Stora Enso as an investment

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Stora Enso is the renewable materials company

Stora Enso’s promise to the world is that everything which is made with fossil-based materials today can be made from a tree tomorrow. This forms the core of our strategy and is the foundation of our innovation growth agenda.

A leader in Sustainability with a naturally green business, driving opportunities

We develop products and solutions based on renewable materials made from sustainably sourced trees. Sustainability is deeply embedded in our overall business strategy and our responsible business practices. Our renewable and circular solutions contribute positively to climate change, restore negative impacts on the environment, help our customers become climate friendly, and drive revenue to the Group. Our goal is to offer products which are 100% regenerative, 100% circular and carbon net positive by 2050.

Stora Enso’s growth strategy is to focus on leading positions and accelerated growth in 3 focus areas:  Packaging, Building Solutions and Biomaterials Innovation. Most of our growth comes from these segments. Click on the image for a larger view.

  1. Packaging, high margin and high growth business driven by strong and increasing demand for plastic free and eco-friendly circular packaging.
  2. Building Solutions, driven by a growing wooden buildings market. Stora Enso offers sustainable alternatives to fossil-based construction materials.
  3. Biomaterials Innovations, focusing on new products made from lignin, targeting strong growth in new applications and markets.

Investment case - What sets Stora Enso apart

“Building outstanding value for our shareholders now and for the long term.”

1. A global leader with a diversified business model underpinned by megatrends

Stora Enso is one of the world’s largest private forest owners and a world-leading packaging company, driving competitive advantage through integration of the value chain and innovation.

The Company has a history dating back as far as 1288 since when we have built unique expertise, know-how and a robust position in our sector. Our diversified business portfolio creates resilience to changing market dynamics and fluctuations in demand, while enabling flexibility and synergies for an evolving business. During the period 2006 - 2022, we transformed from primarily a paper business into the renewable materials company. Global megatrends such as urbanisation, digitalisation, changing lifestyles, global warming and eco awareness, all underpin our growth opportunities. We create renewable, sustainable products which respond to our customers’ need to replace fossil-based materials, helping combat climate change.

We see significant prospects for growth to expand our total addressable market and target to grow more than 5% per year. By investing in innovation, we further increase the gap to our peers, enhance our competitive advantage, while at the same time help our customers become 100% circular. This puts us in an excellent position for long-term growth and value creation for all our stakeholders.

Sunshine through leaves

2. Sustainability is the opportunity driving our strategy

Sustainability is a natural part of our strategy and business conduct, deeply shaping both.

The global increased focus on sustainability provides us with several long-term growth opportunities and enables us to lead the green materials revolution. We foresee strong, long-term, and accelerating demand for renewable, recyclable, and regenerative products.

We have set an ambitious goal to offer 100% regenerative solutions by 2050 to support both our own business opportunities, our customers, and the general climate agenda. We are taking the lead in this area by developing products that not only reduce harm, but are also positive from a biodiversity, circular economy, and CO2 footprint perspective.

3. Creating competitive advantage with unique and differentiated products which make a difference

Stora Enso develops market-leading products which drive benefits for our customers while positively impacting the environment. 

We grow our business by offering our customers a wide range of unique, differentiated and customer-led innovative products.

The revenue from our business portfolio is diversified, both geographically and by product, providing both a robust base and multiple growth opportunities. We will create value for our shareholders by growing our leading positions in our key focus growth areas: Packaging Materials and Solutions, Building Solutions, and Biomaterials Innovations.

Circular products

4. Our forest assets create a solid and valuable foundation for our business

Stora Enso is one of the largest global private forest owners, our forests are strategically important to us.

Our forest holding is a scarce real asset and a guarantee of a solid balance sheet as well as a driver of shareholder value. It is also an important raw material which provides us with competitive wood supply, giving us tactical flexibility, synergies, and value. Our forests both initiate our integrated value chain and our sustainability credentials throughout the whole product line.

We create value with best-in-class forestry and biodiversity management. Our innovation in precision forestry and biotechnology supports both increased yield and a sustainable forest.

5. Focused and disciplined capital allocation and dividend returns drive shareholder value

Strong cash flow generation and a solid balance sheet play key roles in Stora Enso’s capital allocation plan.

Stora Enso will allocate capital for sustainable and profitable growth projects in our key focus growth areas. Capital expenditure is expected to be at or below depreciation over the cycle. We will grow organically in segments where we have a leading position, and we will further accelerate our growth opportunities through selected M&A, mainly in Packaging Solutions and Building Solutions.

Stora Enso’s dividend policy is to distribute 50% of earnings per share to its shareholders over the cycle (excluding fair valuation).

People walking and talking

6. Performance culture and operational excellence power our business edge

Leadership is a top priority for Stora Enso. It is the strongest driver for performance, company culture and personal wellbeing.

The decentralised operating model empowers our people to strengthen the execution of our strategy. Our divisions are agile with quick decision-making close to the market. We drive a performance culture through our business-specific processes to grow a profitable business for the long term.

Financial targets

Long-term financial targets

Please find our long-term financial targets on a Group and divisional level in the image above. The long-term growth target for the Group is to grow more than 5% per annum.
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Capital allocation plan

Strong cash flow generation has a key role in Stora Enso’s capital allocation. Stora Enso will allocate capital for sustainable profitable growth in the three focus areas and expects capital expenditure to be at or below depreciation over the cycle in the long-term. Growth will be further supported by selective M&A.
Click to view the graph

Capital expenditure

The capital expenditure forecast for 2024 is EUR 1,030–1,130 million, mainly due to the consumer board investment at the Oulu site in Finland.
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Dividend policy

Stora Enso’s dividend policy is to distribute 50% of earnings per share (EPS) excluding fair valuation over the cycle. In 2023, EPS excluding fair valuation was EUR -0.45. The AGM resolved, in accordance with the proposal by the Board of Directors, that the Company shall distribute a dividend of EUR 0.10 per share for the year 2023. In addition, the AGM resolved, in accordance with the proposal of the Board of Directors, that the Board of Directors is authorised to decide at its discretion on the payment of an additional dividend up to a maximum of EUR 0.20 per share. Based on the authorisation, it is also possible to resolve on distributing the additional dividend in one or several instalments. The authorisation is valid until 31 December 2024.
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