stora enso cmd - presentation by juan bueno, evp, biomaterials
DESCRIPTION
Stora Enso's Capital Markets Day on 22 March 2012TRANSCRIPT
Growth
Engine Juan Bueno, EVP, Biomaterials
Biomaterials
March 22, 2012 Juan Bueno 2
Why?
March 22, 2012 Juan Bueno 3
Population Growth
Growing Environmental Pressures
Doing more with less
March 22, 2012 Juan Bueno 4
5
Sustainability
Pulp market outlook
March 22, 2012 Juan Bueno 6
Global Market Pulp demand by end use: 46mt
March 22, 2012 Juan Bueno 7
Source: Hawkins Wright, 2010 figures
March 22, 2012 Juan Bueno 8
What does that mean in terms of market pulp?
8
63
46
Paper US-WE-JP
7
2010 2025 Integrated Capacity
9
Fluff
2
Packaging
8
Tissue
15
Paper
Growth Countries
9
46
63
2
Ok. Tissue is growing. But where?
March 22, 2012 Juan Bueno 9
Forecast tissue demand (M Tons)
While online advertising in China is growing, there is still
room for growth in all types of media, including commercial
March 22, 2012 Juan Bueno 10
Advertising revenue is
~450€/capita in US
A large growth potential remains for advertising spend,
including direct mail
~75% of total population
Paper consumption clearly declining in Western
Europe and North America, but what about China?
March 22, 2012 Juan Bueno 11
Some growth expected,
but China will leapfrog
to Digital Life.
China household
broadband penetration
Strongest growth in demand of fibre-based
consumer board will be in Asia
12 12
2010-2020
Million tonnes
Source: China Ministry Of Industry
and Information Technology;
Chinese Telecom company
publications; PwC ; Bain analysis
Asia
CAGR
6.9 %
Eastern
Europe
CAGR
4.6 %
Western
Europe
CAGR
1.4 %
Middle East &
Africa
CAGR
3.3 %
South
America
CAGR
3.5 %
North
America
CAGR
0.2 %
Fibre-based
consumer board
consumption
CAGR
China 9%
Pakistan 9%
India 6%
Middle East 4%
March 22, 2012 Juan Bueno
Go where the growth is
March 22, 2012 Juan Bueno 13
BA Biomaterials
March 22, 2012 Juan Bueno 14
BA Biomaterials
March 22, 2012 Juan Bueno 15
BA Biomaterials Capacities Ktons
Sunila 370
Enocel 480
Skutskär 540
Total Own Mills 1,390
Veracel 550
Montes del Plata * 650
Total with JV's 2,590
* start up in 2013
Oulu
Kaukopää
Enocell
Sunila
Nymölla
50%
Veracel
50% Montes
del Plata -
2013
Stand alone mills
Integrated mills with dried pulp
Skutskär
Total Chemical Pulp Balance at Stora Enso
March 22, 2012 Juan Bueno 16 16
Market Pulp
incl MdP
1 825
700
80 260
785
MdP
650
Market
pulp
1 175
50 80 260
785
Internal
Consumption
3 430
1 775
1 655
External
Purchases
220
120 100
Dried and
wet pulp
production
4 385
1 705
80 260
2 340
Hardwood
Dissolving pulp
Fluff
Softwood
MdP = + 55%
Market Pulp
BA Biomaterials compared with competition
EBIT % (quarterly Ebit)
March 22, 2012 Juan Bueno 17
Source: Quarterly financial reports
-10%
0%
10%
20%
30%
40%
50%
60%
Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11
Stora Enso
BA Biomaterials capacity cost competitiveness
March 22, 2012 Juan Bueno 18
BSKP All Dried
Source: Poyry and Stora Enso Experts
BHKP All Dried (incl. MdP)
BSKP: Stable position since cost curve not likely to change significantly.
BHKP: Cost curve will flatten and we are driving ourselves into a strong position.
For the 4th quartile mills, we are looking into other products (I.e Dissolving, Fluff etc.)
EUR/t
2nd
quartile
79%
3rd
quartile
21%
BA Biomaterials capacity - % in each quartile BA Biomaterials capacity - % in each quartile
1st
quartile
77%
4th
quartile
23%
Costs delivered to Frankfurt Costs delivered to Frankfurt EUR/t EUR/t
March 22, 2012 Juan Bueno 19
Montes del Plata Pulp Mill 1.3 M Tons of BHKP
1.4 B euro Investment
Top 20 market pulp producers
March 22, 2012 Juan Bueno 20
Source: Hawkins Wright
- 1 000 2 000 3 000 4 000 5 000 6 000
Cenibra
Canfor
West Fraser
Ence
IP
Mercer
Ilim
Domtar
UPM-Kymmene
Paper Excellence
Botnia/M-Real
Suzano
Weyenhaeuser
Stora Enso
Sodra
CMPC
Georgia Pacific
Arauco
April
Fibria
BSKP
UKP
MEC
BHKP
- 1 000 2 000 3 000 4 000 5 000 6 000
Cenibra
Canfor
West Fraser
Ence
IP
Mercer
Ilim
Domtar
UPM-Kymmene
Paper Excellence
Botnia/M-Real
Suzano
Weyenhaeuser
Stora Enso
Sodra
CMPC
Georgia Pacific
Arauco
April
Fibria
BSKP
UKP
MEC
BHKP
Mdp
How do we win
March 22, 2012 Juan Bueno 21
Innovation
Customer
Focus
Financial
Discipline and
Growth
Tall Oil
Bio-Methanol
Turpentine
Lignoboost
BIOREFINERY
Innovation
Increase value added to current process
MFC
Bio-Tech
Carbon Fibre
RESEARCH
&
DEVELOPMENT
Innovation
Explore new markets
Customer Focus
March 22, 2012 Juan Bueno 25
Stora Enso
Other key supplier
Promoters
Neutrals
Detractors
Financial Discipline Our Cash Engines
March 22, 2012 Juan Bueno 26
Enocell Sunila Skutskär
Maximize results with cash engines (Nordic Pulp mills) • Operational efficiency.
• Add value through by products (talloil, Lignoboost etc.)
• Improve energy efficiency.
• Lean and focused capital expenditure model.
• Optimal working capital management.
• Adjust product mix as there is fit (Dissolving Pulp, Fluff).
Financial Discipline Our Growth Engines
March 22, 2012 Juan Bueno 27
Montes del Plata Existing Plantations
Projects
Value Adding
Partnerships
Sustainable growth • Environmental & Social responsibility
• Certified plantations
• Time to market
• Low production cost : only 1st quartile interests us
• Close to growing markets is key
• Value added partnerships
• Short term with a state of the art pulp mill in Uruguay
• Medium term with pulp from Tiger
• Long term via strong focus on innovation, new technologies
development and strategic partnerships. Option to do Veracel II
• Strong customer focus
• Strong financial discipline balancing cash engines that can
help fund profitable growth opportunities
• Clear respect for the highest sustainability standards
Biomaterials offers an attractive growth platform
March 22, 2012 Juan Bueno 28
Biomaterials
March 22, 2012 Juan Bueno 29
March 22, 2012 Juan Bueno 30
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.
March 22, 2012 Juan Bueno 31