Stora Enso Oyj Class A · OMXHEX:STEAV
Stora Enso Oyj Class A — Investor Day (November 2017)
24 slides from Stora Enso Oyj Class A's investor day presentation, Nov 8, 2017
Slide 1: Biomaterials – Innovating for the future
Biomaterials – Innovating for the future Markus Mannström EVP, Biomaterials division
Slide 2: Our road to success in the bioeconomy
Our road to success in the bioeconomy Introducing Addressing Delivering Generating xxxx xxxx attractive xxxx sustainable xxxx superior new products and services end-use profitable ROCE segments growth 2 8 November 2017 Stora Enso CMD
Slide 3: Biomaterials has the widest offering in the market
Biomaterials has the widest offering in the market Well managed certified 4 R&D centres renewable raw material 2 new products since 2014 6 strategic partnerships on innovation 7 digitalisation projects 5 pulp mills Finland, Sweden, Brazil, 60 countries Uruguay 1 376 MEUR sales 2016 +13.5% Q3 YOY 201
Slide 4: Our three focus areas
Our three focus areas Maximize value from Differentiate our Nordic pulp Create new platforms for growth eucalyptus pulp business • Continue to improve production • Reduce exposure in softwood • We build and develop strong efficiency business on: • Grow in fluff and dissolving pulp -Improved pulp pro
Slide 5: Global trends enhance pulp growth…
Global trends enhance pulp growth… Tissue 34 Mt market, growing +3.5%/y 20 Mt market pulp Textiles, non-wovens Urbanisation Growing Global middle-class warming 100 Mt market, growing 3%/y 6.1 Mt market pulp (dissolving) Cartonboard Eco To 2021… Digitalisation awareness 44 Mt market, growing 2.5%/y 4
Slide 6: …and we have the widest pulp portfolio in the market
…and we have the widest pulp portfolio in the market 42% 37% Internal consumption Market pulp 63% 37% 12% Stora Enso 7% pulp capacity 2% 5 800 Kt Among the TOP10 Hardwood Softwood Fluff Dissolving UKP 900Kt 800Kt 250Kt 150Kt 50Kt largest pulp producers 6 8 November 2017 Stora Enso CMD
Slide 7: We are differentiating our pulp mix…
We are differentiating our pulp mix… Maximize value from eucalyptus pulp Today Target 2020 21% 15% 37% 42% Improve competitiveness of our 43% 42% Nordic mills (Fluff and dissolving) Softwood Hardwood Fluff/dissolving 7 8 November 2017 Stora Enso CMD
Slide 8: …and pulp demand is growing in our strategic segments
…and pulp demand is growing in our strategic segments Pulp demand to 2021 in million tonnes (Mt) +2.4 +1.1 +1 +1 +4.4 -1.5 by end-uses 71 63 CAGR: + 2.5% ~ + 1.7 million tonnes (Mt)/year 52 47 Grade Mt Hardwood 4.2 Softwood 0.7 2005 2010 2016 2021 Fluff 1.1 Source: Hawkins Wright, Pöyry, Stora Enso
Slide 9: Balanced market expected
Balanced market expected Hardwood and softwood average capacity growth (Mt/year) Cash cost CIF Europe (USD/tonne) Cash cost by country 2006-2016 + 1.4 Mt/y (90% ratios) Not sustainable Solid Best in class 2017-2021 + 1.2 Mt/y Announced capacity growth 2017–2021: 6.2 Mt (1.2 Mt/year) Cumulative capac
Slide 10: Wood price impact in pulp industry
Wood price impact in pulp industry Average industry pulp cost breakdown Wood cost per region Region Hardwood Softwood Brazil 33 29 USA 41 35 + + Chile 51 34 Canada 35 41 Nordics 46 45 40–50% 40–50% 10–20% Portugal 51 39 Indonesia 51 n/a China 80 74 Source: Hawkins Wright, Pöyry Q2/17 (USD/m3/sob) at
Slide 11: New capacity does not fully correlate with pricing
New capacity does not fully correlate with pricing Mt Average price index Source: Pöyry (net price included average estimated discounts) 11 8 November 2017 Stora Enso CMD
Slide 12: Exchange rate has an impact on pulp pricing
Exchange rate has an impact on pulp pricing FX USD/EUR Source: European Central Bank and Pöyry (net price included average estimated discounts) 12 8 November 2017 Stora Enso CMD
Slide 13: GDP correlating well with pulp prices
GDP correlating well with pulp prices GDP growth % Source: IMF and Pöyry (net price included average estimated discounts) * Based on G20 countries, representing more than four-fifths of gross world product 13 8 November 2017 Stora Enso CMD
Slide 14: Pulp price is stable compared to other commodities
Pulp price is stable compared to other commodities Price index 125 108 85 82 Source: World Bank, Pöyry (net price included average estimated discounts) 14 8 November 2017 Stora Enso CMD
Slide 15: Innovation is key for sustainable profitable growth
Innovation is key for sustainable profitable growth Product platforms 1. Improved 2. Regenerated 4. Bio-based 3. Lignin pulp properties cellulose & MFC chemicals Technology platform for extraction & separation 15 8 November 2017 Stora Enso CMD
Slide 16: Platform 1: improving pulp properties for existing products
Platform 1: improving pulp properties for existing products Fluff pulp • Hygiene and health, growing by 3.6% per year • Life expectancy and increased disposable income in developing countries • Improve fluff pulp properties to increase customer value Dissolving pulp • Dissolving pulp to textiles is
Slide 17: Platform 2: Developing new technologies for using wood fibre in textiles, non-woven and specialty papers
Platform 2: Developing new technologies for using wood fibre in textiles, non-woven and specialty papers Regenerated cellulose • Participate in the development of new technologies for using wood fibre in textile • Growing interest from global brand owners increases demand for renewable fibres • Oppo
Slide 18: Platform 3: Lignin – big opportunities in many markets
Platform 3: Lignin – big opportunities in many markets Phenol replacement • Phenolic resins is a 2.8 Mt market, growing at 4% CAGR • It replaces phenol in adhesives for plywood, OSB (oriented strand board), laminates, LVL and other wood construction materials • The carbon footprint for lignin is rou
Slide 19: Platform 4: Bio-based chemicals replacing fossil-based materials
Platform 4: Bio-based chemicals replacing fossil-based materials Bioplastics and intermediates • Growing interest in packaging/bottling markets for renewable solutions • Reduction on carbon footprint and enhanced properties are key target areas C5 and • Market clearly favoring second generation biom
Slide 20: Strategic steps for new business and differentiation
Strategic steps for new business and differentiation Pulp business - New platforms for growth Future growth options 2019 Grow in fluff and dissolving 2018 Enocell dissolving pulp II New business from 2017 Skutskär R&D platforms increased fluff 2016 B2X demo plant, Improve efficiency Raceland USA and
Slide 21: Our three focus areas
Our three focus areas Maximize value from Differentiate our Nordic pulp Create new platform for growth eucalyptus pulp business Delivering sustainable profitable growth 21 8 November 2017 Stora Enso CMD
Slide 22: 1% shift of fossil-based and other materials
1% shift of fossil- 20 BEUR based and other = renewable business materials
Slide 23: 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 24: The Renewable Materials Company
THE RENEWABLE MATERIALS COMPANY