New markets for
biomaterials and bio
based chemicals
EVP, Biomaterials Markus Mannström
SVP, Investor Relations Ulla Paajanen
13 March 2019
Stora Enso
1 13 March 2019
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 profitability; and statements preceded by “believes”, “expects”,
“anticipates”, “foresees”, or similar expressions, are forward-looking statements. 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. All
statements are based on management’s best assumptions and beliefs in light of the information currently available to it
and Stora Enso assumes no obligation to publicly update or revise any forward-looking statement except to the extent
legally required.
2
Stora Enso
13 March 2019
There is a need for a new approach to materials
- Different sides of the same coin
13 March 2019
Stora Enso
3
The world needs a new approach to materials
13 March 2019
Stora Enso
4
The renewable materials profitable growth company
Everything that’s
made with fossil-
based materials
today can be
made from a tree
tomorrow
Stora Enso
5 13 March 2019
We are well-positioned for profitable growth
– strength of our portfolio
Stora Enso
6
Sales 2018
EUR and % of group’s sales
Market growth Position
Consumer
Board
2.6 BEUR
2016–2030 for virgin board:
Europe 1.8%, North America 1.2%,
Latin America 3.3%, China 4.3%, Rest
of Asia 3.4%, Africa 2.5%
#1 in LPB, FSB and CUK in Europe or
the world
Packaging
Solutions
1.3 BEUR
High quality SC fluting 1-3%;
Kraftliner 2–3% excl. North Am;
Testliner 3–4% Eastern Europe
#6
in containerboard in Europe
Biomaterials
1.6 BEUR
Market pulp 2.3%; Fastest growth in
tissue (3.2%)
Widest pulp grades portfolio
#1
in Europe in fluff
Wood
Products
1.6 BEUR
Global sawn softwood 2–3%,
European new construction 3.5%
#1
in Europe and
#4
in the world in supplying wooden
construction material
Paper
3.1 BEUR Declining 3–5% annually
#2
in Europe
+
+
-
+
+
25%
13%
16%
15%
29%
13 March 2019
The megatrends make us important in helping
customers stay competitive and profitable
Global warming
Growing population
Digitalisation
Growing middle class
Eco awareness
Urbanisation
Changing
lifestyles
7
Increasing demand
for material that is
renewable,
recyclable and
fossil free
New demands on
brands to keep their
pricing power
Stora Enso
13 March 2019
Wood-based materials offer a better alternative to
fossil-based and other non-renewable materials
Renewable materials
help combat global
warming
Recycling is good –
but it’s not
enough
Trees, our raw
material, grow back
Join us on our
journey
to replace plastics
Stora Enso
8 13 March 2019
Forest assets – Northern and Southern hemisphere
Fair value of 3.3 BEUR
Stora Enso
9
Bergvik Skog, Sweden
Stora Enso’s share 936 000 ha of
productive forest land in Sweden
Tornator, Finland
Stora Enso’s share 223 200 ha of productive
forest land in Finland, Estonia and Romania
Veracel plantations, Brazil
Stora Enso’s share 43 700 ha of productive
forest land
Note: Fair value of Biological
assets and Group’s indirect share
of forest assets is as of 31 Dec
2018, in total 3 328 MEUR
Montes del Plata, Uruguay
Stora Enso’s share 81 200 ha of productive
forest land
Guangxi, Southern China (leased)
77 300 ha of productive forest land
In addition, leased plantations:
- Laos: trial plantation, 3 100 ha
- Russia: 369 500 ha
13 March 2019
Consumption, million m
3
sub (solid under bark)
Supply from own sources based on ownership, %
We control ~30% of our wood raw material
– a critical advantage in the bioeconomy
10
Wood supply restrictions for expansion
Potential for wood supply expansion
( ) Wood cost (USD/m3/sob) at mill - hardwood
* Sweden includes Stora Enso’s share of Bergvik Skog and Finland Stora Enso’s share of Tornator.
Brazil and Uruguay with 50% share.
million
m
3
sub
Standing
stock
Annual
procurement
Sweden 79.3 9.5
Finland 24.6 13.5
Brazil 2.9 1.9
Uruguay 8.1 2.1
China 6.4 0.3
Stora Enso’s forest assets*
(36)
(30)
(49)
(56)
(51)
(54)
(48)
(48)
(30)
(71)
Pulpwood plantation availability and wood cost
(40)
Long-term supply contracts, %
Purchased, %
Sold externally of annual harvesting, %
Stora Enso
13 March 2019
Demand for all pulp grades is growing by 2.3%...
Global
warming
Growing
population
Digitalisation Eco
awareness
Changing
lifestyles
Source: Pöyry Consulting Group, Hawkins Wright, Smithers Pira, RISI
Pulp consumption increase (Mt)
-4
-2
0
2
4
6
8
Growing
segments
Graphic
paper
Urbanisation Growing
middle class
Textiles, nonwovens
107 Mt market, growing 3%/y
6.6 Mt market pulp (dissolving)
Tissue
36 Mt market, growing 3.2%/y
22 Mt market pulp
Hygiene
590 billions of converted unit, growing 3.5%/y
6.2 Mt market pulp (fluff)
Carton board
47 Mt market, growing 2.0%/y
5.3 Mt market pulp
Paper
Specialty: 29 Mt market, growing 2.0%/y
9 Mt market pulp
Graphic: 101 Mt market, declining -1.0%/y
17 Mt market pulp
13 March 2019
Stora Enso
11
…and we expect a balanced market in pulp to continue
13 March 2019
Stora Enso
12
Pulp (hardwood and softwood) demand
grows 2% CAGR by 2023
15%
6%
75%
4%
Share in pulp demand growth
0%
0%
0%
2018
2023
59
90
65
96
Demand, Mt/a
Market balance, %
2019-2023
2007-2018
+ 1.6 Mt/y (90% ratios)
+ 0.3 Mt/y
Unconfirmed capacity additions
+1.3 Mt/y
Pulp average capacity growth
Source: Hawkins Wright, Pöyry and Stora Enso
12
Source: World Bank, UN Global Goals, Morgan Stanley Research, RISI, Stora Enso
Megatrends support the demand for virgin pulp in China
13
Urbanisation
Growing middle class
58%
Changing lifestyles
From 14 kg
to 21 kg
per capita
consumption
/
To 2030:
Ban on
imported
recovered
fibre
Eco awareness
70%
(+200 million people)
5 trillion
9.6 trillion
60%
90%
Stora Enso
13 March 2019
+10 Mt
of hardwood
and
softwood
(private consumption in USD)
(safe sanitation services)
Solutions for various end-use applications
Our Supreme, Perform
and Select grades are
transformed by our
customers into all kinds
of paper, packaging and
tissue.
Our Care fluff grades
are mostly used for the
manufacturing of
hygiene products such
as diapers and feminine
care products.
Our Pure dissolving
pulp is used for the
production of viscose
fabrics, but also in
applications in the food
and pharmaceutical
industries.
In addition to pulp, we
also produce various by-
products such as Lineo™
by Stora Enso (kraft
lignin), Tall Oil and
Turpentine, used as raw
materials in the adhesive
and cosmetic industries
among others.
13 March 2019
Stora Enso
14
Solid performance with increased focus on innovation
72%
21%
7%
Europe China
Others
Sales by region
Sales by product
49%
31%
10%
9%
1%
Hardwood Softwood
Fluff Dissolving
Others
Renewable
material from
certified forests
and plantations
Nr 1 in fluff in Europe
100% of our wood is
traceable to its
forest of origin
26.1% EBIT margin 2018
17.9% ROOC 2018
60
countries
1 635 MEUR
sales 2018
+10.3%
2018 YoY
4 R&D Innovation
centres
4 Growth platforms
16 Projects
An ambition to
become the leading
R&D innovator within
the industry sector
13 March 2019
Stora Enso
15
Internal
consumption
64%
Market
pulp
36%
Our chemical pulp offering
Stora Enso
pulp capacity
5 900 Kt
Among the TOP10
largest pulp
producers
Stora Enso
16 13 March 2019
Market pulp 2019
In 2018, Stora Enso’s expenditure on research
and development was EUR 149 million, which was
equivalent to 1.4% of sales.
Our renewable products
13 March 2019
Stora Enso
18
REPLACING
PE-FILMS IN CUPS
Future potentials to replace fossil-based
materials
Source: SmithersPira, internal analysis
POUCHES FOR LOW TO
MEDIUM SHELF LIFE
POUCHES WITH HIGH
BARRIER PROPERTIES
REPLACING
ALUMINIUM FOIL
CAPS, CLOSURES
& PACKAGING
COMPONENTS
TRAYS TUBES
CAPS WITH
HINGES
LIDS
BIO
-BARRIERS
AND FILMS
BIOCOMPOSITES
GLOBAL
MARKET SIZE
~80
BEUR
~25
BEUR
2019-2021
RIGID
CONTAINERS
STRAWS
2021-2023
2023-2025
Stora Enso
19 13 March 2019
Micro Fibrillated Cellulose –
potential in films, coatings and
barrier materials
• MFC key areas of use are strength enhancement, ideal
for specialty paper and wet-laid nonwovens.
• Rheology modifier and stabilizer
• Films and barrier solutions
Stora Enso
20 13 March 2019
Biocomposites gradually replacing plastic
• Use in products, such as disposable cutlery,
furniture, as well as storage and logistics goods
• Raw material for markets where plastics dominate
• Can reduce the consumption of fossil-based
plastic by up to 60%
• Always a better alternative than fossil-based
plastic, reducing the carbon footprint of a product
up to 80%
Stora Enso
21 13 March 2019
Lignin replaces fossil-based materials
O OH
HO
O
H
O
HO O
O
OH
O
HO
O
O OH
HO
O
O OH HO
HO
OH
O
O
HO
OH
HO
O
O
O
O
O
O
O OH
O
OH
OH
O
S
HO
HO
O
O
HO
HO
OH
O
OHS
Stora Enso
22 13 March 2019
Lignin – big opportunities in many markets
Adhesives
Carbon fibre
Energy storage
Stora Enso
23 13 March 2019
New technologies for sustainable wood fibre in textiles
Trees
Wood based fibre
Yarn
Fabric
Brand owners
Dissolving pulp
Synthetic fibres
Cotton
Trees Dissolving pulp Wood based fibre Yarn Fabric Brand owners
Stora Enso
24 13 March 2019
TreeToTextile – sustainable textile fibres with
less energy and chemicals
• TreeToTextile a joint venture between H&M group,
Inter IKEA group, Stora Enso and innovator Lars
Stigsson
• TreeToTextile has developed a new way of
processing dissolving pulp to yarn, similar to
Viscose, Modal, Tencel, Ioncell
• The TreeToTextile production process uses less
energy and chemicals, allowing for a much more
sustainable and cost-efficient fibres.
• There is a strong market for a fibre with good
sustainability performance
13 March 2019
Stora Enso
25
Creating value from renewable, reusable and
fossil free materials
13 March 2019
Stora Enso
26
Innovation Platforms Value proposition End markets Time to market
Market Potential:
Size / value
Improved pulp properties
Increased material efficiency
and performance
Specialty papers, hygiene
fibre-based packaging
Continuous 2.6 Mt / 1.4 BEUR
Regenerated cellulose
Novel sustainable material
from cellulose
Textile, and as film material
in packaging
2020–2022 20 Mt / 35 BEUR
MFC
Increased material efficiency
and performance
Specialty papers, coatings,
cosmetics, and as film
material in packaging
2019–2021 0.7 Mt / 1.6 BEUR
Lignin
Replace fossil-based
materials
Resins and adhesives
Carbon fibre
Carbons for energy storage
2017–2023 1 Mt / 1.7 BEUR
Bio-based chemicals
Replace fossil-based
materials for plastics
Packaging 2026–2027 2 Mt / 2.5 BEUR
Sources: Hawkins Wright, The Fiber Year 2018, EMBS, Smithers Pira, Transparency market research, Price Hanna consultants, Composites Marktbericht, Plastics Insight, Stora Enso experts
Winning in sustainability
27 13 March 2019
Stora Enso
1% shift
of fossil-
based and
other
materials
20 BEUR
renewable
business
=
POWER OF A
TREE
