Stora Enso strategy and market environment. CEO Karl-Henrik Sundström

Transcription

1 strategy and market environment CEO Karl-Henrik Sundström Finnish Large Cap Summit November 214

2 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 November 214 2

3 Transformation journey continues Sales and operational EBIT 26 Sales Q3 214 Sales 2XX Sales 21 % -3 % 34 % % 38 % 3 % 12 % 7 % 17 % 11 % 7 % Paper Growth businesses -3 % 1 % 16 % 35 % 11 % 6 % 62 % 62 % 1 % 26 Operational EBIT Q3 214 Operational EBIT 2 November 214 In 26, all pulp used internally 3

4 Snapshot of current demand for our products Consumer board Carton board Hardwood pulp Disposable income Growing population Tissue & packaging demand Softwood pulp Wood products Paper Tissue & packaging demand Housing starts Digitalisation 2 November 214 4

5 ,5,9 1,3 1,9 3,7 4,3 7,9 14,8 6,1 6,4 1,2 1,9 Strongest growth in consumer board will be in Asia Increasing demand for consumer board in China CAGR.4% CAGR 3.8% CAGR 5.4% Eastern Europe North America CAGR 1.1% CAGR 3.3% Western Europe South America CAGR 3.4% China and Asia Pacific Rest of the world Million tonnes Source: Pöyry, June 214: Cartonboard market update and outlook Includes SBS, FBB, CUK, LPB and FSB 2 November 214 5

6 Corrugated packaging grows also in Europe Nordic SC Fluting Global market size (kt) RCP based containerboard Europe (kt) (Kt) (Kt) Kt + 1.4% Kt + 1.8% Kraftliner Europe (kt) Corrugated packaging* (kt) (Kt) (Kt) Kt + 2.3% Kt + 2.8% Market Source: Pöyry 213, ICCA, PIRA, Analysis *Sweden, Finland, Poland, Russia, Baltic, Hungary 6

7 Chemical market pulp demand to increase from 55 to 6 Mt in (Kt) 7 1% 6 95% 5 9% 4 85% 3 2 8% 1 75% Capacity Demand Supply/Demand balance 7% 2 November 214 Source: Pulp and Paper Products Council, 214 7

8 Index 23 = 1 Housing starts by region Europe, USA, Japan CAGR CAGR USA -6.7% +11.2% Europe -5.3% +4.1% Japan -1.7% -7.7% Europe by region Eastern Nordic CAGR CAGR Central -.9% +5.8% Western -1.9% +2.5% South -15.9% +1.5% Nordic -1.1% +4.6% Eastern -.3% +8.2% USA Japan Central Western 4 2 Europe 4 2 South Sources: Euroconstruct, Consensus Forecasts, NAHB 2 November 214 8

9 Development in Renewable Packaging Guangxi Partnering with IFC (equity and loan) FSC and PEFC certified plantation Key equipment selected Site levelling work mainly completed, next steps waiting for the permits Phase one: board machine operational early 216 as previously announced Investment in Imatra mills EUR 27 million to improve quality and cost-competitiveness Increases consumer board capacity by 2 tonnes Finalised in Sept 215 Varkaus conversion EUR 11 million for conversion EBITDA margin above 15% Start up Q4 215 Capacity 39 tonnes of kraftliner Uncoated fine paper capacity to reduce by 28 tonnes 2 November 214 9

10 Recent development: Non-core asset divestment and restructuring Non-core asset divestments: Corenso core and coreboard operations to Powerflute, cash consideration appr. EUR 75 million expected Q4 Thiele Kaolin, cash consideration EUR 56 million, Q1 214 Restructuring: Uetersen Mill sales purchase agreement was discontinued in Q3 Planned divestment cancelled 2 November 214 1

11 Recent major investments and acquisitions 2 November 214 Investment Capex Timing Inpac acquisition, India and China EUR 8 million Q3 211 Bulleh Shah acquisition (35%), Pakistan EUR 3 million Q2 213 Skoghall, Sweden EUR 9 million Start-up Nov 212 Ostroleka, Poland EUR 285 million Start-up Jan 213 Bergvik Skog share acquisition EUR 99 million Q2 214 Montes del Plata, Uruguay EUR 85 million Start-up June 214 Sunila, Finland EUR 32 million Start-up Q1 215 Varkaus, Finland EUR 11 million Start-up Q4 215 Imatra, Finland EUR 27 million Ready Sep 215 Virdia acquisition, USA EUR 24 + EUR 21 million June by 217 Guangxi, China EUR 75 million Start-up early 216 Demonstration plant, Louisiana, USA EUR 32 million Start-up early 217 Total EUR 2.4 billion Cash flow Cash flow from operations Q3 YTD EUR 3.2 billion 2 November

12 Financial performance - divisions Sales, EBITDA margins, EBIT margins and ROOC Renewable Packaging Biomaterials 86 25% 29 2% % 15% % 16% 14% 12% % % 5% % 6% 4% 2% 74 12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 % 21 12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 % Building and Living Printing and Reading 6 2% 14 12% Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 18% 16% 14% 12% 1% 8% 6% 4% 2% % Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 1% 8% 6% 4% 2% % -2% -4% Sales, MEUR Operational ROOC, 4Q rolling 2 Operational November 214 EBITDA margin Operational EBIT margin 12

13 Summary financials Q3 214 EUR million Q3/14 Q3/13 Change % Change % Q3 14 / Q3 13 Q2/14 Q3 14 / Q2 14 Sales Operational EBITDA Operational EBITDA, % Operational EBIT Operational EBIT margin, % Profit before tax excl. NRI EPS excl. NRI, EUR EPS (basic), EUR Operational ROCE, % Operational ROCE, % excl. transformation investments Cash Flow from Operations Net debt/last 12 months operational EBITDA November

14 Printing and Reading: Cash flow generation Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 18% 16% 14% 12% 1% 8% 6% 4% 2% % Cash flow from operations, MEUR Cash flow to Sales 2 November

15 Sensitivity analysis 1% change, impact on operational EBIT 1% decrease in Impact* Energy prices Wood prices Chemical and filler prices Positive EUR 13 million Positive EUR 187 million Positive EUR 59 million 1% increase in Impact* Market pulp price, total Positive EUR 95 million 1% strengthening against Euro in the value of US dollar Swedish krona British pound Impact* Positive EUR 13 million Negative EUR 74 million Positive EUR 46 million *Impact on operational EBIT for the next twelve months. An increase of energy, wood or chemical and filler prices or decrease of pulp prices, as well as weakening of the currencies would have the opposite impact. 2 November

16 Impact of the Ukraine and Russia crisis Operations in Russia 3 packaging plants 2 sawmills Wood Supply: 1% of Group s wood in 213 No operations in Ukraine One sales company Some effects to customers Overall economic situation 2 November

17 Guidance for Q4 214 Compared to Q3 214 Sales are estimated to be roughly similar to the EUR million Operational EBIT is expected to be somewhat lower than EUR 21 million Due to normal seasonal weakness in the Renewable Packaging and Building and Living divisions 2 November

18 2 November

19 Dividend policy Strive to pay stable dividends linked to the long-term performance One half of net profits over a business cycle Dividend for 213 totalled EUR 237 million EUR 1,8,6,4,2 Earnings and distribution per share Excluding non-recurring items 27 28* 29* Earnings per share Dividend per share *Distribution of capital 2 November