Stora Enso Oyj Interim Report January–March 2020

Financial News
Typography
  • Strengthening our resilience for the headwinds
  • Dividend proposal EUR 0.15 per share, additional max. EUR 0.35 to be decided later

Q1/2020 (compared with Q1/2019)

  • Sales decreased by 16.2% to EUR 2 207 (2 635) million, due to significantly lower prices and volumes.
  • Operational EBIT decreased to EUR 180 (335) million.
  • Operational EBIT margin was 8.1% (12.7%).
  • Operating profit (IFRS) was EUR 262 (313) million.
  • EPS was EUR 0.19 (0.29) and EPS excl. IAC and fair valuations was EUR 0.12 (0.32).
  • Cash flow from operations amounted to EUR 146 (223) million. Cash flow after investing activities was EUR -32 (94) million.
  • The net debt to operational EBITDA ratio at 2.3 (1.6) was above the target level of less than 2.0.
  • Operational ROCE was 6.8% (14.5%), below the strategic target of over 13%.

Managing uncertainties
The health and safety of Stora Enso’s employees is a key priority. A healthy workforce ensures uninterrupted operations and customer deliveries. Stora Enso has secured the health and safety of its workforce by imposing a global travel ban since early February, prohibiting all physical meetings, strongly advising personnel to work remotely whenever feasible, restricting access to mill sites, quarantining the affected workforce, and closely monitoring the Covid-19 situation within Stora Enso. Thanks to Stora Enso's proactive approach so far, there has been minimal impact on the Group's ability to run mills and serve customers.

Stora Enso's liquidity and funding position is strong. At the end of Q1/2020, cash and cash equivalents were at EUR 756 million. Additionally, the Company has a fully undrawn EUR 600 million Revolving Credit Facility and access to EUR 950 million statutory pension premium loans in Finland. Furthermore, during April, Stora Enso signed bilateral loan and credit facility agreements for EUR 400 million to increase liquidity. There are no financial covenants on Stora Enso Oyj's debt.To address costs and mitigate negative market demand impacts, Stora Enso has started to implement additional cost reduction actions including capital expenditure and recruitment restrictions, as well as co-determination negotiations on possible temporary layoffs currently in all the divisions and Group functions in various countries following local labour laws and regulations.

Due to the cross-border travel restrictions and safety concerns associated with Covid-19, most of Stora Enso’s annual mill maintenance shutdowns have been postponed to the second half of 2020. Only Heinola Mill annual maintenance shutdown is scheduled for the second quarter of 2020.

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Source: Stora Enso

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