios, to steer allocation of resources to them. |
| Operational EBITDA | Operating result (IFRS) excluding silviculture costs and damage to forests, fixed asset depreciation and impairment, IACs and FV. The definition includes the respective items of subsidiaries, joint arrangements and associated companies. |
Used by management to analyse the business and, from time-to-time, for short term and long-term target setting. |
| Operational return on capital employed, operational ROCE, LTM3 (%) |
Operational EBIT3 x 100 Capital employed1 |
Used for long-term Group financial targets setting. |
| Operational return on operating capital, operational ROOC, LTM3 (%) |
Operational EBIT3 x 100 Operating capital 1 |
Used for long-term divisional financial targets setting. |
| Return on equity, ROE, LTM3 (%) |
Net result for the period x 100 Total equity1 |
A measure of the profitability in relation to equity. |
| Net debt | Interest-bearing liabilities – interest-bearing assets, marked with "I" in the statement of financial position. |
Used for long-term Group financial targets setting. |
| Net debt/equity ratio | Net debt Equity2 |
Used for long-term Group financial targets setting. |
| Net debt/last 12 months' operational EBITDA ratio |
Net debt LTM operational EBITDA |
Used for long-term Group financial targets setting. |
| Earnings per share (EPS) excluding FV | Net result for the period excluding fair valuations and non-operational items after tax divided by the weighted average number of shares |
Stora Enso's dividend policy is to distribute 50% of earnings per share (EPS) excluding fair valuation over the cycle. |
| Operating capital and capital employed | Operating capital is comprised of items marked with "O" in the statement of financial position. Capital employed = Operating capital – Net tax liabilities. Net tax liabilities are marked with "T" in the statement of financial position. |
Used for long-term Group financial targets setting. |
| Items affecting comparability (IAC) | The most common IAC are significant capital gains and losses, impairments or impairment reversals, disposal gains and losses relating to Group companies, provisions for planned restructurings, environmental provisions, changes in depreciation due to restructuring and penalties. Items affecting comparability are normally disclosed individually if they exceed one cent per share. |
Represent certain significant items, identified by the management, considered not indicative of the operating business performance due to their nature and/or frequency. |
| Fair valuations and non-operational items (FV) |
Fair valuations and non-operational items include non-cash income and expenses related to CO2 emission rights and liabilities, non-operational fair valuation changes of biological assets, adjustments for differences between fair value and acquisition cost of forest assets upon disposal and the Group's share of income tax and net financial items of associated companies. Non-operational fair value changes of biological assets reflect changes made to valuation assumptions and parameters. The adjustments for differences between fair value and acquisition cost of forest assets upon disposal are a result of the fact that the cumulative non-operational fair valuation changes of disposed forest assets were included in previous periods in IFRS operating result (biological assets) and other comprehensive income (forest land) and are included in operational EBIT only at the disposal date (for non-strategic forest assets disposals). |
Represent adjustments for certain items considered by the management less relevant for understanding operating business performance. These adjustments result in differences in the recognition and measurement principles applicable under IFRS. |
| Operational fair value change of biological assets |
Operational fair value changes of biological assets contain all other fair value changes (see above about non-operational fair value changes of biological assets), mainly due to inflation and differences in actual harvesting levels compared to the harvesting plan. |
The long-term value change of the growing forests is an important component of the forestry business profitability. |
| Cash flow from operations (non-IFRS) and Cash flow after investing activities (non-IFRS) |
Cash flow from operations (non-IFRS) is equal to Net cash provided by operating activities (IFRS) before cash flows related to financial items and income taxes. Cash flow after investing activities (non-IFRS) is equal to Cash flow from operations (non-IFRS) minus cash spent on intangible assets, property, plant and equipment, and biological assets and acquisitions of associated companies. |
These are measures of cash generation, working capital efficiency and capital expenditure outflows. |
| Capital expenditure | Capital expenditure on fixed assets includes investments in and acquisitions of tangible and intangible assets as well as internally generated assets and capitalised borrowing costs, net of any related subsidies. Capital expenditure on leased assets includes new capitalised leasing contracts. Capital expenditure on biological assets consists of acquisitions of biological assets and capitalisation of costs directly linked to growing trees in plantation forests. The cash flow impact of capital expenditure is presented in cash flow from investing activities, excluding lease capex, where the cash flow impact is based on paid lease liabilities and presented in cash flow from financing and operating activities. |
A measure of the operating business investments capitalised as tangible and intangibles assets. |
| Fixed costs | Maintenance, personnel and other administration type of costs, excluding IAC and FV. |
A measure of the costs that are less variable in nature. |
1 Average for the last five quarter ends 2 Attributable to the owners of the Parent 3 Last 12 months prior to the end of reporting period
Presenting return measures based on the last 12 months is an effective way to analyse the most recent financial data on an annualised basis and is considered more suitable for tracking the development of long-term targets.
From Q1/2023 onwards, Stora Enso presents the operational return on capital employed (operational ROCE) based on the last 12 months prior to the end of the reporting period. This is calculated by dividing the operational EBIT of the last 12 months with the average capital employed. The average capital employed for the
last 12 months is determined as the average of the published capital employed of the last five quarter-ends.
Similarly, the return on operating capital (operational ROOC) for the divisions and the return on equity (ROE) for the Group will be based on the last 12 months prior to the end of the reporting period.
The presentation of operational ROCE, operational ROOC and ROE based on quarter or year-to-date figures has been discontinued.
| GHG emissions, Scope 1 + 2 | Direct absolute CO2e emissions from production (Scope 1) and indirect absolute CO2e emissions related to purchased electricity and heat (Scope 2). Excluding joint operations. Reported as rolling 12 months. Calculated in accordance with the Greenhouse Gas Protocol of the World Resource Institute (WRI). |
|---|---|
| GHG emissions, Scope 3 | Absolute CO2e emissions from other sources along the value chain of all production units are estimated based on the most recent methodology. Joint operations included as suppliers. Currently, material emission categories for Scope 3 emissions are updated annually. Accounting based on guidelines provided by the Greenhouse Gas Protocol and the World Business Council for Sustainable Development (WBCSD). |
| Forest certification coverage | The proportion of land in wood production and harvesting owned or leased by Stora Enso that is covered by forest certification schemes. Reporting on total land area and its forest certification coverage aligned with financial reporting on forests assets. |
| Share of technically recyclable products |
The proportion of technically recyclable products based on production volumes as tonnes. Technical recyclability is defined by international standards and tests when available, and in the absence of these, by Stora Enso's tests that prove recyclability. The reporting scope includes Stora Enso's packaging, pulp, paper and solid wood products as well as biochemical by products. |
| TRI (Total recordable incidents) rate | Number of incidents per one million hours worked. Including joint operations, but excluding De Jong Packaging Group. |
| Gender balance: % of female managers among all managers |
The share of female managers is calculated as the headcount of all permanent managers with at least one direct report. The manager must be permanent, but the subordinates can be temporary or permanent. Reported as rolling 12 months. Excluding joint operations. |
| Total water withdrawal per saleable tonne |
Reported as rolling 12 months. Excluding joint operations. Total water withdrawal includes process water and cooling and non-contact water intakes by board, pulp, and paper production sites as cubic metres (m3 ). |
| Process water discharges per saleable tonne |
Reported as rolling 12 months. Excluding joint operations and De Jong Packaging Group. Process water discharges include the discharges of board, pulp, and paper production sites as cubic metres (m3 ). |
| Supplier Code of Conduct (SCoC) coverage |
The share of supplier spend (rolling 12 months) covered by the Supplier Code of Conduct (SCoC). Excludes joint operations, intellectual property rights, leasing fees, financial trading, government fees such as customs, and wood purchases from private individual forest owners. Excluding De Jong Packaging Group. |
Packaging Materials
Leading the development of circular packaging, providing premium packaging materials based on virgin and recycled fiber.
Packaging Solutions Developing and selling premium fiber-based packaging products and services.
Biomaterials Meeting the growing demand for bio-based solutions to replace fossil-based and hazardous materials.
Wood Products
One of the largest sawn wood producers in Europe and a global leading provider of renewable woodbased solutions.
Forest
Creating value through sustainable forest management, competitive wood supply and innovation.
Stora Enso Oyj Stora Enso AB storaenso.com FI-00101 Helsinki, Finland SE-107 24 Stockholm, Sweden Tel. +358 2046 111 Klarabergsviadukten 70
P.O.Box 309 P.O.Box 70395 storaenso.com/investors Visiting address: Salmisaarenaukio 2 Visiting address: World Trade Center Tel. +46 1046 46 000
Anna-Lena Åström, SVP Investor Relations, tel. +46 702 107 691 Carl Norell, SVP Corporate Communications, tel. +46 722 410 349
Part of the global bioeconomy, Stora Enso is a leading provider of renewable products in packaging, biomaterials, and wooden construction, and one of the largest private forest owners in the world. We believe that everything that is made from fossil-based materials today can be made from a tree tomorrow. Stora Enso has approximately 20,000 employees and our sales in 2023 were EUR 9.4 billion. Stora Enso shares are listed on Nasdaq Helsinki Oy (STEAV, STERV) and Nasdaq Stockholm AB (STE A, STE R). In addition, the shares are traded on OTC Markets (OTCQX) in the USA as ADRs and ordinary shares (SEOAY, SEOFF, SEOJF). storaenso.com/investors
It should be noted that Stora Enso and its business are exposed to various risks and uncertainties and certain statements herein which are not historical facts, including, without limitation those regarding expectations for market growth and developments; expectations for growth and profitability; and statements preceded by "believes", "expects", "anticipates", "foresees", or similar expressions, are forward-looking statements. Since these statements are based on current plans, estimates and projections, they involve risks and uncertainties, which may cause actual results to materially differ from those expressed in such forward-looking statements. Such factors include, but are not limited to: (1) operating factors such as continued success of manufacturing activities and the achievement of efficiencies therein, continued success of product development, acceptance of new products or services by the Group's targeted customers, success of the existing and future collaboration arrangements, changes in business strategy or development plans or targets, changes in the degree of protection created by the Group's patents and other intellectual property rights, the availability of capital on acceptable terms; (2) industry conditions, such as strength of product demand, intensity of competition, prevailing and future global market prices for the Group's products and the pricing pressures thereto, price fluctuations in raw materials, financial condition of the customers and the competitors of the Group, the potential introduction of competing products and technologies by competitors; and (3) general economic conditions, such as rates of economic growth in the Group's principal geographic markets or fluctuations in exchange and interest rates. All statements are based on management's best assumptions and beliefs in light of the information currently available to it and Stora Enso assumes no obligation to publicly update or revise any forward-looking statement except to the extent legally required.
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