Hans Sohlström, who has served as a member of the company’s board, has been appointed as Stora Enso’s new CEO.
Forestry company Stora Enso’s CEO is changing.
According to the company’s press release, Stora Enso’s CEO Annica Bresky leaves his position and “looks for new challenges outside the company”.
Stora Enso’s board of directors has appointed a graduate in engineering and a master’s degree in economics as the new managing director as of Monday Hans Sohlström.
Sohlström is a Stora Enso board member and he will leave his board position immediately. Previously, he has worked as the CEO of Ahlström, which manufactures fiber materials, the investment company Ahlström Capital and the investment company Rettig, as well as in various management positions at the forest company UPM-Kymmene.
“Hans Sohlström has shown strong business skills and excellent leadership skills in his previous positions. He has extensive experience in the forest industry and a strong vision of Stora Enso as a result of working on the board for more than two years”, Chairman of the Board of Stora Enso Kari Jordan says in the announcement.
“In the opinion of Stora Enso’s board, Hans Sohlström is the right person to lead the company in a challenging operating environment towards the set long-term profit goals.”
Jordan also thanks former CEO Bresky for his work as CEO of Stora Enso. Bresky started as the company’s CEO in 2019.
“Under his leadership, Stora Enso has made significant structural changes to strengthen its long-term competitiveness in line with its strategy. We wish him the best of success in his future challenges,” says Jordan in the press release.
On Monday, HS could not reach Stora Enso’s board chairman Kari Jordan to comment on the change of CEO.
Neither does the company’s director of communications Fairy tale Härkönen did not comment on the matter.
“I don’t know anything other than that the government is today [maanantaina] made a decision to appoint a new managing director”, says Härkönen.
Big ones Enso, like other forest companies, has recently suffered from the slowdown in global economic growth and Europe’s weak prospects, which have drastically weakened the demand for pulp, cardboard and wood products.
In July, Stora Enso reported a significant collapse in earnings in the second quarter of the current year. In April–June, the company’s operating profit fell by a whopping 93 percent to 37 million euros. At the same time last year, operating profit was 505 million euros.
The company’s CEO at the time, Annica Bresky, described the result as disappointing and said she expected the third quarter to be “very difficult” as well.
Stora Enso’s new CEO Sohlström now says in the company’s press release that the goal is a profit turnaround.
“I’m looking forward to the opportunity to work with new colleagues with our goal of profit turnaround, increasing shareholder value and verifying the purpose of the renewable materials company,” says Sohlström.
CEO the change cannot be considered a surprise, says an analyst from the analysis company Inderes Antti Viljakainen.
“Stora Enso lost its profitability almost completely in the second quarter, and the end of the year doesn’t look substantially better either, so you can’t be particularly surprised by the change,” he says.
“Even though Stora Enso’s result has been mainly driven by the weak economy, in a listed company the CEO is responsible for the result.”
In addition to a weak financial year, the company also has a company acquisition behind it, which Viljakainen considers unsuccessful, at least in the short term.
Stora Enso announced last fall that it would buy the Dutch corrugated packaging manufacturer De Jong Packaging Group. The acquisition was completed in January. De Jong’s company value is around one billion euros.
“In this significant capital allocation decision, the CEO has certainly played a significant role and responsibility, although the board has of course blessed the acquisition,” he says.
Stora Enso’s result is quite dependent on the economic development, and in that sense the new CEO now enters a rather difficult situation, Viljakainen estimates.
However, the company’s market position is strong in certain areas, the company has some valuable assets and a healthy balance sheet, so Viljakainen believes that the business can be strengthened in the longer term under the leadership of the new CEO.
“When it is taken into account that the company may need to adjust its strategy and make other changes, it is logical that the new CEO can also start his work as quickly as possible,” says Viljakainen.
September at the beginning Stora Enso said that it had decided to permanently stop pulp production and lignin separation at the Sunilan plant in Kotka. The company announced its plans to close the pulp mill in June. The arrangement is related to the company’s extensive savings measures.
So far, Stora’s cost-saving measures have led to the termination of more than 710 people’s jobs. The company said in June that the restructuring may lead to a reduction of approximately 1,150 employees.
In addition to Sunila, the company said at the beginning of September that it had also concluded the change negotiations regarding the reduction of office staff. Around 80 people will be laid off from Finnish group operations.