Stora Enso Reshapes for Value as Oulu Ramp-Up and Wood Cost Savings Offset Market Headwinds

Portfolio optimization accelerates with Bergslagets Skogar separation, while consumer board and pulp margins show resilience.

STERV.HE · Earnings Call · 2026-07-23

Portfolio Optimization Gaining Momentum

Stora Enso's second-quarter 2026 results demonstrated a company firmly focused on executing its own value-creation agenda in a volatile market. “We improved operational performance, strengthened customer relationships and advanced several important strategic initiatives.” — Hans Sohlstrom, President and CEO · 2026-07-23 The highlight is the planned separation of Bergslagets Skogar, a move that CEO Hans Sohlstrom described as “a key step in unlocking value and enhancing strategic focus for both companies.” — Hans Sohlstrom, President and CEO · 2026-07-23 The company also announced an investment in fluff pulp capacity at Skutskar, the closure of a less competitive line, and the divestment of a corrugated site in Germany. These actions, alongside the strategic review of Central European sawmills, underscore a disciplined approach to customer value and capital allocation. Financially, the company delivered stable sales of EUR 2.4 billion and a 27% increase in adjusted EBIT to EUR 160 million, driven by positive operational performance, particularly in Consumer Packaging, and progress at the Oulu ramp-up.

Wood Cost Divergence and Oulu Ramp-Up

Wood costs are a key swing factor. CFO Niclas Rosenlew explained the nuance: “While pulpwood costs have declined, sawlog costs have remained high and, in some cases, continue to increase, particularly for sawmills.” — Niclas Rosenlew, CFO · 2026-07-23 The net benefit is therefore more modest than the headline pulpwood decline suggests. The timing of these cost impacts is also important, with a lag of three to six months. The company continues to manage this through its own actions, with a pipeline of EUR 500-700 million in value creation initiatives. On Oulu, the ramp-up of the new consumer board line is progressing well, though it remains a drag on profitability. “We expect to reach full capacity with the new consumer board line in Oulu during next year.” — Hans Sohlstrom, President and CEO · 2026-07-23 This is a repeat of prior messaging, as seen in the February 2026 call where Hans noted “we don't give any further guidance there. I would say that the ramp-up is progressing.” — Hans Sohlstrom, President and Chief Executive Officer (CEO) · 2026-02-04

The main message is that progress with our own actions and in Oulu more than compensated for the negative market impacts.
Niclas Rosenlew, CFO · 2026-07-23

Consumer Board Resilience

Despite market overcapacity and increased imports from Asia, Stora Enso's Consumer Packaging segment continues to outpace the market. “We continue to grow faster than the market in consumer board, backed up by our recent significant investments here.” — Hans Sohlstrom, President and CEO · 2026-07-23 The company's integrated, cost-competitive mills and strong customer relationships underpin this resilience. As Hans noted in a prior call, “we are much more efficient internally than we were 3 years ago.” — Cole Hathorn, Analyst · 2026-02-04 The wood cost environment remains a mixed bag, but the company's ability to offset headwinds through operational excellence and procurement efficiencies is a recurring theme. The increased imports from Asia are being monitored, but Hans emphasized that the company has not lost business to Asian producers, citing the high-quality, multi-layered nature of their products and close customer ties. Overall, Stora Enso is navigating a challenging environment with a clear focus on self-help. The strategic reshaping, coupled with the Oulu ramp-up and cost discipline, positions the company for margin expansion as market conditions stabilize. The message from management is consistent and determined, as seen in the repeated emphasis on own actions and value creation.