Stora Enso Profitable growth

Transcription

1 Profitable growth CFO Seppo Parvi

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

3 in brief Leading global provider of renewable solutions in packaging, biomaterials, wooden constructions and paper Some employees in 35 countries Sales EUR 10.0 billion in 2015 Operational EBIT EUR 915 million in 2015 shares are listed on NASDAQ OMX Helsinki and Stockholm. In addition, the shares are traded in the USA as ADRs on the International OTCQX over-thecounter market 35 3

4 responds to global megatrends Major global trends drive the world s demand for renewable materials Global warming Growing population Urbanisation Digitalisation Changing lifestyles Growing middle class Eco-awareness Bio-based products are not only reusable, but also renewable 4

5 Everything that s made with fossil based materials today can be made from a tree tomorrow 5 From a traditional paper and board producer to a global renewable materials growth company

6 Majority of the portfolio is aimed at growth 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 6

7 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 Estonia, and ha in Romania (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 7

8 The emergence of middle class in China 100% ACT FCS T 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Low Income Lower Middle Class Upper Middle Class Affluent Notes: Per household per year disposable income in 2010 real RMB: Low Income: < RMB 59,000 Lower Middle Class: RMB 59, ,000 Upper Middle Class: RMB 103, ,000 Affluent: > RMB 222,000 Source: McKinsey, as of Jan

9 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 9

10 The global consumer board market is growing Growth of 9 million tonnes expected FBB 5.0% CUK 4.2% WLC 4.1% FSB 4.0% LPB 3.6% SBS 3.4% FBB 1.5% FSB 1.5% CUK 0.5% Above region average FSB 3.2% FBB 3.0% CUK 1.8% LPB 7.8% FSB 7.6% FBB 7.4% CUK 6.3% SBS 4.3% FBB 5.7% FSB 4.5% CUK 3.2% SBS 3.2% LPB 3.9% FSB 3.8% 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) 10 WLC 2.8% CUK 2.8% FBB 2.4% SBS 1.9% Source: Pöyry Management Consulting

11 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 Excluding categories services and large travel 11 SOURCE: Euromonitor May 2015

12 Thousands Thousands Thousands Thousands Corrugated packaging grows also in Europe SC Fluting global market size (mt) kt HQ CAGR 1 3 % HQ CAGR 0% High Quality SC fluting Other SC fluting RCP-based containerboard Eastern Europe* (mt) kt CAGR 1,8 % kt CAGR 3-4 % Eastern Europe Western Europe 12 0 Kraftliner global (mt) Source: Global CAGR 1-2 % kt CAGR +2-3 % Pöyry, ICCA, analysis North America Global excl. NA Corrugated boxes packaging* (mt) kt CAGR 3-4 % *) Sweden, Finland, Poland, Russia, Baltic

13 Focus on four innovation clusters in Biomaterials 13

14 Innovation Centre for biomaterials Located in Stockholm Maximize the value of wood and biomass Research, application, business development and strategic marketing Boost innovation by identifying business opportunities and linking them with innovation and research centres Xylose demonstration and market development plant under construction in Louisiana, USA, expected to be completed in early

15 Innovation Centre for packaging Located in Helsinki Venue for innovation and R&D work Develop innovative and sustainable packaging concepts with customers and other stakeholders A packaging design lab and virtual reality retail technology, among other things Co-operation with NXP on intelligent packaging solutions announced in Q2 2015, customer project ongoing Commercial phase for MFC announced in Q2 2015, customer deliveries started 15

16 More for less with Micro Fibrillated Cellulose (MFC) The first time MFC is used for Liquid Packaging board in dairy segment The customer Elopak wish to make packaging as light as possible Renewable innovation: New Natura Concept based on MFC from Stora Enso Stiffness and strength are maintained with less weight more packaging material per ton of board Successfully launched in Eastern Europe, more than 100 million packages produced Western Europe next in line 16

17 Transformation proceeding Division Investment Annual capacity Investment value To be completed Consumer Board Beihai consumer board mill tonnes 800 MEUR Started on 26 May 2016 Wood Products Varkaus wooden building elements m 3 43 MEUR June 2016 Biomaterials Xylose demonstration and market development plant 32 MEUR Early

18 Transformation non-core asset divestments in 2016 Arapoti Mill Q Hartola production unit announced 1 June 2016 Kabel Mill announced 1 June 2016 Expected to be completed Q MEUR cash consideration NRI in Q MEUR on operating profit -10 MEUR tax impact 17 MEUR pension liabilities to be transferred to new owner 18

19 Transformation journey continues Growth businesses 65% of sales and 79% of operational EBIT 2006 Sales 30% 65% Q1/2016 Sales 2006 Paper businesses, incl. Merchants Biomaterials Wood products business Packaging business Other and eliminations In 2006, all pulp used internally 2006 Operational EBIT 38% 79% Q1/2016 Operational EBIT Q1/2016 Paper Biomaterials Wood products business Consumer Board Packaging Solutions Other and eliminations 19

20 Profitable growth From asset transformation to sales transformation Asset transformation Innovation & customer focus 20

21 group sales 2011 Q1/2016 Note: * Excluding paper and divested businesses. Year 2011 have not been restated in accordance with IFRS11. 21

22 Transformation benefits clearly visible MEUR Operational EBIT and operational EBIT margin MEUR Cash flow from operations CAGR 21% Net debt to operational EBITDA Capex and depreciation 22

23 Continuous improvements Operational ROCE 11.3%, excluding Beihai Mill project 13.7% ROCE target of 13% *Excluding Montes del Plata until end of 2014 and excluding Beihai Mill project in Guangxi 23

24 Strategic targets ambitious, but reachable Group targets Q1 15 Q1 16 Status Dividend To distribute 50% of net income over the cycle Growth* To grow faster than the relevant market 0.3% (YoY) 2.4% (YoY) Net debt to operational EBITDA <3.0x Fixed costs to sales <20% 23.9% 24.4% Debt to equity <80% 65% 58% Operational ROCE >13% 10.1% 11.3% Operational ROCE excl. Beihai 11.3% 13.7% Divisional targets Q1 15 Q1 16 Status Consumer Board Operational ROOC > 20% 17.3% 14.3% Consumer Board excl. Beihai 30.0% 34.2% Packaging Solutions Operational ROOC > 20% 12.9% 3.2% Biomaterials Operational ROOC > 15% 11.4% 13.1% Wood Products Operational ROOC > 18% 11.7% 12.3% Paper Cash flow after investing activities to sales > 7% 5.9% 5.3% *Excluding Paper and Barcelona Mill 24

25 Strategy for transformation continues s strategy is about profitable growth based on customer insights and innovation, supported by structured processes and motivated employees 25

26 Thank you!

27 Welcome to CMD on 17 November 2016 in London 27

28 More information in s Investor kit storaenso.com downloads Strategy Businesses Capacities Markets Financial performance Cost structure Capex Dividend policy Ownership structure Management Most recent quarterly results 28