HELSINKI, Feb. 1, 2019
HELSINKI, Feb. 1, 2019 /PRNewswire/ --
FINANCIAL STATEMENT RELEASE 1 February 2019 at 9.30 EET
Sales growth continued
Temporary operational challenges – Dividend proposal EUR 0.50 per share
Year 2018 (year-on-year)
Outlook for 2019
Stora Enso introduces new way of giving annual outlook and quarterly guidance. The Group starts to guide absolute range for quarterly operational EBIT, instead of comparing quarterly sales and operational EBIT to the previous quarter qualitatively.
Stora Enso's year 2019 is expected to be largely in line with 2018, provided that the current trading conditions do not significantly change. Demand growth is expected to continue for Stora Enso's other businesses except for European Paper, for which demand is forecast to continue to decline in 2019. Group's sales are expected to be higher and costs are forecast to increase in 2019 compared to 2018. Stora Enso will implement measures to mitigate these cost increases and the increased uncertainties with a new profit protection programme.
Guidance for Q1/2019
Q1/2019 operational EBIT is expected to be in the range of EUR 260–350 million. The Group's annual maintenance schedule has been changed from last year. During Q1/2019 there will be annual maintenance shutdowns at Veracel pulp mill and Ostrołęka containerboard mill. The total negative impact of maintenance is estimated to be EUR 20 million more compared to Q1/2018. In Q1/2018 there were no annual maintenance shutdowns.
Operational EBIT margin
Operating profit (IFRS)
Profit before tax excl. IAC
Profit before tax
Net profit for the period
Net interest-bearing liabilities
Earnings per share (EPS) excl. IAC, EUR
EPS (basic), EUR
Net debt/last 12 months' operational EBITDA ratio
Average number of employees
Stora Enso's CEO Karl-Henrik Sundström comments on the fourth quarter 2018 results:
We continue to deliver sustainable profitable growth for the eighth consecutive quarter, with a sales increase of close to 6%. This was the highest fourth quarter sales since 2012 and the growth was primarily due to favourable prices and our active work on product mix and pricing. Due to slightly weaker markets, we have had lower levels of deliveries. We have experienced temporary operational issues at six of our mills, which has resulted in an EBIT impact of approximately EUR 40 million. Our operational EBIT decreased a bit over 3%, while operational EBIT margin exceeded 10% for the sixth consecutive quarter.
Looking at the whole year of 2018, sales are again well above EUR 10 billion and our operational EBIT increased by 32%. Our operational ROCE was close to 16%, well above the strategic target of 13%. I am also very pleased with the quite significant increase in full year EPS of 62.5%. We continue to strengthen our balance sheet and net debt/EBITDA amounted to 1.1. Therefore, the Board of Directors proposes to the Annual General Meeting a dividend of 0.50 euros per share, an increase of 22% from last year. This is the fourth year in a row with an increase. This is a vote of confidence for the future of Stora Enso.
Our transformation projects are progressing well. The investment in a new cross laminated timber (CLT) unit at the Gruvön sawmill is being completed. Commercial production will begin during the first quarter of 2019 as planned. I am additionally encouraged that we have taken an important step in securing our competitive raw material supply for the long term. We, together with the other shareholders, have signed a binding agreement aiming at completing the Bergvik Skog forestry transaction during the first half of 2019.
We continue to launch new products that enable our customers to leverage digital solutions to further advance their business. The most recent one is a new sustainable RFID tag technology called ECO™ by Stora Enso. It is designed for intelligent packaging functionalities in supply chain, retail and e-commerce applications. We have also entered an interesting partnership with H&M group and Inter IKEA group to industrialise new textile fibres in a sustainable way at attractive cost levels.
As sustainability is in the core of our business, I am indeed proud that we have been top-rated in combatting global warming by the international non-profit organisation CDP. CDP has included us on its new 2018 Climate A List, which identifies the global companies that are taking leadership in climate action. Moreover, we have been acknowledged as the leading Swedish listed company on sustainability in a ranking of all companies listed on the Stockholm Stock Exchange and we have received the award of the Best sustainable brand of the year in our industry.
With reference to current geopolitical developments, there is a notable risk of escalation in protectionist measures to the extent that global trade could materially shrink. This would have major knock-on effects for inflation, business sentiment, consumer outlook and ultimately global economic growth. Therefore, we have started to implement a profit protection programme of EUR 120 million to be kicked-off immediately, to better prepare for potential market weakness.
In these times of increased uncertainty and less visibility, 2019 is expected to continue in line with 2018 for us, provided that the current trading conditions do not significantly change. I expect growth in demand to continue for all our businesses except for European paper, for which demand is forecast to continue to decline in 2019. Our sales are expected to be higher and costs are forecast to increase in 2019 compared to 2018. We will implement measures to mitigate these cost increases and the increased uncertainties with our profit protection programme.
As always, I would like to thank our customers for their business, our employees for their dedication, and our investors for their trust.
1) Press conference in Helsinki at 11.00 EET
The webcast and press conference for media will take place at 11.00 EET (10.00 CET, 09.00 UK time, 04.00 EST) at Stora Enso's Head Office, Kanavaranta 1, Helsinki. The event will be held in English and it will be hosted by CEO Karl-Henrik Sundström, CFO Seppo Parvi, and EVP, Communications Ulrika Lilja. The webcast may be accessed at https://storaenso.videosync.fi/2018-full-year-result
2) Webcast and conference call for analysts and investors at 14.30 EET
The webcast and conference call for analysts and investors will take place at 14.30 EET (13.30 CET, 12.30 UK time, 07.30 EST). It will be hosted by CEO Karl-Henrik Sundström, CFO Seppo Parvi, and SVP, Head of Investor Relations Ulla Paajanen, and may be accessed at https://edge.media-server.com/m6/p/gngcow7q
Those analysts and investors who wish to ask questions should join the conference call (details below). All participants can follow the presentation over the webcast.
Live event at 14.30 EET
Confirmation Code: 2894258
The links to the webcasts are also available on the Stora Enso website: storaenso.com/investors
This release is a summary of Stora Enso's Financial Statement Release 2018. The complete report is attached to this release as a pdf file. It is also available on the company website at storaenso.com/investors.
Part of the bioeconomy, Stora Enso is a leading global provider of renewable solutions in packaging, biomaterials, wooden constructions and paper. We believe that everything that is made from fossil-based materials today can be made from a tree tomorrow. Stora Enso has some 26 000 employees in over 30 countries. Our sales in 2018 were EUR 10.5 billion. Stora Enso shares are listed on Nasdaq Helsinki (STEAV, STERV) and Nasdaq Stockholm (STE A, STE R). In addition, the shares are traded in the USA as ADRs (SEOAY). storaenso.com/investors
STORA ENSO OYJ
For further information, please contact:
SVP, Investor Relations
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The following files are available for download:
STORAENSO RESULTS Q418 ENG