Hello everyone and welcome to Stora Enso's third quarter results presentation. I'm Jutta Mikkola, Head of Investor Relations, and I'm joined today by Hans Sohlström, our President and CEO, and Niclas Rosenlew, our CFO. The theme for today is good progress in a challenging market environment, which indeed we have done.
We'll start with Hans, who will walk u s through the key highlights and strategic focus areas. After that, Niclas will take you through the financial performance and we'll wrap it up with the main takeaways and key focus for the rest of the year. Once we're done, we'll open the floor for your questions. Thank you for being here with us today. Hans, over to you.
Thank you, Jutta. In the third quarter of 2025, despite ongoing challenges in markets and subdued demand, we remain focused on the areas within our control driving progress where it matters most. However, before looking more closely at the third quarter highlights, I would like to announce changes in Stora Enso's Group Leadership Team. Michaela Torström has been appointed Executive Vice President, People and Legal General Counsel as of January 1st, 2026. Michaela has been part of our Group Leadership Team since 2023, serving as Executive Vice President, Legal and General Counsel. Furthermore, Niclas Rosenlew, our Chief Financial Officer, will assume additional responsibilities and represent the Communication and Brand organizations on top of his current duties. I want to congratulate both Michaela and Niclas for their new and extended roles. We are ready to look more closely at the quarterly highlights.
We have taken important steps to build a stronger and more competitive Stora Enso. A major milestone in the quarter was the completion of the divestment of approximately 175,000 hectares of forest land in Sweden, representing 12.4% of our total forest holdings in Sweden. The transaction, with an enterprise value of SEK 9.8 billion, equivalent to approximately EUR 900 million and in line with forest book value, strengthens our balance sheet and improves our financial flexibility. The deal includes a long-term wood supply agreement to Stora Enso. This strengthens our cash flow and reduces net debt, which is a key priority for us. We also made progress on the strategic review of our remaining 1.2 million hectares of Swedish forest, including the assessment of a potential demerger and public listing.
This review is central to unlocking further value for our shareholders as well as strengthening our growth and business focus in both forest and renewable packaging businesses. We will share updates as that process moves forward, aiming at Capital Markets Day later this year on November 25th. On profitability, we continue to act proactively to improve margins. These measures are essential as we navigate challenging market conditions and subdued consumer sentiment. Adjusted EBIT for the quarter was EUR 126 million excluding the EUR 45 million impact from the Oulu Consumer Board ramp-up. Profitability would have been comparable to the same quarter last year, reflecting a stable underlying performance despite persistent market headwinds. Finally, on sustainability, we launched a science-based framework together with IUCN to advance nature-positive forestry practices. This is an important step towards our long-term environmental goals. As we all know, market conditions have been challenging.
Therefore, we have intensified our actions to improve profitability. It's important to emphasize that these efforts are not new. We have been acting on these priorities for a good while now. Since 2023, we have been very clear on our strategy: improving profitability, driving performance, and shaping the portfolio for long-term strength. This has been our new way of working—proactive, not reactive—so we can stay ahead of market turbulence and rapidly changing global trends. On fixed cost reduction, we launched significant cost-saving programs in 2023 and 2024 totaling over EUR 230 million of savings. These include structural efficiency measures, site closures, and divestiture across business areas and the group. Operational efficiency has been another key focus. We have implemented FTE reductions, cut external spend, and driven value creation initiatives across the whole company to streamline processes. Building a strong performance culture has been critical.
More than 4,000 improvement measures have been identified, with around 800 initiative team leaders, meaning that thousands of our employees are actively driving continuous improvement and cost savings initiatives across the company every day. We have also strengthened cash flow and working capital discipline, reducing operating working capital by about EUR 700 million and improving cash flow from operations. Going forward, we remain committed to disciplined capital allocation. On portfolio actions, on top of earlier closures and divestments, we completed the sale of 12.4% of our Swedish forest assets and continue the strategic review of the remaining assets in Sweden. At the same time, we are ramping up Oulu Consumer Board line and De Lier Corrugated site to secure cost efficiency and competitiveness. This approach gives us resilience and flexibility by acting early and decisively. We have not just reacted to market challenges.
We are shaping our future and positioning Stora Enso to thrive in a rapidly changing world. With that, let me give you an update on the Oulu Consumer Board line ramp-ups. Stora Enso's new consumer packaging board line at the Oulu site in Finland has entered the production ramp-up phase earlier this year. While the project remains on track in terms of its original timeline and the EUR 1 billion budget, the ramp-up process has progressed slower than initially anticipated, resulting in production volumes somewhat behind the original schedule. Nevertheless, we remain focused on reaching EBITDA breakeven by the end of 2025, which continues to be an achievable target. However, due to the slower than expected ramp-up, the EBIT impact for Q4 is now projected to be higher than previously anticipated, estimated at about EUR 50 million to EUR 35 million.
Consequently, the full year EBIT impact is expected to be in the range of EUR 120 million- EUR 140 million. It is important to emphasize that the Oulu investment is a long-term strategic move that will deliver substantial value for Stora Enso over time. This transformation of the Oulu site into a state-of-the-art consumer board production facility is a cornerstone of our strategy to lead in renewable packaging. This investment is not just about near-term volumes, it is about building a competitive platform for the next decade and beyond. As the ramp-up continues, we remain confident that Oulu will become a key driver of profitable, cost-competitive growth and a benchmark for sustainable packaging innovation. This year we have seen some remarkable recognition for our design and innovation. Winning the Red Dot Design Awards 2025 underscores our ability to combine aesthetics, functionality, and sustainability in everything we create.
Our craftsmanship was showcased on the global stage at the World Ski Championships where we designed official medal boxes crafted from renewable materials, fully recyclable and even featuring braille for accessibility. This is not the first time we have been recognized by Red Dot. Earlier this year we also received the award for our collaboration with Marimekko on a scalable, recyclable gift packaging portfolio. One of the most exciting milestones is our contribution to Atlassian Central in Sydney. Once completed, it will be the world's tallest hybrid timber tower. At the heart of this achievement is massive timber solutions. It is a powerful demonstration of how engineered wood can transform urban skylines while reducing carbon emissions. Closer to home, October brought us the Finlandia Prize for Architecture for our new headquarters at Katajanokan Laituri in Helsinki.
This award celebrates not only architectural excellence, but also our leadership in sustainable building practices. Together, these achievements highlight how innovation and responsibility go hand in hand in shaping the future of construction. That concludes our review of the key highlights for the quarter, and I'll hand over now to Niclas who will take you through our financial performance.
Thank you Hans and hello everyone. During the third quarter, as Hans already mentioned, our own actions resulted in good progress in a market with subdued demand and low consumer confidence. Delivery volumes were relatively low, particularly in containerboard and biomaterials. Sales increased by 1% to EUR 2.3 billion, which was mainly due to the contribution of the Junnikkala acquisition and the consumer board line ramp-up at the Oulu site. While market conditions continue to be volatile with low demand, we focused on the areas within our control. On that note, adjusted EBIT for the quarter was EUR 126 million. As Hans mentioned, excluding the EUR 45 million impact from the Oulu ramp-up, profitability would have been comparable to the same quarter last year, reflecting a stable underlying performance despite persistent market headwinds. This we can see clearly when looking more closely at the EBIT bridge for Q3.
Overall, adjusted EBIT decreased by EUR 49 million compared to last year, primarily due to the ramp-up of the new line in Oulu. As said, Oulu had a negative impact of EUR 45 million. In the other bar, where you can see the Oulu impact, you can also see the absence of a EUR 10 million insurance compensation that was received last year in the wood product segment along with some other smaller movements. Looking at the other components, the picture is relatively stable given how volatile the markets have been. We are quite pleased with this as it reflects the result of disciplined execution of our strategy and profit improvement actions. Price mix contributed positively with EUR 12 million, partly offset by a smaller negative impact from lower volumes. Variable costs were flat as higher fiber costs were offset by lower energy and chemical costs.
Fixed costs decreased by EUR 30 million driven by strong cost control and lower maintenance compared to last year, and FX had a negative impact of EUR 20 million. If we then turn the focus to cash flow, despite the challenging market environment, we managed to safeguard profitability and improve cash generation. Cash flow after investing activities turned positive as expected following the gradual completion of the investment phase in Oulu. I want to note that in this picture, which shows the operational cash flow after investing activities, the proceeds from the Swedish forest divestment, so the 12% divestment, are not included. These proceeds were received in Q3, but they are recorded further down in the cash flow statement under divestments. On that note, let's take a look at the net debt.
Net debt decreased by almost EUR 800 million to EUR 3.2 billion during the third quarter, reflecting the positive impact of the forest asset divestment. The ratio of net debt to the last 12 months adjusted EBITDA is now at 2.7x after being above 3x for most of the past two years. As the intensive strategic CapEx phase of the last two years nears finalization and profitability gradually improves, net debt levels and the ratio are expected to improve further. Operating working capital to sales was around 8%, that is at similar levels to the last few quarters. We intend to keep operating working capital at these levels or at these lower levels and decrease it when possible. Let's move on to the segment performance starting with packaging materials where we continued to implement value creation actions during the quarter to mitigate the impact of the challenging market conditions.
Sales declined mainly due to slightly lower consumer board prices and adverse currency effects from a weaker U.S. dollar. Adjusted EBIT decreased year on year by EUR 37 million primarily due to the adverse impact coming from the Oulu ramp-up. In addition, fiber costs remained high and logistics expenses and trade tariffs increased, adding further pressure on profitability. These headwinds were, as said, partly offset by value creation initiatives. As order inflow weakened further during the quarter, we continued to manage capacity and cost levels in line with demand. In packaging solutions, we had a similar development with market headwinds being offset by own actions. Sales increased slightly with improved product mix, offsetting a small decline in volumes. Adjusted EBIT increased year on year supported by higher sales and improved margins driven by value creation initiatives.
Despite persistent overcapacity, actions to enhance product and customer mix combined with continuous cost efficiency improvements helped protect margins. Moving from packaging to biomaterials, in biomaterials, market conditions stabilized at low levels during the third quarter. Demand for hardwood pulp strengthened in both Europe and China, while softwood pulp demand in Europe remained weak. Sales decreased driven by lower prices and adverse currency movements, somewhat offset by higher volumes. Adjusted EBIT decreased year on year primarily due to lower prices, but as said, stabilized at low levels. Cost reduction measures also helped mitigate part of the negative market impact. If we then move on to wood products, protecting margins has been a key priority, mitigating the increase in raw material costs. Sales increased, driven mainly by higher prices and stronger volumes for sawn wood.
However, EBIT declined primarily due to increased solo costs in Central Europe and the absence of last year's EUR 10 million insurance compensation, which affects comparability. That said, price increases and value creation initiatives helped cushion the impact and protect margins. The construction market remained weak overall, yet we did see improved demand for both traditional and wood products and building solutions compared to the previous year. In forest, sales increased, driven mainly by higher volumes and wood prices. However, EBIT declined slightly due to slightly higher costs. In sum, forest continued its stable and strong performance. I'll now hand it back to you, Hans, for the key takeaways and our focus for 2025.
Thank you, Niclas. Today we have focused on profit, performance, and portfolio, three pillars that guide our actions as we navigate a challenging market and position Stora Enso for long-term success and improved profitability. Profitability and cash flow remain top priorities, supported by company-wide initiatives in sourcing, operational efficiency, commercial excellence, and cost optimization. To ensure resilience and agility, we are finalizing the strategic review of our Swedish forest assets, including evaluating a potential separation and public listing to unlock value and sharpen our focus on core businesses. At the same time, we are ramping up production and leveraging the EUR 1 billion investment in the new packaging board line at our integrated mill in Oulu, Finland, strengthening our competitive position in renewable packaging and advancing our ambition to lead in sustainable solutions. These actions are critical steps towards delivering shareholder value and navigating in tough markets.
We look forward to sharing more at Capital Markets Day on November 25th in London. Thank you for listening, and we are now ready to take your questions.
If you would like to ask a question, please use the raise hand function at the bottom of your Zoom screen. When it is your turn, you will receive a prompt to be promoted as a panelist. Please accept. Wait a moment, and once you have been introduced, you may unmute yourself, turn your video on, and ask your question. Our first question will come from Cole Hathorn with Jefferies. You may now unmute your audio, turn your video on, and ask your question.
Good morning. Thanks for taking my question. Could I start with the cost positioning, the improved costs in the biomaterials and packaging materials division. The cost per ton has come down. You talk about efficiencies. Are we right to assume that this is your internal actions that have supported the lower cost per ton rather than lower pulp, wood, or wood cost feeding through into the business sooner? That's just the first question, if it's internal actions. The second one is around the packaging materials business and particularly consumer board. We've got a lot of oversupply in the market, and I'm just wondering how Stora Enso is thinking about that. Strategically, you are the market leader. How do you think about improving operating rates as you ramp up Oulu versus the price dynamics of the market? Are you still considering or are you evaluating capacity out in the industry?
Thank you.
Yeah, thank you very much, Cole. First of all, about the cost improvement actions. They are internal actions throughout the whole company, and we have started this very proactive, systematic work on reducing our cost base, both variable as well as fixed cost, since two years back. We are going to give some updates about this in the Capital Markets Day on November 25th. Some tangible examples of the way we are working, but it's significant cost reduction results throughout the whole company. This is not a project, this is our new way of working. This is a continuous improvement work. It's our new culture where basically we have identified over 4,000 profit improvement actions throughout the whole company, in every unit, every mill, every single part of the organization. We have 800 project initiative team leaders working on these.
We have thousands of people actually actively working on cost improvement actions and profit improvement initiatives as we speak. It's not a project, it's our new culture, and it's a continuous way of working. When it comes to your question, Cole, about Consumer Board, we know that there is in Europe alone 1 million ton of higher cost consumer board capacity than our most expensive, most highest cost line. We also know that we have in Consumer Board the most cost efficient capacities in Europe today. Currently, we don't have any plans to consolidate or close capacity. I'm sure there is consideration in our industry for those who have negative cash flow, for instance.
I'd like some color on what you are seeing from a demand and order book perspective. Could you give some color between containerboard and, within consumer board, what you're seeing in the difference in kind of the traditional folding box board as well as your liquid packaging? Thank you.
Yes. First of all, year to date we have increased our top line by 5%. We are growing as a company, and also in the last quarter where demand was rather subdued, we grew 1%, and we are quite determined to continue growth. We have invested in growth in the Oulu Consumer Board line as well as the young corrugated site, which is in a ramp-up phase still. Thanks to earlier investments, we have cost-competitive, state-of-the-art capacity that we are ramping up in order to ensure continued growth for the future. When it comes to Consumer Board versus Containerboard, I would say that our operating rates in Containerboard are quite high. As you also know from a global supply and demand perspective, especially kraftliner, which is our strength, our core area in Containerboard, that is actually a market where the global supply and demand situation is the best.
The market is the tightest, and when it comes to Consumer Board, we have very cost-efficient, high-quality capacity that we are currently utilizing and also ramping up in Oulu.
Thank You.
Our next question will come from Andres Castanos with Berenberg. Please unmute your line, turn your video on, and ask your question.
Hello, good morning. Can you please help me understand why d id you book a gain of EUR 140 million with the forest asset sale? This was a sale that was done i n line with book value? What is your current view a bout the deferred tax liabilities associated to t he historical appreciation of the assets that you sold? What will be the treatment in your view? Thank you.
[Joel]. It is a bit of a complex accounting issue, but the sale of the 12% was in line with book value, and there was a portion in the book value which is deferred tax liabilities. As you said, the sale was tax free according to local tax rules. We sold a company, not the assets, and therefore from an accounting perspective, we then kind of cancelled the deferred tax liability, and that portion was then going into the P&L. It is more of an accounting technical topic.
That's helpful, thank you.
Thanks.
Our next question will come from Charlie Muir-Sands with BNP Paribas Exane. Charlie, please unmute your audio, turn your video on, and ask your question.
Yes, good morning both of you. Thank you very much for taking my questions. There's been quite a lot of talk in the industry about falling pulpwood prices and some mixed messaging around log pricing. I just wondered what you're seeing specifically yourselves at the moment and how soon you would anticipate it manifesting if indeed there are movements. Secondly, I appreciate you're going to give us an update on the possible forest spin-off at the Capital Markets Day, but can you share any early thoughts on what you see as the relative pros and cons of making such a transaction? Then just on Oulu, finally, the ramp-up there, you haven't quantified what the profit drag is. Unlike Oulu, I wondered if you can put any numbers around that. Also, is the constraint for the Oulu ramp-up technical or is it that it is constrained by market demand conditions?
Thank you.
Thank you very much, Charlie. First of all, wood costs have come down in the Nordics, both in Finland and Sweden, since the peak in the summer. However, before they are visible in our P&L, there is a time lag and actually in the beginning there is a negative impact because the inventory values of our wood inventories come down. With the time lag of a few months, there will be of course a positive impact of lower wood costs in the Nordics. Concerning the forest, the Swedish forest spin-off, 1.2 million hectares in total. I would say that the clear plus is, and that's also one of the main objectives, shareholder value creation. We clearly see that now after the sales of 12% of our Swedish forest land, the total value of all our forest holdings is EUR 10.50 per share.
The whole idea here is to unlock value for our shareholders as well as also being able to focus on the very different businesses of creating value and profits in a forest business, as well as creating value and profits in industrial activities, renewable packaging, and biomaterials businesses. Regarding the Oulu ramp-up, the bottleneck is the market, so it's demand. We are gradually increasing volumes there. In an oversupplied market, it takes time.
Got it. So far you've not identified any cons in terms of the possible forest spin-off.
Can you think about any, Niclas?
I can't immediately at least, but we'll think about it then.
Thank you.
Our next question will come from Pallav Mittal with Barclays . Please unmute your audio, turn on your video, and ask your question.
Are you muted? Very quiet. Maybe we take the next question.
Our next question will come from Andrew Jones with UBS. Andrew, please unmute your audio, turn on your video, and ask your question.
Hello, can you hear me okay?
Yep.
Yes.
Excellent, thanks. A few of my questions have already been answered, but just a bit of color on 4Q. First of all, you mentioned that the fixed costs were down EUR 30 million in 3Q mainly on seasonality. I'm curious how much of that should come back in 4Q, and taken together all the other moving parts on costs, I'm guessing that the wood costs don't make that much of a difference into 4Q given the lag. Can you talk us through wood energy, some of the other moving parts as to how you see costs evolving into the fourth quarter? Separately, I've just got a question on FBB sales to the U.S. Is that profitable now? How should we think about margins on sales there? Have you changed your sales mix as a result of the tariffs and the currency moves?
How are you looking at the different markets for your box board at the moment?
Right, Andrew, I'll take the first one. Fixed cost very much, as we said and we've said before. We are working a lot on cost scrutiny and this is nothing new. We've been on it for some time, but there's still a lot to do. Not commenting specifically now on Q4, but even kind of further, further out and that absolutely will continue. Specifically in Q4, we continue with the normal maintenance. Maintenance stops should be roughly similar cost to Q3. On wood costs specifically, very much as Hans said, we have seen some downward trend. Now we talk about the Nordics, Finland, Sweden, it's different in Central Europe. Very much as Hans said, it comes with a delay and we talk about a quarter or two or so. When it first goes into the inventory valuation, inventory value actually goes down.
It has a slight negative impact on the short term result. Over time it should start to help the result. In that sense it takes a while and don't expect any major impact or positive impact in Q4.
When it comes to.
Logistics has gone up a bit, chemicals down a bit, energy down a bit. It's a bit more of a mixed bag.
Flattish sounds like the interpretation.
Flattish. Yeah. Not commenting specifically on Q4, but more what we've seen up until now and in Q3.
When it comes Andrew, to your question about folded box board and the U.S.A. I mean we have been increasing prices in folded box board sales to the U.S. We have been able to compensate a clear majority of the 15% import duty. On the other hand, of course also as we know during this year the U.S. dollar has weakened against the euro quite significantly. We are making positive margins on our business to the U.S. but very thin margins. That's where we are today. However, having said that, I do want to underline that if you consider our packaging materials, our board grades, our main board grades, so consumer board, various grades as well as craft liner, and then I exclude recycled fiber based test liner because that's a very local business.
If you look at consumer board and craft liner, it's good to remember that the U.S.A. is a 4 million tonne net exporter around the world of these products. If profitability of sales to the U.S. is challenged, there are also other opportunities around the globe to develop businesses. I think one of my favorite sayings is that every challenge is an opportunity. You need to also find the new businesses and the new opportunities. We have not given up on the U.S. We continue to develop our business there. Of course, in order to improve margins, we need to increase prices further.
Okay, that's great, thank you.
Our next question will come from Linus Larsson with SEB. Please unmute your audio, turn your video on, and ask your question.
Good morning, gents. Thanks for taking my questions first. Just to double check, we're not missing anything on biomaterials. It was sequentially somewhat better in the third quarter, although prices were lower and I think your volumes were lower as well. If you could just maybe elaborate just a little bit about what happened in the third quarter, I think we may have touched on part of it already. Just to make sure that we're not missing anything, any benefits which might not be there in the fourth quarter, please.
I'll start at least, Linus. What we saw in Q3 was a stabilization at low levels, a stabilization. I would say no major movements there, volume or price that I can think of at least in terms of what to miss now going forward.
Okay.
If I can build on that, Linus. I think it's important when you consider our biomaterials business. Our market pulp business, we have the majority as cost efficient eucalyptus from Veracel and Montes del Plata, as you know very well. They are among the world's most cost efficient pulp mills in the first quartile when you take, for instance, average cost, competitive cost, capacity, competitiveness considerations. Great cash machines in every situation. The market pulp mills we have in the Nordics, Skutskär in Sweden and Enocell in Finland, are producing specialized niche pulps. Skutskär, the majority is fluff pulp where we are clearly the largest producer in Europe. Most of the fluff pulp in Europe is imported from the U.S.A., so it's a specialty pulp grade.
In Enocell, we are gradually increasing the amount of specialized pulp grades, among others, unbleached kraft pulp for electrotechnical end uses and other special niches where you can get a better price compared to the volume grades. That perhaps also explains somewhat our position in biomaterials.
Thanks for the color. If you compare the various units within biomaterials, is there a material profitability difference in, say, the third quarter, or are they all doing pretty well?
We haven't really split out the profitability of every mill. As we've commented before, we very much look at each and every component mill needing to be profitable, goes without saying, deliver positive cash flow. Of course, as Hans said, the South American operations are kind of absolute cost leaders. No answer, Linus. No direct answer. At least if you hope. Hope it's okay.
Okay.
I was building on that. I would say that, you know, based on this product differentiation and specialization in the Nordics, I'm pretty sure that, you know, there are lots of, you know, pulp mills in the Nordics producing standard volume, you know, grades that are not doing as well as we are doing.
That's helpful. Thank you. Just one more follow up on Oulu, and maybe if you could just briefly touch on or give an update on your commercial plans for the output from Oulu's 750,000 tons. That's a big amount of paperboard. Where will you allocate those volumes, and how have plans possibly changed from your original plans?
Linus, first of all, I think it's important to remember that the line will be, as we have said from the beginning, fully ramped up in full capacity in 2027. Also, next year will be a year of gradually increasing production and sales volumes. Quality is good, really good. We have received very good customer feedback. It's also important to remember that Oulu is not producing only folded box board. It's also producing CKB. For instance, where there are only two producers in Europe, we are producing CKB on three production lines, and then there is a competitor producing on only one small production line. It's not only folded box board, we also have some other consumer grades i n t he Oulu production unit.
I want to remind everyone that Oulu is not only for us an increase in carton board capacity because we are also transferring carton board volumes from our liquid packaging board mills, for instance, Kugal, into Oulu, which gives us an opportunity to grow in liquid packaging board. Basically, Oulu is providing opportunities for us to grow in all the product areas we have within consumer board: both carton board, liquid packaging board, food service board, and so on. When it comes to our sales plans, our job is to maximize profitability. Our job is not to follow a certain plan, but to maximize profitability in every situation.
As we discussed before, it's clear that the margins in the U.S. because of the 15% import duties are thinner than what we anticipated before the tariffs came in place or the plans for import tariffs came in place. We are actively looking to maximize profitability by optimizing our market mix and our customer mix, as well as product mix. We really look to place those volumes wherever we can maximize profitability and value. It's not any board, it's the best board.
Good, well said. Thanks, Niclas.
Of course, excellent. Thanks. Thanks, guys.
Our next question comes from Pallav Mittal with Barclays . Pallav, please unmute your audio, turn your video on, and ask your question.
On.
As a reminder, when it is your turn, you received a prompt to be.
Good morning, can you hear me?
Yes, we hear you, Pallav. Hi there. Good, good to hear you.
Sorry about that. Some technical issues at my end. A couple of follow-ups on some comments that you have already made. Firstly, on Oulu, appreciate all the commentary that you have made and clearly volumes you have highlighted are currently running behind schedule. What gives you confidence that you are still on track to reach full capacity by 2027, especially given the overcapacity issues in Asia? Secondly, in the third quarter, EBIT, you have almost EUR 30 million odd fixed cost saving and these are your cost savings program over the last couple of years. Can you help us understand how much of those two programs is already in the numbers so far and how should we think about further improvement in Q4 and also in 2026?
Yes, thank you very much, Pallav. If I take the first question and Niclas the second one.
First of all, Oulu, we are ramping up and I would say that especially the last months have been very encouraging in terms of optimizing the production processes there. That gives us really confidence that we will be able to reach the full capacity from production perspective in 2027 as we have forecasted. Of course, with a relatively weak oversupplied market, that also in a way restricts the speed of ramp-up and ramping up the volumes. You mentioned China. We were just last week in China. We know that what is happening in China is that, for instance, there is a lot of the local folded box board, which is called ivory board, taking market share from higher cost recycled fiber-based grades. What they call duplex there, which we call test liner in Europe. We can see similar trends in Europe.
Folded box board, virgin fiber-based, top quality carton board, taking market shares from recycled fiber-based white line chipboard. For instance, with our folded box board, you can basically, with 30% lower basis weight, get better characteristics, product folding characteristics, printing characteristics, a cleaner sheet, better looking board than with white line chipboard. We see also migration there from the European 3 million ton annual white line chipboard market into carton board. In China, there is a 6 million ton of white line chipboard or duplex market that is gradually being substituted with the local folded box board. We cannot only look at the specific product segments as such. There are also important movements happening between these product categories. Now over to you, Niclas t he second question.
On the costs. What comes to the previous programs, more than $200 million t hey are done.
As said earlier, we are very active in terms of looking at our competitiveness, our cost base throughout. We'll continue with scrutinizing fixed costs, we'll continue with scrutinizing variable costs. We have, as discussed earlier, the programs with more than 4,000 initiatives, 800+ initiative owners and they continue and they are now, it's not a program, it's more of a culture and that we intend to keep up and, if anything, speed up. At the same time, as you know, we made a big organizational change in the summer, 1st of July. We have seven P&L responsible BAs, 22 P&L responsible BUs. Then we moved some of the functions to cut across the company and now we are taking the next step and looking at how do we make this new kind of construction, if you may call it so, more efficient.
There have been some articles or some press picking up on some of our actions we are doing across. That's just some of the actions; we are doing a lot under the hood. That's the whole idea. These are not programs per se, but we are day in, day out looking at how we make sure that we are competitive and create value for our customers.
Thank you.
Our next question comes from Lars Kjellberg with Stifel. Lars, you may now unmute your audio, turn your video on, and ask your question.
Thank you for taking my question. I got thrown out earlier due to a power cut where I am, so not helpful. Back on again. Essentially, a couple of questions for me. Coming back to wood markets, obviously there's been an exceptionally tight market now in the Nordics. The industry, certainly from the pulp and paper industry, is not running full. Prices are starting to give a bit. What is your thinking in an upturn in this market again in terms of the wood supply that is available? In that context, coming back to what you said earlier, Hans, about maximizing profitability, can you operate everything, including your new assets, from a wood supply standpoint on a competitive level? The other thing that you mentioned earlier was disciplined capital allocation going forward. I just wanted to understand what that means. You put in a lot of money on growth.
You continue to talk about growth. If I'm looking at some of the markets you serve, in particular the consumer packaging, there's no growth in this market since 2016. The volumes are the same. How should we think in that context, your focus on growth versus what's happened in the market, and in the context of capital discipline, what does it really mean? The final point, then, Cole earlier today talked about stable, generally, prices on consumer board for the contract business. If you try to go after new volumes, there's a tremendous amount of pricing pressure. The question is, what are you finding on that incremental volume that you're trying to place relative to the contract business in terms of pricing pressures?
Yes, thank you very much, Lars. I let you take the second question, but a couple of comments. First of all, starting from your last question about pricing, yes, we see consumer board prices or board prices in general stable. When we are now introducing our own new volumes to the market, very much we gain business, we gain volumes with yield advantage. Our folded box board, for instance from Oulu, has a 30%- 40% yield advantage compared to white lined chipboard or SBS, some of the other board grades. Also, with a higher price point for folded box board, you can basically prove to customers that the total cost of ownership goes down when they move to our grades instead of what they are using currently.
Then regarding, and also one point on growth, if you look at Stora Enso during the last 10 years, you will notice that our core packaging business has been growing an average 5% per year. That's the growth we can demonstrate since 10 years back in our packaging business. Yes, our top line has been about unchanged, around EUR 10 billion. We don't have basically any printing papers anymore and we have a significantly bigger packaging business. Ten years ago, packaging and printing papers were roughly equal sized, representing almost 40% of our total turnover each. Today, packaging is representing 60%, whereas printing papers almost zero. When it comes to the wood costs and the supply and demand situation for wood in the Nordics, I think that we have seen here this year that the wood costs have reached the pain point, the pain levels.
There have been significant curtailments in pulp capacity without mentioning any names of our competitors, but there have been very long curtailments showing that when you're producing standard volume bulk pulp grades, it doesn't make sense to run at these higher wood cost levels. I think the proof is in the pudding and we have seen that these levels basically force the volume producers of pulp to take curtailments and shutdowns, extended shutdowns. As said, since the summer we have seen wood costs now moving downwards. Over to you, Niclas, for the other part of the.
Yes, a lot, Lars , on capital allocation. This is something we'll come back to as well in the Capital Markets Day. As we all know, we've had over EUR 1 billion CapEx now for a couple of years. This year will go down to some mid-EUR 700 million and likely down from there somewhat. We've done a lot of work internally thanks to great efforts by the team to really categorize our assets, run for cash assets, key growth assets, and so on. We see that we can become more disciplined by just doing internally, being very structured, having criteria, return criteria of course, but also other criteria for where to allocate the capital when talking about CapEx. There has been a lot of work going on recently on this and we'll come back and explain a bit more what it means in detail.
CapEx is now on a downward slope and, as Hans said here earlier, and as you know, we have made quite significant investments. Oulu is one, of course, De Lier, D e Jong is another. Now going forward, we of course need to show the results of these and reap the benefits of them. Essentially, no major CapEx initiatives here in the near horizon. We have what it takes essentially to. We have what it takes to grow essentially.
Yeah, in 2026, what does that mean for CapEx? What do you think you're going to land roughly?
Let's come back to that. As you know, we typically in the beginning of the year in connection with Q1, we give an idea of next year, but it is down from where we are this year.
Thank you.
We have reached the end of the time for the Q&A session. I shall now hand back to Hans Sohlström and CFO Niclas Rosenlew for closing remarks.
Thank you very much for your attention. Thank you for joining this call. We are powering ahead. We are focusing on profit performance as well as our portfolio to maximize shareholder value. That's our ultimate goal to create the best possible value to our shareholders. Thank you very much. I'm looking forward to meet with you then in the next quarter. Bye b ye.