Stora Enso Profitable growth

Transcription

1 Stora Enso Profitable growth SVP, Investor Relations Ulla Paajanen-Sainio 9 March 2016

2 Disclaimer It should be noted that certain statements herein which are not historical facts, including, without limitation those regarding expectations for market growth and developments; expectations for growth and profitability; and statements preceded by believes, expects, anticipates, foresees, or similar expressions, are forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of Since these statements are based on current plans. estimates and projections, they involve risks and uncertainties which may cause actual results to materially differ from those expressed in such forward-looking statements. Such factors include, but are not limited to: (1) operating factors such as continued success of manufacturing activities and the achievement of efficiencies therein, continued success of product development, acceptance of new products or services by the Group s targeted customers, success of the existing and future collaboration arrangements, changes in business strategy or development plans or targets, changes in the degree of protection created by the Group s patents and other intellectual property rights, the availability of capital on acceptable terms; (2) industry conditions, such as strength of product demand, intensity of competition, prevailing and future global market prices for the Group s products and the pricing pressures thereto. price fluctuations in raw materials, financial condition of the customers and the competitors of the Group, the potential introduction of competing products and technologies by competitors; and (3) general economic conditions, such as rates of economic growth in the Group s principal geographic markets or fluctuations in exchange and interest rates. 2 9 March 2016

3 A changing world Global trends drive for renewable materials Growing population Urbanisation Digitalization Income growth Global warming Eco awareness 3 9 March 2016 Changing lifestyles

4 Everything that s made with fossil fuels today can be made from a tree tomorrow From a traditional paper and board producer to a global renewable materials growth company 4 9 March 2016

5 Majority of the portfolio is aimed at growth Stora Enso Group FY 2015: Sales MEUR / Op EBITDA MEUR / Op ROCE 10.6% / Capex 989 MEUR Consumer Board Packaging Solutions Biomaterials Wood Products Paper Profitable growth Sales MEUR Op EBITDA 434 MEUR Op ROOC 15.5% Capex 533 MEUR Value creation to customers Sales 913 MEUR Op EBITDA 147 MEUR Op ROOC 11.1% Capex 128 MEUR Transformation from a pure pulp producer to a biochemical company Sales MEUR Op EBITDA 420 MEUR Op ROOC 12.4% Capex 146 MEUR Increase growth in the value added wood products area Sales MEUR Op EBITDA 111 MEUR Op ROOC 15.7% Capex 63 MEUR Maintaining cash flow generation Sales MEUR Op EBITDA 231 MEUR Cash flow from operations 286 MEUR Capex 84 MEUR 5 9 March 2016

6 Stora Enso s plantations and forest assets Bergvik Skog, Sweden 2.3 million ha of land in Sweden, ha in Latvia (ownership of 49%) Tornator, Finland ha of forestland in Finland, ha in Romania, and ha in Estonia (ownership 41%) Guangxi, Southern China (leased) ha of land of which ha eucalyptus, ha other species Veracel plantations, Brazil ha of land of which ha eucalyptus plantations Rio Grande do Sul, Brazil ha of land of which ha eucalyptus plantations Note: Fair value of Biological assets and Group s indirect share of forest assets is as of 31 Dec 2015, in total EUR million Montes del Plata, Uruguay ha of land of which ha planted In addition, leased plantations: - Laos: trial plantation, ha - Russia: ha - Czech Republic: ha 6 9 March 2016

7 The global consumer board market is growing Growth of 9 million tonnes expected Latin America North America Europe China Rest of Asia Africa Source: Pöyry Management Consulting 7 9 March 2016

8 The global consumer board market is growing Growth of 9 million tonnes expected FBB 5.0% Above region average CUK 4.2% LPB 7.8% WLC 4.1% FSB 7.6% FBB 5.7% FSB 4.0% FBB 1.5% FSB 3.2% FBB 7.4% FSB 4.5% LPB 3.9% LPB 3.6% FSB 1.5% FBB 3.0% CUK 6.3% CUK 3.2% FSB 3.8% SBS 3.4% CUK 0.5% CUK 1.8% SBS 4.3% SBS 3.2% WLC 3.6% 3.0% 0.4% 1.8% 3.3% 4.0% 3.1% 3.3% Latin America North America Europe China Rest of Asia Africa SBS 0.3% WLC 0.3% LPB -0.7% SBS 1.7% LPB 1.6% WLC 1.5% WLC 2.6% LPB 3.1% Below region average FBB = Folding boxboard, CUK = Coated unbleached kraftboard, WLC = White lined chipboard, FSB = Food service board, LPB = Liquid packaging board, SBS = Solid bleached sulfate board. For more information about the grades, please see the Glossary at the end of the presentation (appendix) 8 9 March 2016 WLC 2.8% CUK 2.8% FBB 2.4% SBS 1.9% Source: Pöyry Management Consulting

9 Online shopping is rapidly changing retail as we know it Online retail market grows faster than other retail markets. EUROPE CHINA % p.a. +18% p.a Different retail categories face different challenges for successful online packaging New reality for brand owners and retailers packaging is clearly a strategic tool to gain from the growth in online retailing 9 Excluding categories services and large travel SOURCE: Euromonitor May 2015

10 Corrugated packaging grows also in Europe High Quality SC Fluting global market size (kt) RCP-based containerboard Eastern Europe (kt) kt +1% kt +3-4% Kraftliner Europe (kt) kt +1-2% Corrugated packaging* (kt) +750 kt +3% *) Sweden, Finland, Poland, Russia, Baltic Source: Pöyry, ICCA, Stora Enso analysis 10 9 March 2016

11 More innovative use of raw material Our raw material is not competing with food New technologies enable to fractionate the incoming biomass better and create solutions for all the fractions, new biochemicals and biomaterials that can serve several industries % Cellulose Fiber Sugar 25-35% Hemi cellulose Various sugars 20-30% Lignin Binder 11 9 March 2016

12 Innovations steps in 2015 Co-operation with NXP on intelligent packaging solutions announced in Q Customer project ongoing Commercial phase for MFC announced in Q Customer deliveries started Innovation Centre for packaging in Helsinki inaugurated in November Innovation Centre for biomaterials in Stockholm inaugurated in December 12 9 March 2016

13 Market pulp demand growing organically 2% per year (Kt) % % % % % % % Source: Pulp and Paper Products Council, 2014 Capacity Demand Supply/Demand balance 13 9 March 2016

14 Global softwood market pulp inventories remain on normal level, hardwood pulp inventories increase Source: EPIS Note: January tonnage data available in March 2016.Tonnage data for pulp inventories is released one month later than days of supply-data 14 9 March 2016

15 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 15Q1 15Q2 15Q3 15Q4 USD/tonne Pulp price softwood pulp price increase announced in Europe Bleached softwood kraft pulp Bleached hardwood kraft pulp March 2016

16 From sawmilling to value added products 2007 Today Our Target 20% 32 % 50 % 50 % 80% 68 % Value-added products Basic sawn Value-added products Basic sawn Value-added products Segment focused wood products 16 9 March 2016

17 Capacity closure, tonnes Paper cash generation maintained on a high level MEUR Cash flow after investing activities Cash flow after investing activities to sales % Optimising paper cash flow in the future % 8% 250 6% Working capital Variable and fixed costs Right segment of paper % 2% 0% High machine capacity utilisation Capacity closures Cash flow after investing activities to sales 12% 10% 8% % % 2% % 17 9 March 2016

18 Transformation steps completed 2014 Q Q Q Q Montes del Plata pulp mill - Performed at the nominal capacity level in June Annual capacity of 1.3 Mt of which Stora Enso s share 50% Murow sawmill - Started in Q as planned. - Capacity increase to m³/shift/year Sunila Biorefinery - Investment completed in Q First volumes of lignin are expected to be commercialised in early 2016 Virdia acquisition - Acquired in June Extraction and separation technologies for conversion of cellulosic biomass into highly refined sugars and lignin Imatra de-bottlenecking - The investment at the Imatra mill in Finland in quality, costcompetitiveness and an increase in capacity was completed according to plan. Varkaus conversion - The conversion of the fine paper machine to kraftliner is proceeding and the production started in October 18 9 March 2016

19 Transformation in progress Beihai Mill expected to be operational during Q2 Division Investment Investment value To be completed Consumer Board Beihai consumer board mill 800 MEUR Q Wood Products Varkaus wooden building elements 43 MEUR Q Biomaterials Xylose demonstration and market development plant 32 MEUR Early March 2016

20 Transformation journey continues Growth businesses with 64% of sales and 83% of operational EBIT 2006 Sales Q4/2015 Sales 30% 64% 38% 83% In 2006, all pulp used internally 20 9 March Operational EBIT Q4/2015 Operational EBIT

21 Profitable growth From asset transformation to sales transformation Asset transformation Innovation & customer focus 21 9 March 2016

22 Record high annual Operational EBITDA margin Summary financials Q and 2015 EUR million Q4/15 Q4/14 Change % Q4/15 / Q4/14 Q3/15 Change % Q4/15 / Q3/ Change % 15/14 Sales % % % Operational EBITDA % % % Operational EBITDA margin 13.7% 12.1% 14.1% 13.5 % 12.4 % Operational EBIT % % % Operational EBIT margin 9.7% 8.2% 9.8% 9.1% 7.9% Profit before tax excl. NRI n/m 128 n/m % EPS excl. NRI, EUR EPS (basic), EUR Operational ROCE 11.3% 9.7% 11.6% 10.6% 9.5% Operational ROCE excl. Beihai project 13.3% 13.1%* 13.1% 12.2% 12.7%* Cash Flow from Operations % % % Net debt/last 12 months operational EBITDA *Excluding Beihai and Montes del Plata investments 22 9 March 2016

23 ROCE reaching new levels ROCE target of 13% *Excluding Montes del Plata until end of 2014 and excluding Beihai Mill project in Guangxi *Excluding Montes del Plata until end of 2014 and excluding Beihai Mill project in Guangxi 23 9 March 2016

24 Forecast for capex in 2016 MEUR Forecast 2016 Capital expenditure Depreciation The capital expenditure forecast includes approximately 100 MEUR for the group s biological assets and approximately 160 MEUR for the Beihai Mill in China 24 9 March 2016

25 Guidance Q1/2016 sales are estimated to be similar to the amount of MEUR Operational EBIT is expected to be in line with the 242 MEUR recorded in Q4/2015 No major scheduled annual maintenance shutdowns during Q1/ March 2016

26 Dividend proposal Dividend policy: Strive to pay stable dividends linked to the long-term performance One half of net profits over a business cycle Dividend proposal of 0.33 EUR per share for 2015 totaling 260 MEUR *Dividend proposal 26 9 March 2016

27 Strategic targets ambitious, but reachable Group targets Q4 14 Q4 15 Status Dividend To distribute 50% of net income over the cycle Growth* To grow faster than the relevant market 1.2% (YoY) 5.4% (YoY) Net debt to operational EBITDA <3.0x Fixed costs to sales <20% 25.6% 25.7% Debt to equity <80% 65% 60% Operational ROCE >13% 9.7% 11.3% Operational ROCE excl. Beihai 13.1**% 13.3% Divisional targets Q4 14 Q4 15 Status Consumer Board Operational ROOC > 20% 10.0% 10.6% Consumer Board excl. Beihai 18.7% 24.0% Packaging Solutions Operational ROOC > 20% 14.5% 10.5% Biomaterials Operational ROOC > 15% 5.6% 12.7% Wood Products Operational ROOC > 18% 7.6% 16.6% Paper Cash flow after investing activities to sales > 7% 17.5% 1.8% *Excluding Paper, Corenso and Barcelona Mill **Excluding also Montes del Plata investments 27 9 March 2016

28 Everything that s made with fossil fuels today can be made from a tree tomorrow From a traditional paper and board producer to a global renewable materials growth company 28 9 March 2016

29 Thank you!

30 More information in Stora Enso s Investor kit storaenso.com downloads Strategy Businesses Capacities Markets Financial performance Cost structure Capex Dividend policy Ownership structure Management Most recent quarterly results 30 9 March 2016