Stora Enso as an investment

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Why to invest in Stora Enso

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

Stora Enso’s promise to the world is that everything that is made with fossil-based materials today can be made from a tree tomorrow. This is also the foundation of the entire innovation’s agenda. Stora Enso wants to be the solution to the new demands that consumers have, when they request eco-friendly products. We are The Renewable Materials Company.

Three reasons to invest in Stora Enso:

  • New strategy focusing on three key focus areas for growth
  • Businesses driven by revised financial targets
  • Strengthened balance sheet supporting profitable growth

Stora Enso has updated its strategy and certain financial targets, to support the Group’s focus on growth and value creation. Stora Enso will continue to create value in the bioeconomy with renewable products, that solve global sustainability challenges. Focus will be on meeting consumer demand for eco-friendly and circular solutions and we continue to concentrate our efforts in innovation.

Illustration 

According to its new strategy, Stora Enso has three focus areas for growth:

1. Packaging Materials and Packaging Solutions, driven by high demand for plastic free and eco-friendly circular packaging. Stora Enso holds leading market positions and sees attractive investment options.

2. Building Solutions, within our Wood Products division, driven by a growing wooden buildings market. Stora Enso offers alternatives to fossil-based construction material and is a leading global supplier.

3. Biomaterials innovation, where Stora Enso's agenda is focused on lignin, and targets strong growth in new applications and markets.

Stora Enso aims to increase the focus of its innovation efforts to the areas of sustainable barriers, new sustainable packaging materials and biochemical platform in lignin. Forest, traditional wood products and market pulp make up the foundation for value creation in Stora Enso. Paper will continue to be run in order to maximise cash flow in the declining market.

Stora Enso has revised its long-term financial targets. There are new Group level targets for growth and return on capital employed (ROCE). The divisional targets for Packaging Solutions and Forest have also changed. Also, dividend policy is updated to distribute 50% of earnings per share (EPS) excluding fair valuation over the cycle. Other targets remain unchanged.

Illustration

Stora Enso has a new capital allocation plan where strong cash flow generation has a key role. Stora Enso will allocate capital for sustainable profitable growth projects selectively in the above-mentioned three focus areas and expects capital expenditure to be at or below depreciation over the cycle. The company will accelerate growth by selective M&A especially in packaging businesses.

Illustration

Stora Enso’s capital expenditure is expected to be in the range of EUR 675–725 million in 2021. The annual depreciation and depletion of capitalised silviculture costs is forecast to be EUR 600–640 million.

Graph capital expenditureStora Enso’s dividend policy is to distribute 50% of earnings per share (EPS) excluding fair valuation over the cycle. In 2020, EPS excluding fair valuation was EUR 0.45. The AGM 2021 approved the proposal by the Board of Directors that the Company shall distribute a dividend of EUR 0.30 per share for the year 2020.

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Part of the bioeconomy, Stora Enso is a leading global provider of renewable solutions in packaging, biomaterials, wooden construction and paper. We employ some 23 000 people and have sales in more than 50 countries and our shares are listed on the Helsinki (STEAV, STERV) and Stockholm (STE A, STE R) stock exchanges.

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