Stora Enso Annual Report 2019 Contents Strategy Strategy Sustainability Financials Governance Part of Stora Enso’s Annual Report 2019 Part of Stora Enso’s Annual Report 2019 Part of Stora Enso’s Annual Report 2019 Part of Stora Enso’s Annual Report 2019 Sustainability Financials Governance Strategy Sustainability Financials Governance This is Stora Enso ................................................2 Governance ..........................................................4 Stora Enso in 2019 ...............................................2 Corporate Governance in Stora Enso 2019 .....2 Strategy, governance, and stakeholders ..............5 Shareholders’ meetings ........................................2 Stora Enso in 2019 ...............................................5 Report of the Board of Directors ......................3 Our targets .............................................................9 Board of Directors (Board) ....................................3 CEO’s overview ....................................................7 Adopting the SDGs ..............................................10 Consolidated financial statements ................21 Board committees .................................................7 How we create value .........................................10 Human rights .......................................................12 Notes to the consolidated Management of the Company ..............................8 financial statements .........................................26 Internal control and risk management Transformation .................................................. 11 Social agenda ....................................................16 related to financial reporting ...............................10 Employees and wider workforce......................... 17 Parent company Stora Enso Oyj Divisions .............................................................22 Community ..........................................................22 financial statements .........................................75 Remuneration Statement ................................ 11 Consumer Board .................................................23 Business ethics ...................................................27 Decision-making procedure ............................... 11 Packaging Solutions ............................................28 Notes to the parent company Stora Enso Oyj financial statements ..............77 Main principles of remuneration ......................... 11 Biomaterials .........................................................33 Environmental agenda .....................................31 Remuneration Report 2019 .................................13 Wood Products ....................................................38 Materials, water, and energy ...............................32 Signatures for the financial statements ........85 Paper ....................................................................43 Carbon dioxide ....................................................42 Members of the Board of Directors ................15 Auditor’s report .................................................86 Forests, plantations, and land use ......................48 Group Leadership Team ...................................48 Members of the Group Leadership Team ...... 17 Stora Enso in capital markets .........................89 Economic agenda .............................................55 Appendix 1 ..........................................................19 Customers ...........................................................56 Stora Enso as a taxpayer ..................................95 Suppliers ..............................................................60 Capacities by mill in 2020 .................................97 Investors ..............................................................64 Information for shareholders ........................100 External recognition ............................................66 Data and assurance ..........................................67 Reporting scope ..................................................68 Data by production unit .......................................69 Auditor’s assurance report ..................................72 The GRI index is available at storaenso.com/gri2019 Strategy Annual Report 2019 Strategy Stora Enso supports customers Part of Stora Enso’s Annual Report 2019 to meet consumers’ demand for sustainable products based on renewable materials. Our solutions offer low-carbon Sustainability alternatives to products based on finite resources. Financials Governance Contents Strategy Annual Report 2019 Our renewable products provide a sustainable alternative to fossil-based materials. Sustainability This is Stora Enso ............................... 2 Stora Enso in 2019 .............................. 5 CEO’s overview ................................... 7 Financials How we create value .........................10 Transformation ..................................11 Divisions ............................................ 22 Consumer Board ................................ 23 Packaging Solutions ........................... 28 Biomaterials ........................................ 33 Wood Products ................................... 38 Paper ................................................... 43 Group Leadership Team .................. 48 Print optimised A4 Governance Download printable PDF of Stora Enso’s Annual Report 2019 This is 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 26 000 people in more than 30 countries and our shares are listed on the Helsinki (STEAV, STERV) and Stockholm (STE A, STE R) stock exchanges. Our fiber-based materials are renewable, recyclable, and fossil-free. Our solutions offer low-carbon alternatives to products based on finite resources. We believe that everything that is made from fossil-based materials today can be made from a tree tomorrow. Our products respond to the needs of eco-conscious consumers and producers looking for innovative alternatives to plastic. PureFiber™, a new selection of formed fiber products can be used for single-use food packaging, and DuraSense™ biocomposites for example in cutlery. We are the renewable Our raw material is Our products Our renewable products renewable, recyclable replace fossil- contribute to a circular materials company and fossil-free. based materials. bioeconomy. 3 Divisions in brief Strategy 2019: Enso Stora – This is Stora Enso Consumer Board Packaging Solutions Biomaterials Wood Products Paper The ambition of the Consumer Board The Packaging Solutions division The Biomaterials division offers The Wood Products division is a leading Stora Enso is the second largest paper division is to be the global leader in provides fiber-based board materials a wide variety of pulp grades to meet provider of innovative wood-based producer in Europe with an established high-quality virgin fiber cartonboard. and corrugated packaging products the demands of paper, board, tissue, solutions. The product range covers customer base and a wide product We aim to be the preferred partner and services that are designed for textile and hygiene product producers. applications for construction, portfolio for print and office use. of customers and brand owners in a wide array of applications. Our We maximise the business potential of the window and door industry, as well Customers benefit from Stora Enso’s premium end-use packaging and renewable high-end packaging the side streams of our processes, such as for the packaging and decoration broad selection of papers made from graphical segments. Our wide board solutions serve leading converters, as tall oil and turpentine from biomass. industries. Biocomposites offer recycled and virgin fiber as well as our and barrier coating selection is suitable brand owners and retailers – including Based on our strong innovation plastic replacement opportunities valuable industry experience, know- for consumer packaging for liquid, food, those in e-commerce that are looking to approach, all fractions of biomass, in e.g. consumer goods, industrial how and customer support. pharmaceutical and luxury goods. optimise performance, drive innovation like lignin and sugars, hold substantial components, cosmetics and packaging. and improve their sustainability. potential for use in various applications. Pellets provide a sustainable solution for heating. The offering includes service concepts such as Building Solutions and e-business. Our solutions meet strict requirements regarding safety, quality, design and sustainability. Share of Share of Share of Share of Share of Group sales Group sales Group sales Group sales Group sales 25% 12% 15%* 16% 28% Share of Group Share of Group Share of Group Share of Group Share of Group operational EBIT operational EBIT operational EBIT operational EBIT operational EBIT 26% 14% 24% 11% 22% * of which internal sales 19% * of which internal sales 19% As of 1 January 2020, Stora Enso merged its containerboard business previously in the Packaging Solutions division with the Consumer Board division, creating a new Packaging Materials division. The remaining business in Packaging Solutions together with the recently created Formed Fiber unit, will constitute a more focused Packaging Solutions division. The Group also established a new Forest division. Divisions in 2020: Packaging Materials, Packaging Solutions, Biomaterials,