"2024 marked a year of substantial progress for Stora Enso, demonstrating our commitment to building a foundation for sustained profitable growth." – Hans Sohlström, Presiddnt and CEO, Stora Enso.
Feb. 11, 2025 - Stora Enso today reported fourth quarter and full year 2024 results. The company provided an outlook for 2025 and Stora Enso's President and CEO Hans Sohlström commented on the fourth quarter 2024 results.
We expect demand to remain subdued and volatile, affected by macroeconomic confidence and continued geopolitical uncertainty. Wood prices are expected to remain at high levels. Throughout 2025, we continue with our actions to reduce costs and strengthen operational and commercial excellence with the aim to improve operational performance and competitiveness.
In the first quarter of 2025, maintenance costs are expected to decrease to EUR 64 million from EUR 118 million in Q4/2024, due to no major planned maintenance activities in the quarter.
During the full year 2025, the Group's adjusted EBIT is anticipated to be adversely impacted by approximately EUR 100 million, primarily in H1/2025, due to the ramp-up in the coming months of the new packaging board line in Oulu, Finland.
The Group's capital expenditure forecast for the full year 2025 is EUR 730-790 million.
The fiber packaging market is currently challenged by soft demand due to slow economic recovery, low operating rates and uncertain visibility. Consumer board volumes in Q1/2025 are anticipated to increase following planned maintenance stops and seasonally low demand in Q4/2024. With continued weak demand and excess capacity, containerboard operating rates in fresh fiber are expected to improve but still remain at a relatively low level. Recycled containerboard volumes are expected to remain stable. High wood fiber costs continue to put pressure on margins. The division's average price level is expected to remain stable quarter-on-quarter.
Market demand continues to be unpredictable and volatile with vast overcapacity. The first quarter typically represents a low season for the division. Volumes in Q1/2025 in Central, Northern and Western Europe are anticipated to be stable quarter-on-quarter, while the Chinese market is expected to return to normal levels following their peak season at year-end. High containerboard costs and the ongoing ramp up of the corrugated packaging site in De Lier, in the Netherlands are expected to continue to constrain margin growth beyond Q1/2025.
The pulp market is currently positioned near its cyclical low. Leading pulp producers have announced price increases, with potential effects likely becoming more apparent in Q2/2025. Demand outlook is uncertain driven by economic activity and geopolitical risks.
The overall outlook for Q1/2025 is expected to remain relatively unchanged from Q4/2024, characterised by low and stable demand for classic sawn in Europe and overseas, alongside some price increases driven by high raw material costs. Raw material costs are projected to continue at a stable level, with an upward trend in log cost. Construction activity is expected to remain low.
Wood demand in the Nordics is expected to remain robust in Q1/2025, despite reductions in pulpwood consumption from curtailments in packaging and pulp markets, as forest companies are minimising costly imports.
Stora Enso's President and CEO Hans Sohlström comments on the fourth quarter 2024 results:
2024 marked a year of substantial progress for Stora Enso, demonstrating our commitment to building a foundation for sustained profitable growth. Our actions to improve sourcing and operational efficiency as well as commercial excellence, and the implementation of cost reductions across the Company have borne fruit, enhancing our profitability and competitiveness. Despite facing macroeconomic uncertainties, fluctuations in market demand, and rising wood costs, these actions have progressed well.
In 2024, we increased our adjusted EBIT by 75%, reaching 598 million euro, or a 6.6% margin. This improvement was supported by higher deliveries across all divisions, partially offset by lower sales prices. Sales decreased by 4% to 9,049 million euro, due to structural changes; within that, sales for continuing businesses increased by 1%. We reduced our fixed costs by 110 million euro and offset the continued wood cost escalation with efficiency improvements and reductions in other variable cost categories.
In the fourth quarter of 2024, adjusted EBIT increased by 139% to 121 million euro compared to the same quarter previous year, corresponding to a margin of 5.2%. The improvement was driven by price increases and cost saving actions. Sales increased to 2,322 million euro, a year-on-year growth of 7%.
Our focused actions to reduce operating working capital resulted in an all-time low operating working capital of 544 million euro in the fourth quarter, a reduction of more than 700 million euro in 1.5 years with an operating working capital to sales ratio of 7% down from 14%. This further improved our cash flow from operations to 325 million euro in the quarter.
The fair value of our total forest assets reached 8.9 billion euro, or 11.28 euro per share, highlighting the enduring value and potential of our asset base. Additionally, as announced in the fourth quarter last year, we are preparing to sell approximately 12% of our forest assets in Sweden. This move is aimed at further reducing our net debt, increasing financial flexibility and confirm the financial value of the Company's forest holdings.
We are also proud to announce that we have surpassed our 2030 target by achieving a 53% reduction in Scope 1 and 2 greenhouse gas emissions, demonstrating our commitment to sustainability and environmental responsibility.
The 1 billion euro investment in building a consumer board packaging line at our Oulu site in Finland is on schedule and expected to commence production ramp-up in the coming months. We estimate the start-up to adversely impact our 2025 adjusted EBIT by approximately 100 million euro, primarily in the first half of the year, followed by a gradual improvement in earnings thereafter.
We need to continue with our actions to make Stora Enso more efficient and stronger. While short-term demand outlook continues to be subdued, we continue our systematic and structured work to reduce our fixed and variable costs as well as improve operative performance during 2025.
In the longer term, Stora Enso is poised to leverage the recent big investments and cost reductions to further strengthen our market position, strive to deliver exceptional service to our customers, and continue our journey of sustainable development towards our long-term financial targets and improved shareholder value creation.
I would like to thank all our employees, customers, suppliers, and shareholders for their commitment and support during 2024. I am exceptionally proud of our team's resilience, engagement and dedication, which have been crucial in navigating this year's challenges and setting the stage for future successes.
Stora Enso is the leading provider of renewable products in packaging, biomaterials, and wooden construction, and one of the largest private forest owners in the world. Stora Enso has approximately 19,000 employees. Sales in 2024 were EUR 9 billion.
SOURCE: Stora Enso
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