Stora Enso has released its Q4 2023 and Full year 2023 reports.
For Q4 2023, sales were €2,174m, down 24% on same period last year (€2,864m). Profit decreased to €-326m (€710m in same period last year).
For the full year, sales were €9,396m (€11,680m in 2022). Operating result (IFRS) was €-322m (€2,009m in 2022).
In its report, Stora Enso expects market conditions to remain uncertain in 2024, with ongoing pressure on demand, prices and margins. However, there are some positive signs such as increasing pulp prices, declining global pulp inventories, less customer destocking, and lower inflation and interest rates.
The first quarter is not expected to show a significant market improvement following a historical low fourth quarter in 2023 and a slow recovery. All variable costs continued to ease in the fourth quarter, except for wood, which are expected to follow similar trends also in the first quarter this year. The potential risk of logistical challenges from the Red Sea area could disrupt the flow of goods and increase costs.
The Packaging Materials and Wood Products divisions continue to suffer from low demand, prices and volume. Value chain destocking for Packaging Materials is coming to an end during the first half of 2024, which may support a slight recovery especially in the consumer board segment.
Packaging Solutions expects a stronger sequential demand in the first half of the year due to the greenhouse season. However, low demand leads to high price and margin pressure due to containerboard price reductions, inflation-driven fixed costs, and overcapacity.
During the second half of 2023, Stora Enso implemented significant restructuring measures to enhance its financial performance going forward. These included the closure of sites and production lines, the sale of assets, the adoption of a more decentralised operating model, and a reduction of employees by approximately 1,150. These actions are expected to improve the Group’s cost competitiveness and streamline its organisation, leading to a stronger financial performance in the years to come.
Building on last year’s cost-saving initiative, Stora Enso will further pursue profit turnaround and cash flow improvements to reduce costs and improve competitiveness. A new profit improvement programme targeting annualised €80m improvement of the operational EBIT has been initiated. This could lead to a potential reduction of approximately 1,000 employees.