The renewable materials company
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CEO review: Record high results across key business areas

Newsroom Articles and reference cases CEO review: Record high results across key business areas

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Published 10 February 2022
In 2021, we made significant progress in our strategic ambition to lead in sustainability and transform into ‘The renewable materials company’. Our focus on growth in leading market positions has resulted in record high profitability and a strong balance sheet.

Proof of resilient and adaptable business

Looking at our performance in 2021, Stora Enso showed tremendous adaptability and resilience. We delivered record high results across our key business areas, overcoming macroeconomic turbulence and supply chain disturbances. Group revenue increased by 19% YoY while operational EBIT increased by 135% YoY. Our net debt ratio to EBITDA of 1.1 was below the target of less than 2. These are results to be proud of and a testimony of our continuous improvements and strategic progress.

Although uncertainties remain as new pandemic-related challenges continue to surface, the year carried many positives. We have found new ways of working safely to deliver products and services at the same high standard and pace as before the pandemic. By investing in a culture of learning and empowerment, we create a more agile business with enhanced customer intimacy. An increased demand for eco-friendly products, the hard work of our people, and our resilient business model have together supported our strong performance. I believe our achievements in 2021 provide a stellar example of a company striving towards one common goal: driving sustainable growth.

Sustainability is core to our strategy

Stora Enso is one of the world’s largest private forest owners. Sustainably managed, our growing forests have a positive climate impact, both as a carbon sink and through circular end-products. A flexible wood supply chain and accessibility is also fundamental for our innovation agenda. Global megatrends, with sustainability at the core, call for fossil-free materials and new applications for renewable and innovative materials. Our customers are increasingly aware of the advantages of products which are circular and climate friendly. It is our job to continue to deliver solutions to meet those needs. We foresee significant growth potential for our products within packaging, biomaterials innovations and building solutions, and this is where we focus strategic efforts and investments.

Strong demand for eco-friendly solutions

A strong demand for our packaging materials and solutions has been a major driver behind our solid 2021 results. In light of sustainability trends and the pandemic, the need for eco-friendly and hygienic food packaging is more important than ever. A shift in the packaging industry continues to accelerate, underlined by the rising demand for fossil-free, bio-based and recyclable packaging for everyday use. At the same time, consumer behaviour is changing rapidly with growing e-commerce related to increased home deliveries of retail goods, groceries and take-away food. All this, in turn, boosts market size and demand for sustainable packaging.

We are leading in sustainable consumer packaging with strong market positions, and are investing to meet a growing demand. Our liquid packaging board site in Skoghall, Sweden will add significant capacity following a EUR 97 million investment. Our EUR 350 million kraftliner conversion in Oulu, Finland started up in 2021, with profitability already ahead of schedule. In the beginning of 2022, we decided to move forward with a feasibility study for a second conversion in the Oulu site for production of premium carton board. Also, to improve recycling throughout Central and Eastern Europe, we have announced an investment to build a large-scale recycling facility in Poland together with Tetra Pak. The investment represents an important milestone towards a circular future.

Annica Bresky

Annica Bresky

President and
Chief Executive Officer

Annual Report 2021

"Need for eco-friendly and hygienic food packaging is more important than ever."

Annica Bresky
President and CEO

Capturing new revenue in growth markets

Stora Enso is the world’s largest producer of lignin, one of the main building blocks of a tree. Lignin has a wide array of potential applications. Following more than six years of investments in extensive research and innovation, our pilot plant in Sunila, Finland started producing lignin-based hard carbon. Our product Lignode is a sustainable alternative to carbon-based battery anodes in electric vehicles. We predict that this opportunity alone has significant sales potential.

Wood-based building solutions is another key growth area, addressing the need to replace less climate-friendly construction materials such as concrete and steel. Prefabricated wooden elements, such as beams, bearing elements and walls, offer higher construction efficiency while significantly reducing the carbon footprint of a building. With the building and construction industry representing approximately 40% of the world’s CO2 emissions, governments and real estate developers are increasingly recognising the sustainability advantages of wooden buildings. In 2021, we launched several new concepts to grow our market share of wooden construction in industrial buildings, office buildings, residential multistorey and schools. Here, we are well positioned to capture new business as the share of wood used in building projects is expected to grow more than 10% by 2030.

Our products contribute to a greener world

To support our strategic objectives, we have renewed our sustainability ambitions. We take a regenerative stance within climate, circularity, and biodiversity. This means putting greater emphasis on rebuilding and making a positive climate contribution within the planetary boundaries, rather than just minimising impact. By 2050, we aim to offer 100% regenerative solutions. To reach this goal, we have set ambitious 2030 science-based targets to reduce greenhouse gas emissions by 50%, aligning with the 1.5-degree scenario. Furthermore, 100% of our products will be technically recyclable by 2030.

Our forest management practices will also evolve to not only support forest growth, but also to restore and enhance biodiversity. To enable continuous improvement, our progress will be monitored through third-party approved biodiversity indicators. A positive contribution on nature and living species through our forest operations allows for resilient ecosystems that thrive and flourish. We will use our own forest land as a development platform with the aim to make us a frontrunner in this important area.

Strategic actions for long term value creation

Sustainable growth remains central in everything we do. Paper products have continued their structural decline and we took the difficult decision to close two paper sites: Kvarnsveden in Sweden and Veitsiluoto in Finland. We also divested our Sachsen site in Germany. These decisions were necessary to maintain a competitive paper business. Once fully restructured, our paper business will represent around 10% of total revenues. By the end of the year, as a result of these actions and market recovery, we could see a significant improvement in the supply and demand balance for paper in Europe.

We made significant progress in 2021, strengthening our position for continued growth. This is bolstered by business resilience, a strong safety and people agenda and a proactive and flexible approach to customer collaboration. Stora Enso continuously evolves, and we have the ability and raw material platform to make our business truly integral in the green revolution. Circular products from the forest are part of the solution to combat climate change, a legacy that we will pass on to future generations.

We are committed to the UN Global Compact’s ten principles and the UN’s Guiding Principles on Business and Human Rights.

The renewable future grows in the forest.

Annica Bresky
President and CEO