Stora Enso has confirmed its results for Q1 2020. Sales decreased by 16.2% to €2,207m, down from €2,635m in the same period last year. The company states this is due to significantly lower prices and volumes. Operational EBIT decreased to €180m (€335m) and operational EBIT margin was 8.1% (12.7%). Operating profit (IFRS) was €262m (€313m).
Stora Enso’s President and CEO Annica Bresky, comments, “The first quarter of the year has been marked by challenging harvesting conditions, strikes in Finland and the start of the Covid-19 pandemic. Lower prices and volumes during the quarter had a negative impact on sales and operational EBIT, compared to the record levels in the first quarter of last year. Under these conditions, ‘a new normal’ where historical references are no longer valid, I am satisfied with our performance for the quarter. We delivered a result of €180m, in the upper end of our guidance range. Our continued focus is on building business resilience and putting our efforts in the areas we can impact, that is serving our customers by keeping our operations running and mitigating supply chain challenges, securing liquidity and managing costs, margins and cash flow. Ultimately, we want to ensure our ability for a quick recovery once the tide turns.
“We were out early with actions related to Covid-19, including a global travel ban, social distancing and appointed work streams to keep business momentum. So far, our operations have been running normally on a global level. We have built a strong liquidity position amounting to €1.4bn, for a potentially longer and deeper recession. We have actions in place to enhance our cash flow going forward by active working capital management and cost savings. Our profit protection programme is delivering ahead of plan and we have increased our savings target to €350m (earlier €275m) by the end of 2021. During this first quarter of 2020, we achieved cost savings amounting to €40m, including one-time cost savings. In regards to managing a potential demand decrease, we have started preparations for potential temporary layoffs or shorter working time if and when needed.”
