Annual Report • Apr 25, 2023
Annual Report
Open in ViewerOpens in native device viewer
Our purpose:
January-March 2023
Do good for people and the planet. Replace non-renewable materials with renewable products.
| Summary | 2 |
|---|---|
| CEO comment | 5 |
| Events | 6 |
| Sustainability | 7 |
| Results | 9 |
| Divisions | 11 |
| Capital structure | 16 |
| Cash flow | 17 |
| Capital expenditure | 17 |
| Short-term risks | 18 |
| Sensitivity analysis | 18 |
| Legal proceedings | 19 |
| Changes in management | 19 |
| AGM and dividend | 20 |
| Financials | 21 |
"The business environment this year is expected to be significantly more challenging for all our divisions. Current demand for most of our products is weak or weakening and market uncertainties are persisting."
A stronger presence in European packaging markets
The De Jong Packaging Group acquisition was completed in early January. The integration process and the expected synergy effects are proceeding according to plan.
Divestment of paper assets The Paper division was discontinued on 1 January 2023, and the Nymölla, Hylte and Maxau sites have been divested. The Langerbrugge and Anjala paper sites are retained in Stora Enso.
On track with science-based CO2e targets for scope 1 and 2
Continued actions on CO2e reduction for scope 1 and 2 have resulted in a 32% decrease from the 2019 baseline. The target is to halve the emissions by 2030.
Cover: Asia's largest mass timber building at Nanyang Technological University Photo: Steeltech Industries PTE Ltd
Stora Enso has lowered its guidance for the full-year 2023 due to worsening market outlook. The new guidance is: Stora Enso's full-year 2023 operational EBIT is expected to be significantly lower than for the full-year 2022 (EUR 1,891 million).
Net debt to operational EBITDA 1.3
(Q1/2022: 1.1)
EPS (basic) EUR 0.24 (Q1/2022: 0.37)
Operational ROCE excl. the Forest division (LTM1 )
16.5% (Q1/2022: 20.5%)
Cash flow from operations EUR 254 million (Q1/2022: 403)
1 Last 12 months
The market outlook is worsening and accelerated towards the latter part of the first quarter. Cost pressures and market uncertainties are expected to be significantly more challenging in 2023 than in 2022, weighing on our results and lowering the short-term visibility this year. Compared to 2022, Group margins are expected to be adversely impacted by increasing costs, particularly in relation to energy, wood, and chemicals.
The whole packaging market is currently weakening. Especially containerboard demand which is expected to remain weak but also consumer board is showing signs of weakening, with the exception for liquid packaging board.
The construction sector remains challenging with a lower number of issued building permits and new housing starts. This is expected to have a temporary impact on demand for the Wood Products division this year. In addition to higher pulpwood cost, a weakening global pulp market is expected to weigh on the Biomaterials division. Availability for pulpwood remains tight.
To protect margins, preparatory actions are taken to respond to fluctuations in demand with reinforced cost control. Other measures such as pricing, flexibility in product mix, capacity and inventory management, and sourcing and logistics have been put in place. In Finland, Stora Enso has completed negotiations on potential furloughs at its divisions' production sites. Capacity adjustment activities are in place to respond to fluctuations in demand.
The Group has made extensive changes to reshape the business over the past three years under its new leadership and disciplined capital allocation is firmly integrated into the Group's day to day operations. After the discontinuation of the Paper division, the Group now consists of five divisions with a key focus on strategic growth areas for long term shareholder and customer value creation.
Operationally, the focus on decentralisation continues together with reduction of overhead costs. Restrictive capital expenditure and working capital management to safeguard cash flow and to secure a solid balance sheet are in place.
Stora Enso is now financially, operationally and strategically in better shape to handle market fluctuations while investing for growth in renewable packaging, sustainable building solutions and biomaterials innovations.
| Q2/2023 market demand outlook | |
|---|---|
| Packaging Materials | Demand for consumer board is expected to remain stable. Demand for containerboard is expected to remain weak. |
| Packaging Solutions | Demand for corrugated packaging is expected to slightly improve due to seasonality. |
| Biomaterials | Pulp demand is expected to be lower in Europe and China. |
| Wood Products | Limited seasonal demand improvement for sawn wood expected. |
| Forest | Sawlogs demand is expected to remain stable, while pulpwood demand is expected to decline. |
| EUR million | Q1/23 | Q1/22 | Change % Q1/23–Q1/22 |
Q4/22 | Change % Q1/23–Q4/22 |
2022 |
|---|---|---|---|---|---|---|
| Sales | 2,721 | 2,798 | -2.7 % | 2,864 | -5.0 % | 11,680 |
| Operational EBITDA | 399 | 662 | -39.8 % | 515 | -22.6 % | 2,529 |
| Operational EBITDA margin | 14.7 % | 23.7 % | 18.0 % | 21.7 % | ||
| Operational EBIT | 234 | 503 | -53.5 % | 355 | -34.1 % | 1,891 |
| Operational EBIT margin | 8.6 % | 18.0 % | 12.4 % | 16.2 % | ||
| Operating profit (IFRS) | 258 | 394 | -34.6 % | 705 | -63.5 % | 2,009 |
| Profit before tax (IFRS) | 228 | 374 | -39.1 % | 666 | -65.7 % | 1,858 |
| Net profit for the period (IFRS) | 185 | 287 | -35.4 % | 584 | -68.3 % | 1,536 |
| Cash flow from operations | 254 | 403 | -36.9 % | 429 | -40.7 % | 1,873 |
| Cash flow after investing activities | 1 | 224 | -99.7 % | 202 | -99.7 % | 1,162 |
| Capital expenditure | 229 | 85 | 168.9 % | 368 | -37.8 % | 778 |
| Capital expenditure excluding investments in biological assets |
214 | 71 | 200.0 % | 346 | -38.2 % | 701 |
| Depreciation and impairment charges excl. IAC |
136 | 135 | 1.1 % | 130 | 4.5 % | 527 |
| Net interest-bearing liabilities | 2,917 | 2,593 | 12.5 % | 1,853 | 57.4 % | 1,853 |
| Forest assets1 | 8,269 | 7,965 | 3.8 % | 8,338 | -0.8 % | 8,338 |
| Operational return on capital employed (ROCE), LTM2 |
11.5% | 13.6% | 13.7% | 13.7% | ||
| Operational ROCE excl. Forest division, LTM2 |
16.5% | 20.5% | 20.4% | 20.4% | ||
| Earnings per share (EPS) excl. FV, EUR | 0.23 | 0.35 | -33.4 % | 0.32 | -28.0 % | 1.55 |
| EPS (basic), EUR | 0.24 | 0.37 | -34.4 % | 0.74 | -67.7 % | 1.97 |
| Return on equity (ROE), LTM2 | 12.2% | 14.4% | 13.3% | 13.3% | ||
| Net debt/equity ratio | 0.25 | 0.24 | 0.15 | 0.15 | ||
| Net debt to LTM2 operational EBITDA ratio |
1.3 | 1.1 | 0.7 | 0.7 | ||
| Equity per share, EUR | 14.82 | 13.60 | 9.0 % | 15.89 | -6.7 % | 15.89 |
| Average number of employees (FTE) | 21,144 | 22,211 | -4.8 % | 21,004 | 0.7 % | 21,790 |
Operational key figures, items affecting comparability and other non-IFRS measures: The list of Stora Enso's non-IFRS measures, and the calculation and definitions of the key figures are presented at the end of this report. See also the section Non-IFRS measures at the beginning of the Financials section.
IAC = Items affecting comparability, FV = Fair valuations and non-operational items
1 Total forest assets value, including leased land and Stora Enso's share of Tornator.
2 Last 12 months - change in the calculation method explained in the section Non-IFRS measures
| Change % Q1/23– |
Change % Q1/23– |
|||||
|---|---|---|---|---|---|---|
| Q1/23 | Q1/22 | Q1/22 | Q4/22 | Q4/22 | 2022 | |
| Board deliveries1 , 1,000 tonnes |
1,026 | 1,081 | -5.1 % | 1,010 | 1.6 % | 4,294 |
| Board production1 , 1,000 tonnes |
1,127 | 1,244 | -9.4 % | 1,094 | 2.9 % | 4,682 |
| Corrugated packaging European deliveries, million m2 |
285 | 224 | 27.4 % | 166 | 72.4 % | 741 |
| Corrugated packaging European production, million m2 |
290 | 236 | 22.9 % | 171 | 69.0 % | 771 |
| Market pulp deliveries, 1,000 tonnes | 564 | 580 | -2.7 % | 632 | -10.7 % | 2,374 |
| Wood products deliveries, 1,000 m3 | 1,044 | 1,219 | -14.4 % | 1,043 | 0.1 % | 4,397 |
| Wood deliveries, 1,000 m3 | 3,779 | 3,091 | 22.3 % | 3,335 | 13.3 % | 13,304 |
| Paper deliveries, 1,000 tonnes | 266 | 535 | -50.2 % | 396 | -32.7 % | 1,924 |
| Paper production, 1,000 tonnes | 258 | 533 | -51.6 % | 407 | -36.6 % | 1,926 |
1 Includes consumer board and containerboard volumes
Expected and historical impact as lost value of sales and maintenance costs
| EUR million | Q2/20231 | Q1/20232 | Q4/2022 | Q3/2022 | Q2/2022 | Q1/2022 |
|---|---|---|---|---|---|---|
| Total maintenance impact | 143 | 119 | 180 | 150 | 120 | 107 |
1 Estimated
2 The estimate for Q1/2023 was EUR 109 million.
During the last two years, we have delivered record high results and advanced our growth agenda in renewable packaging, sustainable building solutions and biomaterials innovations. Simultaneously, we have taken investment decisions to improve the competitiveness of strategic assets and steps to reduce cyclicality by exiting the paper business.
The business environment this year is expected to be significantly more challenging for all our divisions. Demand for most of our products is weak or weakening and market uncertainties are persisting. During the quarter, the high inflationary pressures persisted, and we have curtailed production to reduce inventories and adapt to the prevailing market conditions. For us, this means reinforced cost control and diligent capital allocation management.
In packaging, all end-uses excluding liquid packaging, are showing signs of weakening demand throughout the year. Wood products continue to be challenged by the weaker construction market with fewer building permits and lower rates of home renovations. For the pulp market, we see slower market activity in China and for paper and packaging end-uses, and the global inventories reached very high levels at the end of the quarter. In addition, around 4.5 million tonnes of new pulp capacity is coming on stream during this year which will put additional pressure on the market. For pulpwood, the market is tight, an impact from the lack of Russian wood volumes and increased competition from the energy sector.
Our results for the first quarter this year are very disappointing. Beyond the market-driven lower demand and cost escalation, we have been negatively impacted by operational issues and the logistical strikes in Finland. This resulted in an operational EBIT of 234 million euro, with a margin of 9%, a year-on-year decrease by 53%. Our sales were 2,722 million euro, a year-on-year decrease by 3%. For the full year we expect the challenging market conditions to prevail and therefore we forecast a result that is significantly lower than last year.
To protect our margins, we are constantly taking actions by curtailing production, reducing fixed and variable costs, managing working capital, evaluating product and market mix, and price adjustments where possible. We continue our path of decentralising decision-making, so divisions can more effectively capitalise on customer opportunities, and we are creating lean HQ operations to reduce overhead costs, strengthen leadership and efficiencies across the Group. Our asset footprint is reviewed continuously in order to develop cost-competitive assets and if necessary, restructure to adapt to market conditions. Recently, we have consolidated to five divisions after the discontinuation of the Paper business and as the demand of publication paper continues to rapidly decline, we are planning to permanently reduce capacity at the Anjala paper site.
For the past few years, we have been investing in our longterm growth initiatives in packaging, wood products and biomaterials innovations. Due to the current business environment and to protect our balance sheet and cash flow we will be restrictive on new strategic capex initiatives. Our focus is to deliver long-term shareholder and customer value from the investment decisions already made and run our operations as efficiently as possible.
We always look for the best opportunities to optimise capital allocation. Continuing operations at Beihai, would require sizeable investments to further improve cost competitiveness. The Beihai divestment process is progressing well, and we are working closely with our Joint Venture partners to manage the interest from potential buyers. The released capital will support our already decided investments in Europe, improving our long-term profitable growth opportunities.
The benefits of De Jong Packaging Group acquisition are starting to be visible. We are gaining a modern, cost competitive production base and a strong ecosystem in relatively resilient end uses such as agricultural products. We will also be able to long-term reduce our long position in containerboard. Timing wise, these opportunities do not come very often and for us this is a significant strategic step to gain market share in Western Europe. As to a possible future conversion in Langerbrugge, we will postpone such a decision until more favourable market conditions for containerboard.
The construction of a new consumer board line at the Oulu site is also progressing well. Economies of scale and the additional investments in pulp production, will improve the cost structure and competitiveness of the whole site. The site will have a leading cost-curve position, enabling transportation overseas while still being able to offer highmargin products. The added flexibility from the new line, will also allow for growth in liquid packaging end-uses. Products from other consumer board sites can be moved to Oulu, streamlining the product portfolio and improving productivity in all sites.
We aim to lead in the fiber-based packaging market in premium end-uses globally. The demand for both virgin and recycled consumer board is expected to grow by more than 11 million tonnes globally, approaching 57 million tonnes by 2030. The investment in Oulu allows us to build on the plastic substitution trend and grow with existing and new customers through our global sales network.
There is long-term, growing demand for Stora Enso's renewable products and we are confident that our strategy will continue to deliver market share gains and sustainable growth from a more resilient and powerful business platform over the cycles.
I am very grateful for the commitment of our teams in these turbulent times, to deliver innovative products, financial and operational performance, and to meaningfully contribute to a better environment and value for all stakeholders. With our values to "lead" and "do what is right", we will future proof our business for tomorrow and beyond.
The renewable future grows in the forest.
Global megatrends such as urbanisation, digitalisation, global warming, the replacement of plastics to fiber-based packaging, and eco and brand awareness all underpin Stora Enso's growth opportunities. Regulation promoting a circular economy further supports growth. Stora Enso creates renewable, sustainable and circular products which respond to its customers' need to substitute fossil-based materials, helping combat climate change. The global increased focus on sustainability provides us with several long-term growth opportunities and enables us to lead the green materials transition. There is strong drive to maximise the efficient use of raw materials and to make the value chains circular. This is supported by lifecycle thinking, hand in hand with rising consumer demand for ecofriendly products that enable a reduced carbon footprint. Stora Enso foresee strong, long-term, and accelerating demand for renewable, recyclable and carbon net positive products. The Company sees significant prospects to expand its total addressable market and aim to grow by >5% per year over the cycle.
Sustainability is driving Stora Enso's strategy and is a natural part of its business conduct. The Company's forest holding is a real asset which both initiates the integrated value chain and sustainability credentials throughout the whole product line. Stora Enso's products store CO2, and substitute, replace and displace fossil-based products. The Company creates value by focusing on growing its leading positions in: renewable packaging, sustainable building solutions and biomaterials innovations. It also ensures maximising value creation in the foundation businesses: forest, biomaterials and wood products. Stora Enso helps drive the green revolution by investing in innovation, helping its customers reach their sustainability targets regarding climate impact and circular solutions. Stora Enso drives a performance culture through its businessspecific processes to grow profitability long term. Responsible leadership based on a diverse and inclusive culture is a top priority and the strongest driver for performance, company culture and personal well-being.
In January, Stora Enso finalised the acquisition of the Dutch De Jong Packaging Group. The integration process is proceeding according to plan. When the ongoing expansion projects in packaging converting are ramped up, an additional EBITDA of EUR 40 million is estimated to be delivered. In the mid-term, the acquisition is expected to generate average annual synergies of EUR 30 million over the cycle.
The divestments of the Nymölla and Maxau paper sites were completed during the quarter, and the divestment of the Hylte site was completed on 4 April. The divestment process of the Anjala paper site was discontinued. The Paper division was discontinued on 1 January 2023.
Stora Enso's segment reporting was changed on 1 January 2023 due to the reorganisation of the Paper division's operations and changes in the reporting of emerging businesses in the Packaging Solutions division. The Langerbrugge and Anjala paper sites, which are retained in Stora Enso, are reported as part of the Packaging Materials division, and the emerging businesses under segment Other. The restated comparative figures were published on 29 March.
Stora Enso and the Polish plywood manufacturer Paged are collaborating to meet customers' demand for bio-based and sustainable plywood. Utilising Stora Enso's bio-based high-purity kraft lignin, Paged can replace 40% of fossilbased glue in plywood.
Stora Enso and Finnish company Valmet are collaborating on next-generation lignin product and process development. The objective is to further develop the quality and customer value of lignin, increase the supply by using optimised process machinery and asset design, and accelerate fulfilment of the growing demand for lignin.
Stora Enso and Korean company Kolon Industries have signed a Joint Development Agreement to develop and industrialise bio-based polyesters and their applications, as well as renewable binder resin formulations. Application areas cover, packaging, car tyre reinforcements, and films for products such as electronics, panels and displays.
Stora Enso plans to consolidate its book paper production and permanently close one of the two paper machines at the Anjala paper unit in Finland. The Group has started change negotiations concerning all employees at the integrated Anjalankoski site.
The Finnish energy company Pohjolan Voima, in which Stora Enso has a 15.6% shareholding, started regular electricity production at the new nuclear power reactor 3 at Olkiluoto plant on 16 April. The income from energy sales is reported under the segment Other. The divisions are charged for electricity at market price. Stora Enso has an estimated 75% energy self-sufficiency in 2023.
The negotiations of the union trade collective agreements in Sweden and Central Europe have been closed and contracts put in place. The agreement in Finland was put in place in 2021.
Stora Enso contributes to the circular bioeconomy transition in the three areas in which it has the biggest impact and opportunities: climate change, biodiversity and circularity. 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 base year, in line with the 1.5 degree scenario.
By the end of Q1/2023, the scope 1 and 2 CO2e emissions were 1.76 million tonnes or 32% less than in the base year. During the quarter, the emissions decreased mainly due to the impacts of the closure of the Veitsiluoto site, as well as lower overall production volumes.
Stora Enso continues to further reduce scope 1 and 2 emissions from operations by investing in energy efficiency, and by increasing the share of clean energy sources, including woodbased biofuels from sustainable sources. A recent example of the Group's continued action on CO2e reduction is the investment to renew the energy set-up and process equipment at the Heinola fluting site in Finland, reducing the site's CO2e emissions by more than 90%.
Direct and indirect CO2e emissions (scope 1+2, last four quarters)1 2
In 2022, Stora Enso's estimated scope 3 CO2e emissions along the value chain were 6.01 million tonnes or 27% less than in the base year (2021: 7.83 million tonnes or 4% less). The emissions decreased year-on-year due to mill closures and dissolving pulp production.
During 2023, Stora Enso will continue to identify areas where scope 3 emissions could be further reduced. The focus is on supplier engagement and improving the accounting for scope 3 emissions.
1 For definitions, see the section Calculation of key figures.
2 Comparative figures recalculated due to structural changes or additional data after previous Interim Reports.
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 on the species, habitat and landscape levels. The actions are guided by sciencebased targets, and progress is monitored with impact indicators reported on the Group's website.
Stora Enso has launched a new project to regenerate biodiversity by recovering wetlands in the south-east Sweden during 2023. The project contributes to the recovery of vegetation and other species, increasing the wetlands' carbon sequestration in the long run. The project will continue beyond 2023, with new areas being mapped. A similar project was launched in 2022 with Tornator in Finland and will continue until 2027.
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 2022 (2021: 99%).
1 For definitions, see the section Calculation of key figures.
Stora Enso's target is to reach 100% recyclable products by 2030. By the end of 2022, 94% (2021: 94%) of products, such as paper and packaging products, were recyclable. Stora Enso aims to ensure the recyclability of products through an increased focus on circularity in innovation processes. Stora Enso also collaborates actively with customers and partners to set up infrastructure to improve the actual recycling of its products.
Finland's largest trading sector company Kesko decided to replace the plastic buckets used for transporting flowers with Stora Enso's square boxes made from 97% renewable material. The boxes are optimised for transport and storage, providing high efficiency in logistics, and enable Kesko to save 27 tonnes of plastic annually.
| 31 Mar 2023 31 Dec 2022 | 31 Mar 2022 | Target | ||
|---|---|---|---|---|
| Occupational safety: TRI rate, year-to-date1 | 5.2 | 5.9 | 6.5 | 4.9 by the end of 2023 |
| Gender balance: % of female managers among all managers | 24% | 23% | 23% 25% by the end of 2024 | |
| Water: total water withdrawal per saleable tonne (m3 /tonne)2 |
60 | 58 | 56 | Decreasing trend |
| Water: process water discharges per saleable tonne, (m3 /tonne)1,2 |
34 | 34 | 33 17% reduction by 2030 | |
| Sustainable sourcing: % of supplier spend covered by the Supplier Code of Conduct (SCoC)1 |
96% | 96% | 96% | 95% |
1
1The figures exclude De Jong Packaging Group.
2Comparative figures recalculated due to structural changes or additional data after the previous Interim Reports.
For definitions, see the section Calculation of key figures. For a full overview of Stora Enso's sustainability targets and 2022 performance, see our website.
Stora Enso's safety target for 2023 is to achieve a TRI of 4.9 by the end of the year. The Group's safety performance remained stable during the quarter.
Stora Enso constantly strives to improve its water performance through targeted investments. As of 2023, the new goal is to reduce specific process water discharges per saleable tonne (m3 /tonne) by 17% from the 2019 base year (36 m3 /tonne) by 2030. During the quarter, the process water discharges decreased by 4% from the base year. The total water withdrawal per saleable tonne increased slightly from the 2016 base year (59 m3 /tonne), and was 60 m3 /tonne.
The key performance indicator (KPI) for sustainable sourcing measures the proportion of total supplier spend covered by the Supplier Code of Conduct. By the end of the quarter, 96% of the spend on materials, goods and services was covered by the SCoC.
The KPI for diversity and inclusion measures the proportion of female managers among all managers. At the end of the quarter, the proportion was 24%. The target is 25% by the end of 2024. Among all employees, the proportion of female employees was 25%. In the Group Leadership Team (GLT), 42% of the members were female at the end of Q1/2023.
Stora Enso actively participates in the following ESG assessment schemes:
| ESG rating | Stora Enso score | Change vs previous score | Rating compared to peers | Last update |
|---|---|---|---|---|
| CDP | Climate A Forest B Water B |
Climate and Water unchanged, declined in Forest from A- to B |
Clearly above the industry average level | Q4/2022 |
| FTSE Russell | 4.5 out of 5.0 | Improved from 4.4 to 4.5 | Among highest rank in the industry | Q4/2022 |
| ISS Corporate Rating | B- / A+ | Unchanged | Among highest decile rank in the industry | Q2/2022 |
| ISS QualityScore | Governance 1* Social 1 Environment 1 |
Improved in Governance from 2 to 1* |
Clearly above the industry average level | Q1/2023 |
| MSCI | AAA / AAA | Unchanged | Clearly above the industry average level | Q3/2022 |
| Sustainalytics | 15.8 out of 100** | Improved slightly from 15.9 to 15.8 | Clearly above the industry average level | Q1/2023 |
| VigeoEiris*** | 73 out of 100 | Improved from 68 to 73 | Highest ranked company in the industry | Q3/2021 |
* 1 indicating the lowest risk ** 0 indicating the lowest risk *** V.E. part of Moody's ESG solutions
Stora Enso was, for the third consecutive year, included in the global environmental non-profit CDP Supplier Engagement Rating (SER) Leaderboard. Stora Enso ranks among the top 8% of companies assessed on efforts to engage suppliers on climate change.
Sales YoY -3% Operational EBIT YoY -53% Earnings per share EUR 0.24 (Q1/2022: 0.37)
Group sales decreased by 3%, or EUR 77 million, to EUR 2,721 (2,798) million. Higher sales prices in all divisions, except Wood Products, improved the topline. Foreign exchange rates had a positive impact on sales. This was more than offset by lower deliveries and a negative effect of structural changes, mainly related to the paper site divestments at Nymölla in Sweden and Maxau in Germany, as well as the exit from the Russian operations.
Group operational EBIT decreased by 53%, or EUR 269 million to EUR 234 (503) million and the operational EBIT margin decreased to 8.6% (18.0%). The exit from the Russian operations reduced the first quarter profitability by EUR 12 million compared to a year ago. Higher sales prices in all divisions except Wood Products improved profitability by EUR 116 million. Net foreign exchange rates had a positive EUR 49 million impact on operational EBIT. Increased variable costs had a negative EUR 313 million impact. Lower volumes reduced operational EBIT by EUR 48 million. Fixed costs increased by EUR 77 million, impacted by De Jong Packaging Group acquisition. The impact from the closed and divested paper units, depreciations, equity accounted investments and other was positive EUR 4 million on operational EBIT.
Fair valuations and non-operational items had a positive net impact on the operating profit of EUR 11 (21) million. The impact came mainly from valuation of emission rights.
The Group recorded items affecting comparability (IAC) with a positive impact of EUR 12 (negative 130) million on its operating profit. The related tax impact was negative EUR 3 (positive 4) million. The IACs relate mainly to the disposals of the Nymölla and Maxau paper sites, De Jong Packaging Group acquisition and paper mill restructurings.
Net financial expenses of EUR 29 million were EUR 10 million higher than a year ago. Net interest expenses of EUR 25 million decreased by EUR 3 million, mainly because of higher interest income on deposits and cash. Other net financial expenses of EUR 2 million were EUR 5 million lower than a year ago. The net foreign exchange impact in respect of cash equivalents, interest-bearing assets and liabilities and related foreign-currency hedges amounted to a loss of EUR 2 (16) million.
Earnings per share decreased by 34% to EUR 0.24 (0.37), and earnings per share excluding fair valuations were EUR 0.23 (0.35).
The operational return on capital employed (ROCE) was 11.5% (13.6%). Operational ROCE excluding the Forest division was 16.5% (20.5%).
| Sales Q1/2022, EUR million | 2,798 |
|---|---|
| Price and mix | 3 % |
| Currency | 1 % |
| Volume | -7 % |
| Other sales1 | 1 % |
| Total before structural changes | -2 % |
| Structural changes2 | -1 % |
| Total | -3 % |
| Sales Q1/2023, EUR million | 2,721 |
1 Energy, paper for recycling (PfR), by-products etc.
2 Asset closures, major investments, divestments and acquisitions
| Capital employed 31 March 2022, EUR million | 13,299 |
|---|---|
| Capital expenditure excl. investments in biological assets less depreciation |
310 |
| Investments in biological assets less depletion of capitalised silviculture costs |
6 |
| Impairments and reversal of impairments | -57 |
| Fair valuation of forest assets | 544 |
| Unlisted securities (mainly PVO) | -1 |
| Equity accounted investments | 244 |
| Net liabilities in defined benefit plans | 80 |
| Operative working capital and other interest-free items, net |
317 |
| Emission rights | -69 |
| Net tax liabilities | -240 |
| Acquisition of subsidiaries | 868 |
| Disposal of subsidiaries | -231 |
| Translation difference | -473 |
| Other changes | -23 |
| Capital employed 31 March 2023 | 14,573 |
Group sales decreased by 5%, or EUR 143 million, to EUR 2,721 (2,864) million. Sales were negatively impacted by the paper site disposals of Nymölla in Sweden and Maxau in Germany. Higher sales in Packaging Solutions mainly as a consequence of the De Jong Packaging Group acquisition was more than offset by lower pulp prices and deliveries.
Operational EBIT decreased by EUR 121 million to EUR 234 (355) million and the margin to 8.6% (12.4%). The sales prices were EUR 61 million lower mainly due to lower pulp and sawn wood prices. Variable costs were EUR 94 million higher, especially due to energy and pulpwood. Lower volumes reduced operational EBIT by EUR 30 million and negative net foreign exchange rates by EUR 18 million. Fixed costs were EUR 54 million lower, driven by seasonality and timing of annual maintenance shutdowns. Positive impact from the closed and divested units, depreciations, equity accounted investments and other was EUR 27 million.
| Operational ROOC | 2022 | 2023 | |
|---|---|---|---|
| Q1 | — | — | |
| 13.5% | Q2 | Beihai, Ostrołęka | Beihai, Ostrołęka, Langerbrugge |
| (Target: >20%) | Q3 | Skoghall, Ingerois, Heinola, Oulu, Anjala, Nymölla | Anjala, Heinola, Ingerois, Ostrołęka, Oulu, Varkaus |
| Q4 | Fors, Imatra, Skoghall, Varkaus | Fors, De Hoop, Imatra, Skoghall |
• Sales decreased by 1%, or EUR 16 million, to EUR 1,300 million. Price and volume decline in containerboard was only partly offset by the contribution from the De Hoop recycled containerboard site and higher consumer board and paper prices.
| Change % Q1/23– |
Change % Q1/23– |
|||||
|---|---|---|---|---|---|---|
| EUR million | Q1/23 | Q1/22 | Q1/22 | Q4/22 | Q4/22 | 2022 |
| Sales | 1,300 | 1,317 | -1.2 % | 1,335 | -2.6 % | 5,496 |
| Operational EBITDA | 128 | 293 | -56.2 % | 142 | -9.4 % | 993 |
| Operational EBITDA margin | 9.9 % | 22.3 % | 10.6 % | 18.1 % | ||
| Operational EBIT | 41 | 208 | -80.3 % | 59 | -30.3 % | 655 |
| Operational EBIT margin | 3.2 % | 15.8 % | 4.4 % | 11.9 % | ||
| Operational ROOC, LTM1 | 13.5 % | 18.4 % | 18.6 % | 18.6 % | ||
| Cash flow from operations | -5 | 165 | -103.1 % | 168 | -103.0 % | 823 |
| Cash flow after investing activities | -157 | 81 | -293.9 % | 61 | n/m | 488 |
| Deliveries, 1,000 tonnes | 1,119 | 1,160 | -3.5 % | 1,086 | 3.1 % | 4,599 |
| Production, 1,000 tonnes | 1,127 | 1,244 | -9.4 % | 1,094 | 2.9 % | 4,682 |
| 1 |
Last 12 months Comparative figures have been restated as described in our release from 29 March 2023
| Product | Market | Demand Q1/23 compared with Q1/22 |
Demand Q1/23 compared with Q4/22 |
Price Q1/23 compared with Q1/22 |
Price Q1/23 compared with Q4/22 |
|---|---|---|---|---|---|
| Consumer board | Europe | Significantly weaker | Stronger | Significantly higher | Slightly lower |
| Kraftliner | Global | Significantly weaker | Slightly stronger | Significantly lower | Significantly lower |
| Testliner | Europe | Significantly weaker | Stable | Significantly lower | Significantly lower |
| Paper | Europe | Significantly weaker | Significantly weaker | Significantly higher | Stable |
Source: Fastmarket RISI, Fastmarket FOEX, CEPI, Numera Analytics, Stora Enso. Consumer board prices only include FBB.
| Operational ROOC 5.2% (Target: >15%) |
Sales YoY 46% |
Operational EBIT margin 2.8% (Q1/2022: 2.5%) |
|---|---|---|
| • Sales increased by 46% or EUR 87 million to EUR 276 million. The acquisition of De Jong Packaging Group more than offset the impact of the divestment of the Russian operations in Q2/2022. Sales from the Northern and Central Eastern European businesses decreased slightly due to the soft market. Sales prices in corrugated packaging were lower as a consequence of lower raw material prices in |
• Operational EBIT increased by EUR 3 million to EUR 8 million, including amortisation of acquired intangibles of EUR 4 million. The acquisition of De Jong Packaging Group and contribution from the Northern and Central-Eastern European businesses improved performance, mitigating the negative impact of the soft market for the remaining businesses and the divestment of the Russian operations |
• Operational ROOC was 5.2%, below the long-term target of >15%. Sales and operational EBIT 300 12% 250 10% 200 8% 150 6% 100 4% 50 2% 0 0% Q2/22 Q3/22 Q4/22 Q1/23 Q1/22 Q2/21 Q3/21 Q4/21 |
| containerboard. | (Q2/2022). | Sales, EUR million Operational EBIT, % |
| EUR million | Q1/23 | Q1/22 | Change % Q1/23– Q1/22 |
Q4/22 | Change % Q1/23– Q4/22 |
2022 |
|---|---|---|---|---|---|---|
| Sales | 276 | 189 | 46.3 % | 177 | 56.2 % | 727 |
| Operational EBITDA | 24 | 11 | 111.0 % | 11 | 111.6 % | 42 |
| Operational EBITDA margin | 8.6% | 6.0 % | 6.3 % | 5.7 % | ||
| Operational EBIT | 8 | 5 | 64.3 % | 5 | 51.6 % | 16 |
| Operational EBIT margin | 2.8% | 2.5 % | 2.9 % | 2.2 % | ||
| Operational ROOC, LTM1 | 5.2% | 18.6 % | 7.9 % | 7.9 % | ||
| Cash flow from operations | 19 | -3 | n/m | 17 | 12.3 % | 11 |
| Cash flow after investing activities | -7 | -10 | 32.5 % | 9 | -171.3 % | -14 |
| Corrugated packaging European deliveries, million m2 | 307 | 232 | 32.6 % | 171 | 80.1 % | 772 |
| Corrugated packaging European production, million m2 | 290 | 236 | 22.9 % | 171 | 69.0 % | 771 |
1 Last 12 months
Comparative figures have been restated as described in our release from 29 March 2023
Market development during Q1
| Product | Market | Demand Q1/23 compared with Q1/22 |
Demand Q1/23 compared with Q4/22 |
Price Q1/23 compared with Q1/22 |
Price Q1/23 compared with Q4/22 |
|---|---|---|---|---|---|
| Corrugated packaging | Europe | Significantly weaker | Weaker | Stable | Stable |
Source: Fastmarket RISI
0% 2% 4% 6% 8% 10% 12%
• Sales increased by 10%, or EUR 46 million to EUR 488 million. The record-high first quarter sales were driven by stronger year-onyear prices, solid by-product sales support and favourable currency exchange rates.
| 2022 | 2023 | |||
|---|---|---|---|---|
| Q1 | Montes del Plata | Veracel | ||
| Q2 | Enocell | Montes del Plata, Skutskär | ||
| Q3 | Sunila | Sunila | ||
| Q4 | — | Enocell |
| Change % Q1/23– |
Change % Q1/23– |
|||||
|---|---|---|---|---|---|---|
| EUR million | Q1/23 | Q1/22 | Q1/22 | Q4/22 | Q4/22 | 2022 |
| Sales | 488 | 442 | 10.5 % | 649 | -24.8 % | 2,180 |
| Operational EBITDA | 125 | 149 | -15.8 % | 284 | -55.9 % | 822 |
| Operational EBITDA margin | 25.7 % | 33.7 % | 43.8 % | 37.7 % | ||
| Operational EBIT | 91 | 117 | -21.7 % | 249 | -63.3 % | 687 |
| Operational EBIT margin | 18.7 % | 26.4 % | 38.4 % | 31.5 % | ||
| Operational ROOC, LTM1 | 24.0 % | 22.2 % | 25.3 % | 25.3 % | ||
| Cash flow from operations | 192 | 136 | 41.0 % | 213 | -9.9 % | 682 |
| Cash flow after investing activities |
140 | 97 | 43.8 % | 168 | -16.5 % | 536 |
| Pulp deliveries, 1,000 tonnes |
580 | 611 | -5.0 % | 693 | -16.3 % | 2,554 |
1Last 12 months
| Product | Market | Demand Q1/23 compared with Q1/22 |
Demand Q1/23 compared with Q4/22 |
Price Q1/23 compared with Q1/22 |
Price Q1/23 compared with Q4/22 |
|---|---|---|---|---|---|
| Softwood pulp | Europe | Weaker | Slightly weaker | Higher | Slightly lower |
| Hardwood pulp | Europe | Weaker | Slightly weaker | Significantly higher | Slightly lower |
| Hardwood pulp | China | Slightly stronger | Weaker | Significantly higher | Significantly lower |
Source: PPPC, Fastmarket FOEX, Fastmarket RISI, Stora Enso
| Operational ROOC 24.9% (Target: >20%) |
Sales YoY -21% |
Operational EBIT margin -2.3% (Q1/2022: 20.6%) |
||
|---|---|---|---|---|
| • | Sales decreased by 21%, or EUR 119 million, to EUR 454 million, mainly impacted by lower volumes and sales prices, especially for sawn wood, and the exit from Russian operations |
• Operational ROOC was above the long-term target of >20% at 24.9% (65.8%). |
Sales and operational EBIT |
• Operational EBIT decreased by EUR 129 million to EUR -11 million, affected by lower prices and volumes, together with increased costs mainly for logistics and electricity.
in Q2/2022.
| EUR million | Q1/23 | Q1/22 | Change % Q1/23– Q1/22 |
Q4/22 | Change % Q1/23– Q4/22 |
2022 |
|---|---|---|---|---|---|---|
| Sales | 454 | 573 | -20.7 % | 471 | -3.7 % | 2,195 |
| Operational EBITDA | 2 | 130 | -98.8 % | -1 | n/m | 356 |
| Operational EBITDA margin | 0.3 % | 22.7 % | -0.1 % | 16.2 % | ||
| Operational EBIT | -11 | 118 | -109.0 % | -14 | 22.3 % | 309 |
| Operational EBIT margin | -2.3 % | 20.6 % | -2.9 % | 14.1 % | ||
| Operational ROOC, LTM1 | 24.9 % | 65.8 % | 43.2 % | 43.2 % | ||
| Cash flow from operations | 3 | 78 | -96.0 % | 54 | -94.3 % | 346 |
| Cash flow after investing activities | -8 | 55 | -114.1 % | 28 | -128.0 % | 264 |
| Wood products deliveries, 1,000 m3 | 1,001 | 1,178 | -15.0 % | 999 | 0.1 % | 4,235 |
1 Last 12 months
| Product | Market | Demand Q1/23 compared with Q1/22 |
Demand Q1/23 compared with Q4/22 |
Price Q1/23 compared with Q1/22 |
Price Q1/23 compared with Q4/22 |
|---|---|---|---|---|---|
| Wood products | Europe | Significantly weaker | Stronger | Significantly lower | Slightly lower |
| Wood products | Overseas | Significantly weaker | Significantly weaker | Significantly lower | Slightly lower |
Source: Stora Enso
Segments
• Operational ROCE, at 3.8% (3.7%), was above the 3.5% longterm target, despite the increasing fair value of Stora Enso's forest assets in the Nordics.
| EUR million | Q1/23 | Q1/22 | Change % Q1/23–Q1/22 |
Q4/22 | Change % Q1/23–Q4/22 |
2022 |
|---|---|---|---|---|---|---|
| Sales1 | 687 | 626 | 9.7 % | 664 | 3.4 % | 2,519 |
| Operational EBITDA | 68 | 58 | 16.2 % | 79 | -14.4 % | 256 |
| Operational EBITDA margin | 9.9 % | 9.3 % | 11.9 % | 10.2 % | ||
| Operational EBIT | 57 | 49 | 16.4 % | 62 | -7.9 % | 204 |
| Operational EBIT margin | 8.3 % | 7.8 % | 9.3 % | 8.1 % | ||
| Operational ROCE, LTM2 | 3.8 % | 3.7 % | 3.7 % | 3.7 % | ||
| Cash flow from operations | 20 | 45 | -55.0 % | 20 | -0.3 % | 146 |
| Cash flow after investing activities | 9 | 34 | -73.6 % | -3 | n/m | 91 |
| Wood deliveries, 1,000 m3 | 9,227 | 10,224 | -9.7 % | 9,136 | 1.0 % | 38,217 |
| Operational fair value change of biological assets |
29 | 22 | 31.9 % | 22 | 36.5 % | 87 |
1 In Q1/2023, internal wood sales to Stora Enso's divisions represented 62% of net sales and external sales to other forest companies represented 38%. 2 Last 12 months
The segment Other included the paper production sites in the process of divestment during the first quarter, the reporting of the emerging businesses (including Formed Fiber, Circular Solutions (biocomposites), and Selfly Stores), as well as Stora Enso's shareholding in the energy company Pohjolan Voima (PVO), and the Group's shared services and administration.
| Change % Q1/23– |
Change % Q1/23– |
|||||
|---|---|---|---|---|---|---|
| EUR million | Q1/23 | Q1/22 | Q1/22 | Q4/22 | Q4/22 | 2022 |
| Sales | 364 | 481 | -24.2 % | 528 | -30.9 % 2,150 | |
| Operational EBITDA | 31 | 21 | 50.6 % | 20 | 57.4 % | 102 |
| Operational EBITDA margin | 8.6 % | 4.3 % | 3.8 % | 4.7 % | ||
| Operational EBIT | 27 | 6 | n/m | 14 | 93.6 % | 63 |
| Operational EBIT margin | 7.3 % | 1.3 % | 2.6 % | 2.9 % | ||
| Cash flow from operations | 25 | -17 | 244.8 % | -42 | 159.6 % | -136 |
| Cash flow after investing activities | 23 | -34 | 168.2 % | -61 | 138.3 % | -203 |
Comparative figures have been restated as described in our release from 29 March 2023
| EUR million | 31 Mar 2023 | 31 Dec 2022 | 31 Mar 2022 |
|---|---|---|---|
| Operative fixed assets1 | 14,503 | 14,368 | 13,800 |
| Equity accounted investments | 820 | 832 | 578 |
| Operative working capital, net | 949 | 862 | 617 |
| Non-current interest-free items, net | -211 | -255 | -331 |
| Operating Capital Total | 16,061 | 15,806 | 14,664 |
| Net tax liabilities | -1,488 | -1,451 | -1,364 |
| Capital Employed2 | 14,573 | 14,356 | 13,300 |
| Equity attributable to owners of the Parent | 11,688 | 12,532 | 10,726 |
| Non-controlling interests | -31 | -30 | -19 |
| Net interest-bearing liabilities | 2,917 | 1,853 | 2,593 |
| Financing Total2 | 14,573 | 14,356 | 13,300 |
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 decreased by EUR 679 million to EUR 1,238 million.
Net debt increased by EUR 1,063 million to EUR 2,917 (1,853) million during the first quarter. The ratio of net debt to the last 12 months' operational EBITDA was at 1.3 (0.7). The net debt/equity ratio on 31 March 2023 increased to 0.25 (0.15). The average interest expense rate on borrowings was at reporting date 3.5% (3.3%).
During the first quarter Stora Enso draw bilateral loans of EUR 200 million with three-year maturity and extension options. These loans were arranged during last quarter of 2022, but undrawn at the year-end.
Stora Enso had in total EUR 900 million committed fully undrawn credit facilities as per 31 March 2023. Additionally, the Company has access to EUR 1,050 million statutory pension premium loans in Finland.
The value of total forest assets, including leased land and Stora Enso's share of Tornator's forest assets, decreased by EUR 69 million to EUR 8,269 (8,338) million. The decrease is mainly caused by foreign exchange impact. The fair value of biological assets, including Stora Enso's share of Tornator, decreased by EUR 24 million to EUR 5,629 (5,653) million. The value of forest land, including leased land and Stora Enso's share of Tornator, decreased by EUR 45 million to EUR 2,640 (2,685) million.
| Credit ratings | ||
|---|---|---|
| Rating agency | Long/short-term rating | Valid from |
| Fitch Ratings | BBB- (positive) | 9 March 2023 |
| Moody's | Baa3 (positive) / P-3 | 10 February 2023 |
| EUR million | Q1/23 | Q1/22 | Change % Q1/23– Q1/22 |
Q4/22 | Change % Q1/23– Q4/22 |
2022 |
|---|---|---|---|---|---|---|
| Operational EBITDA | 399 | 662 | -39.8 % | 515 | -22.6 % | 2,529 |
| IAC on operational EBITDA | 32 | -61 | 152.1 % | 8 | 280.9 % | -133 |
| Other adjustments | -57 | 13 | n/m | -77 | 26.5 % | -62 |
| Change in working capital | -120 | -211 | 43.2 % | -18 | n/m | -461 |
| Cash flow from operations | 254 | 403 | -36.9 % | 429 | -40.7 % | 1,873 |
| Cash spent on fixed and biological assets | -253 | -177 | -43.4 % | -225 | -12.8 % | -705 |
| Acquisitions of equity accounted investments |
0 | -2 | 100.0 % | -2 | 100.0 % | -7 |
| Cash flow after investing activities | 1 | 224 | -99.7 % | 202 | -99.7 % | 1,162 |
Cash flow after investing activities was EUR 1 (202) million. Working capital increased by EUR 120 million, mainly due to increased inventories, and was offset by lower trade receivables and increased payables. Cash spent on fixed and biological assets was EUR 253 million. Payments related to the previously announced provisions amounted to EUR 7 million. EUR million
Additions to fixed and biological assets totalled EUR 229 (85) million, of which EUR 214 (71) million were fixed assets and EUR 15 (14) million biological assets.
Depreciations and impairment charges excluding IACs totalled EUR 136 (135) million. Additions in fixed and biological assets had a cash outflow impact of EUR 253 (177) million.
| EUR million | Q1/23 | Investment to be finalised |
|
|---|---|---|---|
| Packaging Materials | 83 | Oulu consumer board investment Board machine 8 capacity increase at Skoghall in Sweden |
2025 2024 |
| Packaging Solutions | 88 | De Jong Packaging Group's De Lier site expansion | 2023 |
| Biomaterials | 42 | Skutskär bleach plant upgrade in Sweden Lignin related investments at Sunila, Finland |
2024 2023 |
| Wood Products | 6 | n/a | |
| Forest | 5 | n/a | |
| Other | 5 | n/a | |
| Total | 229 |
| EUR million | Forecast 2023 |
|---|---|
| Capital expenditure | 1,200–1,300 |
| Depreciation and depletion of capitalised silviculture costs | 640–680 |
Stora Enso's capital expenditure forecast includes approximately EUR 80 million for the Group's forest assets. The depletion of capitalised silviculture costs is forecast to be EUR 70–80 million.
Risk is characterised by both threats and opportunities, which may have an impact on future performance and the financial results of Stora Enso, as well as on its ability to meet certain social and environmental objectives.
The rapidly changing macroeconomic and geopolitical disruption is increasing complexity. The sanctions on Russia, retaliatory measures as well as conflict-related risks to people, operations, trade credit, cyber security, supply, and demand, could all have an adverse impact on the Group.
There is risk of continued high cost inflation in general and increased price volatility for raw materials such as wood, chemicals, other components and energy in Europe, as well as continued logistical disruptions across the markets. The tight wood market could cause disruptions such as delays and/or lack of wood supply to the Group's production sites. The risk of a prolonged global economic downturn and recession, as well as sudden interest rate increases, currency fluctuations, and trade unions strike action could all affect negatively the Group's profits, cash flow and financial position, as well as access to material and transport.
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 one of Stora Enso's manufacturing facilities with operational or environmental impacts; risks inherent in conducting business through joint ventures; and other factors that can be found in Stora Enso's press releases and disclosures.
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, and the outcome of such a process could result in adverse financial impact on Stora Enso.
A more detailed description of risks is included in Stora Enso's Annual Report 2022, available 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 35 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 222 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 150 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 46 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 89 million, negative EUR 12 million and positive EUR 14 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 164 million expense exposure in Brazilian real (BRL) and approximately EUR 77 million income exposure in Chinese Renminbi (CNY). These exposures arise from the foreign subsidiaries and jointoperations located in Brazil and China, respectively. For these exposures a 10% strengthening in the value of a foreign currency would have a negative EUR 16 million and a positive EUR 8 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.
As announced in Stora Enso's stock exchange release on 12 October 2021, the European Commission has conducted unannounced inspections in locations at several member states at the premises of companies active in the wood pulp sector. Stora Enso was included in the European Commission's inspection at its headquarters in Helsinki, Finland.
Stora Enso is cooperating fully with the authorities. As stated by the Commission, the fact that they carry out such inspections does not mean that the companies are guilty of anti-competitive behaviour nor does it prejudge the outcome of the investigation itself.
Stora Enso is under strict confidentiality rules regarding the details of the ongoing European Commission investigation and cannot pre-empt or speculate regarding the next steps or eventual outcome of the investigation.
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.
Micaela Thorström was appointed EVP Legal and General Counsel and Member of the Group Leadership Team. She assumed her new role in April. Micaela joined Stora Enso in 2015 as Legal Counsel and was appointed Vice President of Group Legal in April 2022.
Before joining Stora Enso, she held several senior level positions at companies and law firms in Finland such as PricewaterhouseCoopers, Hannes Snellman, Lindholm Wallgren Attorneys and Roschier.
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. The dividend was paid on 27 March 2023.
The AGM approved the proposal by the Shareholders' Nomination Board that the current members of the Board of Directors – Håkan Buskhe, Elisabeth Fleuriot, Helena Hedblom, Kari Jordan, Christiane Kuehne, Antti Mäkinen, Richard Nilsson and Hans Sohlström – were re-elected members of the Board of Directors until the end of the following AGM and that Astrid Hermann was elected new member of the Board of Directors for the same term of office. The AGM elected Kari Jordan as Chair of the Board of Directors and Håkan Buskhe as Vice Chair of the Board of Directors.
The AGM approved the proposal that
PricewaterhouseCoopers Oy be elected as auditor until the end of the following AGM. PricewaterhouseCoopers Oy has notified the company that Samuli Perälä, APA, will act as the responsible auditor.
The AGM approved the proposals that the Board of Directors be authorised to decide on the repurchase and on the issuance of Stora Enso R shares. The amount of shares shall not to exceed a total of 2,000,000 R shares, corresponding to approximately 0.25% of all shares and 0.33% of all R shares.
The AGM approved the annual remuneration for the Board of Directors as follows:
| Chair | EUR 209,000 (2022: 203,000) |
|---|---|
| Vice Chair | EUR 118,000 (2022: 115,000) |
| Members | EUR 81,000 (2022: 79,000) |
The AGM approved the proposal by the Shareholders' Nomination Board that the annual remuneration for the members of the Board of Directors, be paid in Company shares and cash so that 40% will be paid in Stora Enso R shares to be purchased on the Board members' behalf from the market at a price determined in public trading, and the rest in cash.
The AGM approved the proposed annual remuneration for the Board committees.
The AGM approved the amendment of Stora Enso's Articles of Association to enable arranging a General Meeting of Shareholders as a virtual meeting without a meeting venue as an alternative for a physical meeting or a hybrid meeting.
At its meeting held after the AGM, Stora Enso's Board of Directors elected Richard Nilsson (Chair), Elisabeth Fleuriot and Astrid Hermann as members of the Financial and Audit Committee.
Kari Jordan (Chair), Håkan Buskhe and Antti Mäkinen were elected members of the People and Culture Committee.
Christiane Kuehne (Chair), Helena Hedblom and Hans Sohlström were elected members of the Sustainability and Ethics Committee.
This report has been prepared in English, Finnish, and Swedish. If there are any variations in the content between the versions, the English version shall govern. This report is unaudited.
Helsinki, 25 April 2023 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 Maxau, Nymölla and Hylte sites 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 Stores.
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 preliminary 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 final purchase price is subject to customary purchase price adjustments.
The fair values of the identifiable assets and liabilities as of the acquisition date are presented in the table below.
| EUR million | Q1/2023 |
|---|---|
| Net assets acquired | |
| Cash and cash equivalents | 27 |
| Property, plant and equipment | 223 |
| Intangible assets | 219 |
| Right-of-use assets | 104 |
| Working capital | 15 |
| Tax assets and liabilities | -70 |
| Interest-bearing assets and liabilities | -232 |
| Fair value of net assets acquired | 287 |
| Purchase consideration, cash part | 612 |
| Purchase consideration, contingent | 0 |
| Total purchase consideration | 612 |
| Fair value of net assets acquired | -287 |
| Non-controlling interest | 2 |
| Goodwill | 327 |
| Cash outflow on acquisitions | -612 |
| Cash and cash equivalents of acquired subsidiaries | 27 |
| Cash flow on acquisition, net of acquired cash | -585 |
The fair values of the acquired assets, liabilities and goodwill as on the acquisition date have been determined on a provisional basis pending finalisation of the postcombination review of the fair values. If new information obtained within one year of the date of acquisition about facts and circumstances that existed at the date of acquisition, or any other adjustment items, are identified, the above amounts and the accounting for the acquisition will be adjusted. The provisional 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 Q1/2023, De Jong Packaging Group contributed sales of EUR 162 million and an IFRS net loss of EUR 13 million to the Group's results. Since the acquisition occurred in the
In Q1/2023 Stora Enso completed transactions for the Nymölla paper site in Sweden and the Maxau paper site in Germany. The following table reflects the net assets of companies sold, including disposal consideration.
beginning of the year, Stora Enso Group's consolidated sales and net profit include the results from the acquired units from the beginning of 2023. 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 | Q1/23 | Q1/22 |
|---|---|---|
| Net assets sold | ||
| Cash and cash equivalents | 20 | 0 |
| Property, plant and equipment | 257 | 1 |
| Intangible assets | 57 | 0 |
| Working capital | -13 | 0 |
| Tax assets and liabilities | -23 | 0 |
| Interest-bearing assets and liabilities | -85 | 0 |
| Net assets in disposed companies | 212 | 1 |
| Total disposal consideration | 256 | 5 |
As announced in January 2023, Stora Enso has signed agreements to dispose of the Hylte paper production site in Sweden. The unit belongs to the segment Other, considering the segment changes in 2023. Disposal of the Hylte site was completed at the beginning of April 2023.
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.
The Group's key non-IFRS performance metric is operational EBIT, which is used to evaluate the performance of its operating segments and to steer allocation of resources to them.
Operational EBIT comprises the operating profit excluding items affecting comparability (IAC) and fair valuations from the segments and Stora Enso's share of the operating profit of equity accounted investments (EAI), also excluding items affecting comparability and fair valuations.
Items affecting comparability are exceptional transactions that are not related to recurring business operations. The most common IAC are 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.
Fair valuations and non-operational items include CO2 emission rights, 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 EAI. Non-operational fair value changes of biological assets reflect changes made to valuation assumptions and parameters. Operational fair value changes of biological
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.
Accordingly, assets held for sale at the end of Q1/2023 include the Hylte site. Assets held for sale include mainly fixed assets, inventories and operative receivables, whereas related liabilities consist mainly of operative liabilities.
assets contain all other fair value changes, mainly due to inflation and differences in actual harvesting levels compared to the harvesting plan. 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 profit (biological assets) and other comprehensive income (forest land) and are included in operational EBIT only at the disposal date.
Cash flow after investing activities (non-IFRS) is calculated as follows: cash flow from operations (non-IFRS) excluding cash spent on intangible assets, property, plant and equipment, and biological assets and acquisitions of EAIs.
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.
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 will present 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 will be discontinued.
The full list of the non-IFRS measures is presented at the end of this report.
• 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.
| EUR million | Q1/23 | Q1/22 | Q4/22 | 2022 |
|---|---|---|---|---|
| Sales | 2,721 | 2,798 | 2,864 | 11,680 |
| Other operating income | 147 | 89 | 89 | 326 |
| Change in inventories of finished goods and WIP | 22 | 89 | 1 | 258 |
| Materials and services | -1,739 | -1,682 | -1,757 | -6,979 |
| Freight and sales commissions | -259 | -245 | -288 | -1,148 |
| Personnel expenses | -328 | -324 | -330 | -1,315 |
| Other operating expenses | -161 | -135 | -134 | -594 |
| Share of results of equity accounted investments | 11 | 20 | 156 | 221 |
| Change in net value of biological assets | 0 | -12 | 268 | 195 |
| Depreciation, amortisation and impairment charges | -156 | -204 | -165 | -635 |
| Operating profit | 258 | 394 | 705 | 2,009 |
| Net financial items | -29 | -19 | -39 | -151 |
| Profit before tax | 228 | 374 | 666 | 1,858 |
| Income tax | -43 | -88 | -82 | -322 |
| Net profit for the period | 185 | 287 | 584 | 1,536 |
| Attributable to | ||||
| Owners of the Parent | 189 | 289 | 586 | 1,550 |
| Non-controlling interests | -4 | -2 | -2 | -13 |
| Net profit for the period | 185 | 287 | 584 | 1,536 |
| Earnings per share | ||||
| Basic earnings per share, EUR | 0.24 | 0.37 | 0.74 | 1.97 |
| Diluted earnings per share, EUR | 0.24 | 0.37 | 0.74 | 1.96 |
| EUR million | Q1/23 | Q1/22 | Q4/22 | 2022 |
|---|---|---|---|---|
| Net profit for the period | 185 | 287 | 584 | 1,536 |
| Other comprehensive income (OCI) | ||||
| Items that will not be reclassified to profit and loss | ||||
| Equity instruments at fair value through OCI | -469 | 68 | -175 | 519 |
| Actuarial gains and losses on defined benefit plans | 3 | 77 | -101 | 147 |
| Revaluation of forest land | 0 | 0 | -149 | 259 |
| Share of OCI of Equity accounted investments (EAI) | 0 | 0 | 58 | 58 |
| Income tax relating to items that will not be reclassified | -8 | -10 | 41 | -77 |
| -474 | 135 | -326 | 906 | |
| Items that may be reclassified subsequently to profit and loss | ||||
| Cumulative translation adjustment (CTA) | -66 | 25 | -262 | -197 |
| Net investment hedges and loans | -1 | 2 | 3 | -27 |
| Cash flow hedges and cost of hedging | -9 | 32 | 55 | 52 |
| Share of OCI of Non-controlling Interests (NCI) | 0 | -1 | 3 | 0 |
| Income tax relating to items that may be reclassified | 1 | -5 | -14 | -6 |
| -75 | 52 | -216 | -177 | |
| Total comprehensive income | -364 | 474 | 42 | 2,265 |
| Attributable to | ||||
| Owners of the parent | -360 | 477 | 41 | 2,278 |
| Non-controlling interests | -4 | -3 | 0 | -13 |
| Total comprehensive income | -364 | 474 | 42 | 2,265 |
CTA = Cumulative translation adjustment
OCI = Other comprehensive income
EAI = Equity accounted investments
| EUR million | 31 Mar 2023 | 31 Dec 2022 | 31 Mar 2022 |
|---|---|---|---|
| Assets | |||
| Goodwill O |
557 | 244 | 283 |
| Other intangible assets O |
327 | 121 | 122 |
| Property, plant and equipment O |
5,054 | 4,860 | 4,975 |
| Right-of-use assets O |
569 | 418 | 437 |
| 6,507 | 5,643 | 5,817 | |
| Forest assets O |
6,775 | 6,846 | 6,737 |
| Biological assets O |
4,492 | 4,531 | 4,545 |
| Forest land O |
2,282 | 2,315 | 2,192 |
| Emission rights O |
239 | 123 | 273 |
| Equity accounted investments O |
820 | 832 | 578 |
| Listed securities I |
6 | 8 | 12 |
| Unlisted securities O |
972 | 1,437 | 973 |
| Non-current interest-bearing receivables I |
112 | 120 | 69 |
| Deferred tax assets T |
67 | 74 | 123 |
| Other non-current assets O |
36 | 38 | 40 |
| Non-current assets | 15,533 | 15,120 | 14,621 |
| Inventories O |
1,903 | 1,810 | 1,619 |
| Tax receivables T |
32 | 11 | 26 |
| Operative receivables O |
1,463 | 1,473 | 1,543 |
| Interest-bearing receivables I |
68 | 77 | 110 |
| Cash and cash equivalents I |
1,257 | 1,917 | 983 |
| Current assets | 4,723 | 5,287 | 4,280 |
| Assets held for sale | 33 | 514 | 0 |
| Total assets | 20,288 | 20,922 | 18,901 |
| Equity and liabilities | |||
| Owners of the Parent Non-controlling Interests |
11,688 -31 |
12,532 -30 |
10,726 -19 |
| Total equity | 11,656 | 12,502 | 10,706 |
| Post-employment benefit obligations O |
153 | 159 | 263 |
| Provisions O |
83 | 81 | 94 |
| Deferred tax liabilities T |
1,499 | 1,443 | 1,425 |
| Non-current interest-bearing liabilities I |
2,864 | 2,792 | 3,082 |
| Non-current operative liabilities O |
11 | 11 | 14 |
| Non-current liabilities | 4,611 | 4,486 | 4,878 |
| Current portion of non-current debt I |
917 | 667 | 182 |
| Interest-bearing liabilities I |
559 | 513 | 496 |
| Bank overdrafts I |
19 | 0 | 6 |
| Provisions O |
34 | 43 | 132 |
| Operative liabilities O |
2,389 | 2,410 | 2,413 |
| Tax liabilities T |
84 | 64 | 88 |
| Current liabilities | 4,001 | 3,697 | 3,317 |
| Liabilities related to assets held for sale | 20 | 237 | 0 |
| Total liabilities | 8,632 | 8,419 | 8,195 |
| Total equity and liabilities | 20,288 | 20,922 | 18,901 |
Items designated with "O" comprise Operating Capital
Items designated with "I" comprise Net Interest-bearing Liabilities
Items designated with "T" comprise Net Tax Liabilities
| EUR million | Q1/23 | Q1/22 |
|---|---|---|
| Cash flow from operating activities | ||
| Operating profit | 258 | 394 |
| Adjustments for non-cash items | 116 | 220 |
| Change in net working capital | -120 | -211 |
| Cash flow from operations | 254 | 403 |
| Net financial items paid | -24 | -27 |
| Income taxes paid, net | -40 | -56 |
| Net cash provided by operating activities | 190 | 319 |
| Cash flow from investing activities | ||
| Acquisition of subsidiary shares and business operations, net of acquired cash | -585 | 0 |
| Acquisitions of equity accounted investments | 0 | -2 |
| Acquisitions of unlisted securities | -1 | 0 |
| Cash flow on disposal of subsidiary shares and business operations, net of disposed cash | 236 | 5 |
| Cash flow on disposal of forest and intangible assets and property, plant and equipment | 35 | 2 |
| Capital expenditure | -253 | -177 |
| Proceeds from/payment of non-current receivables, net | -24 | -5 |
| Net cash used in investing activities | -593 | -177 |
| Cash flow from financing activities | ||
| Proceeds from issue of new long-term debt | 210 | 9 |
| Repayment of long-term debt and lease liabilities | -167 | -259 |
| Change in short-term interest-bearing liabilities | 78 | -39 |
| Dividends paid | -399 | -359 |
| Purchase of own shares1 | -6 | -1 |
| Net cash provided by financing activities | -284 | -649 |
| Net change in cash and cash equivalents | -687 | -508 |
| Translation adjustment | 7 | 4 |
| Net cash and cash equivalents at the beginning of period | 1,917 | 1,480 |
| Net cash and cash equivalents at period end | 1,238 | 977 |
| Cash and cash equivalents at period end | 1,257 | 983 |
| Bank overdrafts at period end | -19 | -6 |
| Net cash and cash equivalents at period end | 1,238 | 977 |
1 Own shares purchased for the Group's share award programme. The Group did not hold any of its own shares on 31 March 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 Equity Accounted Investments |
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 profit for the period | — | — | — | — | — | — | — | — | — | 289 | 289 | -2 | 287 |
| OCI before tax | — | — | — | — | 68 | 32 | — | — | 27 | 77 | 203 | -1 | 202 |
| Income tax relating to OCI | — | — | — | — | — | -5 | — | — | 1 | -10 | -15 | — | -15 |
| Total comprehensive income | — | — | — | — | 68 | 26 | — | — | 27 | 356 | 477 | -3 | 474 |
| Dividend | — | — | — | — | — | — | — | — | — | -434 | -434 | — | -434 |
| Acquisitions and disposals | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Purchase of treasury shares | — | — | — | -1 | — | — | — | — | — | — | -1 | — | -1 |
| Share-based payments | — | — | — | 1 | — | — | — | — | — | — | 1 | — | 1 |
| Balance at 31 March 2022 | 1,342 | 77 | 633 | — | 846 | 22 | 1,373 | 28 | -168 | 6,572 | 10,726 | -19 | 10,706 |
| Net profit for the period | — | — | — | — | — | — | — | — | — | 1,261 | 1,261 | -11 | 1,250 |
| OCI before tax | — | — | — | — | 451 | 21 | 259 | 58 | -250 | 70 | 609 | 1 | 610 |
| Income tax relating to OCI | — | — | — | — | 1 | -4 | -53 | — | 3 | -15 | -68 | — | -68 |
| Total Comprehensive Income | — | — | — | — | 452 | 17 | 206 | 58 | -247 | 1,316 | 1,802 | -10 | 1,792 |
| Dividend | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Acquisitions and disposals | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Purchase of treasury shares | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Share-based payments | — | — | — | — | — | — | — | — | — | 4 | 4 | — | 4 |
| Balance at 31 December 2022 | 1,342 | 77 | 633 | — | 1,298 | 39 | 1,579 | 87 | -415 | 7,893 | 12,532 | -30 | 12,502 |
| Net profit for the period | — | — | — | — | — | — | — | — | — | 189 | 189 | -4 | 185 |
| OCI before tax | — | — | — | — | -469 | -9 | — | — | -67 | 3 | -543 | — | -542 |
| Income tax relating to OCI | — | — | — | — | — | 2 | — | — | -1 | -9 | -7 | — | -7 |
| Total comprehensive income | — | — | — | — | -468 | -7 | — | — | -68 | 183 | -360 | -4 | -364 |
| Dividend | — | — | — | — | — | — | — | — | — | -473 | -473 | — | -473 |
| Acquisitions and disposals | — | — | — | — | — | — | — | — | — | — | — | 2 | 2 |
| Purchase of treasury shares | — | — | — | -6 | — | — | — | — | — | — | -6 | — | -6 |
| Share-based payments | — | — | — | 6 | — | — | — | — | — | -11 | -5 | — | -5 |
| Balance at 31 March 2023 | 1,342 | 77 | 633 | — | 830 | 32 | 1,578 | 87 | -484 | 7,592 | 11,688 | -31 | 11,656 |
CTA = Cumulative Translation Adjustment OCI = Other Comprehensive Income NCI = Non-controlling Interests
| EUR million | Q1/23 | Q1/22 | 2022 |
|---|---|---|---|
| Carrying value at 1 January | 12,489 | 12,654 | 12,654 |
| Additions in tangible and intangible assets | 137 | 68 | 656 |
| Additions in right-of-use assets | 77 | 3 | 45 |
| Additions in biological assets | 15 | 14 | 77 |
| Depletion of capitalised silviculture costs | -22 | -18 | -75 |
| Acquisition of subsidiaries | 862 | 0 | 0 |
| Disposals and classification as held for sale1 | -6 | -1 | -312 |
| Depreciation and impairment | -156 | -205 | -640 |
| Fair valuation of forest assets | 21 | 6 | 529 |
| Translation difference and other | -136 | 33 | -445 |
| Statement of Financial Position Total | 13,282 | 12,554 | 12,489 |
1Including company disposals
| EUR million | 31 Mar 2023 | 31 Mar 2022 | 31 Dec 2022 |
|---|---|---|---|
| Bond loans | 2,446 | 2,497 | 2,460 |
| Loans from credit institutions | 802 | 354 | 623 |
| Lease liabilities | 528 | 385 | 375 |
| Long-term derivative financial liabilities | 1 | 26 | 0 |
| Other non-current liabilities | 5 | 3 | 2 |
| Non-current interest bearing liabilities including current portion | 3,781 | 3,264 | 3,459 |
| Short-term borrowings | 485 | 426 | 429 |
| Interest payable | 37 | 34 | 35 |
| Short-term derivative financial liabilities | 37 | 37 | 49 |
| Bank overdrafts | 19 | 6 | 0 |
| Total Interest-bearing Liabilities | 4,359 | 3,767 | 3,972 |
| EUR million | Q1/23 | Q1/22 | 2022 |
|---|---|---|---|
| Carrying value at 1 January1 | 3,972 | 3,938 | 3,938 |
| Additions in long-term debt, companies acquired | 133 | 0 | 0 |
| Proceeds of new long-term debt | 210 | 9 | 366 |
| Repayment of long-term debt | -156 | -268 | -351 |
| Additions in lease liabilities, companies acquired | 99 | 0 | 0 |
| Additions in lease liabilities | 77 | 3 | 45 |
| Repayment of lease liabilities and interest | -17 | -18 | -73 |
| Change in short-term borrowings | 63 | 49 | 75 |
| Change in interest payable | 7 | 4 | 19 |
| Change in derivative financial liabilities | -12 | -6 | -19 |
| Disposals and classification as held for sale | 1 | 0 | -5 |
| Other | 15 | 7 | 8 |
| Translation differences | -32 | 48 | -32 |
| Total Interest-bearing Liabilities | 4,359 | 3,767 | 3,972 |
1The table format has been updated during last quarter of 2022 to better present changes in liabilities arising from cash flow activities and non-cash activities. The comparison figures have been restated for Q1/2022 accordingly.
| EUR million | 31 Mar 2023 | 31 Dec 2022 | 31 Mar 2022 |
|---|---|---|---|
| On Own Behalf | |||
| Guarantees | 18 | 14 | 15 |
| Other commitments | 4 | 0 | 0 |
| On Behalf of Equity Accounted Investments | |||
| Guarantees | 5 | 5 | 5 |
| On Behalf of Others | |||
| Guarantees | 6 | 5 | 6 |
| Other commitments | 36 | 36 | 36 |
| Total | 68 | 60 | 61 |
| Guarantees1 | 28 | 24 | 26 |
| Other commitments1 | 40 | 36 | 36 |
| Total | 68 | 60 | 61 |
1The comparative figures as at 31 March 2022 have been restated due to a reclassification from other commitments to guarantees.
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 Mar 2023 | 31 Dec 2022 | 31 Mar 2022 |
|---|---|---|---|
| Total | 751 | 593 | 228 |
The Group's direct capital expenditure contracts include the Group's share of direct capital expenditure contracts in joint operations.
| EUR million | Q1/23 | Q1/22 | Change % Q1/23–Q1/22 |
Q4/22 | Change % Q1/23–Q4/22 |
2022 |
|---|---|---|---|---|---|---|
| Operational EBITDA | 399 | 662 | -39.8 % | 515 | -22.6 % | 2,529 |
| Depreciation and silviculture costs of EAI | -2 | -2 | -4.9 % | -3 | 20.7 % | -11 |
| Silviculture costs1 | -27 | -23 | -17.7 % | -27 | 2.2 % | -100 |
| Depreciation and impairment excl. IAC | -136 | -135 | -1.1 % | -130 | -4.5 % | -527 |
| Operational EBIT | 234 | 503 | -53.5 % | 355 | -34.1 % | 1,891 |
| Fair valuations and non-operational items2 | 11 | 21 | -46.2 % | 381 | -97.0 % | 363 |
| Items affecting comparability (IAC)2 | 12 | -130 | 109.4 % | -31 | 139.1 % | -245 |
| Operating profit (IFRS) | 258 | 394 | -34.6 % | 705 | -63.5 % | 2,009 |
1Including damages to forests
2 See section Non-IFRS measures for IAC and fair valuations and non-operational items definitions.
| EUR million | Q1/23 | 2022 | Q4/22 | Q3/22 | Q2/22 | Q1/22 |
|---|---|---|---|---|---|---|
| Packaging Materials | 1,300 | 5,496 | 1,335 | 1,421 | 1,424 | 1,317 |
| Packaging Solutions | 276 | 727 | 177 | 176 | 186 | 189 |
| Biomaterials | 488 | 2,180 | 649 | 567 | 522 | 442 |
| Wood Products | 454 | 2,195 | 471 | 520 | 631 | 573 |
| Forest | 687 | 2,519 | 664 | 581 | 649 | 626 |
| Other | 364 | 2,150 | 528 | 575 | 568 | 481 |
| Inter-segment sales | -848 | -3,589 | -959 | -876 | -925 | -828 |
| Total | 2,721 | 11,680 | 2,864 | 2,963 | 3,054 | 2,798 |
Comparative figures have been restated as described in our release from 29 March 2023.
| EUR million | Q1/23 | 2022 | Q4/22 | Q3/22 | Q2/22 | Q1/22 |
|---|---|---|---|---|---|---|
| Packaging Materials | 1,242 | 5,257 | 1,277 | 1,362 | 1,359 | 1,258 |
| Packaging Solutions | 273 | 704 | 171 | 170 | 179 | 184 |
| Biomaterials | 423 | 1,798 | 522 | 471 | 435 | 370 |
| Wood Products | 416 | 2,058 | 436 | 487 | 595 | 540 |
| Forest | 258 | 848 | 223 | 195 | 219 | 211 |
| Other | 108 | 1,014 | 234 | 279 | 267 | 234 |
| Total | 2,721 | 11,680 | 2,864 | 2,963 | 3,054 | 2,798 |
Comparative figures have been restated as described in our release from 29 March 2023.
| EUR million | Q1/23 | 2022 | Q4/22 | Q3/22 | Q2/22 | Q1/22 |
|---|---|---|---|---|---|---|
| Product sales | 2,707 | 11,521 | 2,841 | 2,927 | 3,000 | 2,753 |
| Service sales | 15 | 159 | 23 | 37 | 54 | 45 |
| Total | 2,721 | 11,680 | 2,864 | 2,963 | 3,054 | 2,798 |
| EUR million | Q1/23 | 2022 | Q4/22 | Q3/22 | Q2/22 | Q1/22 |
|---|---|---|---|---|---|---|
| Packaging Materials | 41 | 655 | 59 | 188 | 200 | 208 |
| Packaging Solutions | 8 | 16 | 5 | 4 | 2 | 5 |
| Biomaterials | 91 | 687 | 249 | 197 | 123 | 117 |
| Wood Products | -11 | 309 | -14 | 70 | 134 | 118 |
| Forest | 57 | 204 | 62 | 47 | 47 | 49 |
| Other | 27 | 63 | 14 | 29 | 14 | 6 |
| Inter-segment eliminations | 21 | -42 | -20 | -7 | -15 | 0 |
| Operational EBIT | 234 | 1,891 | 355 | 527 | 505 | 503 |
| Fair valuations and non-operational items1 | 11 | 363 | 381 | 6 | -45 | 21 |
| Items affecting comparability1 | 12 | -245 | -31 | -22 | -61 | -130 |
| Operating Profit (IFRS) | 258 | 2,009 | 705 | 511 | 399 | 394 |
| Net financial items | -29 | -151 | -39 | -63 | -29 | -19 |
| Profit before Tax | 228 | 1,858 | 666 | 448 | 370 | 374 |
| Income tax expense | -43 | -322 | -82 | -81 | -71 | -88 |
| Net Profit | 185 | 1,536 | 584 | 367 | 299 | 287 |
1 See section Non-IFRS measures for IAC and fair valuations and non-operational items definitions. Comparative figures have been restated as described in our release from 29 March 2023.
| EUR million | Q1/23 | 2022 | Q4/22 | Q3/22 | Q2/22 | Q1/22 |
|---|---|---|---|---|---|---|
| Impairments and impairment reversals | -19 | -124 | -9 | -2 | -2 | -111 |
| Restructuring costs excluding impairments | 22 | -3 | 11 | -5 | -3 | -6 |
| Acquisitions | -16 | 0 | 0 | 0 | 0 | 0 |
| Disposals | 20 | -104 | -31 | -17 | -56 | 0 |
| Other | 6 | -15 | -3 | 1 | 0 | -13 |
| Total IAC on Operating Profit | 12 | -245 | -31 | -22 | -61 | -130 |
| Fair valuations and non-operational items | 11 | 363 | 381 | 6 | -45 | 21 |
| Total | 24 | 118 | 350 | -17 | -106 | -109 |
Items affecting comparability had a positive impact on the operating profit of EUR 12 (negative -130) million. The IACs relate mainly to the disposals of the Nymölla and Maxau paper sites, De Jong Packaging Group acquisition and paper mill restructurings. Fair valuation and nonoperational items had a positive impact on the operating profit of EUR 11 (21) million. The impact came mainly from valuation of emission rights.
| EUR million | Q1/23 | 2022 | Q4/22 | Q3/22 | Q2/22 | Q1/22 |
|---|---|---|---|---|---|---|
| Packaging Materials | -21 | -9 | -2 | -3 | 2 | -6 |
| Packaging Solutions | -20 | -98 | 0 | -5 | -57 | -36 |
| Biomaterials | 0 | -2 | 0 | 0 | 0 | -2 |
| Wood Products | 0 | -56 | -6 | -21 | -2 | -27 |
| Forest | -3 | -48 | 1 | -6 | 0 | -43 |
| Other | 56 | -33 | -23 | 12 | -4 | -17 |
| IAC on Operating Profit | 12 | -245 | -31 | -22 | -61 | -130 |
| IAC on tax | -3 | 9 | 3 | 1 | 1 | 4 |
| IAC on Net Profit | 10 | -236 | -29 | -21 | -60 | -126 |
Comparative figures have been restated as described in our release from 29 March 2023.
| EUR million | Q1/23 | 2022 | Q4/22 | Q3/22 | Q2/22 | Q1/22 |
|---|---|---|---|---|---|---|
| Packaging Materials | 0 | 7 | 17 | 1 | 2 | -12 |
| Packaging Solutions | 0 | 0 | 0 | 0 | 0 | 0 |
| Biomaterials | -1 | -17 | -9 | 0 | -6 | -2 |
| Wood Products | 0 | 0 | 0 | 0 | 0 | 0 |
| Forest | -9 | 367 | 401 | 2 | -47 | 10 |
| Other | 21 | 6 | -27 | 2 | 6 | 25 |
| FV on Operating Profit | 11 | 363 | 381 | 6 | -45 | 21 |
| FV on tax | -3 | -38 | -46 | -1 | 13 | -4 |
| FV on Net Profit | 8 | 324 | 335 | 5 | -32 | 17 |
Comparative figures have been restated as described in our release from 29 March 2023.
| EUR million | Q1/23 | 2022 | Q4/22 | Q3/22 | Q2/22 | Q1/22 |
|---|---|---|---|---|---|---|
| Packaging Materials | 21 | 653 | 74 | 185 | 204 | 190 |
| Packaging Solutions | -12 | -81 | 5 | -1 | -54 | -31 |
| Biomaterials | 90 | 668 | 240 | 198 | 117 | 113 |
| Wood Products | -11 | 253 | -20 | 49 | 133 | 91 |
| Forest | 44 | 523 | 463 | 43 | 0 | 16 |
| Other | 104 | 36 | -37 | 43 | 16 | 14 |
| Inter-segment eliminations | 21 | -42 | -20 | -7 | -15 | 0 |
| Operating Profit (IFRS) | 258 | 2,009 | 705 | 511 | 399 | 394 |
| Net financial items | -29 | -151 | -39 | -63 | -29 | -19 |
| Profit before Tax | 228 | 1,858 | 666 | 448 | 370 | 374 |
| Income tax expense | -43 | -322 | -82 | -81 | -71 | -88 |
| Net Profit | 185 | 1,536 | 584 | 367 | 299 | 287 |
Comparative figures have been restated as described in our release from 29 March 2023.
| EUR million | Q1/23 | Q1/22 | Q4/22 |
|---|---|---|---|
| Operational EBIT, LTM | 1,622 | 1,703 | 1,891 |
| Capital employed, LTM average | 14,114 | 12,560 | 13,795 |
| Operational return on capital employed (ROCE), LTM | 11.5% | 13.6% | 13.7% |
| Operational EBIT excl. Forest division, LTM | 1,410 | 1,511 | 1,687 |
| Capital employed excl. Forest division, LTM average | 8,552 | 7,366 | 8,276 |
| Operational ROCE excl. Forest division, LTM | 16.5% | 20.5% | 20.4% |
| Net profit for the period, LTM | 1,435 | 1,409 | 1,536 |
| Total equity, LTM average | 11,730 | 9,803 | 11,532 |
| Return on equity (ROE), LTM | 12.2% | 14.4% | 13.3% |
| Net debt | 2,917 | 2,593 | 1,853 |
| Operational EBITDA, LTM | 2,266 | 2,358 | 2,529 |
| Net debt to last 12 months' operational EBITDA ratio | 1.3 | 1.1 | 0.7 |
LTM = Last 12 months. The change in the calculation method is explained in the section Non-IFRS measures
| One Euro is | Closing Rate | Average Rate (Year-to-date) | ||
|---|---|---|---|---|
| 31 Mar 2023 | 31 Dec 2022 | 31 Mar 2023 | 31 Dec 2022 | |
| SEK | 11.2805 | 11.1218 | 11.2017 | 10.6274 |
| USD | 1.0875 | 1.0666 | 1.0730 | 1.0539 |
| GBP | 0.8792 | 0.8869 | 0.8832 | 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.
| Fair value | Fair value through |
Total | Fair value hierarchy | |||||
|---|---|---|---|---|---|---|---|---|
| EUR million | Amortised cost |
through OCI |
income statement |
carrying amount |
Fair value | Level 1 | Level 2 | Level 3 |
| Financial assets | ||||||||
| Listed securities | — | 6 | — | 6 | 6 | 6 | — | — |
| Unlisted securities | — | 957 | 15 | 972 | 972 | — | — | 972 |
| Non-current interest-bearing receivables | 89 | 23 | — | 112 | 112 | — | 23 | — |
| Derivative assets | — | 23 | — | 23 | 23 | — | 23 | — |
| Loan receivables | 89 | — | — | 89 | 89 | — | — | — |
| Trade and other operative receivables | 1,126 | 59 | — | 1,185 | 1,185 | — | 59 | — |
| Current interest-bearing receivables | 13 | 39 | 16 | 68 | 68 | — | 55 | — |
| Derivative assets | — | 39 | 16 | 55 | 55 | — | 55 | — |
| Other short-term receivables | 13 | — | — | 13 | 13 | — | — | — |
| Cash and cash equivalents | 1,257 | — | — | 1,257 | 1,257 | — | — | — |
| Total | 2,485 | 1,084 | 31 | 3,599 | 3,599 | 6 | 137 | 972 |
| 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 | 2,864 | 1 | — | 2,864 | 4,345 | — | 1 | — |
| Derivative liabilities | — | 1 | — | 1 | 1 | — | 1 | — |
| Non-current debt | 2,864 | — | — | 2,864 | 4,344 | — | — | — |
| Current portion of non-current debt | 917 | — | — | 917 | 917 | — | — | — |
| Current interest-bearing liabilities | 521 | 24 | 15 | 559 | 559 | — | 38 | — |
| Derivative liabilities | — | 24 | 15 | 38 | 38 | — | 38 | — |
| Current debt | 521 | — | — | 521 | 521 | — | — | — |
| Trade and other operative payables | 1,939 | — | — | 1,939 | 1,939 | — | — | — |
| Bank overdrafts | 19 | — | — | 19 | 19 | — | — | — |
| Total | 6,260 | 24 | 15 | 6,298 | 7,778 | — | 39 | — |
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 income |
Total carrying |
Fair value hierarchy | |||||
|---|---|---|---|---|---|---|---|---|
| EUR million | cost | through 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 | Q1/23 | 2022 | Q1/22 |
|---|---|---|---|
| Financial assets | |||
| Opening balance at 1 January | 1,437 | 905 | 905 |
| Reclassifications | 0 | -1 | -1 |
| Gains/losses recognised in other comprehensive income | -466 | 523 | 69 |
| Additions | 1 | 10 | 0 |
| Closing balance | 972 | 1,437 | 973 |
The Group did not have level 3 financial liabilities as at 31 March 2023.
At period end, Level 3 financial assets included EUR 957 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 466 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 7.55% 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 +99 million and -99 million, respectively. A +/- percentage point change in the discount rate would change the valuation by EUR -143 million and +182 million, respectively.
During the first quarter of 2023, the conversions of 829 A shares into R shares were recorded in the Finnish trade register.
On 31 March 2023, Stora Enso had 176,237,451 A shares and 612,382,536 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 237,475,704.
On 17 April 2023, the conversion of 2,398 A shares into R shares was recorded in the Finnish trade register.
| Helsinki | Stockholm | ||||
|---|---|---|---|---|---|
| A share | R share | A share | R share | ||
| January | 95,984 | 29,074,140 | 124,120 | 6,444,280 | |
| February | 65,873 | 32,846,560 | 95,522 | 6,474,417 | |
| March | 93,477 | 50,395,431 | 158,277 | 7,155,293 | |
| Total | 255,334 | 112,316,131 | 377,919 | 20,073,990 | |
| Helsinki, EUR | Stockholm, SEK | |||
|---|---|---|---|---|
| A share | R share | A share | R share | |
| January | 14.35 | 13.10 | 162.40 | 149.10 |
| February | 14.85 | 13.40 | 163.20 | 148.10 |
| March | 13.45 | 11.98 | 152.40 | 134.70 |
| Million | Q1/23 | Q1/22 | Q4/22 | 2022 |
|---|---|---|---|---|
| At period end | 788.6 | 788.6 | 788.6 | 788.6 |
| Average | 788.6 | 788.6 | 788.6 | 788.6 |
| Average, diluted | 789.8 | 789.5 | 789.5 | 789.4 |
| Operational return on capital employed, operational ROCE, LTM4 (%) |
100 x | Operational EBIT4 Capital employed1 2 |
|---|---|---|
| Operational return on operating capital, operational ROOC, LTM4 (%) |
100 x | Operational EBIT4 Operating capital 2 |
| Return on equity, ROE, LTM4 (%) |
100 x | Net profit/loss for the period Total equity2 |
| Net interest-bearing liabilities | Interest-bearing liabilities – interest-bearing assets | |
| Net debt/equity ratio | Net interest-bearing liabilities Equity3 |
|
| Earnings per share (EPS) | Net profit/loss for the period3 Average number of shares |
|
| Operating capital | Operating capital is comprised of items marked with "O" in the statement of financial position |
|
| Operational EBIT | Operating profit/loss excluding items affecting comparability (IAC) and fair valuations of the segments and Stora Enso's share of operating profit/loss excluding IAC and fair valuations of its equity accounted investments (EAI) |
|
| Operational EBITDA | Operating profit/loss excluding silviculture costs and damage to forests, fixed asset depreciation and impairment, IACs and fair valuations. The definition includes the respective items of subsidiaries, joint arrangements and equity accounted investments. |
|
| Net debt/last 12 months' operational EBITDA ratio |
Net interest-bearing liabilities LTM operational EBITDA |
|
| Fixed costs | Maintenance, personnel and other administration type of costs, excluding IAC and fair valuations. |
|
| Last 12 months (LTM) | 12 months prior to the end of reporting period | |
1 Capital employed = Operating capital – Net tax liabilities 2 Average for the last five quarter ends 3 Attributable to the owners of the Parent 4 Last 12 months prior to the end of reporting period
| Operational EBITDA | Operating capital |
|---|---|
| Operational EBITDA margin | Depreciation and impairment charges excl. IAC |
| Operational EBIT | Operational ROCE |
| Operational EBIT margin | Earnings per share (EPS), excl. FV |
| Capital expenditure | Net debt/last 12 months' operational EBITDA ratio |
| Capital expenditure excl. investments in biological assets | Operational ROOC |
| Capital employed | Cash flow after investing activities |
| GHG emissions, scope 1 + 2 | Direct fossil CO2e emissions from production (scope 1) and indirect fossil CO2e emissions related to purchased electricity and heat (scope 2). Excluding joint operations. Reported as last four quarters. Calculated in accordance with the Greenhouse Gas Protocol of the World Resource Institute (WRI). Historical figures recalculated due to divestments or additional data after the previous annual report. |
|---|---|
| GHG emissions, scope 3 | Fossil 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). Historical figures recalculated due to divestments or additional data after the previous annual report. |
| 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. Historical figures recalculated due to additional data after the previous annual report. |
| TRI (Total recordable incidents) rate | Number of incidents per one million hours worked. Including joint operations. |
| Gender balance: % of female managers among all managers |
The share of female managers is accounted for 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. Excluding joint operations. |
| Total water withdrawal and process water discharges per saleable tonne |
Last four quarters for board, pulp and paper units. Excluding joint operations. Excluding mechanical wood product units and packaging converting units due to their low impact on the Group's consolidated water use and different metrics for sales production (cubic metre and square metre) compared to board, pulp and paper units (tonnes). |
| Supplier Code of Conduct (SCoC) coverage |
% of supplier spend (last 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. |
Stora Enso's diversified business portfolio creates resilience to changing market dynamics and fluctuations in demand, while enabling flexibility for evolving transformation.
Packaging Materials Leading the development of circular packaging, providing premium packaging materials based on virgin and recycled fiber.
Share of Group external sales
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.
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.
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
Stora Enso Oyj Stora Enso AB storaenso.com
For further information, please contact: Anna-Lena Åström, SVP Investor Relations, tel. +46 702 107 691 Carl Norell, Press officer, 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 21,000 employees and our sales in 2022 were EUR 11.7 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 in the USA as ADRs (SEOAY). 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.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.