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rethink. Stora EnsoQ1 2011 Strong – Earnings more than doubledCFO Markus Rauramo
It should b noted th t certain statements h i which are not hi t i l f t i l di      h ld be      t d that     t i t t    ...
Stora Enso s business      Enso’sWhat we do                      Publication paper                     Fine paper         ...
Employees and capacity Employees by country 2010*                                  Paper and board capacity by country 201...
rethink. Stora Enso   25 May 2011   5
Q1 2011 Strong – Earnings more than doubledSales                                                             up 19%EBIT ex...
Earnings improving      g    p     gHigher prices and continued productivity improvement                     EBIT excl NRI...
RCP continued to drive inflation              200              160      tonne              120                            ...
Higher p p p  g    pulp prices p                   positiveDue to 1 million tonnes net market pulp position              1...
Net debt down 15% y-o-yN t d bt d                              Net Debt                Net Debt/EBITDA excl NRI and fair v...
11
Stora Enso leading industry restructuring                 g        y             gCapacity closures since 2006  Paper     ...
Personnel reduced by 33%40 00035 000                                                                             Average p...
Productivity increased           yPricing over volumes, managing assets      120 000      100 000EUR       80 000         ...
15
Proof points of action      pOur direction•       Growth markets        G   th    k t    •    Growth markets        Proof ...
Implementing strategy  p        g       gyHigh return growth businesses               Project                 oject       ...
18
Outlook - increasing concerns on cost inflation•   Inflation d    I fl ti and maintenance li it Q2                   i t  ...
20
Summary•   Strong quarter    St         t•   Inflation pressure              p•   80% of CAPEX for strategic high    retur...
Rethinking continues!
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Goldman Sachs Basic Materials Conference in New York. Presentation by CFO Markus Rauramo (25 May 2011)

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Transcript of "Goldman Sachs Basic Materials Conference in New York. Presentation by CFO Markus Rauramo (25 May 2011)"

  1. 1. rethink. Stora EnsoQ1 2011 Strong – Earnings more than doubledCFO Markus Rauramo
  2. 2. It should b noted th t certain statements h i which are not hi t i l f t i l di h ld be t d that t i t t t herein hi h t historical facts, including, without ith tlimitation those regarding expectations for market growth and developments; expectations for growthand profitability; and statements preceded by “believes”, “expects”, “anticipates”, “foresees”, or similarexpressions, are forward-looking statements within the meaning of the United States Private SecuritiesLitigation R fLiti ti Reform A t of 1995 Si Act f 1995. Since th these statements are b t t t based on current plans, estimates and d t l ti t dprojections, they involve risks and uncertainties which may cause actual results to materially differ fromthose 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 ofefficiencies th i continued success of product d ffi i i therein, ti d f d t development, acceptance of new products or services l t t f d t iby 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 protectioncreated by the Group’s patents and other intellectual property rights, the availability of capital onacceptable terms (2) ind str conditions s ch as strength of prod ct demand intensit of competition terms; industry conditions, such product demand, intensity 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 theGroup, 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 conditions,markets or fluctuations in exchange and interest rates. rethink. Stora Enso 25 May 2011 2
  3. 3. Stora Enso s business Enso’sWhat we do Publication paper Fine paper Packaging Wood products Sales, EUR 2 727 million Operating profit, EUR 248 million* 24 % 39 % 21 % 32 % 18 % 15 % 12 % 9% 10 % 11 % 8% 5% Consumer Industrial Newsprint Magazine Fine Paper Wood Consumer Industrial Newsprint Magazine Fine Paper Wood Board Packaging and Book Paper Products Board Packaging and Book Paper Products Paper P Paper *excluding non-recurring items and fair valuations rethink. Stora Enso 25 May 2011 3
  4. 4. Employees and capacity Employees by country 2010* Paper and board capacity by country 2011 *Continuing operations rethink. Stora Enso 25 May 2011 4
  5. 5. rethink. Stora Enso 25 May 2011 5
  6. 6. Q1 2011 Strong – Earnings more than doubledSales up 19%EBIT excl NRI and fair valuations up 108%EPS excl NRI up 47%Q1 2011 compared to Q1 2010 rethink. Stora Enso 25 May 2011 6
  7. 7. Earnings improving g p gHigher prices and continued productivity improvement EBIT excl NRI and fair valuation EBIT margin*, % 4 Q avg ROCE* , % 4 Q avg 300 12 % 250 10 % 200 8% EUR million n 150 6% 100 4% 50 2% 0 0% *excluding NRI and fair valuation rethink. Stora Enso 25 May 2011 7
  8. 8. RCP continued to drive inflation 200 160 tonne 120 Mixed EUR/t OCC 80 De-inking 40 0 German RCP price development, free delivered Source: Verband D t h P i f b ik /St S V b d Deutscher Papierfabriken/Stora EEnso rethink. Stora Enso 25 May 2011 8
  9. 9. Higher p p p g pulp prices p positiveDue to 1 million tonnes net market pulp position 1 200 1 000 800 tonne 600 Bleached softwood kraft pulp USD/t Bleached hardwood kraft pulp 400 200 0 Source: FOEX rethink. Stora Enso 25 May 2011 9
  10. 10. Net debt down 15% y-o-yN t d bt d Net Debt Net Debt/EBITDA excl NRI and fair valuations 5 000 6,0 4 500 5,0 4 000 4,0 ionEUR milli 3 500 3,0 3 000 2,0 2 500 1,0 2 000 0,0 00 SENA divestment closed in Q4 2007 EBITDA: Continuing operations g p Merchants divestment closed in Q2 2008 Net debt: Total operations rethink. Stora Enso 25 May 2011 10
  11. 11. 11
  12. 12. Stora Enso leading industry restructuring g y gCapacity closures since 2006 Paper Pulp Board Wood 18% 9% 8% Products 20% rethink. Stora Enso 25 May 2011 12
  13. 13. Personnel reduced by 33%40 00035 000 Average personnel30 00025 000 2005 2006 2007 2008 2009 2010 2011 Q1 rethink. Stora Enso 25 May 2011 13
  14. 14. Productivity increased yPricing over volumes, managing assets 120 000 100 000EUR 80 000 Sales per employee 60 000 40 000 07Q1 08Q1 09Q1 10Q1 11Q1 rethink. Stora Enso 25 May 2011 14
  15. 15. 15
  16. 16. Proof points of action pOur direction• Growth markets G th k t • Growth markets Proof points: • Inpac acquisition • •Plantation based pulp Plantation-based d iinvestment Ostroleka O t l k containerboard t i b t t • Investment to Montes del Plata• • Plantation-based pulp Fibre-based packaging Proof point: P f i t • Investment to Montes del Plata • Selected paper grades• Fibre-based packaging Maintain and develop global leadership position Proof points: • Inpac acquisition • Ostroleka containerboard investment• Selected paper grades 25 May 2011 16
  17. 17. Implementing strategy p g gyHigh return growth businesses Project oject O ta get Ot e p og ess On target Other progress Montes del Plata Machinery and port pulp mill, Uruguay suppliers selected and contracted for MdP Ostroleka Proceeding as planned containerboard machine, Poland CLT All permits received, main investment, Ybbs, Austria machine supplier selected Skoghall Support wood handling in investment Sweden and further develop Skoghall mill Inpac Integration planning strong packaging company in China and India 17
  18. 18. 18
  19. 19. Outlook - increasing concerns on cost inflation• Inflation d I fl ti and maintenance li it Q2 i t limit Demand Price earnings improvement y-o-y development development Q2/11 vs Q2/11 vs Q2/10 Q1/11• Inflation estimate increased to Consumer Board ~4% for the full year 2011 compared to 2010 Industrial Packaging• Actions to fight inflation continue Newsprint and Book Paper to be even more important p Coated Magazine Paper Uncoated Magazine P M i Paper Fine Paper Wood Products W dP d t rethink. Stora Enso 25 May 2011 19
  20. 20. 20
  21. 21. Summary• Strong quarter St t• Inflation pressure p• 80% of CAPEX for strategic high return growth areas in 2011• Investments in strategic high- return growth areas – Montes del Plata – Ostroleka – Ybbs Ybb – Skoghall rethink. Stora Enso 25 May 2011 21
  22. 22. Rethinking continues!
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