2015 capital markets day presentation by gilles van nieuwenhuyzen

The renewable materials company

CV – Gilles van Nieuwenhuyzen Executive Vice President, Packaging Solutions


Experience from driving results in large multinationals

• President Enablers Division, Danisco/DuPont, 2010-2014

• Managing Director, Executive Interim Management, 2008-2010

• Division President, Purac, CSM (now Corbion), 2001-2007

• Business leadership roles in Rexam and DSM

• McKinsey & Company in early career

Brings in new competencies to Packaging Solutions

• Experience from leading companies in other industries: Food

ingredients, chemicals, biotechnology

• Accelerating growth via innovation and differentiation

• Margin improvements track record

• Global experience

Gilles van Nieuwenhuyzen

EVP Stora Enso Packaging Solutions

London, 28 May 2015

Division Packaging Solutions


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.


Disclaimer


Containerboard: from commodity to

differentiated supplier


High quality virgin and

recycled fiber based

containerboards...

Rightweighting / Rightgrading

Technical Customer Service

eFlow supply chain services

Recycling Services

A holistic approach to

creating value for customers

... combined with high quality

services

Key segments

Household & Furniture

(5%)

Food (31%)

Consumer Electronics

(7%)

Beverages (9%)

Retail (5%)

Industrial (31%)

External Converters

(12%)


Packaging Solutions provides offerings

in containerboard and corrugated packaging

6

Consumer

Forest

mgmt

Stora Enso

Customers

Recycled fibre

Containerboard

Converter /

Corrugator

Converter /

Corrugator

Brand owner /

Producer

Online retail

Retail


Note: SC = Semi chemical, RCP = Recycled paper

Containerboard

• SC / RCP Fluting

• Kraftliner / Testliner

Corrugated packaging

• Corrugated solutions for multiple

segments

• Services e.g. design and packaging

automation

Packaging Solutions business fundamentals


Geographic span

Recycled

Corrugated

packaging Virgin

Capital intensity

Asset and cost

competitiveness

Global Regional Local

High High Low

Containerboard

• High volume

• Technological

differentiation

• Access to wood fiber

• Integrated pulp and

efficient energy

• High volume

• Technological

differentiation

• Access to recycled

fiber

• Efficient energy

• Proximity to

customer

• Access to growth

markets

• Technological

differentiation

Customers Converters and Brand

owners

Converters and Brand

owners

Brand owners and

retailers

Offering Full portfolio of containerboards Boxes incl design

services

Strong financial track record with room to grow

Note: Proforma non-audited financial data for the period 2010-2012

Sales 2010 – 2014* EBITDA / EBITDA-margin 2010 – 2014*

ROOC 2010 – 2014* Production 2010 – 2014*

(MEUR) (MEUR)

800

900

1 000

1 100

2010 2011 2012 2013 201410%

12%

14%

16%

18%

100

120

140

160

180

200

2010 2011 2012 2013 2014

8%

10%

12%

14%

16%

2010 2011 2012 2013 2014

700

800

900

1 000

1 100

700

800

900

1 000

1 100

2010 2011 2012 2013 2014

Board (Kt) Corrugated (M sqm)

(Kt

)

(M sqm)


Trends shaping our industry create

new opportunities


Recycled fiber

deterioration

Growth in retail

Growth in online

shopping

Intelligence in

packaging

Competitive advantage for our

containerboards

Shift in power creating new customers

Shift in consumption creates new demand

growth

New functionality and value add from

packaging

Opportunities based on trends

Rightweighting

Sustainability

From selling weight to selling performance

Demand for sustainable fiber based

materials


Containerboard expansion into kraftliners

through conversion of Varkaus with

attractive margins

Varkaus mill, Finland

New production of kraftliners

Business transformation

• From declining fine paper (280kton) to growing kraftliners (390kton)

• EBITDA margin >15%

Appealing story

• Attractive demand growth for kraftliners

• Serve Global markets

• Complete portfolio enabling cross selling

• Among largest / most cost competitive machines

Low CAPEX / capacity ton

• 110 M EUR CAPEX => 281 EUR / capacity ton

• Integrated pulp mill, power plant, well fitting paper machine and

infrastructure in place


Strengthening Stora Enso position

in Containerboard

Containerboard capacity position

from #10 to #6 in Europe

1

2

3

4

5

10

Smurfit Kappa

SAICA

DS Smith

Mondi

Prinzhorn

Stora Enso

6 Stora Enso including Varkaus

Competitive assets complemented with

new Varkaus investment

High volume

• Large scale machines in all product areas

Technological differentiation

• Ostroleka - one of the most modern

containerboard machines using recycled fiber

• Varkaus asset quality one of the best in Europe

Access to fiber

• Own network for collecting recycled paper in

Poland

• Competitive virgin fibre sourcing in Finland

Integrated pulp and efficient energy

• Integrated pulp mill and power plant in all mills

Capacity +46%

Source: Pöyry

Note: Containerboard position measured in capacity tonnes as of 2014

Packaging Solutions Regional break-down

Our markets 8 900 mn sqm

• Stora Enso is the largest player overall • The market is very fragmented

Russia 4 100 M sqm

CEE 3 800 M sqm

Nordics 1000 M sqm

• 1) Market share within 300 km radius from plant

• Source: ICCA, Pöyry, Stora Enso

• Note: Nordics = Sweden and Finland, CEE = Poland, Hungary,

Estonia, Latvia and Lithuania

No.1

No.1 No.3 No.4


Leading position in our corrugated

packaging markets

Market shares in corrugated packaging focus markets Year 2014, M sqm

Well positioned to capture growth markets

Kristiinankaupunki

Heinola Lahti Jonköping

Skene

Vikingstad

Tallinn

Riga

Kaunas

Mosina Lodz

Tychy

Komarom

Ostroleka

Corrugated Packaging

Containerboard

Varkaus (Q4 2015)

Balabanovo

Arzama

s

Lukhovits

y

Dongguan

Shanghai

Beijing

+1,0%

+3,7%2

+1,3%1 +2,6%

+4-7%

• Higher growth rates in most

corrugated packaging markets where

Stora Enso is present

• Attractive global sales opportunities

to capture growth in containerboard

markets


Source: Pöyry’s World Paper Markets up to 2030; Stora Enso; Rosstat

Note: CAGR data for 2015-2020. 1) Nordics = Sweden and Finland, 2) CEE = Poland, Hungary, Estonia, Latvia and Lithuania

Stora Enso provides customer value through

thought leadership and innovation

Proof points

• Customer insights sharing

• Advisory to brand owners and retailers

• Basis for new business

• Strong international media attention

I love it, sharing

insights is in line with

the trend of open

innovation.

Packaging Innovator,

Global brand owner

“ • DesignStudio, 8 in Europe and 3 in China

• 3D virtual store

• Modern lightweight boards

Thought leadership Innovation in design solutions

and material performance


../../Images/Biedronka_movie and pictures/Biedronka_movie_2.mp4

Customer case examples showing how corrugated

delivers customer value beyond the box

Increasing customer sales Decreasing customer costs

Before After Before After

Sales increase

+40% Box weight reduction

-20% Truck load

+60% Box weight reduction

-38%



Stora Enso is well positioned for

profitable growth


Deep customer understanding

Strong offering

Well positioned

Innovative

Proven track record

World of packaging

2015 capital markets day presentation by gilles van nieuwenhuyzen

Investor Relations