Slide 1: Financial results Q3 2024
Financial results Q3 2024 Continued growth and earnings improvement Cover photo: Packaging Materials division's products used in food packaging (AvantForte Brown, Natura, CKB Nude, Tambrite)
Slide 2: Key highlights
Key highlights Q3 2024 Continued profit improvement driven by price increases and cost saving actions • Q3 2024 adj. EBIT rose for the 4th consecutive quarter • Solid performance in Packaging Materials, Biomaterials and Forest • Persistent weakness in Packaging Solutions and Wood Products Targeted a
Slide 3: Continued profit improvement driven by price increases and cost saving actions
Continued profit improvement driven by price increases and cost saving actions Year-on-Year comparison Sales EBIT Cash flow MEUR MEUR % MEUR 3,000 14 500 200 175 12 2,500 2,301 400 2,174 2,261 323 323 2,127 2,164 149 153 10 300 269 271 150 231 2,000 8 200 1,500 100 86 6 100 38 4 1,000 51 0 4 50 -9 5
Slide 4: Improved profitability despite continued pressure on margins from high fiber costs
Improved profitability despite continued pressure on margins from high fiber costs Year-on-Year comparison Quarterly adjusted EBIT variance 6 175 15 8 13 33 60 99 MEUR -80 Other variable costs: • Energy: 36 MEUR • Logistics: -15 MEUR • Chemicals and fillers: 29 MEUR • Change in inventory and other v
Slide 5: Packaging Materials
Packaging Materials Solid quarter with high operating rates and results from profit improvement programme Year-on-Year comparison Sales Adjusted EBIT MEUR MEUR % 1,500 100 15 73 1,138 1,169 75 1,250 1,100 52 53 1,057 1,045 10 50 1,000 25 5 750 0 0 500 -25 250 -5 -50 -34 -43 0 -75 -10 Q323 Q423 Q124
Slide 6: Packaging Solutions
Packaging Solutions Margin pressure due to high containerboard costs Year-on-Year comparison Sales Adjusted EBIT MEUR % MEUR 20 20 400 14 15 15 300 266 254 262 10 10 247 224 6 200 5 5 0 0 100 -1 -1 -5 -5 0 -10 -6 -10 Q323 Q423 Q124 Q224 Q324 Q323 Q423 Q124 Q224 Q324 Adjusted EBIT Adjusted EBIT % • S
Slide 7: Biomaterials
Biomaterials Weakened pulp demand mainly due to seasonality and new market capacity ramp-ups Year-on-Year comparison Sales Adjusted EBIT MEUR MEUR % 600 25 80 500 63 20 413 57 375 374 380 60 400 345 43 15 300 35 40 10 200 20 5 100 5 0 0 0 Q323 Q423 Q124 Q224 Q324 Q323 Q423 Q124 Q224 Q324 Adjusted EB
Slide 8: Wood Products
Wood Products Stronger demand, but continued weak markets and low construction activity Year-on-Year comparison Sales Adjusted EBIT % MEUR MEUR 600 10 50 500 414 5 25 400 349 341 349 359 7 300 0 0 -2 200 -9 -25 -5 100 -21 -50 -27 -10 0 Q323 Q423 Q124 Q224 Q324 Q323 Q423 Q124 Q224 Q324 Adjusted EBIT
Slide 9: Forest
Forest Continued high demand and increased prices Year-on-Year comparison Sales Adjusted EBIT MEUR MEUR % 800 690 695 100 20 650 659 81 75 76 600 534 80 70 15 59 60 400 10 40 200 5 20 0 0 0 Q323 Q423 Q124 Q224 Q324 Q323 Q423 Q124 Q224 Q324 Adjusted EBIT Adjusted EBIT % • Sales increased by 30%, or 1
Slide 10: Improved net debt to adjusted EBITDA and stable operating working capital
Improved net debt to adjusted EBITDA and stable operating working capital Net debt to adjusted EBITDA Operating working capital MEUR MEUR % 4,000 5 20 1,500 18 3,500 4 1,250 16 14 1,000 3,000 3 12 10 750 2,500 2 8 500 6 2,000 1 4 250 2 1,500 0 0 0 Q323 Q423 Q124 Q224 Q324 Q323 Q423 Q124 Q224 Q324 Ne
Slide 11: Development of long-term Group financial targets
Development of long-term Group financial targets Group long-term financial targets Q3/23 Q3/24 2023 Dividend (annual) in EUR /share To distribute 50% of EPS excluding 0.10* N/A N/A fair valuation over the cycle (0.20)** Growth YoY > 5% -28% 6% -20% Net debt to adjusted EBITDA < 2.0x 2.4 3.1 3.2 Net
Slide 12: Progressing towards our sustainability targets
Progressing towards our sustainability targets Climate change Circularity Biodiversity -50% 100% Net positive Targets Reduction in absolute Recyclable products Impact on biodiversity emissions by 2030 (Scope 1,2,3) by 2030 by 2050 Committed to reaching -49% net-zero CO2 Scope 1+2 (Q3 2024 compared t
Slide 13: Market and business outlook Q3 to Q4 2024
Market and business outlook Q3 to Q4 2024 Packaging Packaging Biomaterials Wood Forest Materials Solutions Products • Lower volumes due • Unpredictable • Stable demand • Seasonal increase • Wood shortage in to seasonal lows demand with overall with in demand for the Baltic Rim and annual weekly fluc
Slide 14: Key takes – building a stronger future
Key takes – building a stronger future Powering ahead • Value creation programmes focused on sourcing, operational and commercial efficiencies are progressing well across all divisions • The profit improvement programme initiated in Q1/2024 with a target of 120 MEUR in fixed cost savings is expected
Slide 15: Disclaimer
Disclaimer 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 profi
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Slide 17: Cost-driven price increases in containerboard, stable development in folding box board
Cost-driven price increases in containerboard, stable development in folding box board EUR Containerboard price development EUR /tonnes Folding Box Board price development /tonnes 1,600 1,400 1,500 1,200 EUR (average) per ton EUR (average) per ton 1,400 1,000 1,300 Price decline 800 1,200 of ~9% Pri
Slide 18: Global pulp inventories rose while pulp prices declined
Global pulp inventories rose while pulp prices declined 90 Inventory levels Price development 85 USD/tonne Europe NBSK/USD, Delivered Bleached softwood kraft pulp 80 1,800 Europe BHKP/USD, Delivered Bleached hardwood kraft pulp 75 China BHKP/USD NET, Delivered 1,600 70 China NBSK/USD NET, Delivered
Slide 19: Continued weak construction and housing market weighs on Wood Products' performance
Continued weak construction and housing market weighs on Wood Products’ performance Photo: WO2 ©Patrick Raffin Arboretum, Nanterre, France 19
Slide 20: Strategic growth areas represented 58% of Group sales in Q3/2024
Strategic growth areas represented 58% of Group sales in Q3/2024 Sales FY/2006 Sales Q3/2024 Sales in ~FY/2030 30%* 58%* 80%* Strategic growth areas Strategic growth areas Strategic growth areas Paper Foundation sales Foundation sales Calculations are based on external sales *Strategic growth areas
Slide 21: Building a more profitable and competitive company
Building a more profitable and competitive company Restructuring Profit improvement programme programme EBIT impact 110 MEUR EBIT impact 120 MEUR annually annually Oulu investment Decentralised P&L Oulu investment Oulu fully ramped up ~ 1 BEUR during divisions and ramping up from Q2 ~800 MEUR sales
Slide 22: Proceeding with committed growth investments
Proceeding with committed growth investments Returning to the average capex range of 600 - 800 MEUR after 2024 Average capex split for MEUR 1,200 1,125 1,030- 1,130 2014–2024 1,000-1,100 989 Depending on investment decisions 1,000 781 729 778 600- 800 687 666 800 640 656 600 574 400 200 0 2014 2015
Slide 23: Stable forest valuation
Stable forest valuation Group forest assets BEUR • Fair value** of 8.8 BEUR equivalent to EUR 11.11 per share 10.0 9.0 8.0 8.2 8.1 8.3 8.3 8.1 8.3 8.7 8.6 8.7 8.8 • The quarter-on-quarter increase of 35 8.0 MEUR, was mainly due to the impact of 8.0 7.4 7.4 7.2 2.6 changes in foreign exchange rates,
Slide 24: Maintaining a strong liquidity position
Maintaining a strong liquidity position MEUR • Liquidity at the end of September 2024: Liquidity position at the end of September 2024 3,500 − 2.0 BEUR cash and cash equivalents 100 100 − 700 MEUR committed revolving credit facility fully 3,000 200 435 undrawn 700 100 100 200 − 100 MEUR committed cr
Slide 25: Stora Enso – end use geographies and segments
Stora Enso – end use geographies and segments Group sales by geography (FY/2023)* Group sales by end use (FY/2023)* Construction Consumer 5% 3% 9% end uses 9% (packaging) 67% Industrial end uses Food & 23% beverages 38% 11% 72% Other industrial Pharma & 5% Personalcare 9% Industrial packaging E-comm
Slide 26: Development of long-term targets
Development of long-term targets Financial performance Q3/2023 Q3/2024 Growth YoY > 5% -28% 6% Net debt to adjusted EBITDA < 2.0x 2.4 3.1 Net debt to equity < 60% 28% 33% Adjusted ROCE excl. Forest > 13% 5% 3% Dividend per share (EUR ) To distribute 50% of EPS excluding 0.10* 0.60 fair valuation ove
Slide 27: Higher sales prices, especially for board products offset by lower deliveries
Higher sales prices, especially for board products offset by lower deliveries Quarter-on-Quarter comparison Quarterly adjusted EBIT variance 28 175 14 153 10 21 -1 -32 20 -38 MEUR Other variable costs: • Energy: 22 MEUR • Logistics: 1 MEUR • Chemicals and fillers: -3 MEUR • Change in inventory and o
Slide 28: Planned maintenance shutdowns impacting quarterly results
Planned maintenance shutdowns impacting quarterly results Group total planned maintenance Planned maintenance shutdowns in 2024 impact on adjusted EBIT Packaging Materials Biomaterials MEUR 200 Q1: - Q1: - 180 Q2: Beihai, Langerbrugge Q2: Montes del Plata, 180 Q3: Oulu, Varkaus, Heinola Skutskär 160
Slide 29: Stable cash flow from operations driven by higher adjusted EBITDA and reduced working capital
Stable cash flow from operations driven by higher adjusted EBITDA and reduced working capital MEUR 3 0 • Cash flow after investing activities was 300 4 (38) MEUR 2 0 • Working capital decreased by 28 MEUR, mainly due to lower trade receivables and higher 200 trade payables 0 • Cash spent on fixed an
Slide 30: Cash flow by division Q3/2024
Cash flow by division Q3/2024 MEUR 150 130 125 101 100 75 56 46 50 32 30 24 18 25 14 0 -25 -50 -75 -56 -60 -61 -100 -125 -150 Packaging Materials Packaging Solutions Biomaterials Wood Products Forest Other Cash flow from operations Cash flow after investing activities 30
Slide 31: Maturity profile 2024
Maturity profile 2024 September 2024 23% Bonds MEUR 17% 1,300 11% Loans from Financial Institutions 23% Joint Venture Financing 1,200 1,100 Commercial Papers 1,000 Loans from Wood Suppliers 900 Other Loans / Liabilities 14% 800 Committed Credit Facility 700 600 10% 10% 10% 500 400 5% 300 200 100 1%
Slide 32: Overview per division
Overview per division Sales, MEUR Packaging Materials Packaging Solutions Biomaterials Wood Products Forest 6,000 5,496 6,000 6,000 6,000 6,000 4,508 4,557 4,452 3,548 4,000 4,000 4,000 4,000 4,000 2,519 2,490 2,693 1,728 2,180 1,872 2,195 1,580 2,046 2,311 1,587 1,543 1,386 1,463 2,000 2,000 1,077
Slide 33: Adjusted EBIT per division
Adjusted EBIT per division MEUR Change % Change % Q3/24 Q3/23 Q2/24 Q3/24-Q3/23 Q3/24-Q2/24 Packaging Materials 73 -34 n/m 53 38.7% % of sales 6.3% -3.2% 4.6% Packaging Solutions -6 14 -144.8% -1 n/m % of sales -2.5% 5.4% -0.4% Biomaterials 43 5 n/m 63 -31.5% % of sales 11.4% 1.4% 15.3% Wood Product
Slide 34: Stora Enso's wood and energy self-sufficiency
Stora Enso’s wood and energy self-sufficiency Group energy self-sufficiency excl. JVs 2024e Group wood self-sufficiency by country 2023 100% 73% 71% 82% 76% 65% 67% 24% Total energy Fuels Electricity Finland Sweden Uruguay Brazil China 34
Slide 35: Group energy balance in detail
Group energy balance in detail Group energy balance estimate excl. JVs 2024e Impact on non-hedged volume on MEUR operating profit from 10% change p.a. TWh/a for the next 12 months in: 50 Electricity market price ~0,2 40 Self-sufficiency 71% Fossil fuel price ~6,3 30 20 Self-sufficiency 82% Energy he
Slide 36: Biomass as primary fuel source
Biomass as primary fuel source Group fuel consumption Q3/2024 3% 0% 1% 4% 4% Biomass Coal Gas Other Fossil Fuel Oil Peat 88% Stora Enso Group’s total Q3/2024 fuel consumption was 6,7 TWh 36
Slide 37: Net financial items
Net financial items MEUR Change Change Q3/24 Q3/23 Q2/24 Q3/24-Q3/23 Q3/24-Q2/24 Net interest expense -31 -29 -2 -32 1 Average interest rate* 4.1% 3.8% 4.1% Foreign exchange gains and losses 3 -7 10 -4 8 Other financial items -13 -4 -9 -12 -1 Total net financial items -41 -40 -1 -49 8 *Quarterly gro
Slide 38: Net FX effect per division
Net FX effect per division MEUR Packaging Materials Packaging Solutions Biomaterials Wood Products Forest -6 -4 -2 0 2 4 6 8 10 12 14 16 Q3/2024 y-o-y Q2/2024 y-o-y Q1/2024 y-o-y Q4/2023 y-o-y 38
Slide 39: Indicators driving the demand for packaging
Indicators driving the demand for packaging Private consumption Industrial production* Annual growth rate (%) Annual growth rate (%) 12 10 10 8 8 6 6 4 4 2 0 2 -2 0 -4 -2 -6 -8 -4 -10 -6 -12 -14 -8 2020 2021 2022 2023 2024F 2020 2021 2022 2023 2024F EU UK US China Source: Consensus, The World Bank “
Slide 40: Indicators driving the demand for packaging
Indicators driving the demand for packaging GDP Inflation Annual growth rate (%) Annual growth rate (%) 10 10 8 9 6 8 4 7 2 6 0 5 -2 4 -4 3 -6 2 -8 -10 1 -12 0 2020 2021 2022 2023 2024F 2020 2021 2022 2023 2024F EU UK US China Source: Consensus 40
Slide 41: Paper for recycling price development
Paper for recycling price development 360 Mixed OCC ONP/ONG 320 280 240 200 EUR /tonne 160 120 80 40 0 Q216 Q416 Q217 Q417 Q218 Q418 Q219 Q419 Q220 Q420 Q221 Q421 Q222 Q422 Q223 Q423 Q224 Source: Fastmarkets FOEX 41
Slide 42: Pulpwood and sawlog price development in Finland
Pulpwood and sawlog price development in Finland Pulpwood, Pine Sawlogs, Pine 90 80 70 60 50 EUR /m3 40 30 20 10 0 Q113 Q313 Q114 Q314 Q115 Q315 Q116 Q316 Q117 Q317 Q118 Q318 Q119 Q319 Q120 Q320 Q121 Q321 Q122 Q322 Q123 Q323 Q124 Source: Luonnonvarakeskus 42
Slide 43: Forest property market transaction-based price development
Forest property market transaction-based price development Index Sweden SEK/m3fo 1,000 900 800 700 600 500 400 300 200 100 0 1995 2000 2005 2010 2015 2020 2024 Southern Sweden Central Sweden Northern Sweden Sweden Source: Ludvig & Co 22 August 2024 report, based on nominal prices 43
Slide 44: ESG ratings and recognition Q3/2024
ESG ratings and recognition Q3/2024 Climate A-, Forest A ESG rating AAA (highest and Water A- possible score) Highest recognition level, Platinum, Total ESG rating 13.8** out of 100 score 82 out of 100 FTSE Transition ESG rating 4.4 out of 5.0 Top-ranked in both Pathway management quality Russell In
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