Stora Enso in 2020 We want to support industries, producers and retailers in meeting the growing demand for eco- friendly and circular solutions.

We are the renewable materials company Significant potential the world today. Forest is a valuable, cash flow gives us flexibility. The market growing asset that ensures a long-term effects of Covid-19 have posed challenges for profitable growth fiber supply for our products. for our and businesses. Our raw material is Our products Our renewable products The year 2020 was shaped We also adjusted our long-term financial With other parts of our diverse portfolio renewable, recyclable, replace fossil- contribute to a circular by an uncertain political and targets and our goal is to grow profitably by continuing to perform well, the overall more than 5% annually, excluding Paper. impact has been limited. and fossil-free. based materials. bioeconomy. economic landscape, but above The majority of our future growth will come all by the pandemic. In these from the high-margin packaging business, True to sustainability challenging times for societies, Building Solutions, and Biomaterials Sustainability is integral to our relevance companies, and individuals, innovations. as a business, our role as a responsible Stora Enso has remained member of society, and our ability to Sales Employees Sales by destination resilient. Our business is built on Innovation through collaboration contribute to a greener world. Our a renewable raw material, serving We will concentrate our innovation emphasis is on social, environmental, and 72% global markets with products efforts and resources on new sustainable economic responsibility in our operations EUR 8.6 billion 23 000 Pacific 18% that help consumers make packaging materials, sustainable barriers, and the value chain. North America 4% eco-friendly choices. and biochemicals. Speed to market is Production unit 2% essential and we will continue to push Competitive edge Sales office Other 5% this through collaboration and an open As I see it, the winners will be companies Design Studio Making choices innovation approach. that have businesses which are sustainable Innovation Centre for growth and value in the long term from an environmental, Forests and plantations We have renewed our strategy, entering Investments to support social and financial perspective, that stay a new phase in our transformation strategic focus and innovation close to their customers and innovate journey and shaping our business for Mill was converted from paper to based on consumers’ future needs, Personnel by country1 accelerated growth and value. We will kraftliner. This is a major step forward in and that can manage volatility. This is focus on Packaging, Building Solutions, our transformation. We are ramping-up Stora Enso’s competitive edge. Legend FinlandValue 26% in % and Biomaterials innovations. These the production of formed fiber products, The renewable future grows in 72% XX% Europe Sweden 21% are the areas where we have the leading investing in cross laminated timber (CLT) the forest. Asia Pacific 18% XX% 15% XX% North America 4% market positions and are in the frontline of and a granulation and packing plant for South America Poland 8%2% XX% customer driven innovation. And we can , and conducting a feasibility study on Other 5% XX% Total Germany101% 4%XX% build on strong and competitive assets to expanding pulp and board production. Russia 5% drive accelerated profitable growth. Other Europe 17% Although we have specific growth Business during the pandemic and 3% areas, our ability to create value has We have built a strong liquidity position its foundation in forest. We are one and continue active working capital Annica Bresky Other countries 1% of the largest private forest owners in management and cost savings. A strong President and CEO 1 Including 50% of the employees at Veracel in Brazil and Montes del Plata in Uruguay.

This is a summary of Stora Enso in 2020. The full annual report is available at storaenso.com/annualreport

1 Legend Value in % 26% XX% Sweden 21% XX% China 15% XX% Poland 8% XX% Germany 4% XX% Russia 5% XX% Other Europe 17% XX% Brazil and Uruguay 3% XX% Other countries 1% XX% Total 100% XX%

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1 This is Divisions in brief Packaging Materials Packaging Solutions Biomaterials Stora Enso

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 (STEAV, STERV) and Stockholm (STE A, STE R) exchanges. The Packaging Materials division The Packaging Solutions division The Biomaterials division is a global leader in the circular develops and sells premium meets the growing demand for Our fiber-based materials are renewable, recyclable and economy with our premium fiber-based packaging products and the replacement of products made fossil free. Our solutions offer low-carbon alternatives renewable and recyclable packaging services. Our high-end eco-friendly from fossil-based and hazardous to products based on finite resources. We believe that materials based on both virgin packaging products are used by materials with bio-based solutions. everything that is made from fossil-based materials today and recycled fiber. Addressing leading brands across multiple We use all fractions of biomass, like can be made from a tree tomorrow. the needs of today’s eco-conscious market sectors, including store retail, lignin and sugars, to develop new consumers, we help customers e-commerce and industrials. The solutions. We work to replace fossil- replace fossil-based materials portfolio includes corrugated and based materials with new applications with low-carbon, renewable and other converting, design services, such as carbon for energy storage, Our purpose: recyclable alternatives for their automation solutions, and scalable bio-based binders, and bio-based food and drink, pharmaceutical innovations such as formed fiber carbon fiber. The division’s offering or transport packaging. A wide and biocomposites. includes a wide variety of pulp grades Do good for people and selection of barrier coatings enables to meet the demands of paper, board, the planet. Replace fossil- design optimisation for various tissue, textile and hygiene product demanding packaging end-uses. producers as well as materials from based materials with side streams of our processes, such renewable solutions. as tall oil and turpentine from biomass.

Our values: Wood Products Forest Paper Lead. Do What’s Right.

The Wood Products division is The Forest division creates value Stora Enso is the second largest the largest sawn wood producer in with sustainable forest management, paper producer in Europe, with an Europe and a leading provider of competitive wood supply and established customer base and sustainable wood-based solutions innovation, which are the foundation a wide product portfolio for print for the construction industry. Our for Stora Enso’s renewable offerings. and office use. Customers benefit growing Building Solutions business The division manages Stora Enso’s from Stora Enso’s broad selection of offers building concepts to support forest assets in Sweden and the 41% paper products made from recycled low-carbon construction and eco- share of Tornator, the majority of whose and virgin fiber, our technical friendly designs. We develop digital forest assets are located in Finland. expertise and our sustainability tools to simplify the designing of The division is also responsible for know-how as well as our mill and building projects with wood. We also wood sourcing for Stora Enso’s customer service centre network. offer applications for windows, doors Nordic, Baltic and Russian operations and for packaging industries. and B2B customers. Stora Enso is one of the biggest private forest owners in the world.

2 3 How we create value as a renewable materials company

Our solutions provide low-carbon alternatives to products based on finite resources.

Key inputs Key outputs Key impacts • Investments in human rights due diligence programme • 22 human rights development actions • Respect for human rights in operations finalised in Group function processes

• 23 000 direct employees and sales in more than 50 countries • Personnel turnover 13.0% • EUR 1 270 million salaries and benefits • OHS and well-being • 6.1 TRI rate • Impacts of injuries, illness, and well-being • Employee and leadership development • Illness related absenteeism 3.6% • Engaged and motivated employees and • Partnerships with communities and universities • Leadership index 84/100 a capable organisation Our fiber-based

Social • EUR 2.7 million voluntary community investments • 343 voluntary community investment projects • EUR 980 million value through taxes borne • Business ethics and compliance • Code of Conduct index 86/100 and collected materials • Value creation with local communities • Value through ethical operations in the market place 2 are renewable 2 2 and recyclable.

• 2.39 million hectares of lands we own or manage • 9.7 million tonnes of board, market pulp, and paper • Net climate impact of -11.5 million tonnes of CO2e • 35 million m3 of wood used • 5.3 million m3 of wood products • Other environmental impacts of operations and • EUR 91 million environmental investments • Certification coverage 98% for lands in wood production along the value chain • 1.9 million tonnes of Paper for Recycling (PfR) and harvesting and 78% of sourced wood • Forests provide ecosystem services • 2.1 million tonnes of pigments, fillers and other chemicals • 25% utilisation rate for Paper for Recycling • 561 million m3 water withdrawal • 98% utilisation rate for process residuals and waste • 38.6 TWh fuels of which 82% biomass • 97% of water withdrawal returned back to the environment • 6.5 TWh purchased electricity incl. 266 million m3 process water discharges • 2.52 million tonnes fossil CO2e emissions from generated and purchased energy • 1.0 TWh externally delivered electricity/heat/steam Environmental 2 2 2 2 2 2 2 2 2 2 2

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• EUR 11 714 million capital employed • Customer satisfaction: Net Promoter Score 59% • EUR 8.6 billion sales of products and services • EUR 146 million R&D investments • 69 patent applications and over 440 patents granted • EUR 5.8 billion paid to suppliers • Over 20 000 suppliers and nearly 21 000 private forest owners • 96% of supplier spend covered by Supplier Code of Conduct • EUR 687 million capital expenditure • 112 000 shareholders • 22 third-party supplier sustainability audits • EUR 237 million dividends for shareholders • EUR 12.4 billion market capitalisation • EUR 139 million interests for creditors Economic

NPS NPS Adopting the Sustainable Development Goals NPS Stora Enso supports all 17 SDGs, and the following three goals are identified as the most strategic to our business:

Trees absorb CO2 and store carbon together with wood-based products, which can then be recycled as raw material and used for energy generation at end of life.

4 5 Key figures

Operational ROCE Operational EBIT 7.0% 7.6% excl. Forest, Target >13%

Net debt to Debt to Dividend operational equity proposal EBITDA ratio EUR 2.3 0.33 0.30 Target <2.0 Target <0.60 per share

Stora Enso R Share vs indices 1.1.2016 = 100

250 200 150 100 Sales by business 50 0 % 2016 2017 2018 2019 2020

Stora Enso (EUR) OMX Helsinki Basic Materials (EUR) OMX Helsinki (EUR)

Ownership distribution, % of shares held

Solidium Oy¹ 10.7%

Data can be found on theFAM last sheetAB² 10.2% Social Insurance Institution of Finland () 3.1% acagg aterals 36% Finnish institutions (excl. and KELA) 11.4% Swedish institutions (excl. FAM) 6.6% acagg oltos % Finnish private shareholders 4.0% oaterals 1% Swedish private shareholders 4.2% oo rocts 16% ADR holders 2.0% Forest 2% Under nominee names aper 23% (non-Finnish/non-Swedish shareholders) 47.9% ther a elatos 21% 1 Entirely owned by Finnish state. 2 As confirmed to Stora Enso. sales excl. aper

6 Legend Value in % 7

acagg aterals 36%

acagg oltos %

oaterals 1% Legend Value in % oo rocts 16%

Solidium Oy¹ 10.7% XX% Forest 2%

FAM AB² 10.2% XX% aper 23% %

Social Insurance Institution of Finland (KELA) 3.1% XX% ther a elatos 21% 21%

Finnish institutions (excl. Solidium and KELA) 11.4% XX% Total 141%

Swedish institutions (excl. FAM) 6.6% XX%

Finnish private shareholders 4.0% XX%

Swedish private shareholders 4.2% XX%

ADR holders 2.0% XX%

Under nominee names 47.9% XX% (non-Finnish/non-Swedish shareholders) Total 100.1%

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1 Everything that’s made from fossil-based materials today can be made from a tree tomorrow.

8 9 Stora Enso Case: Oulu conversion Packaging will represent a majority of provides solutions Stora Enso’s growth, given the rising demand for sustainable packaging. We have attractive that solve material growth opportunities in Building Solutions, Growth in sustainability where we offer wooden alternatives to premium and construction materials with a large carbon challenges. footprint, such as concrete. Our agenda in low-carbon Biomaterials Innovation will mainly focus packaging on bringing new innovative and sustainable materials based on lignin to the market. Our forests ensure long-term fiber supply for our businesses, now and in the future. Traditional wood products business – sawmilling – is the base for value-added products within Building Solutions and supports our pulp mills As the demand for sustainable packaging in e-commerce and food by supplying fiber. Integrated and cost-efficient applications is increasing, we enable growth by converting Oulu Mill pulp production underpins our board and paper from paper to kraftliner production. The conversion strengthens our manufacturing operations and is the basis for offering in the growing packaging business and is a major step forward our cost competitiveness and future growth. As in our transformation. The production of AvantForte™ by Stora Enso on regards our Paper business, it is a strong cash the converted line started at the beginning of 2021. AvantForte™ is a strong, generator with assets and products that can premium quality kraftliner that meets our customers’ need for high- remain competitive in a declining market. performing, safe and plastic-free packaging while using less material.

Shaping our business for higher growth and value

Growth

1

Packaging Materials Packaging Solutions

2 3

1 We are a leader in eco-friendly, Accelerating the circular packaging We drive the sustainable Wood Products: Biomaterials: materials eco-evolution 2 construction market through Building Solutions Innovations CO2 efficient building solutions 4 5 As the renewable materials company, our promise is that Foundation Cash We see innovation within everything that can be made from fossil-based materials 3 biomaterials as a highly today can be made from a tree tomorrow. To accelerate this attractive platform for growth development, we are shaping our business to build on our Forest, traditional wood leading positions and growth opportunities in packaging, 4 products and market pulp building solutions and biomaterials innovations. Our are our foundation

forest, traditional wood products and market pulp are the 5 Paper is a strong cash generator Forest Wood Products: Biomaterials: Pulp Paper foundation for value creation in our company. Traditional wood products

10 11 Positive climate impacts through Towards a circular bioeconomy substituting fossil-based materials Positive climate benefits are achieved through forest sequestration with

The world needs materials that are both renewable and recyclable – a circular bioeconomy trees absorbing CO2 from the atmosphere, and through the replacement of – to combat climate change. Stora Enso’s focus is to create value through partnerships that finite materials with renewable ones. The product substitution effect describes how much greenhouse gas emissions would be avoided if a wood-based integrate the circular economy into design and innovation. product is used instead of a fossil-based product. Our renewable products can help to reduce emissions otherwise generated by fossil-based products.

When the new materials come from renewable sources no additional fossil CO2 will be released into the atmosphere. 2 6 Circular design Zero waste 3

Circular Case products Stora Enso’s climate impact

CO CO 2 1 5 2 Renewable New circular raw business Our forests remove carbon Our products store carbon materials models −1.5 −2.6 million tonnes of CO2 million tonnes of CO2

CO2

7 4 Our value Our products substitute Sustainable end of life Extending value chain emissions fossil-based products, saving +10.5 −17.9 million tonnes of CO2 million tonnes of CO2 1 Renewable raw materials reused, remanufactured and finally behind the 4evergreen alliance, a European In sustainably managed forests, recycled. Creating new business models circular economy platform. The aim trees can grow forever. Renewability is at is all about collaboration. We are forming is to drive the recycling of fiber-based Climate impact the core of what we do – we need healthy partnerships to build circular value chains packaging and collaboration in circular forests to do business. Growing trees for the future. design and materials. absorb CO2 from the atmosphere, and −11.5 together with wood-based products act 4 Extending value 6 Zero waste as carbon storage. Stora Enso is one of the biggest users We work to minimise waste and million tonnes of CO2 of recycled board and paper in Europe. resource use overall. We focus on 2 Circular design We explore options to recycle products optimising our use of resources and Read more Sustainability 2020 Circular design refers to designing into something different than its original creating value out of by-products. for all stages of the product lifecycle. purpose. Utilising side streams and waste It considers the materials used, can also bring added value. Our revenues 7 Sustainable end of life the manufacturing process, the distribution derived from residuals amounted to When a material or product has and the potential for reuse, or recycling. EUR 105 million in 2020. reached the end of its life, we promote Our aim is to maintain the value of materials recycling and energy recovery to create for as long as possible through product 5 New circular business models further value. At the end of the life cycle, design, innovation and recycling. We are collaborating with customers many of our products are biodegradable and partners to develop new circular or can be burned for energy. 3 Circular products business models to replace fossil- In the circular bioeconomy, products based plastics and cut down on waste. are bio-based. They are also shared, Stora Enso is one of the lead companies

12 13 Stora Enso Forest is our regenerated foundation for forest by planting 62 million seedlings value creation in 2020. We ensure that forests grow to a greater extent than they are harvested, and that biodiversity is promoted as part of everyday forest management practices. The climate benefit and economic values from growing forests are gained while promoting biodiversity and other sustainability aspects.

Precision forestry In 2020, Stora Enso developed Total area of lands Promoting Wood procurement by region, % Digitalisation, remote sensing technology a new ambitious Forest Sustainability Stora Enso sustainable 40 and will enable us to Strategy. One of the focus areas is owns or manages take a step forward in the way we operate biodiversity. The long-term strategic forestry in forests and in the wood supply chain. In focus is to measure biodiversity the future, improved forest data and forest’s holistically to be able to optimise 2.39 98% 30 digital twin enables more accurate forest wood production and biodiversity on planning and operations. our forests and tree plantations. We of the lands we own 20 With a forest’s digital twin, we can collaborate with the Swedish University million or manage were analyse for example the shape, height and of Agricultural Sciences to develop covered by forest diameter of a single tree, the structure of indicators for measuring and monitoring hectares certification schemes 10 a forest site and the landscape view. We the biodiversity impacts of our will be able to carry out forest work more operations and create new methods to precisely in the right place at the right time. enhance select aspects of biodiversity Growing forests capture carbon. 0 Improved data will also support our ambition in our forest management and wood In 2020, we invested Finland Sweden Central Russia Uruguay Baltic Brazil China to achieve more influential sustainability procurement operations. and Europe countries actions. As we become more aware of Supply from own sources, % the growth conditions of individual trees, We control about 30% of our wood raw material consumption globally. In 2020, we can help trees to adapt to the weather EUR 68 million we harvested in own forests and sourced from long-term agreements 10 million fluctuations caused by climate change. in forest growth m3 in total. Our deliveries to our own mills was 35 million m3 in total.

14 15

Country Supply from own % Supply from own sources % sources % Finland 25 30.5 5.5 Sweden and Norway 12.5 25.7 13.2 Central Europe 14.3 14.3 0.0 Russia 8.4 10.1 1.7 Uruguay 2.7 6.6 3.9 Baltic countries 6 6.3 0.3 Brazil 1.9 5.4 3.5 China 0 1.16 1.16

2 Innovations Our innovation agenda is driven by finding new renewable solutions to replace fossil-based materials. In this way we help our customers offer eco-friendly and circular Innovations driving products to their customers and consumers. We aim to increase the focus of our innovation efforts in the areas of sustainable barriers, new sustainable packaging materials change towards and our biochemical platform in lignin. Speed to market is essential and we will drive this through cooperation with a greener future other parties and an “open innovation” approach.

Eco-friendly barriers for food service applications In 2020, Stora Enso expanded its range of renewable packaging materials by introducing new dispersion barrier materials for paper cups and food packaging. Barriers are needed for protection against moisture, oxygen or fat, for example. The new barrier solution responds to market demands for eco-friendly, renewable and recyclable packaging materials to replace plastics in food service applications. The new dispersion barriers Aqua™ and Aqua+™ by Stora Enso are fluorochemical- free and used to produce for cups and food service packaging without the traditional plastic layer.

Highlights Bio-based carbon materials Bio-based foam for protective Carbon fiber for for energy storage packaging and cushioning wind energy rotor blades Stora Enso is developing bio-based carbon Stora Enso will build a pilot facility for Today, 20% of the global carbon fiber materials by processing lignin into a carbon producing lightweight, fiber-based foam supply is used by the wind energy of 2020 intermediate for electrode materials. By material that replaces oil-based polymer industry. In collaboration with Cordenka, converting lignin into so-called hard carbon foams. Cellulose foam can be used as we are developing renewable and anode materials for lithium-ion batteries, protective packaging and for cushioning fossil-free carbon fiber for industrial we can offer a product that replaces fossil- of fragile products such as consumer applications requiring low weight and Stora Enso supports customers to meet consumers’ demand for based anodes, mainly synthetic graphite, electronics. The material offers a renewable, high mechanical performance, such as currently used in batteries. recyclable and biodegradable alternative to wind energy rotor blades. sustainable products based on renewable materials. Our solutions traditional oil-based inner packaging such offer low-carbon alternatives to products based on finite resources. as plastic foam or .

16 17 In production Creating value in the bioeconomy with our renewable products

New generation of eco-products to replace plastic A renewable alternative to plastic cosmetics tubes PureFiber™ by Stora Enso is a new range of ready-made formed The introduction of paperboard for tubes to reduce plastic in fiber packages suitable for food service and consumer goods primary packaging of cosmetics was welcomed by our customers products. The PureFiber™ product line is plastic- and PFAS-free in several acceptance test projects. We are expecting to see and enables a carbon footprint that is approximately 75% lower the first paperboard tube on the market in early 2021. The body compared to alternative packaging materials such as plastic of the tube is made from Natura Shape™ by Stora Enso, which or bagasse. Stora Enso’s formed fiber products are designed is 70% based on renewable raw material, reducing the need for for circularity, meaning that they are renewable, recyclable fossil-based materials. and biodegradable.

A digital B2B marketplace for corrugated packaging In 2020, Stora Enso introduced Box Inc, a new B2B platform business designed to help companies source packaging online easily and cost-efficiently. Box Inc digitalises the traditional buying process by integrating every single step on the platform – from the design of the boxes to supplier quotes and even the ordering Biocomposites – an affordable Building Concepts leading Digital tools to streamline process. As a result, companies save both way to replace fossil plastics the way in the sustainable construction time and money while choosing sustainable Our wood-fiber biocomposites blend To grow wood as a building material Stora Enso offers a range of digital solutions packaging from verified suppliers. wood fibers and polymers – virgin, and to simplify its use in construction, to expand the use of wood in construction, recycled or bio-based. Biocomposites Stora Enso has, together with partners, from design to element installation. These are a more sustainable alternative to developed building concepts for include: CLT360+, a mobile assistant fossil-based plastics with the ability to wooden offices, multi-storey residential for element installation; BIM toolbox, an reduce the carbon footprint by up to buildings and schools. The concepts essential Building Information Modelling 80% compared to fossil-based plastics. show how to create well-performing resource for timber products; Calculatis®, In addition, biocomposites are an outlet and cost-competitive buildings based timber design software for engineers; for recycled plastic streams that would on our wooden components, products and a digital wood moisture meter and otherwise be sent to landfill or incinerated. and services. dashboard, a material monitoring solution.

18 19 Group Leadership Team

Stora Enso Oyj P.O. Box 309 FI-00101 Helsinki, Finland Visiting address: Kanavaranta 1 Tel. +358 2046 131

Stora Enso AB P.O. Box 70395 SE-107 24 Stockholm, Sweden Visiting address: World Trade Center Klarabergsviadukten 70, C4 Tel. +46 1046 46 000 Annica Bresky Seppo Parvi Tobias Bäärnman David Ekberg Johanna Hagelberg President and CEO Chief Financial Chief Strategy and Executive Vice Executive Vice storaenso.com Officer (CFO), Deputy Innovation Officer President, Packaging President, Sourcing [email protected] to the CEO, Country Solutions Division and Logistics Manager Finland

Kati ter Horst Hannu Kasurinen Katariina Kravi Ulrika Lilja Per Lyrvall Executive Vice Executive Vice Executive Vice Executive Vice Executive Vice President, President, Packaging President, Human President, President, Legal, Paper Division Materials Division Resources Communications General Counsel, and Marketing Country Manager Sweden

Markus Mannström Teemu Salmi Annette Stube Jari Suominen Lars Völkel Executive Vice CIO, Head of IT Executive Vice Executive Vice Executive Vice President, & Digitalisation President, President, President, Wood Biomaterials Division Sustainability Forest Division Products Division

For more detailed information about the Group Leadership Team, see Governance 2020, or storaenso.com/investors. Concept and design: Miltton Oy

20 Who to talk to for making brands circular?

Recycling can solve some of the problems with waste. But consumers will demand more for a true eco-friendly lifestyle. We are looking for partners to accelerate the materials eco-evolution by promising consumers true circular packaging and products made of renewable and biodegradable materials for less waste. Start by talking to us. storaenso.com/eco-evolution