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Stora Enso lowers its guidance for 2023 due to worsening market outlook

HELSINKI (News release) -- Due to materially lower earnings forecasts for the full year results 2023, Stora Enso's new guidance is that the full-year 2023 operational EBIT is expected to be significantly lower than for the full-year 2022 (Euro 1,891 million).

The change in earnings expectations for the full year 2023 is a result of the worsening market outlook which accelerated towards the latter part of the first quarter. Cost pressures and market uncertainties are expected to be significantly more challenging in 2023 than in 2022, weighing on our results and lowering the short-term visibility this year. This market situation will continue to weaken consumer confidence resulting in lower private consumption impacting all Stora Enso's divisions. Compared to 2022, Group margins are expected to be adversely impacted by increasing costs, particularly in relation to energy, wood, and chemicals.

The whole packaging market is currently weakening. Especially containerboard demand is expected to remain weak but also consumer board is showing signs of weakening, with the exception for liquid packaging board.

The construction sector remains challenging with a lower number of issued building permits and new housing starts. This is expected to have a temporary impact on demand for the Wood Products division this year. In addition to higher pulpwood cost, a weakening global pulp market is expected to weigh on the Biomaterials division. Availability for pulpwood remains tight.

To manage volatility, variable costs are continually reviewed, and preparatory actions are taken to respond to fluctuations in demand with reinforced cost control actions. Other measures such as pricing, flexibility in product mix, capacity and inventory management, and sourcing and logistics have been put in place. In Finland, Stora Enso has completed negotiations on potential furloughs at its divisions' production sites. Capacity adjustment activities are in place to respond to fluctuations in demand.

Operationally, the focus on decentralisation continues together with reduction of overhead costs. Restrictive capital expenditure and working capital management to safeguard cash flow and to secure a solid balance sheet are in place.

Stora Enso is a leading provider of renewable products in packaging, biomaterials and wooden construction, and one of the largest private forest owners in the world.

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