Ladies and gentlemen, good morning and welcome to the press conference both physically here in Helsinki this morning, but also via a global webcast that we're conducting. Today's press conference is going to last approximately forty five minutes. We're going to conduct it in English. However, afterwards, it's of course possible here in Helsinki to ask questions also on other Nordic languages one on one. At this time, I would like to introduce our Chairman of the Board of Directors, Gunnar Brok.
He'll be hosting the press conference together with Carr Henrik Sundstrom. So please, Gunnar, the floor is yours.
Thank you very much and good morning and welcome to all of you. As a responsible Board, it is of course our duty to make sure that there is an orderly succession in the CEO assignments of the company. And this process started in the autumn of last year when there was a discussion between Joko Carvenen and the Board about the future stay of Joko in the company. And Joko had expressed the desire after seven years in the company and after seven very tough years involving many painful decisions in terms of closing units in the company in various parts of the world and also having set the agenda for the future. So the Board started to look.
And during the time since we have had an external search where we have had an internal candidate that has been put against external candidates. And the reason for this press conference today is of course to introduce to you Carl Hendrik Sundstrom who will as of August 1 be the CEO of Stora Enso. Does this mean a radical change in the strategy of the company? No, it does not. Carl Hendrick has been with the company during the last two years, first as CFO and then during the last year as the Director responsible for the Printing and Living.
He knows the company well. He's been part of the executive group management. He has been in discussions with the Board about the strategic future of the company. So there is no major change in how we would like to see the future of Storanso. The future there we believe that hopefully some of the more painful past is behind us and where the growth is going to be more evident than the restructuring as we go forward.
But I will not take the thunder and tell what Carl Henrik will do as he gradually gets into his position, but rather give you the opportunity to ask questions to Carl Henrik or to myself as Chairman of the Board. But let me say that with Karl Henrik having had two years in the company, but extensive experience in the global manufacturing and service industries with Ericsson, with NXP and other companies. He is very well suited and it's with the full confidence of the Board that we look forward to working with Carl Hendrik. So please Carl Hendrik just a few words before we let questions loose.
Okay. First of all, so my name is Karl Hendrik, but nobody calls me that. So my name is Kalle Sundstrom. That's what I use. It's a lot easier.
So as Gunnar said, I've been in the company for almost two years, first as a CFO and then taking over the paper and wood products for about a year tomorrow. And before that I worked four years in a Dutch company that is in semiconductors. And before that I worked twenty two years in Ericsson. And that's my story. And I'm also a Board member of Swedbank.
I am very honored to get this possibility in what I believe is a great company. I don't know. I have nothing else. I'm a little bit overwhelmed like I should be because this is probably one of the nicest position you can get in any Nordic company I think. So with that I open up for Q and As.
Okay. If you are kind enough to direct your voice to the microphones, because we are having a live audience hopefully far from Helsinki. There will be a microphone here.
Jyrki Wane, Helsinki. It's Anamat. Do you consider yourself that you are an insider in paperboard and pulp business?
I don't think I'm a full insider yet. I feel I still have a couple of years to learn that. But I think I have all the competence I need within the company. I come with a different skill set from different industries. And I think a lot of the skill sets that you need in other industries are being applied right now in the paper and the board industry.
Other questions, comments?
Well, I will continue. Is the headquarter of Sturenzo going to stay here in Helsinki?
Perhaps I should answer that. Yes, the headquarter of Storenso the legal seat is in Helsinki and will remain in Helsinki.
Next question to Karl. How important do you see Finland to Finnish mills and so on to the company?
First of all, I think it's very important that both Finland, Sweden, Germany are the core markets that we are working in. And I don't see any difference situation between any mills in any country. The investment we are having in Finland are actually bigger in size than we are having for example in Sweden. So obviously it's very important.
How do you think is the Surinj of perhaps more Swedish company or Finnish company?
You perhaps repeat the question in the microphone? Sorry.
Do you think is the store and so more Swedish company or Finnish company?
I think that Storanza is a global company and as such the passport is not really of any major importance, particularly not when it comes to people. However, there is a legacy that is very important. Enso has a legacy in Finland, Stora has a legacy in Sweden. But we should also remember that when the company actually when Stora acquired Feltmiller back in the 1990s, it actually did get a very large German legacy and we still have many mills in Germany. So surely it is possibly in Sweden, it's a Finnish company or in Finland it may be a Swedish company.
I don't know, but I think it is not important. It is a true call it venture between the original Enso and Stora. And today it's a company in its own with a global market presence. And as you see the investments are in a way unfortunately taken in Latin America, in China, in India and that's because that's where raw material is available at lower costs. That's also where the consumers are.
So it is unfortunately not an option very often to make an investment in Scandinavia or elsewhere. It is the other factors the raw material and the consumer access that is important.
But I would like to say now spending two years within Stora Enso internally the passport you're holding is not a liability or an asset. It doesn't really matter. And I think that's very important to point out.
Is your home here in Finland or where is it?
So I live in Sweden. That's where my family is living. I work like I've done in the last two years. I spent almost equally time between Helsinki and Stockholm.
Can you tell something about your family?
Okay. I'll tell you about my family. I have two twin daughters that are 22 and one is studying biology in Umio and the other one is just graduating from religious history. And then I have a son that is 17. And then I married to Ulrike my wife.
Do you think that you are going to learn Finnish?
I can tell you honestly that I will try, but I don't think I will succeed, because I'm too old. My brain doesn't work that good any longer.
Eva Pesonev from Copel Fleming. We've understood that Joko Karvinen was a very strong leader. What is your style of leadership?
My style of leadership? Yes. I consider myself a team player and I do believe I build fairly good teams and that's the way I would like to work. I think it's more important the position of Storenso than any single individual. I believe Joko also was a team player.
Joko had a period where he had to make a lot of tough decisions and so forth. So but that's my style and I'm probably quite energetic and that's about me.
Are there more tough decisions ahead?
There will always be a number of tough decisions going forward. We have part of the business which is in a structural decline which is the paper business. And if that's going to decline by 3% or 5%, I don't know. I don't think even God knows. And that means that there will be actions going forward in the paper.
However, we are using a lot of that competence when we are growing in other areas such as biomaterial and renewable packaging. A good example is when we convert the Warkaus into a kraftliner. And that's
Do you have more these sort of plans?
I don't have any plans anything yet because I haven't started. And I think you could give me some time and then I will come back and talk to you. Right now I am still head of Printing and Living and I have to deliver Q2 results and that's the short term focus. And then I start in my new job the first of
Do see the future in the bio economy products Yes. In The Nordic
I think we are coming from a history and a knowledge base that will drive the renewable materials, because we are purely working in renewable materials going forward. And I think that will be an asset that will become more and more valuable over time, because using coal petroleum it's a limited asset and we need to get out of that because it will one day we will have no more petroleum based fuels. So I think renewable and biomaterials is something for the future.
How we can win in the Nordic area in that?
I think we can win by being more innovative and driving and using the knowledge that we're having.
Thank
you. Because you have to remember even in Brazil and even in China, the plantations that we're having either ourselves or with our partners are based on the forestry tradition we brought up in Finland and Sweden with the seedlings and how you do that. We have a huge knowledge base in that area.
Can you tell us something of your remuneration for example in which age you can retire and so on?
Perhaps I should answer that rather than the person in question. When it comes to the remuneration, you will find all the details in the annual accounts. Everything to the I was going to say 0 point dollars but I guess it's zero these days not $0 So there is nothing particular about that.
And my retirement age would be 65. 65.
65.
Yes.
Yes. That's the
tradition of the company. Yes, but he's passed.
I will continue. As you mentioned the demand of the printing paper is decreasing 6%, 7% every year. Do you think that there is need for structural changes in paper industry in Europe?
So first of all, the decline has been around 5% per year. It's gone down a little bit in the last couple of quarters.
Yes. But
year on year, but And that was for newsprint. Other paper grades are holding up. Regarding consolidation, I think in store and so I think it's important that we will look on every opportunity that is creating value for our stakeholders and look on that. However, we are not in a situation where we must do something. We are in a situation that we can do if it's beneficial for us.
And most of the transformation has already been done and we can do that on our own means.
Have you any discussions with UPM now going on?
No, you may say we may say no both of us. Me just say that from the Board's point of view when we talk about the future of the company, We are today with the renewable packaging and biomaterials having by far our majority of assets turnover earning capacity in growth areas. So the contribution from Printing and Living today in terms of result is actually unfortunately rather small in relation particularly to the assets we deploy. But we should not look upon Stora Enso as a uniquely paper company newsprint magazine Fine Paper. It is a company where most of the efforts are in the growth areas.
However, one of the tougher jobs for Carl Henrik in the future, which of course he is responsible for already today is to find a structure and an operating performance product wise in fine paper magazine and newsprint that is sustainable and profitable where we can earn above the cost of capital. But given other of our competitors, I think we have a better footprint actually.
The target for the return on capital employed is 13%. Yes. Is that going to stay? I It's quite
will not make any comments on that because when I start my new job, I will start to look into these things.
I want to change that.
I'm not saying anything. Let me just start in the job and I will come back on that one later on.
Can I just on the Board's behalf say that, I think we owe our shareholders to try to return 13? However, of course today when interest rates are basically zero in most economies inflation is also very low. You could argue that in an environment like the pulp and paper industry, it may be high. On the other hand, given what I just said on the growth sectors, it is not high. So the more we can grow in those more profitable areas and the more we can improve the structure and the profitability of the remaining paper business, it may not be too high.
And we will for sure put in our efforts and demand on the new CEO.
So your answer is yes and no.
More yes than no.
Ladies and gentlemen, are there any more questions specifically here in Helsinki? As I said before, there is a chance to interview most likely both gentlemen for a short period of time after the press conference. If there is no more questions at this point, I would like to close the webcast and the official part of the press conference and we will continue with one on one interviews after this. Thank you very much.
Thank you. Thank you.