Fourth Quarter 2019 Highlights • Corrugated Packaging Segment EBITDA margin of 23.1% and North American Adjusted Segment EBITDA margin of 23.2% • Consumer Packaging Segment EBITDA margin and Adjusted Segment EBITDA margin of 16.1%, an increase of 50 basis points and 100 basis points, respectively, compared to the prior year quarter • Net cash provided by operating activities of $911 million and Adjusted Operating Cash Flow of $942 million; total debt declined by $475 million sequentially. Full Year 2019 and Other Highlights • Completed KapStone acquisition and achieved run rate of $90 million in synergies and performance improvements • Invested $1.37 billion in capital expenditures, including $0.5 billion in strategic capital projects • Returned $557 million to stockholders through dividends and stock repurchases • Reduced total debt by $757 million since December 31, 2018
Sales decreased by 9.3% to EUR 2 411 (2 657) million.
Operational EBIT decreased to EUR 112 (271) million.
Operational EBIT margin was 4.6% (10.2%).
Operating profit (IFRS) was EUR 680 (356) million.
EPS increased to EUR 0.66 (0.39) and EPS excl. IAC was EUR 0.69 (0.33).
Record cash flow from operations amounted to EUR 721 (323) million. Cash flow after investing activities was EUR 518 (148) million.
The net debt to operational EBITDA ratio was 2.1 (1.1)
Operational ROCE was 4.2% (12.4%).
Year 2019 (year-on-year)
Sales were EUR 10 055 (10 486) million.
Operational EBIT was EUR 953 (1 325) million.
Record cash flow from operations amounted to EUR 1 980 (1 365) million. Cash flow after investing activities was EUR 1 386 (811) million.
Stora Enso’s President and CEO Annica Bresky comments on the fourth quarter 2019 results:
“Year 2019 was concluded by a challenging quarter characterised by demanding market conditions, especially significantly lower pulp prices. We have focused on what we can impact: our costs, cash flow and managing value over volume. We are satisfied that we were early out with our profit protection programme. It is proceeding ahead of plan and the total implemented cost saving amounted to EUR 150 million in 2019. We will now continue to work on the areas that we can control, to be prepared for a more profitable future when the cycle turns.
Our forest fair valuations have increased significantly since the publication of our third quarter results. The impact came mainly from the forest fair valuation increases in our forests in Sweden and Tornator in Finland.
The lower prices during the quarter had a negative impact on sales and operational EBIT. However, the impact on operational EBIT was partly offset by lower costs achieved through the profit protection programme. I am pleased that we had a record cash flow from operations, due to good working capital management, and extra dividend and capital repayment from Bergvik Skog. Looking at the whole year of 2019, sales remained above EUR 10 billion. Our operational EBIT decreased and was unsatisfactory.
The Board of Directors proposes to the Annual General Meeting a dividend of 0.50 euros per share, unchanged from last year.
Our transformation projects are progressing well, and the kraftliner production at the Oulu Mill is expected to start by the end of 2020. We are also strengthening our portfolio through innovation. To deliver viable alternatives to fossil-based plastics, we have invested to build a pilot facility for bio-based plastics. With this step, we target applications such as barriers in transparent packaging. Together with the Finnish start up Sulapac, we have additionally commercialised a renewable and biodegradable straw. This is one of our contributions to combat the global problem of plastic waste.
We continue to launch new products that enable our customers to leverage digital solutions to further advance their businesses. In this area, I am proud that we have entered into a global partnership with Atos to bring new automated retail solutions and services to the market. With radio-frequency identification (RFID) technology, we enable e-kiosks designed for on-the-go purchasing.