Latest news with #HansSohlstrom
Yahoo
26-04-2025
- Business
- Yahoo
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.
Yahoo
12-02-2025
- Business
- Yahoo
Stora Enso Oyj (SEOAY) Q4 2024 Earnings Call Highlights: Strong EBIT Growth Amidst Sales Decline
Adjusted EBIT Growth: 75% year-on-year increase, reaching EUR598 million. Fixed Costs Reduction: Decreased by EUR110 million. Operating Working Capital: Reduced by over EUR700 million, lowering from 14% to 7% of sales. Full-Year Sales: Declined by 4% to EUR9 billion; sales for continuing businesses increased by 1%. Fourth-Quarter Sales: Increased to EUR2.3 billion. Fourth-Quarter Adjusted EBIT: Increased to EUR121 million, a 139% increase from the previous year. Adjusted EBIT Margin: Increased to 7% from 4% the previous year. Net Debt: Increased to EUR3.7 billion; net-debt-to-adjusted-EBITDA ratio improved to 3 times. Dividend Proposal: EUR0.25 per share, up from EUR0.20 last year. Capital Expenditures: Additions to fixed and biological assets slightly over EUR1 billion; expected to decrease to EUR730-790 million in 2025. Forest Assets Valuation: Increased to EUR8.9 billion, translating to EUR11.28 per share. Cash Flow from Operations (Q4): EUR325 million; cash flow after investing activities improved to EUR88 million. Warning! GuruFocus has detected 8 Warning Signs with SEOAY. Release Date: February 11, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Stora Enso Oyj (SEOAY) achieved a robust 75% year-on-year growth in adjusted EBIT for 2024, driven by improved sourcing, operational efficiency, and commercial excellence. The company reduced its fixed costs by EUR110 million, which helped offset rising wood costs. Operating working capital reached an all-time low, decreasing by over EUR700 million, reducing the operating working capital to sales ratio from over 14% to 7%. The Board proposed a dividend increase to EUR0.25 per share, up from EUR0.20 last year, reflecting a commitment to shareholder value. Stora Enso Oyj (SEOAY) achieved a 53% reduction in Scope 1 and 2 emissions, surpassing its target of a 50% reduction by 2030, demonstrating strong progress in sustainability efforts. Full-year sales declined by 4% to EUR9 billion, primarily due to capacity closures and divestments in 2023. The Packaging Solutions division faced margin pressure due to market overcapacity, resulting in a negative adjusted EBIT of EUR6 million. Wood Products division's adjusted EBIT remained negative at EUR12 million, despite improvements in volumes and prices. The company is still far from its long-term financial targets, indicating ongoing challenges in achieving desired profitability levels. Market uncertainties and fluctuations in demand and pricing persisted throughout 2024, impacting overall business performance. Q: Can you indicate the main strategic CapEx items after the Oulu ramp-up? A: Hans Sohlstrom, CEO: The projected CapEx includes strategic investments. One disclosed opportunity is the Langerbrugge newsprint mill conversion to testliner, forming a competitive entity with the De Jong facility. No decisions or timelines are set yet. Regarding working capital, the 7% of sales is sustainable, and we continue to improve efficiency. Q: With the need to improve profitability, are there structural actions planned for the Oulu ramp-up? A: Hans Sohlstrom, CEO: We are systematically improving cost efficiency with 3,600 identified actions. The Oulu investment will gradually ramp up, adding 750,000 tonnes to a 50 million tonne market by 2027. No capacity closures are planned. For Packaging Solutions, a new divisional leader is in place to improve profitability. Q: How do you see the transaction volume dynamics and pricing for forest assets? A: Hans Sohlstrom, CEO: We see wood costs stabilizing. Our forest asset valuation is based on deals over the last three years, showing a long-term trend of increasing value. We don't speculate on future developments. Q: What is the plan for Oulu's sales, considering global market conditions? A: Hans Sohlstrom, CEO: The Oulu line will primarily serve Europe and the USA, with preparations for US market entry ongoing. The US currently represents less than 5% of our sales. We are prepared for potential tariffs, though they currently have minimal impact. Q: Can you quantify the potential cost savings from your efficiency programs? A: Hans Sohlstrom, CEO: Despite a EUR300 million increase in wood costs, we improved adjusted EBIT by 75% last year. We continue to focus on sourcing, operational efficiency, and commercial excellence to enhance profitability. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
