2015 capital markets day presentation by Karl Henrik Sundström

1. Capital Markets Day, London, 28 May 2015
Profitable growth
Karl-Henrik Sundström
CEO, Stora Enso
The renewable materials company

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
1995. 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.
The renewable materials company
Disclaimer

3. The renewable materials company
A changing world
- Global trends drivers for renewable materials

4. The renewable materials company
Growing population Urbanisation Digitalization
Income Growth Eco awareness New lifestyles
A changing world
- Global trends drivers for renewable materials

5. From a traditional paper and board producer to a global renewable growth materials company
The renewable materials companyThe renewable materials company
“Everything that’s made with fossil fuels
today can be made from a tree tomorrow”

6. Consumer
Board
Profitable growth
Packaging
Solutions
Value creation
to customers
Biomaterials
Transformation
from a pure pulp
producer to a
biochemical
company
Wood
Products
Increase growth
in the value
added wood
products area
Paper
Maintaining cash
flow generation
Sales 2 297 m
Op EBITDA 439 m
Op ROOC 17.8%
Capex 332 m
Sales 1 065 m
Op EBITDA 183 m
Op ROOC 14.1%
Capex 52 m
Sales 1 104 m
Op EBITDA 173 m
Op ROOC 3.9%
Capex 236 m
Sales 1 779 m
Op EBITDA 126 m
Op ROOC 17.3%
Capex 29 m
Sales 3 912 m
Op EBITDA 361 m
Cash flow from
operations 354 m
Capex 108 m
+ + + + -
FY 2014: Sales 10 213 EUR m / Op EBITDA 1 269 EUR m / Op ROCE 9.5% / Capex 781 EUR m
Majority of the portfolio is aimed at growth
The renewable materials company

7. 20XX Sales
2006 Sales
Q1/2015 Operational EBIT2006 Operational EBIT
Q1/2015 Sales
63%
92%
30%
38%
In 2006, all pulp used internally
Growth businesses: 63% of sales
– 92% of operational EBIT
Q1 2015
21%
12%
70%
-3%
2%
32%
16%
37%
14%
30%
70%
Paper Growth businesses
Paper businesses, including Merchants
Biomaterials
Wood products business
Packaging business
Other and eliminations
4%
48%
7%
33%
8%
-3%
35%
6%
62%

8. Countries where Stora Enso has production facilities
Countries where Stora Enso has sales
Countries where Stora Enso has sales agents
Production and sales worldwide
The renewable materials company

9. Ongoing and recent investments with Capex, MEUR
Montes del Plata, Uruguay 850 Virdia acquisition, USA 17 + 21
Sunila, Finland 32 Guangxi, China 800
Murow sawmill 28 Varkaus wooden building elements, Finland 43
Varkaus conversion, Finland 110 Demonstration plant, Louisiana, USA 32
Imatra, Finland 27
Non-core asset
divestments
Closures 2013 
4 PMs + 1 Mill
1 Sawmill
Capex for growth investments

10. Capital allocation
MEUR
The renewable materials company
-2000
-1500
-1000
-500
0
500
1000
1500
2012 2013 2014
Cash flow from operations Capital expenditure Net financial items paid
Income taxes paid Dividends Net Cash flow

11. From asset transformation to sales transformationProfitablegrowth
Asset transformation Innovation & customer focus

12. 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.
The renewable materials company
35-45%
Cellulose
Fiber
Sugar
25-35%
Hemi cellulose
Various sugars
20-30%
Lignin
Binder

13. Stora Enso biomaterials innovation path
Biomass
• Nordic Forest
• Plantations for fast
growing species
• Other non food
competing
feedstock
New
technologies
• Virdia
• MFC
• Lignoboost
Components
• Cellulose
• Lignin
• Hemi cellulose
• MFC
Products and
applications
• Bio barriers and
chemicals
• Bio materials
• Bio composites
• Xylitol
• Composites
• Liquid packaging without al-foil
• etc.
The renewable materials company

14. Housing starts – main driver for Wood Products
0
20
40
60
80
100
120
140
160
Index2003=100
USA
Europe
Japan
Europe, USA, Japan, Australia CAGR CAGR
03-13 13-18
USA -6.7% +10.9%
Europe -5.7% +3.6%
Japan -1.7% -5.2%
Australia -0.1% +0.8%
Australia
Sources: Euroconstruct, Consensus Forecasts, NAHB, HIA
The renewable materials company

15. From sawmilling to value added products
20%
80%
Value-added products
Basic sawn
32 %
68 %
Value-added products
Basic sawn
50 %50 %
Value-added products
Segment focused wood products
2007 Today Our Target
The renewable materials company

16. Paper consumption, capacity
and growth projections
North America
CAGR 14-20 -4.5%
Europe
CAGR 14-20 -3.3%
Global
Capacity 14 [Mt]
Demand 14 [Mt]
Growth 14-20
[Mt]
Growth 14-20
134.2
116.1
-8.1
-7%
-1.2%
Latin America
CAGR 14-20 +0.0%
Africa
CAGR 14-20 +2.0%
Asia
(incl. Middle East &
Oceania)
CAGR 14-20 +0.9%
Only wood based paper included
Source: SE analysis, PPPC, Euro-Graph

17. Paper cash generation maintained on a high level
year-on-year
• Optimising paper cash flow in
the future
– Working capital
– Variable and fixed costs
– Right segment of paper
– High machine capacity
utilisation
0
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
0%
2%
4%
6%
8%
10%
12%
2007 2008 2009 2010 2011 2012 2013 2014
Capacityclosures,tonnes
Capacity closure Cash flow after capex to sales
MEUR
The renewable materials company

18. • Human Rights Assessment action plans
proceeding
• Responsible sourcing
– The supplier code of conduct covered 77%
of Group’s spending on materials and
services end of Q1 2015
– Implementation continues as planned
• M&A due diligence process
– New checklist for M&A implemented in 2014
– Project leader is responsible
– Global Responsibility actions calculated to
the implementation cost
Global responsibility
The renewable materials company

19. The renewable materials company
From a traditional paper and board producer
to a global renewable materials growth company

20. World of packaging