Stora Enso Oyj Class A · OMXHEX:STEAV
Stora Enso Oyj Class A — Non-Deal Roadshow (May 2021)
35 slides from Stora Enso Oyj Class A's roadshow presentation, May 4, 2021
Slide 1: Shaping our business for higher growth and value
Shaping our business for higher growth and value Back on track Stora Enso Roadshow presentation 4 May 2021
Slide 2: 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 3: Stora Enso in brief
Stora Enso in brief Sales in 2020 7.0% operational Operational EBIT 2020 8.6 BEUR ROCE excluding Forest in 2020 Packaging Materials Packaging Solutions Biomaterials Operational EBIT in 2020 Employees Wood Products Forest 650 MEUR 23 000 Paper External sales 2020 Packaging Materials Packaging Solutio
Slide 4: Stora Enso's annual estimated climate impact
Stora Enso’s annual estimated climate impact Our forests Our products Our value Our products substitute Climate impact3 remove carbon1 store carbon chain emissions2 fossil-based products, saving −1.5 million tonnes of CO2 −2.6 million tonnes of CO2e +10.5 million tonnes of CO2e −17.9 million tonnes
Slide 5: Shaping our business for higher growth and value…
Shaping our business for higher growth and value… Growth Packaging Materials Packaging Solutions Wood Products: Building Solutions Biomaterials: Innovations Foundation Cash Wood Products: Forest Traditional wood products Biomaterials: Pulp Paper 5 4 May 2021 Stora Enso
Slide 6: …by focusing on our three leading positions
…by focusing on our three leading positions Packaging Materials & Solutions Wood Products: Building Solutions Biomaterials Innovations • High demand for plastic free and eco- • 10%+ annual growth • High growth end product markets friendly circular packaging • Leading global supplier • Uncontested su
Slide 7: Packaging
• Packaging Materials – Leading Packaging premium packaging board supplier • Packaging Solutions – Premium sustainable solution provider 7 4 May 2021 Stora Enso
Slide 8: Packaging Materials
Packaging Materials Operational MEUR Sales and operational EBIT % % ROOC in Q1 21 16.7% (Target >20%) 3,600 3,000 24 20 2,400 16 1,800 12 1,200 8 600 4 0 0 2018 2019 2020 Q1 21 Sales Operational EBIT % 8 4 May 2021 Stora Enso
Slide 9: Packaging Solutions
Packaging Solutions Operational MEUR Sales and operational EBIT % % ROOC in Q1 21 7.5% (Target >25%) 800 600 20 15 400 10 200 5 0 0 2018 2019 2020 Q1 21 Sales Operational EBIT % 9 4 May 2021 Stora Enso
Slide 10: Significant growth opportunities for plastic free and circular packaging
Significant growth opportunities for plastic free and circular packaging Global packaging market Increased disposable Industrial packaging Consumer packaging income & urbanisation Board based Board based industrial packaging 10% consumer packaging +4.5%* p.a. in 25% +4.5%* p.a. in Growing e-commerce
Slide 11: Attractive investment options for Packaging Materials growth
Attractive investment options for Packaging Materials growth Focus on brownfield investments, debottlenecking and improving operational efficiency Oulu Varkaus Develop world leading cost Fors Heinola Imatra competitive integrates Skoghall Ingerois Beihai Ostrołęka Explore opportunities to consolidat
Slide 12: Significant opportunities for new sustainable packaging
Significant opportunities for new sustainable packaging Formed fiber Biofoam Biobarriers and films Market growth (CAGR 2020 - 2030) 3% 6% 3% Total market size (BEUR, 2020e) 30 15 80 EBIT margin Supporting potential 30% 35% existing business 1st production line in Hylte Pilot plant in Fors Capacity i
Slide 13: Wood Products
• Building Solutions – Leading supplier Wood of wood-based construction solutions • Traditional wood products – Largest Products producer of classic sawn and planed wood in Europe 13 4 May 2021 Stora Enso
Slide 14: Wood Products
Wood Products MEUR Sales and operational EBIT % % 1,800 24 1,500 20 1,200 16 900 12 600 8 Operational ROOC in Q1 21 36.9% (Target >20%) 300 0 4 0 2018 2019 2020 Q1 21 Sales Operational EBIT % 14 4 May 2021 Stora Enso
Slide 15: Attractive growth opportunities in Building Solutions
Attractive growth opportunities in Building Solutions The global wood-based 2030 market share Building Solutions market and value by geography (BEUR) Carbon storage & safer 9 workplaces 2.3 BEUR Lower building costs & faster construction 3.6 BEUR Policies promoting 1.5 BEUR wooden construction <1 Bu
Slide 16: Global market leader of wood-based Building Solutions
Global market leader of wood-based Building Solutions Stora Enso Cross Laminated Timber Stora Enso global CLT (CLT) capacity (k m³) market share in 2020 360 +44% 250 20% 80% 2020 After Ždírec investment Bad St. Leonhard Ybbs Varkaus Gruvön Ždírec Several projects CLT CLT LVL CLT CLT in pipeline Capa
Slide 17: Biomaterials
• Integrated pulp producer with Biomaterials cost efficient stand alone assets • Innovations to replace fossil- based products 17 4 May 2021 Stora Enso
Slide 18: Biomaterials
Biomaterials Operational ROOC in Q1 21 MEUR Sales and operational EBIT % % 1,800 30 11.2% (Target >15%) 1,500 1,200 25 20 900 15 600 10 300 5 0 0 2018 2019 2020 Q1 21 Sales Operational EBIT % 18 4 May 2021 Stora Enso
Slide 19: New biomaterials are a highly attractive innovation platform
New biomaterials are a highly attractive innovation platform Carbon for energy storage Bio-binders Carbon fibers Market growth (CAGR 2020 - 2030) 30% 2 - 4% 8 - 10% Total market size (BEUR, 2020e) 10 20 3 EBIT margin potential 35% 35% 35% Pilot plant in Sunila 1st production line in Sunila Pilot ong
Slide 20: Focus on strengthening competitiveness
Focus on strengthening competitiveness Delivered cost – Standard market pulp Delivered cost per tonne • Market pulp not a focus area for growth Strengthen the competitiveness • Investments in integrated pulp to support Packaging Materials • Maintain cost competitiveness of the Eucalyptus mills Cumul
Slide 21: Forest
Forest 4 May 2021 21 Stora Enso
Slide 22: Forest
Forest MEUR Sales and operational EBIT % % Operational ROCE in Q1 21 9.9% (Target >3.5%) 2,500 2,000 25 20 1,500 15 1,000 10 500 5 0 0 2018 2019 2020 Q1 21 Sales Operational EBIT % 22 4 May 2021 Stora Enso
Slide 23: Stora Enso's global forest assets 7.2 BEUR
Stora Enso’s global forest assets 7.2 BEUR – significant share of the balance sheet All figures total forest assets including biological Sweden assets and forest land* Tornator (41%) 5.45 BEUR (Market transaction- 818 MEUR based fair value) (DCF) (Q1/21) Group forest assets (Q1/21) Biological assets
Slide 24: Paper
Paper 24 4 May 2021 Stora Enso
Slide 25: Paper
Paper MEUR Sales and operational EBIT % % 3,500 14 12 3,000 10 2,500 8 6 2,000 4 1,500 2 0 1,000 -2 Cash flow -4.6% -4 500 after investing -6 activities to 0 -8 2018 2019 2020 Q1 21 sales in Q1 21 (Target >7%) Sales Operational EBIT % 25 4 May 2021 Stora Enso
Slide 26: Structural paper demand decline continues
Structural paper demand decline continues European paper (Excl. wood free coated) demand European paper demand by end use (million t) 35 CAGR: -4.6% Other commercial 30 Direct mail 25 CAGR: -5.5% 21 Insert & Flyers Copy paper 17 15 Catalogues Books Supplements Newsprint Magazines 2008 2010 2012 2014
Slide 27: Plans to permanently close down pulp and paper production at Kvarnsveden and Veitsiluoto mills
Plans to permanently close down pulp and paper production at Kvarnsveden and Veitsiluoto mills • Decision is subject to completed co-determination negotiations • Kvarnsveden Mill, Sweden − 565 000/a tonnes of SC magazine paper and improved news (two machines) − 900 000/a tonnes of thermomechanical p
Slide 28: Financial impact of potential paper mill closures
Financial impact of potential paper mill closures • Plans would reduce paper capacity by 35% or ~1.3 million tonnes/a • Annual sales would decrease by approximately 600 MEUR • Paper sales would be reduced to slightly above 10% of Group sales • Operational EBITDA would improve by 35 MEUR annually • 1
Slide 29: Financial with Q1 figures
Financial with Q1 figures 29 4 May 2021 Stora Enso
Slide 30: Improving performance and market conditions
Improving performance and market conditions Q1 2021 year-on-year • Sales increased by 3%, 14% excl. Paper • Operational EBIT increased to 328 (180) MEUR, excl. Paper to 362 (158) MEUR − Impact of 74 MEUR from forest sales in Sweden • Operational EBIT % increased to 14.4% (8.1%), excl. Paper 19.4% (9
Slide 31: Strong market conditions for the growth businesses
Strong market conditions for the growth businesses • Robust performance continues for Packaging Materials − Capacity sold-out for the division − Market situation in China continued to improve • Solid e-commerce demand supports corrugated packaging, prices yet to catch-up with raw material price incr
Slide 32: Selective capex to support growth
Selective capex to support growth Biological capex Strategic capex Maintenance capex Capex estimate for 2021 Depreciation and depletion of capitalised silviculture costs Capex for 2019-2020 and estimate for 2021 include the capitalised leasing contracts according to IFRS 16 Leases standard 32 4 May
Slide 33: Operational EBIT in 2021 is expected to be higher than in 2020, as guided earlier
Operational EBIT in 2021 is expected to be higher than in 2020, as guided earlier • Global economy recovering from the pandemic • Demand for our products healthy except for graphic paper • In Packaging Materials Oulu Mill operational EBITDA break-even in Q3 2021. Previously it was estimated to be Q1
Slide 34: Back on track
Back on track • Improving performance and market conditions • 14% growth of core businesses • Operational EBIT improved by 82% • Plan of two paper mill closures significantly improves profitability and long-term competitiveness of Paper business • Close to 90% of group sales would come from core bus
Slide 35: 4 May 2021 Stora Enso
# storaenso QD OO & & THE RENEWABLE MATERIALS COMPANY 35° 4 May 2021 Stora Enso