Proof points - Stora Enso
Proof points - Stora Enso
Proof points - Stora Enso
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ethink. <strong>Stora</strong> <strong>Enso</strong><br />
Q2 2011 results, continued solid performance<br />
year-on-year<br />
CFO Markus Rauramo
It should be noted that certain statements herein which are not historical facts, including, without<br />
limitation those regarding expectations for market growth and developments; expectations for growth<br />
and profitability; and statements preceded by “believes”, “expects”, “anticipates”, “foresees”, or similar<br />
expressions, are forward-looking statements within the meaning of the United States Private Securities<br />
Litigation Reform Act of 1995. Since these statements are based on current plans, estimates and<br />
projections, they involve risks and uncertainties which may cause actual results to materially differ from<br />
those expressed in such forward-looking statements. Such factors include, but are not limited to: (1)<br />
operating factors such as continued success of manufacturing activities and the achievement of<br />
efficiencies therein, continued success of product development, acceptance of new products or services<br />
by the Group’s targeted customers, success of the existing and future collaboration arrangements,<br />
changes in business strategy or development plans or targets, changes in the degree of protection<br />
created by the Group’s patents and other intellectual property rights, the availability of capital on<br />
acceptable terms; (2) industry conditions, such as strength of product demand, intensity of competition,<br />
prevailing and future global market prices for the Group’s products and the pricing pressures thereto,<br />
price fluctuations in raw materials, financial condition of the customers and the competitors of the<br />
Group, the potential introduction of competing products and technologies by competitors; and (3)<br />
general economic conditions, such as rates of economic growth in the Group’s principal geographic<br />
markets or fluctuations in exchange and interest rates.<br />
<strong>Stora</strong> <strong>Enso</strong> presentation 12 September 2011<br />
2
<strong>Stora</strong> <strong>Enso</strong> – sustainable, competitive differentiation<br />
12 September 2011 3
<strong>Stora</strong> <strong>Enso</strong> presentation<br />
rethink business<br />
rethink innovation<br />
rethink customer service<br />
rethink our attitude<br />
rethink products<br />
rethink processes<br />
rethink materials<br />
rethink the future<br />
12 September 2011<br />
4
World needs a new approach to materials<br />
Source: www.cartonawards.com<br />
<strong>Stora</strong> <strong>Enso</strong> presentation 12 September 2011<br />
5
Financial Results Q2 2011<br />
Continued solid performance year-on-year<br />
• EUR 228 million quarterly<br />
operating profit excl. NRI and FV<br />
• Up by 7% year-on-year<br />
– significantly higher sales prices<br />
– offset by cost inflation and<br />
unfavourable exchange rates<br />
<strong>Stora</strong> <strong>Enso</strong> presentation 12 September 2011<br />
6
Good quarter in increasingly uncertain environment<br />
EUR million<br />
300<br />
240<br />
180<br />
120<br />
60<br />
0<br />
EBIT excl NRI and fair valuation EBIT margin*, % 4 Q avg<br />
*excluding NRI and fair valuation<br />
10 %<br />
8 %<br />
6 %<br />
4 %<br />
2 %<br />
0 %<br />
<strong>Stora</strong> <strong>Enso</strong> presentation 12 September 2011<br />
7
<strong>Stora</strong> <strong>Enso</strong> presentation 12 September 2011<br />
8
Productivity increased<br />
Pricing over volumes<br />
Sales per employee, EUR<br />
120 000<br />
100 000<br />
80 000<br />
60 000<br />
40 000<br />
07Q2 08Q2 09Q2 10Q2 11Q2<br />
<strong>Stora</strong> <strong>Enso</strong> presentation 12 September 2011<br />
9
Flexibility increased<br />
Fixed costs developing to the right direction<br />
Fixed Costs/Sales<br />
0,30<br />
0,28<br />
0,26<br />
0,24<br />
0,22<br />
FY2007 FY2008 FY2009 FY2010 H12011<br />
<strong>Stora</strong> <strong>Enso</strong> presentation 12 September 2011<br />
10
Net Debt to EBITDA improved strongly year-on-year<br />
EUR million<br />
5 000<br />
4 500<br />
4 000<br />
3 500<br />
3 000<br />
2 500<br />
2 000<br />
Net Debt Net Debt/EBITDA excl NRI and fair valuations<br />
SENA divestment closed in Q4 2007<br />
Merchants divestment closed in Q2 2008<br />
EBITDA: Continuing operations<br />
Net debt: Total operations<br />
<strong>Stora</strong> <strong>Enso</strong> presentation 12 September 2011<br />
11<br />
6,0<br />
5,0<br />
4,0<br />
3,0<br />
2,0<br />
1,0<br />
0,0
Liquidity remained strong<br />
•Balance sheet (debt/equity 0.41) end Q2 2011<br />
•Liquidity (EUR 996 million) remained strong end Q2 2011<br />
•Long term debt maturities in 2012 EUR 257 million and in<br />
2013 EUR 101 million<br />
•Committed credit facility EUR 700 million fully undrawn,<br />
no covenants<br />
•Access to various long-term sources of funding up to EUR<br />
600 million<br />
<strong>Stora</strong> <strong>Enso</strong> presentation 12 September 2011<br />
12
ethink. <strong>Stora</strong> <strong>Enso</strong>’s business<br />
What we do<br />
Publication paper Fine paper Packaging Wood products<br />
Sales, EUR 2 817 million<br />
24 %<br />
9 %<br />
12 %<br />
18 %<br />
Consumer Industrial Newsprint Magazine<br />
Board Packaging and Book<br />
Paper<br />
Paper<br />
19 %<br />
Fine<br />
Paper<br />
17 %<br />
Wood<br />
Products<br />
37 %<br />
Consumer<br />
Board<br />
Operating profit, 228 EUR million*<br />
9 %<br />
Industrial<br />
Packaging<br />
12 %<br />
Newsprint<br />
and Book<br />
Paper<br />
15 %<br />
Magazine<br />
Paper<br />
21 %<br />
15 %<br />
Fine Paper Wood<br />
Products<br />
*excluding non-recurring items and fair valuations
ethink. Mobile ecosystems – accelerating impact ?<br />
And iPod with iTunes ”killed” the music industry ?<br />
<strong>Stora</strong> <strong>Enso</strong> presentation 12 September 2011<br />
15
ethink. This is not about reading newspapers on<br />
tablets but how the consumers spend their time ?<br />
Social media adopted faster than<br />
any other device / media<br />
• Facebook<br />
– 3rd largest population after China<br />
and India<br />
– Half of UK mobile web traffic<br />
– Fastest growing segment 55-65<br />
year old females<br />
– 1 out of 8 US couples married met<br />
on it<br />
• Let’s ask the people driving this<br />
change!<br />
– Not the ones who are afraid of it<br />
(and tell us what we want to hear)<br />
<strong>Stora</strong> <strong>Enso</strong> presentation 14 September 2011<br />
16
ethink. Materials<br />
Source reduction! Bio polymers!<br />
Relative amount of blanks per tree<br />
200<br />
190<br />
180<br />
170<br />
160<br />
150<br />
140<br />
130<br />
120<br />
110<br />
Index 1970 = 100<br />
Calculated on wood consumption<br />
100<br />
1970 1977 1994 1998 2002 2005 2008 2011
ethink. Building a sustainable future<br />
Additional 2 billion people can buy packed food by 2020<br />
3 B<br />
Population with household income $5000+ (Global)<br />
2<br />
1<br />
0<br />
400 M<br />
300<br />
200<br />
100<br />
0<br />
>$ 35 000<br />
$ 5000-<br />
35 000<br />
2002 2007<br />
Population with household income $5000+ (Greater China)<br />
$ 5000-<br />
35 000<br />
2002 2007<br />
Note: 2007 Exchange Rates, Inflation adjusted<br />
Source: Euromonitor<br />
Annual growth:<br />
6.6%<br />
Annual growth:<br />
26 %<br />
<strong>Stora</strong> <strong>Enso</strong> presentation<br />
12 September 2011 18
ethink. Wood has a good story to tell<br />
• Superior carbon footprint compared to any other building material<br />
• Joint efforts as an industry to remove all norms and standards that are<br />
unjustly discriminating against wood in various end-uses<br />
g/kg<br />
1000<br />
500<br />
0<br />
-500<br />
-1000<br />
-1500<br />
-2000<br />
Steel frame Light weight<br />
concrete block<br />
Carbon sink, g/kg<br />
CO2 emissions of manufacturing, g/kg<br />
Aircrete block Brick Concrete Wood<br />
Source: Puuinfo / Finnish Forest Industries<br />
<strong>Stora</strong> <strong>Enso</strong> presentation 12 September 2011<br />
19
ethink. <strong>Stora</strong> <strong>Enso</strong>’s direction<br />
• Growth markets<br />
• Growth markets<br />
<strong>Proof</strong> <strong>points</strong>:<br />
• Inpac acquisition<br />
• Plantation-based pulp<br />
• Ostroleka containerboard investment<br />
• Investment to Montes del Plata<br />
• • Plantation-based Fibre-based packaging pulp<br />
<strong>Proof</strong> point:<br />
• Investment to Montes del Plata<br />
• Selected paper grades<br />
• Fibre-based packaging<br />
Maintain and develop global<br />
leadership position<br />
<strong>Proof</strong> <strong>points</strong>:<br />
• Inpac acquisition<br />
• Ostroleka containerboard investment<br />
• Selected paper grades<br />
<strong>Stora</strong> <strong>Enso</strong> presentation<br />
12 September 2011<br />
20
ethink. create and renew<br />
Earlier announced strategic investments<br />
Montes del Plata Pulp Mill<br />
Ostroleka Light Weight Containerboard Machine<br />
Ybbs, Wood Based Construction Elements<br />
Skoghall, Liquid Packaging Board<br />
Competitiveness Improvement<br />
A significant step forward in renewable<br />
materials<br />
A pre-commercial plant at Imatra in Finland to<br />
produce microfibrillated cellulose (MFC)<br />
Renewable energy<br />
Investment to Zdírec Sawmill in the Czech<br />
Republic to optimise energy production and usage<br />
<strong>Stora</strong> <strong>Enso</strong> presentation<br />
12 September 2011<br />
Progress<br />
As planned<br />
Q1 2012<br />
Q1 2013<br />
21
Outlook – Uncertainty in European markets increasing<br />
• Cost inflation unchanged at<br />
approximately 4%<br />
• Actions continue to mitigate cost<br />
inflation<br />
• FX rates to have a negative<br />
impact on the Q3 results<br />
• Geographic mix changes<br />
• EBIT excl. NRI and FV in Q3<br />
forecasted to be approximately in<br />
the same range as Q2 2011<br />
Consumer Board<br />
Industrial<br />
Packaging<br />
Newsprint and<br />
Book Paper<br />
Coated<br />
Magazine Paper<br />
Uncoated<br />
Magazine Paper<br />
Fine Paper<br />
Wood Products<br />
Demand<br />
development<br />
Q3/11 vs<br />
Q3/10<br />
Price<br />
development<br />
Q3/11 vs<br />
Q2/11<br />
<strong>Stora</strong> <strong>Enso</strong> presentation 12 September 2011<br />
23
Productivity and flexibility<br />
• Continued solid performance in Q2<br />
• Multiple cost and productivity<br />
improvements to compensate<br />
inflation<br />
• Fixed costs continued to decrease<br />
excluding maintenance impact<br />
• Strategic investments proceeding<br />
according to plan<br />
• Productivity and flexibility decisive in<br />
uncertain environment<br />
<strong>Stora</strong> <strong>Enso</strong> presentation 12 September 2011<br />
24
<strong>Stora</strong> <strong>Enso</strong> presentation 12 September 2011<br />
25
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