2015 capital markets day presentation by jari latvanen

The renewable materials company

Jari Latvanen Executive Vice President, Head of Division Consumer Board


• Solid track record from food industry

– Chief Executive Officer, Findus Nordic 2010-2014

• Awarded with the Swedish Food Prize 2013 for

managing the infamous horse meat scandal and acting

as a whistle blower, White Guide award, Taste

Developer of the Year 2013

– Various leadership positions within Nestlé e.g. Managing

Director, Nestlé Czech Republic and Slovakia, Assistant

Vice President, Zone Europe Nestlé, HQ Switzerland,

Managing Director Nestlé Sweden, Marketing Director

Nestlé Nordics

• Brings unique understanding of consumers and retailers

from working with strong brands in the food industry

• Strategic leader and food industry specialist leading

innovative and interactive organization's focusing on active

consumer based marketing

London, 28 May 2015

Jari Latvanen

EVP Stora Enso Consumer Board

Division Consumer Board


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.

The renewable materials company Stora Enso Capital Markets Day, 28 May 2015

Disclaimer


A broad range of solutions to fit customer demands High quality board for premium segments


Liquid Packaging Food Service Board General Packaging Cigarette Graphical


A broad range of solutions to fit customer demands High quality board for premium segments


Liquid Packaging Food Service Board General Packaging Cigarette Graphical

Chocolate and

confectionary

Cosmetics and

luxury

Pharmaceuticals Food packaging Drinks, wines and

spirits


Versatile and competitive range of boards Strong brands supporting demanding end-uses


SBS Solid Bleached

Sulphate

SUB Solid

Unbleached

Board

FBB Folding

Boxboard

WLC White Lined

Chipboard

Cupstock

LPB Liquid

Packaging

Board

Our products

Our brands

http://renewablepackaging.storaenso.com/products/Natura


Consumers benefit from packaging But also believe packaging is excessive, expensive

and bad for the environment


The modern consumer

• Responsible

• Convenient and stress-free

• Zero tolerance

• Digital adoption

• It’s all about information


Packaging sells! Good packaging strengthens brand identity and

increase consumer satisfaction


Stora Enso Ensocoat™

64% of consumers say the brand

is important when

purchasing products used

on a regular basis

Source: Stora Enso Consumer Board consumer survey 2014


Packaging sells! Good packaging strengthens brand identity and

increase consumer satisfaction


33% of consumers have

purchased a new product

due to the packaging


Stora Enso Ensocoat™

9 7

51

10

17

5

11

55

2

2000 2013 2020

9 7

61

9 0

69

9 3

07

2000 2013 2020

1 5

92

2 6

44

3 2

61

2000 2013 2020


The global consumer board market is growing Growth of 9 million tonnes expected 2013-2020


7 6

11

10

50

7

12

99

2

2000 2013 2020

5 1

66

13

82

4

18

15

7

2000 2013 2020

43

4

608

76

0

2000 2013 2020

Latin America North America Europe Rest of Asia China Africa

Source: Pöyry Management Consulting





SBS 0.3%

WLC 0.3%

LPB -0.7%

SBS 1.7%

LPB 1.6%

WLC 1.5%

CUK 2.8%

FBB 2.4%

SBS 1.9%

WLC 2.6% LPB 3.1%

WLC 2.8%

Latin America North America Europe China Rest of Asia Africa

3.0% 0.4% 1.8% 3.3% 4.0% 3.1% 3.0% 0.4% 1.8% 4.0% 3.1% 3.3%




LPB 7.8%

FSB 7.6%

FBB 7.4%

CUK 6.3%

SBS 4.3%

Above region average


SBS 0.3%

WLC 0.3%

LPB -0.7%

SBS 1.7%

LPB 1.6%

WLC 1.5%

CUK 2.8%

FBB 2.4%

SBS 1.9%

WLC 2.6% LPB 3.1%

WLC 2.8%


Below region average

3.0% 0.4% 1.8% 3.3% 4.0% 3.1% 3.0% 0.4% 1.8% 4.0% 3.1% 3.3%




FSB 3.2%

FBB 3.0%

CUK 1.8%

LPB 7.8%

FSB 7.6%

FBB 7.4%

CUK 6.3%

SBS 4.3%



SBS 0.3%

WLC 0.3%

LPB -0.7%

SBS 1.7%

LPB 1.6%

WLC 1.5%

CUK 2.8%

FBB 2.4%

SBS 1.9%

WLC 2.6% LPB 3.1%

WLC 2.8%



3.0% 0.4% 1.8% 3.3% 4.0% 3.1% 3.0% 0.4% 1.8% 4.0% 3.1% 3.3%




FBB 1.5%

FSB 1.5%

CUK 0.5%

FSB 3.2%

FBB 3.0%

CUK 1.8%

LPB 7.8%

FSB 7.6%

FBB 7.4%

CUK 6.3%

SBS 4.3%



SBS 0.3%

WLC 0.3%

LPB -0.7%

SBS 1.7%

LPB 1.6%

WLC 1.5%

CUK 2.8%

FBB 2.4%

SBS 1.9%

WLC 2.6% LPB 3.1%

WLC 2.8%



3.0% 0.4% 1.8% 3.3% 4.0% 3.1% 3.0% 0.4% 1.8% 4.0% 3.1% 3.3%




FBB 1.5%

FSB 1.5%

CUK 0.5%

FBB 5.0%

CUK 4.2%

WLC 4.1%

FSB 4.0%

LPB 3.6%

SBS 3.4%

FSB 3.2%

FBB 3.0%

CUK 1.8%

LPB 3.9%

FSB 3.8%

WLC 3.6%

LPB 7.8%

FSB 7.6%

FBB 7.4%

CUK 6.3%

SBS 4.3%

FBB 5.7%

FSB 4.5%

CUK 3.2%

SBS 3.2%



SBS 0.3%

WLC 0.3%

LPB -0.7%

SBS 1.7%

LPB 1.6%

WLC 1.5%

CUK 2.8%

FBB 2.4%

SBS 1.9%

WLC 2.6% LPB 3.1%

WLC 2.8%



3.0% 0.4% 1.8% 3.3% 4.0% 3.1% 3.0% 0.4% 1.8% 4.0% 3.1% 3.3%


Huge opportunities in expanding our coverage Our potential market is much higher than current

board packaging demands


Source: SmithersPIRA

2008 2009 2010 2011 2012 2013

Board

Other

packaging

materials


Huge opportunities in expanding our coverage Our potential market is much higher than current

board packaging demands


2008 2009 2010 2011 2012 2013

Board

Other

packaging

materials

Future

Source: SmithersPIRA…


Board’s merits compared to other materials Consumers prefer board


70 62 61

47 46 43

Pa

perb

oa

rd

Gla

ss

Wo

od

Me

tal

Alu

min

ium

Pla

stic

55%

19 10 8 4 3 2

Pa

perb

oa

rd

Gla

ss

Pla

stic

Wo

od

Do

nt kn

ow

Alu

min

ium

Me

tal


“What is your attitude

towards the following

packaging materials?”

“Which type of packaging do

you think is the most

environmentally friendly?

% positive

Consumer appeal Premium perception

Stora Enso Ensocoat 2S


Board’s merits compared to other materials We are aiming for a 100% renewable packaging


Renewable & Recyclable Sustainable

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

50

100

150

200

250

300

350

400

450

1998 2000 2002 2004 2006 2008 2010 2012

Beverage carton recycling (EU28+CH+NO)

Volume (tonnes)

Source: ACE


A focused strategy for growth Finding growth in a demanding business environment


Consistent quality

Right price

Good service

Efficient supply chain

Global responsibility

License to operate




Customer focused portfolio

Strong brands and top quality

Innovation and R&D

Marketing and Communication

Consistent quality

Right price

Good service



Premium offering

License to operate




Consumer foresight

Full value chain understanding

Service offering to brand owners

Customer focused portfolio

Strong brands and top quality

Innovation and R&D

Marketing and Communication

Consistent quality

Right price

Good service



Partner-

ship offering

Premium offering

License to operate


Our strengths We focus on adding value to our customers


• Renewable Solutions

• Customer focus

• Global coverage

• Competitive assets

• Exciting Innovation and R&D


Our strengths We focus on adding value to our customers


“The Brand Tracking Survey – Cartonboard for consumer packaging 2014” defines and ranks the most valuable virgin fibre

cartonboard brands in Western Europe according to consumer goods brand owners. The Opticom Brand Equity Index, takes

into account both awareness of and satisfaction with the brand. Satisfaction encompasses quality and service associations,

perceived brand performance as well as loyalty towards the cartonboard brand.

No.1 “Stora Enso Tambrite most valuable cartonboard

brand among European brand owners.”


• Customer focus

• Global coverage




Our strengths Global products, local contacts


Countries where Stora Enso Consumer Board has sales

Stora Enso Consumer Board mills


• Customer focus

• Global coverage




Our strengths Global products, local contacts


Countries where Stora Enso Consumer Board has sales

Stora Enso Consumer Board mills


• Customer focus

• Global coverage




Investing in China part of the winning strategy Capitalising on our strategic board grades


* Source: Pöyry Management Consulting

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

20 000

200

02

00

12

00

22

00

32

00

42

00

52

00

62

00

72

00

82

00

92

01

02

01

12

01

22

01

32

01

42

01

52

01

62

01

72

01

82

01

92

02

0

Cartonboard demand in China 2000-2020

CAGR

6.5%

• Continued good demand for virgin

fibre board in China

• Strengthen leading global LPB

position

• Asian production base


Our strengths Investing for top quality and competitiveness


• Renewable solutions

• Customer focus

• Global coverage




Our strengths Thinking out of the box mentality


Stora Enso CKB

• Renewable solutions

• Customer focus

• Global coverage



Photo courtesy by Hörauf

Best-in-class margins


2 223 2 209 2 241 2 297

2011 2012 2013 2014

Sales

16,5% 15,4%

16,1%

19,1%

2011 2012 2013 2014

EBITDA margin

15,8%

13,6% 14,4%

17,8%

2011 2012 2013 2014

ROOC

Focus on costs and working capital


Fixed costs

80

85

90

95

100

105

2011 2012 2013 2014

100 101

97

Variable costs per tonne

80

85

90

95

100

105

2011 2012 2013 2014

99

97

94

OWC/sales

80

85

90

95

100

105

2011 2012 2013 2014

100

89

85

Index 2010=100 Index 2010=100 Index 2010=100

100 100

95

Building the future Consumer Board


FOCUSED CUSTOMER BASED STRATEGY

STRONG FINANCIAL PERFORMANCE

CONSUMER DRIVEN INNOVATIONS

World of packaging

Investor Relations

2015 capital markets day presentation by jari latvanen