A promising start of the year, supported by the profit protection programme
Q1/2019 (compared with Q1/2018)
Sales increased 2.2% to EUR 2 635 (2 579) million, the highest first quarter since 2013 and the ninth consecutive quarter of growth.
Operational EBIT decreased to EUR 324 (369) million which was in the upper end of our guidance range of EUR 260–350 million.
The operational EBIT margin was 12.3% (14.3%), above 10% for the seventh consecutive quarter.
Operating profit (IFRS) was EUR 313 (355) million.
EPS decreased by 16.0% to EUR 0.29 (0.35) and EPS excl. IAC was EUR 0.30 (0.35).
Cash flow from operations decreased slightly to EUR 223 (229) million. Cash flow after investing activities amounted to EUR 94 (113) million.
The net debt to operational EBITDA ratio increased to 1.7 (1.3), due to the adoption of IFRS 16 Leases (impact 0.3) and dividend payment.
Operational ROCE was 14.0% (17.7%), above the strategic target of 13%.
Outlook for 2019
Stora Enso's year 2019 is expected to be largely in line with 2018, provided that the current trading conditions do not significantly change. Demand growth is expected to continue for Stora Enso’s other businesses except for European Paper, for which demand is forecast to continue to decline in 2019. Group’s sales are expected to be higher and costs are forecast to increase in 2019 compared to 2018. Stora Enso will implement measures to mitigate these cost increases and the increased uncertainties with the profit protection programme.
Guidance for Q2/2019
Q2/2019 operational EBIT is expected to be in the range of EUR 270–350 million. During the second quarter, there will be annual maintenance shutdown at the Nymölla paper mill. The total negative impact of maintenance is estimated to be EUR 35 million less compared to Q2/2018.