Stora Enso Oyj Class A · OMXHEX:STEAV
Stora Enso Oyj Class A — Investor Day (November 2016)
23 slides from Stora Enso Oyj Class A's investor day presentation, Nov 17, 2016
Slide 1: Solid performance – accelerated transformation
Solid performance – accelerated transformation CEO Karl-Henrik Sundström
Slide 2: Do you know?
Do you know? Implemented product Improved EBITDA margin Improved EBIT margin management, S&OP, 2013 10.3% 2013 5.5% innovation structure Q316 13.6% Q316 9.2% and sales academy Strengthen the balance Improved ROCE sheet from peaked 2013 6.5% 3.5 x to 2.1 x Q316 10.1% excl. Beihai Q316 13.5% 2 17 Nove
Slide 3: Stora Enso responds to global megatrends
Stora Enso responds to global megatrends Major global trends drive the world’s demand for renewable materials Global Growing warming population Changing Urbanisation Digitalisation lifestyles Growing middle class Eco-awareness Bio-based products are not only reusable, but also renewable 3 17 Novembe
Slide 4: Majority of the portfolio is aimed at growth
Majority of the portfolio is aimed at growth Stora Enso Q316: Sales 2 393 MEUR / Operational EBIT 219 MEUR / Operational ROCE 10.1% / Operational ROCE excluding Beihai 13.5% + Consumer Board Expansion of relative market + Packaging Solutions Selective profitable - share in profitable growth niches +
Slide 5: Transformation steps since 2013
Transformation steps since 2013 Investments Divestment and closure announcements Bulleh Shah Packaging Thiele Kaolin, United States Murow sawmill Veitsiluoto PM1, Finland Sunila Bio-refinery Corbehem, France 4.8 million tonnes Enocell power plants and renewable energy Corenso, Europe, Asia and North
Slide 6: Profitable growth
Asset transformation nearly completed – now the focus is on sales and innovation MdP Mill investment Beihai Mill investment Varkaus Mill conversion Innovation Centre Helsinki Profitable growth Murow sawmill investment Innovation Centre Stockholm Varkaus LVL investment Rennovia JDA Imatra de-bottlene
Slide 7: Division Consumer Board: expansion of relative market share in profitable niches
Division Consumer Board: expansion of relative market share in profitable niches ? High FBB LPB FSB CUK • Strong position • #1: World leader and (Europe) European leader • Average margins • Strong margins Annual real growth rate • Good position High Selective growth Grow WLC SBS SP • Barcelona exite
Slide 8: The global consumer board market is growing
The global consumer board market is growing Growth of 9 million tonnes expected 2014-2021 FBB CUK LPB Above WLC FSB FBB FSB FBB FSB FBB FSB LPB region LPB FSB FBB CUK CUK FSB average SBS CUK CUK SBS SBS WLC 3.0% 3.0% 0.4% 0.4% 1.8% 1.8% 3.3% 4.0% 4.0% 3.1% 3.1% 3.3% Latin America North America Europ
Slide 9: Beihai ramp-up tonnes and grades
Beihai ramp-up tonnes and grades kt • Ramp-up ahead of plan EBITDA • BCTMP plant operational before break-even the end of Q4 2016 in Q1/18 • PE coating investment ready by mid-2017 • LPB testing with leading customers is proceeding according to plan • CUK customer tests with very positive feedback •
Slide 10: Division Packaging Solutions: selective profitable growth
Division Packaging Solutions: selective profitable growth • Packaging China • Kraftliner PRODUCTS PRODUCTS ? High • Testliner & integrated corrugated packaging • Semi-chemical fluting Market Attractiveness Selective growth Grow • Corenso (Done) • Russian corrugated PRODUCTS • India (Done) PRODUCTS p
Slide 11: Packaging for online shopping has the strongest growth
Packaging for online shopping has the strongest growth Europe Online retail market grows faster 2015 331 than other retail markets. +12% p.a. 2019 529 Different retail categories face China different challenges for 2015 234 successful online packaging. +18% p.a. 2019 454 New reality for brand owners
Slide 12: Corrugated packaging is also growing in Europe
Corrugated packaging is also growing in Europe SC fluting global market size (million tonnes) RCP-based containerboard (million tonnes) 30 + 1 130 kt 15 CAGR 1.8 % 25 +100 kt HQ CAGR 1–3 % HQ 20 10 15 CAGR 0% + 1 150 kt 5 10 CAGR High Quality SC fluting 3-4 % Western Europe Other SC fluting 5 Easter
Slide 13: Varkaus ramp-up tonnes
Varkaus ramp-up tonnes Full production expected in second half 2017 kt EBITDA EBIT break- break- even in even in Q3/16 Q2/17 13 17 November 2016 Stora Enso CMD
Slide 14: Division Paper: strategy for maximum cash generation
Division Paper: strategy for maximum cash generation Low PRODUCTS PRODUCTS • • ? Office Paper Book Paper High • Coated Fine Paper • Uncoated Magazine Paper • Annual demand decline Improved news Selective growth of Grow market share market share • • PRODUCTS PRODUCTS Coated Magazine Newsprint Paper (
Slide 15: Paper strategy for maximum cash generation
Paper strategy for maximum cash generation NEWS & book SC CMR WFC WFU UPM Stora Enso Sappi Norske Skog Burgo International Paper Mondi The Navigator Company Holmen Lecta 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 Capacity (1 000 tons / year) 15 17 November 2016 Stora Enso CMD
Slide 16: Clear targets driving capital allocation
Clear targets driving capital allocation Target Stora Enso Group ROCE > 13% Consumer Board ROOC > 20% Packaging Solutions ROOC > 20% Biomaterials ROOC > 15% Wood Products ROOC > 18% Paper Free cash flow to sales > 7% Stora Enso Group Fixed costs to sales < 20% 16 17 November 2016 Stora Enso CMD
Slide 17: Clear capital allocation principles
Clear capital allocation principles 2017 plan 600–650 MEUR • Maintenance capex 200–250 MEUR / year • Investments above maintenance levels have to reach capital targets set by each division, either by sales growth, cost reduction or a combination Possible investment cases Divisional targets Group fra
Slide 18: Balance sheet strengthening – excess liquidity reduced as planned
Balance sheet strengthening – excess liquidity reduced as planned Net debt and net debt to operational EBITDA MEUR Net debt to Operational EBITDA target <3.0 18 17 November 2016 Stora Enso CMD
Slide 19: Strategic targets ambitious, but reachable
Strategic targets ambitious, but reachable Group targets 2013 LTM Status Dividend To distribute 50% of net income over the cycle Growth* To grow faster than the relevant market 4.3% (YoY) 2.8% (YoY) Net debt to operational EBITDA <3.0x 2.9 2.1 Fixed costs to sales <20% 27.2% 25.2% Debt to equity <80
Slide 20: Good progress on transformation
Good progress on transformation What a tree can do Sales 2006 Sales LTM Sales 2021 forecast -3% 2% 21% 30% 67% 75% 0 24% 25% 30% 0 34% Consumer Board 12% 10% Packaging Solutions(1) 70% 20% 10% 14% Biomaterials 16% 15% Wood Products Paper(2) EBIT 2006 EBIT LTM EBIT 2021 forecast Other & eliminations
Slide 21: Solid performance, accelerated transformation - we are ready for the next step
Solid performance, accelerated transformation - we are ready for the next step • The asset transformation is nearly complete. Now the focus lies on sales and innovation. • Shift towards value added products well underway • Results so far: − Improved profit margins − Improved profitability − Improved
Slide 22: Disclaimer
Disclaimer It should be noted that Stora Enso and its business are exposed to various risks and uncertainties and certain statements herein which are not historical facts, including, without limitation those regarding expectations for market growth and developments; expectations for growth and profi
Slide 23: Thank you!
storaenso THE RENEWABLE MATERIALS COMPANY