Stora Enso Oyj Class A · OMXHEX:STEAV
Stora Enso Oyj Class A — Investor Day (November 2008)
36 slides from Stora Enso Oyj Class A's investor day presentation, Nov 5, 2008
Slide 1: Plantation-based pulping, Wood Supply in Europe, Sustainability
Plantation-based pulping Wood Supply in Europe Sustainability Elisabet Salander Björklund, EVP Investor Day, Stockholm 5 November 2008
Slide 2: Plantation-based pulping
Plantation-based pulping • Plantation-based pulping • Wood supply in Europe • Sustainability • Appendix
Slide 3: Why plantations and pulp?
Why plantations and pulp? Attractive fundamentals for growing a robust business Plantations Pulp Growth + Projected virgin fibre deficit in + Packaging, tissue and emerging drivers Asia markets growth + Liquid + Low cost assets are attractive Asset class + Non-volatile – Volatile features + Steep co
Slide 4: Good starting position for Stora Enso
Good starting position for Stora Enso • Plantations – Strong capabilities to develop plantations, particularly compared to other international players – Several plantations almost ready • Pulp – Access to low-cost wood plantations – Global #2 in pulp production, but most current assets are relativel
Slide 5: What do we do now?
What do we do now? • Continue to develop existing plantation assets and projects – Veracel II, Brazil – Rio Grande do Sul, Brazil – Uruguay – Guangxi, China – Nizhny Novgorod, Russia (not plantation based) • Map new interesting areas for plantations • Continuous restructuring and efficiency improvem
Slide 6: The bio trends and forest industry
The bio trends and forest industry Future opportunities for Stora Enso Drivers Stora Enso strengths • Climate change • Wood & biomass sourcing, • Energy security logistics infrastructure & • Expensive oil experience • Agro & industrial policies • Synergies in integrates • “Green” consumers • Energy
Slide 7: Opportunity Description, options Current stage
Opportunity Description, options Current stage Forest residues Biomass Other biomass Commercial now Pellets Replacing fossil fuels Power & Heat Existing sites expansion Commercial now New generation capacity Significant development Biofuels New generation biofuels efforts Commercialisation 2012- 201
Slide 8: Major changes
Major changes Pulp Mills Pulp Mills + Biorefineries Single product (pulp) Many products Small mills Big mills Slow growing forests Fast growing plantations North South Softwood Hardwood Mature markets Emerging markets Making tons Making profits Continued efficiency improvements Restructuring New inv
Slide 9: Plantation productivity development
Plantation productivity development • Major advances in plantation Average productivity in Brazilian productivity in the past pulp & paper plantations (m3/a/ha) – Brazilian example 60 Eucalyptus Pine • Drivers include 50 – Biotechnology & genetic 40 improvement – Improved plantation 30 management pr
Slide 10: Veracel
Veracel • Planning continues for second line • Land acquisitions & plantation operations proceed Category Hectares Own land 212 000 Planted 90 000 Available for planting 6 000 Preservation & reserves 98 000 Veracel station 6 000 Infrastructure 12 000 Tree farmers, planted 18 000 Stora Enso Investor
Slide 11: Southern Brazil and Uruguay
Southern Brazil and Uruguay Status • Operations continue with land acquisitions and planting SE properties in Uruguay and South Brazil Land acquisition Rio Grande Uruguay and planting, ha do Sul Purchased land 68 900 45 400 Leased land 3 900 Planted Eucalyptus 6 600 16 700 Pine 7 200 Stora Enso Inve
Slide 12: China
China • Land acquisition and negotiations with local partners continue • Mill feasibility study proceeds • Investment decision to be taken once all necessary preconditions are in place Land area 91 000 Planted with eucalyptus 56 500 Stora Enso Investor Day 2008 5 November 2008 12
Slide 13: Wood supply in Europe
Wood supply in Europe • Plantation-based pulping • Wood supply in Europe • Sustainability • Appendix
Slide 14: Wood Supply
Wood Supply Key facts 2007 Core Wood and biomass fuel supply to Stora Enso tasks mills Stora Enso global wood fibre strategy Wood, biomass and pulp related sustainability issues Employees** 3 579 Wood deliveries, mill. m3sub* • Stora Enso mills 45.8 • External mills 12.1 Wood sales, EURm** 3 163 Not
Slide 15: Russian wood export duties
Russian wood export duties • Announced roundwood export duties: – 1 July 2007 20% or EUR 10 per m3 – 1 April 2008 25% or EUR 15 – 1 January 2009 80% or EUR 50 • Duties applied to all roundwood grades, with the exception of birch roundwood with diameter <15 cm • Aspen duties introduced at EUR 5 per m
Slide 16: Actions taken
Actions taken • Measures taken earlier (Summa, Kemijärvi and Norrsundet closures) were necessary and highly beneficial • Production curtailments, when needed, based on availability of low- cost wood • Investments to develop production and increase flexibility • Wood sourcing structure strategically
Slide 17: Reduction in Russian wood dependency
Reduction in Russian wood dependency Wood sourcing to Stora Enso mills in Finland 100% 90% 80% Other import 70% Russia Domestic 60% 50% 40% 2005 2006 2007 2008E 2009E Based on realised and planned wood deliveries to Stora Enso’s mills Sunila not included Stora Enso Investor Day 2008 5 November 2008
Slide 18: Stumpage prices in Finland 2003 – 2008
Stumpage prices in Finland 2003 – 2008 Four-week sliding average Source: Finnish Forest Industries Stora Enso Investor Day 2008 5 November 2008 18
Slide 19: Roadside prices in Sweden 2003 – 2008
Roadside prices in Sweden 2003 – 2008 Quarterly series SEK / m3ub 600 Pine logs Spruce logs 500 Pine PW Spruce PW Birch PW 400 300 200 100 0 2003 2004 2005 2006 2007 2008 Source: Finnish Forest Research Institute Stora Enso Investor Day 2008 5 November 2008 19
Slide 20: Summary
Summary • Short term turbulence in wood markets in 2007 – 2008 • Path to normalisation will depend on: – general economic development – forest industry capacity & restructuring – Russian export duties on roundwood • Cross-border wood flows will continue – For example, Baltic countries likely to cont
Slide 21: Sustainability: What sustainability means for us
Sustainability What sustainability means for us • Plantation-based pulping • Wood supply in Europe • Sustainability • Appendix
Slide 22: Walking the talk – recent initiatives
Walking the talk – recent initiatives • Code of conduct – no compromise – Same rules everywhere we operate • Climate change – we are part of the solution – We curb climate change on a global scale Stora Enso Investor Day 2008 5 November 2008 22
Slide 23: Sustainably managed forests remove CO2 from the atmosphere…
Sustainably managed forests remove CO2 from the atmosphere… Stora Enso Investor Day 2008 5 November 2008 23
Slide 24: …and store it as carbon.
…and store it as carbon. Stora Enso Investor Day 2008 5 November 2008 24
Slide 25: Carbon is further stored in our products…
Carbon is further stored in our products… Stora Enso Investor Day 2008 5 November 2008 25
Slide 26: …that provide a sustainable & better alternative to materials with bigger carbon footprints.
…that provide a sustainable & better alternative to materials with bigger carbon footprints. Stora Enso Investor Day 2008 5 November 2008 26
Slide 27: At the end of their life-cycle all our products can be recycled…
At the end of their life-cycle all our products can be recycled… Stora Enso Investor Day 2008 5 November 2008 27
Slide 28: …or ultimately burned as bioenergy.
…or ultimately burned as bioenergy. Stora Enso Investor Day 2008 5 November 2008 28
Slide 29: Group CO2 reduction target
Group CO2 reduction target • 20% to be achieved by 2020 • Includes direct emissions from production and indirect emissions from purchased electricity and heat • Baseline year 2006 Stora Enso Investor Day 2008 5 November 2008 29
Slide 30: How do we achieve the reduction target?
How do we achieve the reduction target? • Increase production and energy efficiency • Increase the use of combined heat and power • Increase the use of biomass in internal energy production • Decrease the use of fossil fuels • Continuous energy-saving measures • Question current practices and find n
Slide 31: Appendix
Appendix • Plantation-based pulping • Wood supply in Europe • Sustainability • Appendix
Slide 32: Stora Enso reduced wood exports from Russia
Stora Enso reduced wood exports from Russia Million m3 sub • Reduction from 7.3 Mm3 in 2005 to 8 4.7 Mm3 in 2007 6 • Finnish domestic wood sourcing increased by 20% in 2007 4 • Roundwood flows from Russia will cease if full export duty is 2 implemented in 2009 – Will export only own sawmilling 0 chi
Slide 33: Roadside prices in Lithuania 2007 – 2008
Roadside prices in Lithuania 2007 – 2008 Monthly series LTL / m³ub 300 250 200 150 100 Pine SL Spruce SL Birch SL 50 Pine PW Spruce PW Birch PW 0 2007 2008 Source: Finnish Forest Research Institute Stora Enso Investor Day 2008 5 November 2008 33
Slide 34: Biomass for energy – growth opportunity
Biomass for energy – growth opportunity • Demand for biomass for energy is likely to continue to grow – Driven by climate change and related policies • Stora Enso has efficient biomass procurement structures in place – Meet demand of own mills – Trading with external users Stora Enso Investor Day 20
Slide 35: Results of the carbon footprint study
Results of the carbon footprint study 9.50 fossil CO2 million tonnes in 2007 Direct emissions from production: 3.66 million 24% tonnes 39% Indirect emissions from production (purchased electricity and heat): 3.55 million tonnes Indirect emission from outsourced activities: 2.25 million tonnes 37% St
Slide 36: Sustainability – how we see it
Sustainability – how we see it • A truly sustainable company has a long-term beneficial impact on the society • Sustainability makes good business sense – Customers like it – Stakeholders demand it • Sustainability has many dimensions ... – Economic – Social – Environmental ... built on accountabili