Exane BNP Paribas 14th European Seminar in Paris. Presentation by CEO Jouko Karvinen.

Chasing Growth in Constrained Environment

CEO Jouko Karvinen

13 June 2012

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.

2 13 June 2012 Stora Enso presentation

Stora Enso portfolio FY 2011

Group Sales, EUR 10 964.9 million

46%

10% 15%

29% 0%

Printing and Reading Biomaterials Building and Living Renewable Packaging Other

Operational EBIT, 866.7 EUR million

13 June 2012 Stora Enso presentation 3

32,9 %

19,5 % 6,0 %

34,8 %

5,5 %

Stora Enso’s engines


Growth engines

Renewable Packaging

Plantation based pulp

Building and living

Cash engines

Printing and Reading

Nordic market pulp

Low cost base saw milling

How to keep the cash engines going! Fine Paper

• Restructuring at Nymölla, Uetersen,

Oulu Mills and sheeting plans in

Belgium and UK

• Annual cost reductions ~ EUR 20

million,

– From Q2 2011 to Q2 2012


How to keep the cash engines going! Coated Magazine

• Restructuring at Corbehem, Veitsiluoto

and Kabel Mills

• Cost efficiency and productivity

improvements

– Reduction of costs by EUR 48

million /a

– Investments EUR 18 million

– Full impact Q3 2013 onwards

8 13 June 2012 Stora Enso presentation

How to keep the cash engines going! Swedish maintenance streamlining

• To increase further efficiency and flexibility

• Impacting Renewable Packaging and

Printing and Reading

• Reduction of costs by EUR 21 million /a

– Starting gradually from late 2012 onwards


Shareholder value

1% 2% 3%

-5%

-10%

Average sales price

Lo

st vo

lum

e

Buyer

0% 1% 2% 3%

-5%

-10%

Average sales price

Ga

ine

d v

olu

me

Rest of the market

0%

Rethink strategy

Growth markets

Renewable

packaging

Biomaterials

Competitive paper


Significant growth expected for corrugated packaging in

Eastern Europe, Asia and Middle East & Africa


2010-2020

Million tonnes

Asia

CAGR

4.4%

Eastern

Europe

CAGR

4.1%

Western

Europe

CAGR

1.0%

Middle East &

Africa

CAGR

4.3%

South

America

CAGR

2,7 %

North

America

CAGR

0.5%

Source: Pöyry and Stora Enso


Ostroleka Strengthening competitive position in

corrugated packaging in Central and

Eastern Europe


Montes del Plata Pulp mill investment in Uruguay

Strongest growth in demand of virgin fibre-based

consumer board will be in Asia

13 June 2012 15

6,2 6,3

CAGR

0,2 % 1,1 1,5

CAGR

3,5 %

3,8 4,4

CAGR

1,4 %

0.9 1.5

CAGR

4,6 %

0,5 0,7

CAGR

3,3 %

6,0

11,6

CAGR

6,9 %

Asia

Middle East

& Africa

Eastern

Europe

Western

Europe North

America

South

America

Fibre-based consumer

board consumption

CAGR

China 9%

Pakistan 9%

India 6%

Middle East 4%

2010-2020

Million tonnes

Source: Pöyry and Stora Enso Stora Enso presentation

Focusing on high quality segments in China


Chinese platform

for growth Unique position

A world leading position

Technologies and

specifications

Committed customers

Robust sustainability

Unique integrate

Established footprint

Innovation

Well prepared project to accelerete growth

Biomaterials


29 years


Wood has a good story to tell

• Superior carbon footprint compared to any other building material

• Joint efforts as an industry to remove all norms and standards that are

unjustly discriminating against wood in various end-uses

-2000

-1500

-1000

-500

0

500

1000

Steel frame Light weight concrete block

Aircrete block Brick Concrete Wood

g/k

g

Carbon sink, g/kg

CO2 emissions of manufacturing, g/kg

Source: Puuinfo / Finnish Forest Industries


New investments will contribute well to cash generation


Investment for

future and net cash

from operations

2011

Growth Operating Capital


2011 20XX

Exane BNP Paribas 14th European Seminar in Paris. Presentation by CEO Jouko Karvinen.

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Transcript of Exane BNP Paribas 14th European Seminar in Paris. Presentation by CEO Jouko Karvinen.