Stora Enso as an investment

Why to invest in Stora Enso

Stora Enso is the renewable materials growth company, delivering sustainable profitable growth.

Three reasons to invest in Stora Enso:

  • Continuous strategic growth
  • Businesses driven by clear financial targets
  • Financially strong company

Stora Enso is creating a renewable future in the bioeconomy by providing products based on wooden fibres that are replacing non-renewable materials. Megatrends support our future, enabling us to be truly the renewable materials growth company. All our divisions, excluding Paper, operate in growth markets, and Stora Enso has set a Group level financial target to grow faster than the relevant market, excluding Paper. The divisions are well-positioned for growth, with strong market positions, including #1 in LPB, FSB and CUK in the world.


Stora Enso has completed a major asset transformation and now the focus is on improving sales and innovation, with continued strategic growth investments. All our divisions have clear financial targets and these Operational ROOC targets also drive our capex allocation. Stora Enso’s aim is to keep the capex at or below depreciation and depletion over the business cycle.

Stora Enso has defined clear strategic targets for each division and the Group. The targets will enable the markets to better follow each division’s performance, while guiding the divisions to implement the Group’s strategy. As the divisions operate in very distinct business environments, the targets vary between the divisions. All divisions excluding Paper have Operational ROOC (Operational Return on Operating Capital) percentage set as the key divisional financial target, while the target set for Paper focuses on its cash flow generation. The targets are defined to be ambitious but reachable within a 5-year planning horizon.

Stora Enso has a strong balance sheet, thanks to strong cash flow generation combined with sale of noncore assets. We have also reduced our capital expenditure, in accordance with our policy, to the level of depreciation and depletion. In 2019, net debt to Operational EBITDA was 2.1, which was slightly above the target level of 2.0. In 2019, Stora Enso focused on costs, cash flow and managing value over volume and as a result cash flow from operations increased by 45% to EUR 1,980 million.

Stora Enso’s dividend policy outlines that the Group strives to pay stable dividends linked to the long-term performance and to distribute 50% of earnings per share (EPS) over the cycle. Stora Enso has increased its dividend by 10-12% in 2015-2017 and by 22% in 2018. For the year 2019, the AGM approved the proposal by the Board that the Company distributes a dividend of EUR 0.15 per share. In addition, the AGM approved that the Board to decide at its discretion on the payment of dividend up to a maximum of EUR 0.35 per share. A resolution on the distribution of a dividend will be made at a later stage when it is possible to make a more reliable estimate on the impacts of the Covid-19 pandemic on Stora Enso’s business and liquidity.

Please find Group and Divisional financial targets as well as more information about Stora Enso's capex allocation below.

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Group financial targets

​KPI​Target​Outcome 2019​Outcome 2018​Outcome 2017
Payout ratio, %​To distribute 50% of EPS over the cycle​13%*39%52%
Operational ROCE, %​​>13%9.8%15.5%​11.9%
Sales growth excl. Paper​ ​To grow faster than the relevant market-3.0%5.9%​8.5%
Net Debt / last 12 months'  Operational EBITDA​<2.0x2.11.1​1.4
​Fixed Costs to sales<20%​24.3%23.6%​25.1%
Debt/equity ratio​​<0.600.430.31​0.38

Key divisional financial targets

​Division​KPI​TargetRestated 2019
Packaging MaterialsOperational ROOC​​>20%12.4%
Packaging Solutions​Operational ROOC​​>30%18.9%
Biomaterials​Operational ​ROOC​>15%9.4%
Wood Products​​Operational ROOC​>20%16.6%
Forest​Operational ROOC​>5%3.3%
Paper​​Cash flow after investing activities to Sales​>7%9.3%
GroupROCE​>13%​>13%

Capex allocation

Stora Enso has completed a significant asset transformation and is now targeting to keep the capital expenditure at or lower level of depreciation and depletion (operational decrease in the value of biological assets).

In recent years, Stora Enso has actively transformed its asset base through closures and divestments, strengthening its balance sheet. At the same time, the company has made large scale investments – including the establishment of the Montes del Plata pulp mill, Uruguay (2014), containerboard conversion in Varkaus (2015) and the consumer board mill in Beihai, China (2016). Transformation has been visible also on smaller scale, including investments made in Varkaus (LVL), Murów sawmill, Sunila (bio-refinery), Ingerois (MFC), Skutskär (fluff pulp), Enocell (dissolving pulp) and Gruvön (CLT).


In May 2019, Stora Enso completed the acquisition of Bergvik Skog, increasing the Group's forest lands in Sweden from indirect share of 0.9 million hectares to direct ownership of 1.15 million hectares of productive forest land.  In May 2019,  Stora Enso made a decision to invest approximately EUR 350 million to convert Oulu paper mill into packaging production. The investment includes converting paper machine 7 into high-quality kraftliner production (450 kt/a) and closing down paper machine 6 and the sheeting plant. Production on the converted machine is estimated to start by the end of 2020.

 EUR million  Forecast 2020
 Capital expenditure*  675 - 725
 Depreciation and operational decrease in biological asset values  590 - 620

In Q1/2020, Stora Enso’s capital expenditure forecast for 2020 was reduced by EUR 25 million from the earlier estimated range of EUR 700–750 million to improve 2020 cash flow. The estimate includes approximately EUR 80 million for the Group's biological assets and the capitalised leasing contracts according to IFRS 16 Leases of approximately EUR 40 million. The depreciation and depletion of capitalised silviculture costs forecast includes also the impact of IFRS 16. The depletion of capitalised silviculture costs is forecast to be EUR 50–70 million.