Stora Enso Oyj Class A · OMXHEX:STEAV
Stora Enso Oyj Class A — Investor Day (September 2019)
24 slides from Stora Enso Oyj Class A's investor day presentation, Sep 19, 2019
Slide 1: Strengthening our competitive position through integrated forest assets
Strengthening our competitive position through integrated forest assets CFO Seppo Parvi
Slide 2: Driving performance and value throughout competitive and sustainable business
Driving performance and value throughout competitive and sustainable business Integrating forest Continuously Creating assets and wood improving sustainable value supply – profit protection for shareholders programme and TRIM working capital 2 19 September 2019 Stora Enso Forest and Wood Products Da
Slide 3: Wood supply substantially strengthened after Bergvik deal
Wood supply substantially strengthened after Bergvik deal Total biological asset value in balance sheet ~ 3.6 BEUR Swedish forests Tornator 1 388 000 ha of forest land Stora Enso’s share 250 000 ha in Finland, 24 000 Fair value: 2.6 BEUR (30 June 2019) ha in Estonia and 5 000 ha in Romania Fair valu
Slide 4: Direct ownership of Swedish forests improves our optionality in wood supply
Direct ownership of Swedish forests improves our optionality in wood supply… • Enhances integrated value chain by increasing harvesting volumes by 10–15% • Secures availability and reasonably priced wood for the Swedish mills − Fibre 34% of all costs − Covering 70% of wood supply needs of our mills
Slide 5: …with attractive valuation
…with attractive valuation Hectares Price per ha Value (EUR) (BEUR)*** Indirect ownership* 1 150 000 2 000 2.3 EUR to SEK translation impact on indirect -0.1 ownership (June 2019 vs Dec 2018) Acquired additional forest 250 000 2 400 0.6 Total forest holdings in Sweden 1 400 000 2 000 2.8 Forest valu
Slide 6: Forest assets both appreciate and are renewable - reflected in lower funding cost
Forest assets both appreciate and are renewable - reflected in lower funding cost To direct ownership Net debt impact From indirect holdings of 1.1 million Expected to be appr. 1 BEUR once hectares to direct ownership of 1.4 all steps are concluded. million hectares. Green bond Attractive green bond
Slide 7: Increasing transparency through our new Forest division
Increasing transparency through our new Forest division… • Non-operational fair value changes of biological assets reflect changes made to valuation assumptions and parameters, usually during the annual valuation process − Continue to be reported as earlier and excluded from Operational EBIT, but in
Slide 8: …with over 50 MEUR higher EBITDA annually
…with over 50 MEUR higher EBITDA annually Key figures Illustration Illustration Group as Illustration Illustration Group as Forest Group reported Forest Group reported MEUR H1/2019 H1/2019 H1/2019 2018 2018 2018 Sales 1 245 5 242 5 242 2 285 10 486 10 486 External Sales 433 5 242 5 242 754 10 486 10
Slide 9: 200 MEUR Profit Protection Programme strengthens our fitness for the future
200 MEUR Profit Protection Programme strengthens our fitness for the future… In total 200 MEUR savings Targeted savings per division 100% 30% 25% 80% 20% 60% 15% 40% 10% 20% 5% 0% 0% 2019 / 2020 / Consumer Packaging Biomaterials Wood Products Paper Other ~100 MEUR ~100 MEUR Board Solutions Fixed cos
Slide 10: …and we have launched TRIM to reduce working capital
…and we have launched TRIM to reduce working capital… • Program started in April 2019, OWC decreased 126 MEUR from Q1/2019 to Q2/2019 and is planned to Operative working capital improve further MEUR -126 MEUR 1 800 16% • Lowering inventory levels 1 600 14% 1 400 − Clearing surplus and old finished g
Slide 11: … maintaining healthy cash flow
… maintaining healthy cash flow Cash flow from operations MEUR 1 800 18% 1 600 16% 1 400 14% 1 200 12% 1 000 10% 800 8% 600 6% 400 4% 200 2% 0 0% 2015 2016 2017 2018 H1/18 H1/19 Cash flow from operations Cash flow to sales 11 19 September 2019 Stora Enso Forest and Wood Products Day
Slide 12: Capex raised temporarily above depreciation…
Capex raised temporarily above depreciation… – financed through cash flow and divestments Biological capex Strategic capex Maintenance capex Capex estimate for 2019 and 2020 Oulu Mill kraftliner conversion Depreciation and operational decrease in the value of biological assets Capex estimate for 201
Slide 13: …and is allocated based on capital returns
…and is allocated based on capital returns Capex forecast 2019 * Operational ROOC target ** Cash flow after investing activities to sales target 13 19 September 2019 Stora Enso Forest and Wood Products Day
Slide 14: Strengthening our competitive position through forest assets
Strengthening our competitive position through forest assets Integrating forest Continuously Creating assets and wood improving sustainable value supply – profit protection for shareholders programme and TRIM working capital 14 19 September 2019 Stora Enso Forest and Wood Products Day
Slide 15: Disclaimer
Disclaimer It should be noted that Stora Enso and its business are exposed to various risks and uncertainties and certain statements herein which are not historical facts, including, without limitation those regarding expectations for market growth and developments; expectations for growth and profi
Slide 16: Appendix
Appendix THE RENEWABLE MATERIALS COMPANY
Slide 17: Illustrative operational income statement
Illustrative operational income statement Forest H1/2019 Current reporting Changes 2) Total incl. changes illustration1) Operational changes Presentation change Forest Division after MEUR Forest Division in fair value of silviculture costs changes biological assets Sales 1 245 1 245 Other operating
Slide 18: Illustrative operational income statement
Illustrative operational income statement Forest 2018 Current reporting Changes 2) Total incl. changes illustration 1) Operational changes Presentation change Forest Division after MEUR Forest Division in fair value of silviculture costs changes biological assets Sales 2 285 2 285 Other operating in
Slide 19: Illustrative operating capital breakdown
Illustrative operating capital breakdown Forest Illustration Illustration Illustration MEUR 30 Jun 19 31 Dec 18 1) 31 Dec 18 (Swedish forest assets (Share of Bergvik Skog (Bergvik Skog consolidated line by line) consolidated line by line) consolidated as EAI 2)) Other intangible assets 29 33 30 Prop
Slide 20: Illustrative operational income statement
Illustrative operational income statement Group H1/2019 Current reporting 1) Changes 2) Total incl. changes Operational changes Presentation change MEUR Group in fair value of Group after changes silviculture costs biological assets Sales 5 242 5 242 Other operating income 65 65 Change in inventorie
Slide 21: Illustrative operational income statement
Illustrative operational income statement Group 2018 Current reporting 1) Changes 2) Total incl. changes Operational changes Presentation change MEUR Group in fair value of Group after changes silviculture costs biological assets Sales 10 486 10 486 Other operating income 89 89 Change in inventories
Slide 22: Direct ownership of the forests in Sweden
Direct ownership of the forests in Sweden Unit Stora Enso’s Swedish forests Ha (gross land) Ha (‘000) 1 388 Ha (productive forest) Ha (‘000) 1 140 Forest cubic meters (m3fo) m3fo (million) 143 Forest cubic meters / ha (productive f) m3fo/ha 126 IFRS value* (Bio Assets + Land) MEUR 2 829 IFRS value*/
Slide 23: Indirect ownership of the forests in Finland
Indirect ownership of the forests in Finland Stora Enso’s 41% share of Unit Tornator’s forests in Finland Ha (gross land) Ha (‘000) 250 Ha (productive forest) Ha (‘000) 223 Forest cubic meters in productive area (m3fo) m3fo (million) 24 Forest cubic meters / ha (productive f) m3fo/ha 109 IFRS value*
Slide 24: THE RENEWABLE MATERIALS COMPANY
THE RENEWABLE MATERIALS COMPANY