Oct. 24, 2023 - Stora Enso today reported third quarter 2023 sales decreased by 28% to EUR 2,127 (2,963) million and operational EBIT decreased to EUR 21 (527) million.
Stora Enso's President and CEO Hans Sohlström commented on the third quarter 2023 results:
"In my role as the newly appointed CEO of Stora Enso, my focus lies on the Company's profitability turnaround and shareholder value generation. I am proud to be able to serve the sustainability front runner in the forest industry and to build on the work done by my predecessors.
"I have been a member of the Stora Enso Board of Directors for over two years, gaining valuable insight into the Company's business, operations, and strategy.
"I am passionate about the bioeconomy, and the immense potential that wood-based products offer to create value for our customers, shareholders, and society. To demonstrate my personal commitment, and confidence, I invested 1 million euro in Stora Enso shares in my first week as the CEO.
"However, we are now facing some challenges due to a demanding market situation. After two good years in 2021 and 2022, our financial performance and result have quickly decreased to a historically low level. In the third quarter, year-on-year sales were down by 28% and our operational EBIT by 96%. This is largely driven by a difficult macroeconomic environment which we now need to navigate, mitigate, and adapt to.
"In line with the previous quarter's prediction, Stora Enso had an unsatisfactory financial performance in the third quarter. We faced deteriorating market conditions and price pressure for all segments, including our packaging business. The global pulp demand is still weak, and the supply is high. The inflation and high interest rates continue to negatively affect the construction market, weighing down on our wood products offering. Our variable costs are down from peak levels but still high compared to historical levels, while wood availability remained tight. We anticipate no significant improvement in market demand or inventory levels for the year-end.
"Our strategic initiatives are progressing according to plan. We are investing about two billion euro in two major projects to accelerate our future growth: the acquisition of De Jong Packaging Group in the Netherlands earlier this year and transforming a paper line into consumer board at our Oulu site in Finland. These strategic investments will strengthen our position in the attractive segments of sustainable, renewable and recyclable packaging and packaging materials. However, they also create short-term pressure on our cash flow and balance sheet in the prevailing challenging market conditions.
"During the quarter, most of our announced restructuring actions to strengthen long-term competitiveness were implemented. We now focus on our profit and cash generation; we act decisively and swiftly. Commercial and operational excellence, competitiveness and shareholder value are our key priorities. Here, asset portfolio optimisation, non-core business divestment and complexity reduction will be essential success factors. We need to leverage our scale, synergies, and best practices across the Group; and within this process, continue to pursue value creation with customers, suppliers, and other stakeholders.
"We have the right foundation and the right capabilities to overcome these challenges and achieve our long-term goals. This gives me confidence as we look into the future."
Stora Enso's full third quarter and interim January-September 2023 report is available on the company's website: www.storaenso.com.
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.
SOURCE: Stora Enso
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