Stora Enso Oyj (SEOAY) Q1 2025 Earnings Call Highlights: Strong Sales Growth Amid Operational ...
Sales Growth: Increased by 9% to EUR2.4 billion.
Adjusted EBIT: EUR175 million, up 18% year-over-year with a 7.4% margin.
Operating Working Capital: Decreased by 3 percentage points to 7%.
Net Debt: Increased to EUR3.9 billion, with a net debt to EBITDA ratio of 3.2 times.
Capital Expenditure: Approximately EUR240 million, expected to decrease after Q2.
Cash Flow from Operations: EUR192 million, negatively impacted by a EUR100 million increase in working capital.
Packaging Materials EBIT: Increased by EUR10 million to EUR62 million.
Biomaterials EBIT: Decreased to EUR36 million due to lower sales prices and higher costs.
Forest EBIT: Record high at EUR82 million, with assets fair value at EUR9.3 billion.
Warning! GuruFocus has detected 8 Warning Signs with SEOAY.
Release Date: April 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Sales grew by 9% in the first quarter, reaching EUR 2.4 billion.
Achieved a robust adjusted EBIT of EUR 175 million, representing an 18% increase year-over-year.
Successful production start of the new consumer board line at the Oulu Mill.
Regulatory approval to proceed with the acquisition of Finnish sawmills, Junnikkala, enhancing operational synergies.
Plans to implement a new leaner and flatter organizational structure to enhance efficiency and performance culture.
Adjusted EBIT for the full year 2025 is expected to be adversely impacted by approximately EUR 100 million due to the ramp-up of the new packaging board line.
Higher fiber costs negatively impacted results, with a total negative impact of EUR 131 million in the quarter.
Cash flow after investing activities was negative at EUR 47 million, driven by the Oulu project.
Wood costs remain at record high levels, impacting profitability.
The Packaging Solutions division continues to face challenges due to market overcapacity and oversupply.
Q: Can you explain the changes in the operational structure and what they imply for Stora Enso? A: Hans Sohlstrom, President and CEO, explained that the company is removing one management layer and creating a flatter organization with seven P&L responsible business areas. This change involves integrating Nordic sawmills with the closest pulp and board integrates to enhance efficiencies. The new structure will have 21 P&L responsible business units, decentralizing P&L responsibility closer to operations and sales.
Q: Regarding the Oulu mill ramp-up, what are the expected sales and pricing assumptions for 2025? A: Hans Sohlstrom stated that while specific volume targets for 2025 are not disclosed, the EUR800 million sales target is based on average long-term prices for folded boxboard and coated unbleached kraft. The ramp-up is progressing well, with prime quality customer trials underway.
Q: How are current US tariffs impacting Stora Enso's operations, and what are the opportunities? A: Hans Sohlstrom noted that US tariffs have a limited impact as sales to the US account for less than 3% of total sales. The company is renegotiating contracts and pricing in the US and sees opportunities in markets implementing countermeasures to US tariffs. Stora Enso remains committed to the US market while exploring new opportunities globally.
Q: What is the outlook for wood costs and other input costs for the remainder of the year? A: Hans Sohlstrom mentioned that wood costs are at record high levels but are expected to stabilize. The mills will be dedicated to specific business areas, with some exceptions like the Oulu mill, which will report into the carton board business area despite producing some containerboard.
Q: Can you provide an update on the forest sales process and its timeline? A: Hans Sohlstrom confirmed that the forest sales process is proceeding as planned, with expectations to finalize in the first half of 2025. Despite market volatility, the stable forest asset remains attractive, and its value has increased since the deal was announced.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
11 minutes ago
- Yahoo
Altman-Backed Coco Robotics Raises $80 Million for Delivery Bots
Coco Robotics, an urban delivery startup using small autonomous robots, has secured $80 million in new funding from OpenAI CEO Sam Altman and other investors, Bloomberg reported Wednesday. The financing round was led by venture capital firm SNR, with participation from Pelion Venture Partners, Offline Ventures, and Max Altman, Sam's brother. The latest investment brings Coco's total raised capital to over $110 million. The company did not disclose a new valuation. Warning! GuruFocus has detected 7 Warning Sign with DASH. Founded in 2020 and formally known as Cyan Robotics Inc., the Santa Monica-based startup deploys about 1,300 cooler-sized electric robots across cities including Miami, Chicago, Los Angeles and Helsinki. The devices deliver food and small packages and are integrated into logistics platforms from Uber Technologies Inc. (UBER) and DoorDash Inc. (DASH, Financials). Coco also works directly with merchants and recently deepened its partnership with OpenAI. Under a March agreement, the company uses OpenAI's language and vision models alongside its own software stack to help its robots navigate obstacles and make real-time decisions. The two firms also share data from delivery routes to train AI systems. However, CEO Zach Rash said Sam Altman was not involved in structuring that collaboration. Coco is one of several startups racing to bring robotics to last-mile delivery logistics, a segment where cost-cutting and speed remain key challenges. Despite the sector's volatility, investors are betting that Coco's full-stack software and early commercial traction can differentiate it in a growing market. This article first appeared on GuruFocus.
Yahoo
20 minutes ago
- Yahoo
Nvidia (NVDA) to Build First Industrial AI Cloud in Germany
Nvidia (NVDA, Financials) will develop its first industrial AI cloud in Germany to support applications ranging from automotive design to logistics optimization, CEO Jensen Huang said Wednesday at the VivaTech conference in Paris. Warning! GuruFocus has detected 4 Warning Signs with NVDA. The platform will help industrial firms such as BMW and Mercedes-Benz simulate production processes and integrate robotics with artificial intelligence. Biotech companies like Novo Nordisk (NVO, Financials) are also expected to benefit, using Nvidia's tools for drug discovery. Huang said Nvidia will multiply its AI computing capacity in Europe tenfold over the next two years and will open 20 AI factorieslarge-scale infrastructure facilities for building and deploying AI models. He described Europe as newly "awakened" to the importance of sovereign AI development. Nvidia will also expand its technology centers across seven countries, launch a European compute marketplace, and partner with AI startups such as France-based Mistral to run models on 18,000 Nvidia chips. The project aligns with the European Commission's own investment initiative, which earmarked $20 billion in March for building AI factories. Huang emphasized that no country or company can afford to "outsource its intelligence." Separately, Huang reiterated his recent comments that quantum computing is reaching an inflection point and could solve real-world problems within a few years, reversing his prior view that useful quantum systems remain decades away. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
37 minutes ago
- Yahoo
Wall Street on Edge: Inflation Spike, $58B Debt Test, and Trade Turmoil Collide
Wall Street is holding its breath as two market-moving forces line up: inflation and debt. Investors are watching closely as the U.S. and China restart trade talks in London, aiming to ease tensions and avoid another round of tariff escalations. Meanwhile, a $58 billion Treasury auction could test demand for U.S. debt at a time when long-end yields hover near 5%a level many thought would spark broader market reactions. BMO's Ian Lyngen calls this week's combo of May CPI and Treasury supply a tradable event, with core inflation expected to accelerate to 2.9% year-over-yearthe first uptick of the year. The S&P 500 (SPY) sits roughly 2% from its February peak, but volatility could return fast depending on how these numbers land. Warning! GuruFocus has detected 5 Warning Sign with META. Despite the rebound from April's tariff-driven slide, institutional investors have yet to jump back into equities in full force. Deutsche Bank notes that institutional positioning has been this low less than a quarter of the time since 2010. JPMorgan and Barclays, however, suggest the tide could be turning, with more big money managers set to ramp up equity exposure. That shift hasn't shown up yetBank of America's clients were net sellers last week, with institutions pulling out while hedge funds and retail buyers stepped in. Strategist Jill Carey Hall thinks the market may have already priced in much of the deglobalization risk, but not the potential upside from underappreciated tax policy tailwinds. On the corporate front, action is heating up. Tesla (NASDAQ:TSLA) isn't grabbing headlines today, but its peers are moving fast. Meta's (NASDAQ:META) CEO Mark Zuckerberg is going all-in on artificial general intelligence, quietly assembling a powerhouse team to build out the next big wave in AI. Boeing (NYSE:BA) just secured its biggest monthly order tally in over a yearmuch of it inked during President Trump's trip to the Middle East. Cisco (NASDAQ:CSCO) is rolling out new AI-powered upgrades across its networking portfolio to stay competitive in the enterprise race. Taiwan Semiconductor (NYSE:TSM) posted a 40% revenue surge in May as chipmakers rushed to build inventory ahead of potential trade roadblocks. Not everything was rosyMcDonald's (NYSE:MCD) was slapped with a rare sell rating from Redburn Atlantic, and Citigroup (NYSE:C) is preparing to book hundreds of millions more in loan loss provisions, signaling early cracks in consumer credit health. This article first appeared on GuruFocus.
