Stora Enso Oyj Interim Report January-March 2021

Q1/2021 (year-on-year)
*Sales increased by 3.1% to EUR 2 276 (2 207) million, due to higher deliveries and prices.
*Operational EBIT increased to EUR 328 (180) million, due to lower costs.
*Operational EBIT margin increased to 14.4% (8.1%).
*Operating profit (IFRS) decreased to EUR 161 (262) million.
*EPS was EUR 0.18 (0.19) and EPS excl. fair valuations (FV) was EUR 0.22 (0.11).
*Cash flow from operations amounted to EUR 185 (146) million. Cash flow after investing activities was EUR -9 (-32) million.
*The net debt to operational EBITDA ratio was 2.3 (2.3).
*Operational ROCE excluding Forest division increased to 12.0% (7.8%)

Strategy implementation update
*Stora Enso is planning to permanently close down pulp and paper production at Kvarnsveden and Veitsiluoto mills, as announced on 20 April.
*TreeToTextile, a joint venture where Stora Enso holds a 25% share, invests EUR 35 million in a demonstration plant for sustainable textile fiber.
*Dissolving pulp production at Enocell Mill will be discontinued during 2021, and the mill will be producing other pulp grades.
*The conversion project at Oulu Mill was completed and production of krafliner is in a ramp-up phase.
*The US-based Virdia operations were shut down in Q1/2021.
*A feasibility study is ongoing regarding a possible expansion of the pulp and board production at Skoghall Mill in Sweden.

Preventive Covid-19 actions
Protecting employees and contractors health and safety during the pandemic has been Stora Enso’s key priority. By being proactive and having extensive measures in place, the Group has also been able to continue operations and serve customers with minimal disruptions.

The global economy is recovering from the impacts of the pandemic and the demand for Stora Enso’s products, except for graphic paper, is healthy. Operational EBIT in 2021 is expected to be higher than the 2020 operational EBIT as guided earlier.

Stora Enso will conclude its EUR 400 million profit protection programme by the end of Q2/2021, two quarters ahead of the plan. The accumulated continuous and total savings from the beginning of the programme until Q1/2021 amount to EUR 360 million and EUR 460 million, respectively. Continuous savings of EUR 50 million were achieved in Q1/2021. Remaining targeted savings are expected to be reached by the end of Q2/2021.

The Oulu Mill conversion is estimated to have approximately EUR 10–15 million negative impact on the Packaging Materials Q2/2021 operational EBIT. For 2021, the total negative impact on operational EBIT is forecasted to be approximately EUR 40–50 million. The previous estimate was EUR 45–55 million. The mill is planned to reach designed capacity by the end of Q2/2021 and the commercialisation of product portfolio by the end of 2021. The forecast to reach operational EBITDA break-even is now in Q3/2021, thanks to successful ramp-up and good market conditions. Previously it was estimated to be in Q1/2022.

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