Stora Enso Interim Report January-September 2025: Good progress in a challenging market environment

Rhea-AI Summary

Stora Enso (OTC: SEOAY) reported Q3 2025 results on 23 October 2025 showing sales EUR 2,283m (+1% YoY) and adjusted EBIT EUR 126m (-28% YoY), with an adjusted EBIT margin of 5.5%. Operating result (IFRS) was EUR 231m including items affecting comparability of EUR 117m. Q1–Q3 2025 sales were EUR 7,072m and adjusted EBIT EUR 427m. Cash flow from operations YTD was EUR 560m and net debt/adjusted EBITDA improved to 2.7.

Key actions: completion of a SEK 9.8bn (≈EUR 900m) divestment of ~175,000 ha Swedish forest (12.4%); ongoing strategic review of remaining Swedish forest assets; ramp-up of a EUR 1bn consumer board line in Oulu with a Q3 ramp cost of EUR 45m and an updated full-year ramp impact of EUR -120–140m.

Positive

• Completed divestment: SEK 9.8bn (~EUR 900m) for 175,000 ha (12.4%)
• Net debt to adjusted EBITDA improved to 2.7 (from 3.1)
• EPS (basic) EUR 0.25 in Q3 versus EUR 0.11 a year ago (+125.7%)
• Committed EUR 1bn investment in Oulu consumer board line

Negative

• Adjusted EBIT fell 28% to EUR 126m in Q3
• Oulu ramp-up impact: EUR -45m in Q3; full-year impact now estimated EUR -120–140m
• Adjusted EBIT margin declined to 5.5% (Q3)
• Cash flow from operations YTD down to EUR 560m from EUR 863m (Q1–Q3)

STORA ENSO OYJ INTERIM REPORT 23 October 2025 at 8:30 EEST

HELSINKI, Oct. 23, 2025 /PRNewswire/ -- 

Q3/2025 (year-on-year)

• Sales increased by 1% to EUR 2,283 (2,261) million, mainly due to the acquisition of Junnikkala and the consumer board line ramp-up at the Oulu site.
• Adjusted EBIT decreased by 28% to EUR 126 (175) million, driven by the ramp-up of the new line in Oulu, impacting the Q3 result negatively by EUR 45 million. Adjusted EBIT margin decreased to 5.5% (7.8%).
• Operating result (IFRS) was EUR 231 (139) million, including items affecting comparability of EUR 117 million, and fair valuations and other non-operational items of EUR -11 million.
• Earnings per share were EUR 0.25 (0.11) and earnings per share excl. fair valuations (FV) were EUR 0.26 (0.10).
• The fair value of the forest assets was EUR 8.3 (8.8) billion, equivalent to EUR 10.50 per share, reflecting the impact of the forest asset divestment in Sweden.
• Cash flow from operations amounted to EUR 223 (271) million, impacted by the lower profit.
• The net debt to adjusted EBITDA (LTM) ratio improved to 2.7 (3.1).
• Adjusted ROCE excluding the Forest segment (LTM) was 2.8% (2.7%).

January-September 2025 (year-on-year)

• Sales were EUR 7,072 (6,727) million.
• Adjusted EBIT was EUR 427 (478) million.
• Operating result (IFRS) was EUR 466 (372) million.
• Earnings per share (EPS) were EUR 0.42 (0.26) and EPS excl. fair valuations (FV) was EUR 0.44 (0.25).
• Cash flow from operations amounted to EUR 560 (863) million. Cash flow after investing activities was EUR -26 (-15) million.

Key highlights

• The divestment of approximately 175,000 hectares of forest land in Sweden, equivalent of 12.4% of Stora Enso's Swedish forest assets, was completed in September. The enterprise value of the transaction was SEK 9.8 billion, equivalent to approximately EUR 900 million.
• The strategic review of the Group's remaining forest assets in Sweden, initiated in July, is progressing. The review includes assessing a potential separation and public listing of the forest assets.
• The ramp-up of the consumer board line at the Oulu site in Finland continues, and the production volumes are gradually increasing. The line is expected to reach full capacity during 2027.
• In October, Stora Enso and the International Union for Conservation of Nature (IUCN) launched a science-based framework to enable nature positive forestry. It guides informed prioritisation of biodiversity actions, ensuring that the most urgent threats to biodiversity are addressed first.
• The second instalment of dividend, EUR 0.12 per share, was paid on 2 October.

Outlook and focus for 2025
Stora Enso expects market demand to remain subdued and challenging, affected by low consumer confidence and heightened macroeconomic and geopolitical uncertainty.

Guidance
The ramp-up of the consumer board line at the Oulu site in Finland continues, and the production volumes are gradually increasing. However, volumes are somewhat behind the original schedule. Despite this, the target of reaching EBITDA break-even by year-end is unchanged. As a result, the EBIT impact for Q4 will be higher than initially anticipated - now estimated at a negative EUR 15-35 million. The full year EBIT impact estimated to be approximately negative EUR 120-140 million. The line is expected to reach full capacity during 2027.

Starting in the fourth quarter, the completed divestment of the forest assets in Sweden will have an annual adverse impact of EUR 25 million, approximately EUR 6 million per quarter, on the Forest segment's results.

The Group's capital expenditure forecast for the full year of 2025 is EUR 730-790 million.

Fourth quarter profitability will be impacted by planned maintenance stops, which are expected to be at similar levels as in the third quarter.

Focus for 2025

• Continue proactive, systematic, and determined work across the whole Group to improve profitability, cash flow, and cost competitiveness through activities related to sourcing, operational efficiency, commercial excellence, working capital, and fixed costs.
• Continue to build a leaner and flatter organisation, sharpening the focus on renewable packaging as the core business. The new streamlined structure not only enhances customer centricity and operational efficiency through deeper integration, but also unlocks further performance potential.
• Transition to a more integrated business model across the Nordic packaging board mills to improve the entire value chain and customer-centricity.
• After successfully completing the sale of 12.4% of the Swedish forest assets, continue the strategic review of the remaining Swedish forest assets, including assessment of a potential separation and public listing.
• Ramp up production and leverage the EUR 1 billion investment in the new packaging board line at the integrated mill in Oulu, Finland, to further strengthen Stora Enso's competitive position.

Outlook from Q3/2025 to Q4/2025

Markets remain challenging, with low consumer confidence.

The direct impact of the US tariffs remains modest as Stora Enso's direct sales to the USA account for only just below 3% of total group sales (2024). While tariffs impacting global trade present both risks and opportunities, the primary concern lies in their broader implications for economic conditions and trade flows. Indirect effects - such as weakening consumer confidence and an increase in Chinese exports to Europe - continue to weigh on the markets.

Market outlook continues weak due to suppressed end-user demand, which is leading to weakening order inflow and lower volumes particularly in the packaging businesses. Market prices remain under persistent downward pressure as supply continues to surpass demand.

Market demand for pulp remains weak, driven by ongoing market uncertainty. Market pulp prices are stable at low levels, and with demand continuing to lag. Prices are expected to stay flat or show only limited movement for the remainder of the year.

Demand in the wood products markets remains low. The construction market outlook continues to be weak, and the European construction confidence index remains negative. In addition, rising log costs in Central Europe are putting further pressure on margins.

The Forest segment continues to deliver solid financial performance. Fiber costs are expected to remain high, even though wood prices have decreased slightly.

Key figures

EUR million	Q3/25	Q3/24	Change % Q3/25-Q3/24	Q2/25	Q1-Q3/25	Q1-Q3/24	2024
Sales	2,283	2,261	1.0 %	2,426	7,072	6,727	9,049
Adjusted EBITDA	291	328	-11.4 %	279	889	938	1,223
Adjusted EBIT	126	175	-28.2 %	126	427	478	598
Adjusted EBIT margin	5.5 %	7.8 %		5.2 %	6.0 %	7.1 %	6.6 %
Operating result (IFRS)	231	139	65.8 %	64	466	372	93
Result before tax (IFRS)	202	98	105.3 %	20	354	235	-118
Net result for the period (IFRS)	201	84	138.7 %	15	323	195	-183
Forest assets¹	8,277	8,758	-5.5 %	8,990	8,277	8,758	8,894
Adjusted return on capital employed (ROCE), LTM²	3.9 %	3.7 %		4.3 %	3.9 %	3.7 %	4.3 %
Adjusted ROCE excl. Forest segment, LTM²	2.8 %	2.7 %		3.3 %	2.8 %	2.7 %	3.6 %
Earnings per share (EPS) excl. FV, EUR	0.26	0.10	149.8 %	0.05	0.44	0.25	-0.56
EPS (basic), EUR	0.25	0.11	125.7 %	0.03	0.42	0.26	-0.17
Net debt to LTM² adjusted EBITDA ratio	2.7	3.1		3.3	2.7	3.1	3.0
Average number of employees (FTE)	19,409	19,364	0.2 %	19,136	18,996	19,405	19,233
1 Total forest assets value, including leased land and Stora Enso's share of forest assets in associated companies 2 LTM=Last 12 months

Stora Enso's President and CEO Hans Sohlström comments on the third quarter 2025 results:

During the third quarter of 2025, Stora Enso continued to execute on its strategy and profit improvement actions. While the market continues to be challenging and demand subdued, we focused on the areas within our control.

The improvement actions remained the same - driving operational efficiency, cost competitiveness, and commercial excellence across the Group. In addition, we continue to work on further focusing our portfolio on growth in our core renewable packaging business and operations supporting it.

A major milestone in the quarter was the completion of the divestment of approximately 175,000 hectares of forest land in Sweden, representing 12.4% of our total forest holdings. The transaction, with an enterprise value of SEK 9.8 billion (equivalent to approximately EUR 900 million), in line with forest book value, strengthens our balance sheet and improves our financial flexibility.

We also made progress on the strategic review of our remaining 1.2 million hectares of Swedish forest assets announced in June 2025, including the assessment of a potential separation and public listing. The review aims to evaluate ways to unlock further value for our shareholders and strengthen our focus.

The ramp-up of the new consumer board line at our Oulu site in Finland continues, with production volumes gradually increasing. While the ramp-up has, and will continue to, weigh on profitability in the short term, we remain confident that the Oulu board line will deliver industry-leading quality and cost competitiveness once fully operational. We target EBITDA break-even by the end of the year.

Adjusted EBIT for the quarter was EUR 126 million. Excluding the EUR 45 million impact from the Oulu ramp-up, profitability would have been comparable to the same quarter last year, reflecting a stable underlying performance despite persistent market headwinds. 

Demand continued to be subdued due to low consumer confidence, and delivery volumes were relatively low, particularly in containerboard and biomaterials. Despite these challenges, we have intensified our own actions to improve and safeguard profitability, including a strengthened P&L responsibility in business areas, a leaner, more customer-focused organisation, and targeted efficiency programmes. Our net debt to adjusted EBITDA ratio improved to 2.7 from 3.1 a year ago, reflecting the positive impact of the forest asset divestment.

Looking ahead, we will continue our systematic efforts to improve profitability and cash flow, whilst we expect market conditions to continue to be subdued and challenging. The strategic review of the Swedish forest assets and ramp-up of Oulu continue to be priorities.

Thanks to the dedication of our teams, we are now laying the foundation for a stronger, more focused company-one that is better positioned to deliver long-term value. As we reshape the company, the work being done today will define a more resilient and competitive future for Stora Enso.

Webcast for analysts, investors, and media
Stora Enso's President and CEO Hans Sohlström and CFO Niclas Rosenlew will present the results in a webcast today starting at 11:30 am EET (10:30 CET, 9:30 BST, 4:30 EDT). The live the webcast can be accessed using the following link: https://stora-enso-oyj-q3-earnings-presentation-2025.open-exchange.net/registration.

During the webcast presentation, analysts and investors will also have the possibility to ask questions. To participate in the teleconference, please choose the "Teleconference" option on the homepage of the webcast. Recording of the webcast will be available shortly after the event at the same address and at storaenso.com/en/investors/interim-report.

Media representatives who wish to ask questions after the publication of the report may contact Carl Norell, SVP Corporate Communications at Stora Enso on +46 72 241 0349.

This release is a summary of Stora Enso's Interim Report January-September 2025. The complete report is attached to this release as a pdf file, and it is also available on the company website at storaenso.com/en/investors/interim-report.

Media enquiries:
Carl Norell
SVP Corporate Communications
tel. +46 72 241 0349

Investor enquiries:
Jutta Mikkola
SVP Investor Relations
tel. +358 50 544 6061

The forest is at the heart of Stora Enso and we believe that everything made from fossil-based materials today can be made from a tree tomorrow. We are 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 and our sales in 2024 were EUR 9 billion. Stora Enso shares are listed on Nasdaq Helsinki Oy (STEAV, STERV) and Nasdaq Stockholm AB (STE A, STE R). In addition, the shares are traded in the USA on OTC Markets (OTCQX) as ADRs and ordinary shares (SEOAY, SEOFF, SEOJF). storaenso.com/investors

STORA ENSO OYJ

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FAQ

What were Stora Enso (SEOAY) Q3 2025 sales and adjusted EBIT?

Q3 2025 sales were EUR 2,283m and adjusted EBIT was EUR 126m (a 28% decrease YoY).

How did the SEK 9.8bn Swedish forest sale affect Stora Enso's balance sheet in 2025?

The sale of ~175,000 ha (12.4%) brought an enterprise value of SEK 9.8bn (~EUR 900m), strengthening the balance sheet and improving net debt metrics.

What is the financial impact of the Oulu consumer board line ramp-up on SEOAY in 2025?

The Oulu ramp-up reduced Q3 profit by EUR 45m and is now estimated to reduce full-year EBIT by EUR 120–140m.

Will Stora Enso (SEOAY) reach EBITDA break-even for the Oulu line in 2025?

Management maintains the target of achieving EBITDA break-even by year-end 2025 despite ramp-up delays.

How did Stora Enso's net debt to adjusted EBITDA ratio change by Q3 2025?

The ratio improved to 2.7 from 3.1 year‑on‑year, reflecting the forest divestment's positive effect.

What capex guidance did Stora Enso give for full-year 2025?

The Group forecasted full-year capital expenditure of EUR 730–790m for 2025.