Stora Enso Financial Statement Release 2017

HELSINKI, Feb. 9, 2018 /PRNewswire/ --

Accelerated profitable growth. Dividend proposal EUR 0.41 per share

Q4/2017 (year-on-year)

• Sales of EUR 2 511 (2 438) million increased 3.0%: the fourth consecutive quarter of sales growth.
• Sales excluding the paper business increased 6.2%.
• Operational EBIT increased 46.6% to EUR 280 (191) million, mainly due to favourable prices and higher volumes combined with successful ramp-up of the strategic investments.
• Strong cash generation strengthened the balance sheet further; net debt to operational EBITDA improved to 1.4 (1.9).
• Operational ROCE was 13.5% (8.9%), the second consecutive quarter above the target of 13%.
• The consumer board machine at Beihai Mill reached its designed capacity level and operational EBITDA break-even as promised in Q4/2017.

Year 2017 (year-on-year)

• Sales at EUR 10 045 (9 802) million increased 2.5%. Sales excluding the paper business increased 8.5%.
• Operational EBIT at EUR 1 004 (884) million increased 13.6%.

Key figures

EUR million	Q4/17	Q4/16	Change % Q4/17-Q4/16	Q3/17	Change % Q4/17-Q3/17	2017	2016	Change % 2017-2016
Sales	2511	2438	3.0%	2509	0.1%	10045	9802	2.5%
Operational EBITDA	427	343	24.5%	432	-1.2%	1587	1463	8.5%
Operational EBIT	280	191	46.6%	290	-3.4%	1004	884	13.6%
Operational EBIT margin	11.2%	7.8%		11.6%		10.0%	9.0%
Operating profit (IFRS)	236	145	62.8%	270	-12.6%	904	783	15.5%
Profit before tax excl. IAC	238	110	116.4%	244	-2.5%	826	575	43.7%
Profit before tax	209	76	175.0%	224	-6.7%	742	541	37.2%
Net profit for the period	173	56	208.9%	191	-9.4%	614	407	50.9%
Net interest-bearing liabilities	2253	2726	-17.4%	2476	-9.0%	2253	2726	-17.4%
Operational ROCE	13.5%	8.9%		13.9%		11.9%	10.2%
Earnings per share (EPS) excl. IAC, EUR	0.26	0.17		0.27		0.89	0.65
EPS (basic), EUR	0.22	0.12		0.24		0.79	0.59
Net debt/last 12 months' operational EBITDA ratio	1.4	1.9		1.6		1.4	1.9
Average number of employees	26116	26135	-0.1%	27001	-3.3%	26206	26269	-0.2%

Stora Enso's CEO Karl-Henrik Sundström comments on the fourth quarter 2017 results:
"We have reached a new level as a renewable materials company. The transformation has proven successful as we exceeded ten billion euros in sales and one billion in operational EBIT for the year. At the same time, we have strengthened our position in the bioeconomy for the future.

In four consecutive quarters, we have achieved growth, reaching a 3.0% increase in sales and 6.2% excluding paper in the fourth quarter. This is primarily due to the ramp-up of strategic investments in Beihai, Varkaus and Murów, and favourable prices. Higher volumes, higher sales prices and a better product mix enabled us to reach operational EBIT margin of 11.2% and ROCE of 13.5%, above our long-term financial targets. Strong cash flow strengthened the balance sheet and net debt to operational EBITDA improved to 1.4. Our innovation strategy is paying off. In 2017, 7% of our products and services were new which is a considerable increase compared to 2016.

After finalising our strategic investments, our balance sheet and cash flow are strengthening. This enables us to reward our shareholders. The Board of Directors proposes to the Annual General Meeting a dividend of 0.41 euros per share, which is the third year in a row with an increase.

We continue to deliver on our promises related to the transformation. The ramp-up of Beihai Mill is ahead of schedule and its consumer board machine reached its designed capacity level and operational EBITDA break-even as planned. Also, Varkaus kraftliner mill reached its designed capacity level and exceeded its profitability target.

Securing raw material long term is crucial in the bioeconomy. As a consequence, we have signed a letter of intent aiming at structural changes in Bergvik Skog.

Stora Enso has made two important announcements during the first quarter this year that I'd like to highlight. We have signed a global framework agreement with three global unions to uphold fundamental labour rights. This is in line with our continuous efforts to provide a safe and rewarding workplace for our employees and contractors, and to be an attractive employer.

I am also very proud that we are the first forestry company to commit to a science based target to further reduce our CO2 and other greenhouse gas emissions. This in line with the 2°C limit set for global warming by the Paris Agreement, and is a natural step for us as the renewable materials company.

As always, I would like to thank our customers for their business, our employees for their dedication, and our investors for their trust."

Outlook
Q1/2018 sales are estimated to be similar to or slightly higher than the amount of 2511 million euros recorded in the fourth quarter 2017, and operational EBIT is expected to be somewhat higher than the 280 million euros recorded in Q4/2017. There are no major scheduled annual maintenance shutdowns during Q1/2018.

Events today:

1) Press conference and webcast for media at 11.00 Finnish time (10.00 CET)
Stora Enso's CEO Karl-Henrik Sundström and CFO Seppo Parvi will present the results at the press conference which will be webcast. The event, hosted by EVP, Communications Ulrika Lilja, will be held in English and take place at Stora Enso's Head Office, Kanavaranta 1, Helsinki at 11.00 EET (10.00 CET, 9.00 UK time, 4.00 EDT). The webcast may be accessed at https://storaenso.videosync.fi/2018-02-09-q4-results

2) Webcast and conference call for analysts and investors at 15.00 Finnish time
The webcast and conference call for analysts and investors will take place at 15.00 EET (14.00 CET, 13.00 UK time, 08.00 EDT). It will be hosted by CEO Karl-Henrik Sundström, CFO Seppo Parvi, and SVP Head of Investor Relations Ulla Paajanen-Sainio, and may be accessed at https://edge.media-server.com/m6/p/bzsqvq4d

Those analysts and investors who wish to ask questions should join the conference call (details below). All participants can follow the presentation over the webcast. The links to the webcasts are also available on the Stora Enso website: storaenso.com/investors

Dial-in details for the analyst and investor conference call

Live event at 15.00 EET
UK	[phone]
Finland	[phone]
Sweden	[phone]
USA	[phone]
Confirmation Code:	2891565

This release is a summary of Stora Enso's Financial Statement Release 2017. The complete report is attached to this release as a pdf file. It is also available on the company website at storaenso.com/investors.

Stora Enso is a leading provider of renewable solutions in packaging, biomaterials, wooden constructions and paper on global markets. Our aim is to replace fossil-based materials by innovating and developing new products and services based on wood and other renewable materials. We employ some 26000 people in more than 30 countries, and our sales in 2017 were EUR 10 billion. Stora Enso shares are listed on Nasdaq Helsinki (STEAV, STERV) and Nasdaq Stockholm (STE A, STE R). In addition, the shares are traded in the USA as ADRs (SEOAY). storaenso.com

For further information, please contact:
Seppo Parvi,
CFO,
Tel. [phone]

Ulla Paajanen-Sainio,
SVP,
Investor Relations,
Tel. [phone]

Ulrika Lilja,
EVP, Communications,
Tel. [phone]

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STORAENSO RESULTS 2017 ENG