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It h ld b t d th t t i t t t h i hi h t hi t i l f t i l di ith tIt should be noted that certain statements herein which are not historical facts, including, withoutlimitation 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 SecuritiesLiti ti R f A t f 1995 Si th t t t b d t l ti t dLitigation Reform Act of 1995. Since these statements are based on current plans, estimates andprojections, 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 of
ffi i i th i ti d f d t d l t t f d t iefficiencies therein, continued success of product development, acceptance of new products or servicesby 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 competitionacceptable 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 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 geographicgeneral economic conditions, such as rates of economic growth in the Group’s principal geographicmarkets or fluctuations in exchange and interest rates.
31 May 2011rethink. Stora Enso 2
Stora Enso sustainable competitive differentiationStora Enso – sustainable, competitive differentiation
31 May 2011 3
rethink businessrethink innovation rethink customer servicerethink our attituderethink productsrethink processes
thi k t i lrethink materialsrethink the future
4
World needs a new approach to materialsWorld needs a new approach to materials
31 May 2011rethink. Stora Enso 5Source: www.cartonawards.com
Q1 2011 Strong Earnings more than doubledQ1 2011 Strong – Earnings more than doubled
Sales up 19%
EBIT excl NRI and fair valuations up 108%
EPS excl NRI up 47%
Q1 2011 compared to Q1 2010Q1 2011 compared to Q1 2010
31 May 2011rethink. Stora Enso 7
Earnings improvingg p gHigher prices and continued productivity improvement
12 %300EBIT excl NRI and fair valuation EBIT margin*, % 4 Q avg ROCE* , % 4 Q avg
8 %
10 %
200
250
on
4 %
6 %
100
150
EU
R m
illio
2 %
4 %
50
100
0 %0
31 May 2011rethink. Stora Enso 8
*excluding NRI and fair valuation
RCP continued to drive inflationRCP continued to drive inflation
160
200
120
tonn
e Mixed
80EU
R/t OCC
De-inking
0
40
German RCP price development, free deliveredS V b d D t h P i f b ik /St E
31 May 2011rethink. Stora Enso 9
Source: Verband Deutscher Papierfabriken/Stora Enso
Higher pulp prices positive g p p p pDue to 1 million tonnes net market pulp position
1 000
1 200
600
800
tonn
e
Bleached softwood kraft pulp
400
600
US
D/t Bleached softwood kraft pulp
Bleached hardwood kraft pulp
0
200
Source: FOEX
31 May 2011rethink. Stora Enso 10
N t d bt d 15%Net debt down 15% y-o-y
6,05 000
Net Debt Net Debt/EBITDA excl NRI and fair valuations
4,0
5,0
4 000
4 500
ion
2,0
3,0
3 000
3 500
EU
R m
illi
0 0
1,0
2 000
2 500
EBITDA: Continuing operationsSENA divestment closed in Q4 2007
0,02 000
31 May 2011rethink. Stora Enso 11
g pNet debt: Total operations
SENA divestment closed in Q4 2007Merchants divestment closed in Q2 2008
Stora Enso leading industry restructuringg y gCapacity closures since 2006
Paper18%
Pulp9%
Wood Products
Board8%
20%
31 May 2011rethink. Stora Enso 13
Productivity increasedyPricing over volumes, managing assets
120 000
100 000
80 000
EU
R
Sales per employee
60 000
40 00007Q1 08Q1 09Q1 10Q1 11Q1
31 May 2011rethink. Stora Enso 14
Latest action: Fine Paper re-evaluating its working methods
Th l i t t t ti t
p g gBuilding a new business model to increase cost competitiveness
• The plan is to restructure operations at:– Nymölla Mill, Sweden– Uetersen Mill, Germany– Oulu Mill, Finland– Sheeting plants in Belgium and UK
• Reduce annual costs by approximately EUR 20 million– Starting during 2011 and being completed by the end of Q2 2012
• The proposed measures would affect up to 285 employees
C h i i f i l EUR 16 illi b d d NRI i Q2• Cash provision of approximately EUR 16 million to be recorded as NRI in Q2 2011 operating profit
31 May 2011rethink. Stora Enso 15
Mobile ecosystems accelerating impact ?Mobile ecosystems – accelerating impact ?
31 May 2011rethink. Stora Enso 17
And iPod with iTunes ”killed” the music industry ?
This is not about reading newspapers on tablets but how the consumers spend their time ?
F b kSocial media adopted faster than
80%
% of U.S. population using technology/service • Facebook
– 3rd largest population after China and India
Social media adopted faster than any other device / media
60
DVD Player
TelevisionRadio
– Half of UK mobile web traffic
– Fastest growing segment 55-65 ld f l
20
40Youtube
Cellphone
Radio year old females
– 1 out of 8 US couples married met on it
0
20PC
0 5 10
Cellphone
Telephone
• Let’s ask the people driving this change!
N h h f id f i0 5 10
Years after product launch– Not the ones who are afraid of it
(and tell us what we want to hear)
31 May 2011rethink. Stora Enso 18
Proof points of actionpOur direction
G th k t• Growth marketsProof points: • Inpac acquisition
O t l k t i b d i t t
• Growth markets
• Plantation based pulp• Ostroleka containerboard investment• Investment to Montes del Plata
• Plantation-based pulpP f i t
• Plantation-based pulp
• Fibre-based packagingProof point: • Investment to Montes del Plata
• Fibre-based packaging• Selected paper grades
Maintain and develop globalleadership positionProof points: • Inpac acquisition• Ostroleka containerboard investment
• Selected paper grades
31 May 2011 19
Implementing strategy
Project On target Other progress
p g gyHigh return growth businesses
oject O ta get Ot e p og essMontes del Platapulp mill, Uruguay
Machinery and portsuppliers selected and contracted for MdP
Ostrolekacontainerboard machine, Poland
Proceeding as planned
Poland
CLTinvestment, Ybbs, Austria
All permits received, main machine supplier selected
Skoghallinvestment
Support wood handling in Sweden and furtherinvestment Sweden and further develop Skoghall mill
Inpac Integration planning strongpackaging company in China and India
20
Outlook increasing concerns on cost inflationOutlook - increasing concerns on cost inflation
I fl ti d i t li it Q2• Inflation and maintenance limit Q2 earnings improvement y-o-y
Demand development Q2/11 vsQ2/10
Price development Q2/11 vsQ1/11
• Inflation estimate increased to ~4% for the full year 2011 compared to 2010
Consumer Board
Industrial
• Actions to fight inflation continue to be even more important
Industrial Packaging
Newsprint and Book PaperpCoated Magazine Paper
UncoatedM i PMagazine Paper
Fine Paper
W d P d t
31 May 2011rethink. Stora Enso 22
Wood Products
SummarySummary
St t• Strong quarter
• Inflation pressure p
• 80% of CAPEX for strategic high return growth areas in 2011return growth areas in 2011
• Investments in strategic high-return growth areasreturn growth areas
– Montes del Plata– Ostroleka
Ybb– Ybbs– Skoghall
31 May 2011rethink. Stora Enso 24