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Stora Enso Oyj Half-Year Report January – June 2022

General News
Stora Enso Logo - Lumber Manufacturer

Q2/2022 (year-on-year)

  • Sales increased by 18% to EUR 3,054 (2,592) million.
  • Operational EBIT increased by 39% to EUR 505 (364) million.
  • Operational EBIT margin increased to 16.5% (14.0%).
  • Operating profit (IFRS) increased to EUR 399 (182) million.
  • EPS was EUR 0.38 (0.26) and EPS excl. fair valuations (FV) was EUR 0.42 (0.27).
  • Cash flow from operations amounted to EUR 404 (463) million. Cash flow after investing activities was EUR 247 (339) million.
  • The net debt to operational EBITDA ratio improved to 1.0 (1.8). The target is to keep the ratio below 2.0.
  • Operational ROCE excluding the Forest division increased to 22.8% (18.1%), the target being >13%.

Q1-Q2/2022 (year-on-year)

  • Sales were EUR 5,852 (4,868) million.
  • Operational EBIT was EUR 1,008 (692) million.

Key Highlights

  • A feasibility study was launched at the Langerbrugge site in Belgium for the conversion of one of the two paper lines into a high-volume recycled containerboard line.
  • A feasibility study for the conversion of an idle paper machine at the Oulu site, Finland is ongoing to explore expansion in renewable packaging board with an additional capacity of 750,000 tonnes.
  • Stora Enso and Northvolt, the battery cells and systems supplier, have entered into a Joint Development Agreement to create a battery with wood-based components sourced sustainably and locally in the Nordic countries.
  • Stora Enso’s three packaging sites in Russia were divested to local management. The divestment of the Group’s two sawmills in Russia to local management has been completed. Minor formalities for the Russian legal entities in the wood supply operations, are expected to be completed during H2/2022. After the completion of these divestments, Stora Enso will no longer have any exposure to Russia.
  • The sales process is ongoing to divest four out of five paper production sites to focus on growth in the key strategic areas: renewable packaging, building solutions and biomaterials innovations.


Global megatrends such as an increased awareness of sustainability, an accelerated focus on combatting climate change, and digitalisation underpin Stora Enso’s business strategy and the demand for its renewable and eco-friendly products, both short and long term.

Stora Enso remains mindful of the heightened market disruptions and uncertainties such as increased geopolitical risk, the rapidly changing macroeconomic environment, inflationary pressures, logistical constraints, material shortages and the pandemic. To manage volatility, measures such as pricing, flexibility in sourcing and logistics, as well as hedging are in place.

There is sustained solid demand for Stora Enso’s products. In consumer board, demand remains strong and the demand for corrugated packaging in Europe is expected to remain stable. The strong demand in pulp is expected to continue both in Europe and China. However, Stora Enso enters the third quarter seeing early indications of a normalisation of demand in containerboard and also in traditional sawn goods, albeit from peak levels. Our full year 2022 guidance remains unchanged from the updated guidance communicated in June 2022.


On 13 June, Stora Enso raised its guidance for the full year 2022 operational EBIT due to sustained strong market conditions. Stora Enso’s full-year 2022 operational EBIT is estimated to be higher than the full year operational EBIT for 2021 (EUR 1,528 million).

Stora Enso’s President and CEO Annica Bresky comments on the second quarter 2022 results:

“I am happy to report that our very strong start of the year continued in the second quarter, despite persisting macroeconomic and geopolitical turmoil. We once again demonstrate the agility and commitment of our organisation, our differentiated customer and product portfolio, and the power of the synergies across the breadth of the business. Our commitment to leverage the potential of our renewable materials and solutions has never been stronger.

We continue to grow by 21% excluding Paper year-on-year in our core businesses with margins and returns well above our long-term targets. During the quarter, the demand has been robust for our main segments but logistical challenges with low long haul vessel reliability and poor container availability has had an impact on our ability to fully serve our customers. We have high self-sufficiency in energy and wood supply which has supported and allowed us to secure our key raw materials and energy needs. Our pricing power allows us to mitigate inflationary pressures and our key priorities remain; to support our customers through inventory management and handling continued supply chain and logistical disruptions.

The humanitarian crisis in Ukraine and the horrors of war have undeniably come closer to all of us and our response was swift and necessary. The divestment of the Russian industrial operations to local management has been completed. Minor formalities are left for the wood supply legal entities, and the process will be completed latest in Q4 this year. After that, we will no longer have any exposure to Russia. In all this, I am pleased to have found a safe and sustainable long-term solution for these businesses and our former employees. We stay true to our values and responsible business is an integral part of our day-to-day decision making.

We managed to achieve the highest quarterly result since the early 2000s, with an operational EBIT of 505 million Euros, a year-on-year increase of 39% with an operational EBIT margin of 16.5%. The valuation of our forest assets reached 8.2 billion Euros, corresponding to 10.40 Euro per share. We have also prepared ourselves for tougher economic environment by good cost control, increased liquidity, and reduced debt. For the first time, we reached a net debt to operational EBITDA ratio of 1, below our target of 2 creating resilience and headroom to sustain our growth journey both organically and through selective M&As. I am very proud of these results; they have taken a lot of effort to achieve.

In June, we raised our full year guidance to be higher than our record year 2021 results. Stora Enso reiterates the updated guidance. In Packaging, we see stable demand in consumer packaging, liquid, and food, and are sold out in this segment. Demand for containerboard is normalising due to seasonally slow summer months and customer inventory reductions. Demand is also stable for corrugated box packaging in Europe. For agricultural and food packaging end-uses demand remains solid, while e-commerce, industrials, and the consumer durables end-uses demand are normalising from very high levels.

In Wood Products, we have passed the demand peak from historically high levels for traditional sawn products. The construction market is slowing down due to elevated inflation and availability of other building components. However, our Building Solutions segment is benefiting from long projects and governmental policies and sees sustained strong demand for both cross laminated timber and laminated veneer lumber. In our Paper division, we have full orderbooks, the market remains tight, and there is continued price momentum. We are also fully booked in our Biomaterials division, with a sustained positive sentiment and a continued tight market situation. The tissue, paper, and packaging end-use segments demand remain strong in both Europe and China. Lastly, as a result of the above, the Forest division sees high demand for pulpwood and stable demand for sawn timber.

Renewable packaging is one of our growth areas where we prioritise conversions of existing assets and incremental improvements of environmental performance, production efficiency and quality. In line with this, we initiated a feasibility study in our retained paper site in Belgium for conversion into a cost leading, high-volume recycled containerboard line. We also support our customers becoming fully circular and reducing their carbon footprint. At the same site, we partnered in a feasibility study with Tetra Pak, for a recycling facility serving the Benelux market. This builds on the experiences and learnings of a similar joint project in Poland, for enabling recycling in Eastern Europe.

We are constantly broadening our partnerships and collaborations in the value chain of wooden-based solutions for efficient and low-carbon construction. The French market is the biggest in growth and opportunities, supported by ambitious governmental policies to promote wooden based construction. Latest examples of our progress are our 35% shareholding in a wood processing company and business partnership with an industrial group, both in France.

Lastly, to make a difference and a positive climate impact, we must constantly innovate and challenge ourselves, pushing the boundaries of “what a tree can do”. In Biomaterials Innovations, I am therefore very pleased that we now have our first partnership in place, a joint development agreement with Northvolt, one of Europe’s largest battery makers. We will together create the world’s greenest battery using our anode material Lignode, homegrown in our Nordic forests. We have also teamed up with the Swedish company Modvion to create 100+ meter tall wooden wind turbine towers. The aim is to reduce the carbon footprint of steel-based wind turbine towers by using wood as the material of choice. Imagine: renewable energy production using renewable construction materials, what a win for the climate.

Our decisions are guided by our purpose: to do what is right for people and the planet by replacing fossil-based materials with renewable ones. We will continue our efforts to help our customers become 100% climate positive and circular, creating value for all our stakeholders long-term. We are committed to build the right ecosystem of customers, partners and passionate people that will deliver sustainable and profitable growth. The renewable future grows in the forest.”

For the full second quarter results, click here.

About Stora Enso

Part of the global bioeconomy, Stora Enso is a leading provider of renewable products in packaging, biomaterials, wooden construction and paper, and one of the largest private forest owners in the world. We believe that everything that is made from fossil-based materials today can be made from a tree tomorrow. Stora Enso has approximately 22,000 employees and our sales in 2021 were EUR 10.2 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 as ADRs (SEOAY).


Anna-Lena Åström – SVP Investor Relations – +46 70 210 7691

Source: Stora Enso Oyj