Stora Enso Oyj

Quarterly Report • Oct 22, 2013

STORA ENSO OYJ INTERIM REVIEW 22 October 2013 at 13.00 EET

Stora Enso Interim Review January–September 2013 Firm operational EBIT, solid cash flow

Q3/2013 (compared with Q3/2012)

Operational EBIT slightly higher at EUR 184 (EUR 178) million.

• Operational ROCE 9.0% (8.2%).
• Net debt to the last twelve months' operational EBITDA improved to 2.5 (2.8).
• Cash flow from operations EUR 331 (EUR 312) million. Liquidity further strengthened to EUR 2.1 (EUR 1.7) billion.

Q3/2013 (compared with Q2/2013)

Operational EBIT significantly higher at EUR 184 (EUR 124) million mainly due to lower costs.

Q1-Q3/2013 (compared with Q1-Q3/2012)

• Operational EBIT at EUR 426 (EUR 472) million.
• Solid cash flow from operations at EUR 776 (EUR 781) million.

Transformation

• Consumer board machine in Guangxi, China is expected to be operational in the beginning of 2016, as previously announced.
• Montes del Plata Pulp Mill is expected to begin the mill start-up process during the first months of 2014, provided the main contractors continue to deliver on their updated schedules.

Streamlining and structure simplification

EUR 200 million streamlining and structure simplification programme announced on 23 April 2013 proceeding as planned.

Outlook

In Q4/2013 sales are expected to be lower than the EUR 2 727 million and operational EBIT clearly lower than the EUR 158 million in Q4/2012. Renewable Packaging and Building and Living are expected to experience usual seasonal weakness in operational EBIT in Q4/2013. Historically, Renewable Packaging has typically generated around 85% of its operational EBIT during the first three quarters of the year. The weak demand and price situation in European paper markets is expected to continue in Q4/2013.

Kanavaranta 1 Stora Enso Oyj 00160 Helsinki Business ID 1039050-8 P.O. Box 309 FI-00101 Helsinki, Finland Tel +358 2046 131 Fax +358 2046 21471 www.storaenso.com

Summary of Third Quarter Results*

		Q3/13	Q2/13	Q3/12
Sales	EUR million	2 556	2 717	2 694
Operational EBITDA	EUR million	311	247	302
Operational EBIT**	EUR million	184	124	178
Operating profit (IFRS)	EUR million	158	74	165
Profit before tax excl. NRI	EUR million	125	60	102
Profit before tax	EUR million	102	27	102
Net profit excl. NRI	EUR million	104	45	81
Net profit	EUR million	84	21	81
EPS excl. NRI	EUR	0.13	0.05	0.10
EPS	EUR	0.11	0.02	0.11
CEPS excl. NRI	EUR	0.32	0.24	0.29
Operational ROCE	%	9.0	5.8	8.2

* Data for the comparative periods have been restated following adoption of the amended IAS 19 Employee Benefits standard. Data for the comparative periods have been restated in all tables affected by IAS 19. For further details, please see Basis of Preparation on page 13.

** Operational EBIT comprises the operating profit excluding NRI and fair valuations of the segments and Stora Enso's share of the operating profit excluding NRI and fair valuations of its equity accounted investments (EAI). Fair valuations include equity incentive schemes, synthetic options net of realised and open hedges, CO2 emission rights and valuations of biological assets related to forest assets in EAI.

Stora Enso Deliveries and Production

							Change %	Change %	Change %
		Q3/13 Q2/13 Q3/12		Q1- Q3/13	Q1- Q3/12	2012	Q3/13– Q3/12	Q3/13– Q2/13	Q1-Q3/13– Q1–Q3/12
Paper and board deliveries
(1 000 tonnes)	2 456	2 508	2 576	7 460	7 699	10 268	-4.7	-2.1	-3.1
Paper and board production
(1 000 tonnes)	2 469	2 496	2 610	7 484	7 796	10 357	-5.4	-1.1	-4.0
Wood products deliveries
(1 000 m3 )	1 191	1 345	1 129	3 683	3 575	4 750	5.5	-11.4	3.0
Market pulp deliveries
(1 000 tonnes)*	254	303	267	845	774	1 058	-4.9	-16.2	9.2
Corrugated packaging
deliveries (million m2 )	278	271	275	809	818	1 097	1.1	2.6	-1.1

* Stora Enso's net market pulp position is expected to be about 1.2 million tonnes for 2013.

Key Figures

	3(26)

				Q1-	Q1-		Change % Q3/13–	Change % Q3/13–	Change % Q1-Q3/13–
EUR million	Q3/13	Q2/13	Q3/12	Q3/13	Q3/12	2012	Q3/12	Q2/13	Q1-Q3/12
Sales	2 556	2 717	2 694	7 940	8 088	10 815	-5.1	-5.9	-1.8
Operational EBITDA	311	247	302	798	818	1 094	3.0	25.9	-2.4
Operational EBITDA margin, %	12.2	9.1	11.2	10.1	10.1	10.1	8.9	34.1	-
Operational EBIT	184	124	178	426	472	630	3.4	48.4	-9.7
Operational EBIT margin, %	7.2	4.6	6.6	5.4	5.8	5.8	9.1	56.5	-6.9
Operating profit (IFRS)	158	74	165	252	447	701	-4.2	113.5	-43.6
Operating margin (IFRS), %	6.2	2.7	6.1	3.2	5.5	6.5	1.6	129.6	-41.8
Profit before tax excl. NRI	125	60	102	240	234	317	22.5	108.3	2.6
Profit before tax	102	27	102	93	277	481	-	277.8	-66.4
Net profit for the period excl. NRI	104	45	81	205	174	263	28.4	131.1	17.8
Net profit for the period	84	21	81	89	224	490	3.7	300.0	-60.3
Capital expenditure Depreciation and impairment	102	86	131	249	347	556	-22.1	18.6	-28.2
charges excl. NRI	145	145	149	436	433	583	-2.7	-	0.7
Operational ROCE, %	9.0	5.8	8.2	6.8	7.2	7.3	9.8	55.2	-5.6
Earnings per share (EPS) excl.
NRI, EUR	0.13	0.05	0.10	0.25	0.22	0.33	30.0	160.0	13.6
EPS (basic), EUR Cash earnings per share (CEPS)	0.11	0.02	0.11	0.11	0.28	0.61	-	n/m	-60.7
excl. NRI, EUR	0.32	0.24	0.29	0.81	0.77	1.07	10.3	33.3	5.2
CEPS, EUR	0.29	0.20	0.29	0.70	0.83	1.28	-	45.0	-15.7
Return on equity (ROE), %	6.2	1.5	5.7	2.1	5.1	8.3	8.8	n/m	-58.8
Debt/equity ratio Net debt/last twelve months'	0.51	0.55	0.52	0.51	0.52	0.48	-1.9	-7.3	-1.9
operational EBITDA	2.5	2.7	2.8	2.5	2.8	2.5	-10.7	-7.4	-10.7
Equity per share, EUR	6.82	6.67	7.26	6.82	7.26	7.32	-6.1	2.2	-6.1
Equity ratio, %	41.1	40.7	42.6	41.1	42.6	42.8	-3.5	1.0	-3.5
Average number of employees Average number of shares (million)	28 297	28 661	29 167	28 346	28 915	28 777	-3.0	-1.3	-2.0
periodic	788.6	788.6	788.6	788.6	788.6	788.6
cumulative	788.6	788.6	788.6	788.6	788.6	788.6
cumulative, diluted	788.6	788.6	788.6	788.6	788.6	788.6

Operational EBIT comprises the operating profit excluding NRI and fair valuations of the segments and Stora Enso's share of the operating profit excluding NRI and fair valuations of its equity accounted investments (EAI). Fair valuations include equity incentive schemes, synthetic options net of realised and open hedges, CO2 emission rights and valuations of biological assets related to forest assets in EAI.

NRI = Non-recurring items. These are exceptional transactions that are not related to normal business operations. The most common non-recurring items are capital gains, additional write-downs or reversals of write-downs, provisions for planned restructuring and penalties. Non-recurring items are normally specified individually if they exceed one cent per share.

Reconciliation of Operational Profitability

							Change	Change	Change
							%	%	%
				Q1-	Q1-		Q3/13–	Q3/13–	Q1-Q3/13–
EUR million	Q3/13	Q2/13	Q3/12	Q3/13	Q3/12	2012	Q3/12	Q2/13	Q1-Q3/12
Operational EBITDA	311	247	302	798	818	1 094	3.0	25.9	-2.4
Equity accounted
investments (EAI),
operational*	18	22	25	64	87	119	-28.0	-18.2	-26.4
Depreciation and
impairment excl. NRI	-145	-145	-149	-436	-433	-583	2.7	-	-0.7
Operational EBIT	184	124	178	426	472	630	3.4	48.4	-9.7
Fair valuations and non
operational items**	-3	-17	-13	-27	-45	-59	76.9	82.4	40.0
Non-recurring items	-23	-33	-	-147	20	130	n/m	30.3	n/m
Operating Profit (IFRS)	158	74	165	252	447	701	-4.2	113.5	-43.6

* Group's share of operational EBIT of equity accounted investments (EAI).

** Fair valuations and non-operational items include equity incentive schemes, synthetic options net of realised and open hedges, CO2 emission rights and valuations of biological assets related to forest assets in equity accounted investments (EAI) and Group's share of tax and net financial items of EAI.

Q3/2013 Results (compared with Q3/2012)

Breakdown of Sales Change Q3/2012 to Q3/2013

	Sales
Q3/12, EUR million	2 694
Price and mix, %	-1
Currency, %	-1
Volume, %	-1
Other sales*, %	-1
Total before structural changes, %	-4
Structural change**, %	-1
Total, %	-5
Q3/13, EUR million	2 556

* Wood, energy, paper for recycling, by-products etc.

** Asset closures, major investments, divestments and acquisitions

Sales at EUR 2 556 million were EUR 138 million lower than a year ago as sales of paper products declined. Operational EBIT was EUR 184 million.

Lower volumes and lower sales prices in local currencies for paper grades decreased operational EBIT by EUR 25 million and EUR 28 million, respectively. Higher volumes in packaging improved operational EBIT by EUR 15 million. Paper and board production was curtailed by 8% (8%) and sawnwood production by 1% (10%) to manage inventories.

Overall variable costs were EUR 28 million lower, mainly due to lower prices for wood raw material and pulp. Fixed costs were reduced by EUR 26 million.

The operational result from equity accounted investments decreased by EUR 7 million, mainly due to Veracel.

The average number of employees at 28 300 was 870 lower than a year ago. The number of employees decreased mainly in Sweden and Finland due to closures and restructurings. The average number of employees increased by 410 in China.

The Group recorded non-recurring items (NRI) with a negative net impact of approximately EUR 23 million on operating profit and a positive impact of approximately EUR 3 million on income tax in its third quarter 2013 results. The NRI are related to restructuring provisions due to the streamlining and structure simplification

project announced on 23 April 2013, and release of provisions recorded in previous periods.

Net financial expenses at EUR 56 million were EUR 7 million lower than a year ago. The net interest expense increased by EUR 8 million due to the slightly higher average gross debt level, lower capitalised interest and lower interest income. The fair valuation of interest rate derivatives had a positive impact of EUR 12 million. The net foreign exchange impact in the third quarter in respect of cash, interest-bearing assets and liabilities and related hedges was EUR 7 (EUR -1) million. During the quarter, a EUR 99 million loan note issued by Papyrus Holding AB, classified in the balance sheet as an available-for-sale investment, was derecognised as a result of the Group receiving a cash prepayment of EUR 40 million, with the terms on the remaining portion of the loan being changed through mutual agreement. The new loan note has been classified in the balance sheet as a noncurrent loan receivable. A net fair valuation loss of EUR 5 million related to the changes in the note terms was recorded in the third quarter of 2013.

Breakdown of Capital Employed Change Q3/2012 to Q3/2013

	Capital Employed
Q3/12, EUR million	8 814
Capital expenditure less depreciation	-140
Available-for-sale: operative (mainly PVO)	-144
Equity accounted investments	114
Net liabilities in defined benefit plans	-135
Operative working capital and other interest-free items, net	-223
Net tax liabilities	143
Translation difference	-210
Other changes	-27
Q3/13, EUR million	8 192

The operational return on capital employed was 9.0% (8.2%). Excluding the ongoing strategic investments in Biomaterials and Renewable Packaging the operational return on capital employed would have been 10.4% (9.5%).

January–September 2013 Results (compared with January–September 2012)

Sales decreased by EUR 148 million year-on-year due to lower sales of paper grades. Operational EBIT decreased by EUR 46 million due to clearly lower prices in local currencies and lower deliveries in paper grades. However, fixed costs were reduced, and fibre and chemical costs were clearly lower.

Q3/2013 Results (compared with Q2/2013)

Sales decreased by EUR 161 million, but operational EBIT improved from EUR 124 million in the second quarter to EUR 184 million in the third quarter. Sales prices and volumes remained stable, but energy and especially fixed costs decreased, partly due to seasonality.

Capital Structure
EUR million	30 Sep 13	30 Jun 13	31 Dec 12	30 Sep 12
Operative fixed assets*	5 613	5 571	6 022	6 001
Equity accounted investments	1 972	1 999	1 965	1 978
Operative working capital, net	1 363	1 418	1 460	1 641
Non-current interest-free items, net	-575	-580	-611	-475
Operating Capital Total	8 373	8 408	8 836	9 145
Net tax liabilities	-181	-174	-217	-331
Capital Employed	8 192	8 234	8 619	8 814
Equity attributable to owners of the Parent	5 381	5 261	5 770	5 725
Non-controlling interests	86	88	92	89
Net interest-bearing liabilities	2 725	2 885	2 757	3 000
Financing Total	8 192	8 234	8 619	8 814

* Operative fixed assets include property, plant and equipment, goodwill, biological assets, emission rights, available-for-sale operative shares and other intangible assets.

Financing Q3/2013 (compared with Q2/2013)

Total unutilised committed credit facilities were unchanged at EUR 700 million, and cash and cash equivalents net of overdrafts remained strong at EUR 2 096 million, which is EUR 289 million more than for the previous quarter. In addition, Stora Enso has access to various long-term sources of funding up to EUR 600 million.

In September 2013 Stora Enso drew a EUR 140 million seven-year loan from the European Investment Bank (EIB) to be used for research and development. The interest rate of the loan is 3.3%. There are no financial covenants in the terms of the new loan.

During the third quarter of 2013, Stora Enso repurchased EUR 34 million of the 5.125% bond notes due in June 2014. Following the repurchase, the aggregate nominal amount of the outstanding notes is EUR 347 million. In addition, a bond maturing in August 2013 with a nominal amount of EUR 25 million was repaid.

The ratio of net debt to the last twelve months' operational EBITDA was 2.5 (2.7).

The debt/equity ratio at 30 September 2013 was 0.51 (0.55). The decrease is primarily due to net profit and cash flow generation in the third quarter of 2013 and EUR 77 million increase in the value of Stora Enso's shareholding in PVO owing to higher electricity prices.

Cash Flow
							Change	Change	Change
							%	%	%
EUR million	Q3/13	Q2/13	Q3/12	Q1- Q3/13	Q1- Q3/12	2012	Q3/13– Q3/12	Q3/13– Q2/13	Q1-Q3/13– Q1-Q3/12
Operational EBITDA	311	247	302	798	818	1 094	3.0	25.9	-2.4
NRI on Operational
EBITDA	-23	-54	-	-128	31	18	n/m	57.4	n/m
Dividends received from
equity accounted
investments	2	7	1	20	9	102	100.0	-71.4	122.2
Other adjustments	-3	18	5	1	-10	-34	-160.0	-116.7	110.0
Change in working capital	44	126	4	85	-67	74	n/m	-65.1	226.9
Cash Flow from
Operations	331	344	312	776	781	1 254	6.1	-3.8	-0.6
Cash spent on fixed and
biological assets	-107	-80	-155	-275	-377	-561	31.0	-33.8	27.1
Acquisitions of equity
accounted investments	-8	-37	-37	-55	-99	-115	78.4	78.4	44.4
Cash Flow after Investing
Activities	216	227	120	446	305	578	80.0	-4.8	46.2

Q3/2013 cash flow

Third quarter 2013 cash flow from operations remained solid at EUR 331 million. Receivables decreased by EUR 90 million. Payments from the previously announced restructuring provisions were EUR 30 million. Inventories and payables were unchanged.

Capital Expenditure for January–September 2013

Additions to fixed and biological assets in the first three quarters of 2013 totalled EUR 249 million, which is 57% of depreciation in the same period. Investments in fixed assets and biological assets had a cash outflow impact of EUR 275 million in the first three quarters of 2013.

The EUR 25 million equity injection into Montes del Plata, a joint venture in Uruguay, and EUR 30 million cost of acquiring a 35% shareholding in Bulleh Shah, a joint venture in Pakistan, totalled EUR 55 million in the first three quarters of 2013.

The main capital expenditure projects ongoing during the first three quarters of 2013 were Montes del Plata and the Ostrołęka containerboard machine.

Capital Expenditure, Equity Injections and Depreciation Forecast 2013

EUR million	Forecast 2013
Capital expenditure*	400–450
Equity injections	75
Total	475–525
Depreciation	580–600
* Capital expenditure includes approximately EUR 40-80 million for the project in Guangxi, China.

Streamlining and structure simplification programme to cut EUR 200 million from fixed costs

The streamlining and structure simplification programme, which is intended to achieve annual net fixed cost savings of EUR 200 million after compensating for inflation in addition to cost takeout in the second quarter of 2014 versus actual 2012 is proceeding according to plan. The full impact of the net cost savings is expected from the second quarter of 2014 onwards.

About 40% of the cost reduction actions specific to this programme were completed by the end of the third quarter of 2013. The impact on Stora Enso's result for 2013 is expected to be limited. The non-recurring onetime costs related to the programme in the first nine months of 2013 totalled EUR 88 million, including EUR 45 million in the third quarter of 2013. Most of the remaining non-recurring costs were announced in the third quarter of 2013. The number of employees was reduced by 770 by the end of the third quarter.

Near-term Outlook

In the fourth quarter of 2013 sales are expected to be lower than the EUR 2 727 million and operational EBIT clearly lower than the EUR 158 million in the fourth quarter of 2012. Renewable Packaging and Building and Living are expected to experience usual seasonal weakness in operational EBIT in the fourth quarter of 2013. Historically, Renewable Packaging has typically generated around 85% of its operational EBIT during the first three quarters of the year. The weak demand and price situation in European paper markets is expected to continue in the fourth quarter 2013.

Segments Q3/13 compared with Q3/12

Printing and Reading

Printing and Reading is a world-class responsible supplier of paper from renewable sources for print media and office use. Its wide offering serves publishers, retailers, printing houses, merchants, converters and office suppliers, among others. Printing and Reading produces newsprint, book paper, SC paper, coated paper and office paper.

							Change %	Change %	Change %
				Q1-	Q1-		Q3/13–	Q3/13–	Q1-Q3/13–
EUR million	Q3/13	Q2/13	Q3/12	Q3/13	Q3/12	2012	Q3/12	Q2/13	Q1-Q3/12
Sales	1 041	1 101	1 227	3 265	3 645	4 839	-15.2	-5.4	-10.4
Operational EBITDA	81	51	121	204	364	493	-33.1	58.8	-44.0
Operational EBIT	13	-17	53	-2	164	223	-75.5	176.5	-101.2
% of sales	1.2	-1.5	4.3	-0.1	4.5	4.6	-72.1	180.0	-102.2
Operational ROOC, %*	1.9	-2.4	7.0	-0.1	7.2	7.4	-72.9	179.2	-101.4
Paper deliveries, 1 000 t	1 582	1 652	1 794	4 918	5 339	7 130	-11.8	-4.2	-7.9
Paper production, 1 000 t	1 600	1 641	1 789	4 924	5 401	7 210	-10.6	-2.5	-8.8

* Operational ROOC = 100% x Operational EBIT/Average operating capital

Sales prices in local currencies and product mix had a clearly negative impact on the results. Delivery volumes were lower than a year ago as paper demand remained weak in Europe.

Pulp costs were significantly lower due to lower bleached hardwood kraft pulp (BHKP) consumption at Oulu Mill and the long stoppage in the third quarter of 2012 at Veitsiluoto Pulp Mill, which distorted the year-on-year comparison. Fixed costs were clearly lower than a year ago.

Stora Enso is investing some EUR 14 million in pulp mill modernisation at Oulu Mill in Finland. The investment will improve the mill's environmental performance and cost efficiency.

Markets

Product Market		Demand Q3/13 compared with Q3/12	Demand Q3/13 compared with Q2/13	Price Q3/13 compared with Q3/12	Price Q3/13 compared with Q2/13
Paper	Europe	Weaker	Stable	Slightly lower	Stable

Biomaterials

Biomaterials offers a variety of pulp grades to meet the demands of paper, board and tissue producers. Pulp made from renewable resources in a sustainable manner is an excellent raw material with many different end uses. Biomaterials comprises mainly plantations, the Group's joint-venture Veracel and Montes del Plata pulp mills, Nordic stand-alone pulp mills, the Pulp Competence Centre and the Biorefinery.

							Change	Change	Change
							%	%	%
EUR million	Q3/13	Q2/13	Q3/12	Q1- Q3/13	Q1- Q3/12	2012	Q3/13– Q3/12	Q3/13– Q2/13	Q1-Q3/13– Q1-Q3/12
Sales	242	257	268	756	756	1 012	-9.7	-5.8	-
Operational EBITDA	29	22	38	79	66	99	-23.7	31.8	19.7
Operational EBIT	17	14	32	53	54	82	-46.9	21.4	-1.9
% of sales	7.0	5.4	11.9	7.0	7.1	8.1	-41.2	29.6	-1.4
Operational ROOC, %*	4.9	3.8	8.8	5.1	4.9	5.7	-44.3	28.9	4.1
Pulp deliveries, 1 000 t	444	461	467	1 380	1 365	1 836	-4.9	-3.7	1.1

* Operational ROOC = 100% x Operational EBIT/Average operating capital

The Enocell Pulp Mill annual maintenance stoppage and the unfavourable currency impacts and additional costs, including writing down of capitalised costs and settlement of past legal disputes, at Veracel Pulp Mill decreased operational EBIT.

Montes del Plata Pulp Mill (MDP) is expected to begin the mill start-up process during the first months of 2014, provided the main contractors continue to deliver on their updated schedules. In 2014 Stora

Enso's share of MDP's production is expected to be approximately half a million tonnes, a reduction from the earlier estimate of 650 000 tonnes that assumed start-up by the end of September 2013. The primary focus is to have an excellent mill commissioning, which is key to a successful ramp-up.

Markets
Product	Market	Demand Q3/13 compared with Q3/12	Demand Q3/13 compared with Q2/13	Price Q3/13 compared with Q3/12	Price Q3/13 compared with Q2/13
Softwood pulp Europe		Slightly stronger	Slightly stronger	Higher	Slightly higher

Building and Living

Building and Living provides wood-based innovations and solutions for everyday living and housing needs. The product range covers all areas of urban construction, from supporting structures to interior design and environmental construction. Further-processed products include massive wood elements and housing modules, wood components and pellets, in addition to a variety of sawn timber goods.

							Change	Change	Change
							%	%	%
				Q1-	Q1-		Q3/13–	Q3/13–	Q1-Q3/13–
EUR million	Q3/13	Q2/13	Q3/12	Q3/13	Q3/12	2012	Q3/12	Q2/13	Q1-Q3/12
Sales	460	500	403	1 401	1 228	1 684	14.1	-8.0	14.1
Operational EBITDA	33	39	10	85	42	59	230.0	-15.4	102.4
Operational EBIT	24	28	1	56	22	29	n/m	-14.3	154.5
% of sales	5.2	5.6	0.2	4.0	1.8	1.7	n/m	-7.1	122.2
Operational ROOC, %*	17.7	20.0	0.7	13.6	5.1	5.2	n/m	-11.5	166.7
Deliveries, 1 000 m3	1 157	1 303	1 097	3 573	3 460	4 592	5.5	-11.2	3.3

* Operational ROOC = 100% x Operational EBIT/Average operating capital

Global sales prices in local currencies were clearly higher than a year ago.

Sales volume increased by 6%, costs decreased.

Stora Enso cross-laminated timber (CLT) elements will be used to build a two-storey wooden-framed administrative building for the Nordic World Ski Championships in Sweden.

Product	Market	Demand Q3/13 compared with Q3/12	Demand Q3/13 compared with Q2/13	Price Q3/13 compared with Q3/12	Price Q3/13 compared with Q2/13
Wood products Europe		Stronger	Significantly weaker Slightly higher		Stable

Renewable Packaging

Renewable Packaging offers fibre-based packaging materials and innovative packaging solutions for consumer goods and industrial applications. Renewable Packaging operates throughout the value chain, from pulp production to production of materials and packaging, and recycling. It comprises three business units: Consumer Board, Packaging Solutions and Packaging Asia.

10(26)
--------	--

							Change	Change	Change
							%	%	%
				Q1-	Q1-		Q3/13–	Q3/13–	Q1-Q3/13–
EUR million	Q3/13	Q2/13	Q3/12	Q3/13	Q3/12	2012	Q3/12	Q2/13	Q1-Q3/12
Sales	829	835	812	2 484	2 418	3 216	2.1	-0.7	2.7
Operational EBITDA	152	129	134	400	370	476	13.4	17.8	8.1
Operational EBIT	100	77	83	245	218	273	20.5	29.9	12.4
% of sales	12.1	9.2	10.2	9.9	9.0	8.5	18.6	31.5	10.0
Operational ROOC, %*	16.9	12.7	14.3	14.0	12.8	12.1	18.2	33.1	9.4
Paper and board
deliveries, 1 000 t	874	856	782	2 542	2 360	3 138	11.8	2.1	7.7
Paper and board
production, 1 000 t	869	855	821	2 560	2 395	3 147	5.8	1.6	6.9
Corrugated packaging
deliveries, million m2	278	271	275	809	818	1 097	1.1	2.6	-1.1
Corrugated packaging
production, million m2	266	267	269	791	801	1 076	-1.1	-0.4	-1.2

* Operational ROOC = 100% x Operational EBIT/Average operating capital

Higher sales volumes and lower variable costs, especially for wood, more than offset the impact of a less favourable mix.

Ramp-up of the new containerboard machine at Ostrołęka in Poland is proceeding as planned.

The consumer board machine in Guangxi, China is expected to be operational in the beginning of 2016, as previously announced. Approvals from MOFCOM (Ministry of Commerce of People's Republic of China) are expected to be received before the end of 2013.

There will be an annual maintenance stoppage at Skoghall and Fors mills in Sweden during the fourth quarter of 2013.

Markets

Product	Market	Demand Q3/13 compared with Q3/12	Demand Q3/13 compared with Q2/13	Price Q3/13 compared with Q3/12	Price Q3/13 compared with Q2/13
Consumer board	Europe	Slightly stronger	Stable	Slightly lower	Stable
Corrugated packaging	Europe	Stable	Stable	Stable	Stable

Other

The segment Other includes the Nordic forest equity accounted investments, Stora Enso's shareholding in Pohjolan Voima, operations supplying wood to the Nordic mills and Group shared services and administration.

EUR million	Q3/13	Q2/13	Q3/12	Q1- Q3/13	Q1- Q3/12	2012	Change % Q3/13– Q3/12	Change % Q3/13– Q2/13	Change % Q1-Q3/13– Q1-Q3/12
Sales	612	685	645	2 018	2 011	2 684	-5.1	-10.7	0.3
Operational EBITDA	16	6	-1	30	-24	-33	n/m	166.7	225.0
Operational EBIT	30	22	9	74	14	23	233.3	36.4	n/m
% of sales	4.9	3.2	1.4	3.7	0.7	0.9	250.0	53.1	n/m

Variable costs were lower for Wood Supply in the third quarter of 2013.

Short-term Risks and Uncertainties

The main short-term risks and uncertainties relate to the economic situation in Europe, the ability of certain countries to refinance excessive debts and further increasing imbalance in the European paper market.

Energy sensitivity analysis: the direct effect of a 10% increase in electricity, heat, oil and other fossil fuel market prices would have a negative impact of approximately EUR 15 million on operational EBIT for the next twelve months, after the effect of hedges.

Wood sensitivity analysis: the direct effect of a 10% increase in wood prices would have a negative impact of approximately EUR 200 million on operational EBIT for the next twelve months.

Chemicals and fillers sensitivity: the direct effect of a 10% increase in chemical and filler prices would have a negative impact of approximately EUR 69 million on operational EBIT for the next twelve months.

A decrease of energy, wood or chemical and filler prices would have the opposite impact.

Foreign exchange rates sensitivity analysis for the next twelve months: the direct effect on operational EBIT of a 10% strengthening in the value of the US dollar, Swedish krona and British pound against the euro would be about positive EUR 102 million, negative EUR 84 million and positive EUR 50 million annual impact, respectively. Weakening of the currencies would have the opposite impact. These numbers are before the effect of hedges and assuming no changes occur other than a single currency exchange rate movement.

Veracel

On 11 July 2008 Stora Enso announced that a federal judge in Brazil had issued a decision claiming that the permits issued by the State of Bahia for the operations of Stora Enso's equity accounted investment Veracel were not valid. The judge also ordered Veracel to take certain actions, including reforestation with native trees on part of Veracel's plantations and a possible BRL 20 million (EUR 7 million) fine. Veracel disputes the decision and has filed an appeal against it. Veracel operates in full compliance with all Brazilian laws and has obtained all the necessary environmental and operating licences for its industrial and forestry activities from the competent authorities. In November 2008 a Federal Court suspended the effects of the decision. Veracel has not recorded any provision for the reforestation or the possible fine.

On 30 September 2009 a judge in the State of Bahia issued an interim decision ordering the State Government of Bahia not to grant Veracel further plantation licences in the municipality of Eunápolis in response to claims by a state prosecutor that Veracel's plantations exceeded the legal limits, which Veracel disputes. Veracel's position is supported by documentation issued by the State environmental authority. The case has now been closed by the judge and will not be reported further.

During construction of Veracel Pulp Mill, a supplier won the international tendering to supply part of the mill. The proposal included an element to make the plant eligible for a Drawback Suspension Tax Benefit which would provide exemptions on imports. One of the conditions of the drawback was that funds used to pay the supplier be raised outside Brazil. At the same time, part of the mill construction was financed locally. Following a tax inspection at the supplier, Federal Tax Authorities issued a tax infraction note against the supplier intended to cancel the drawback benefits. The supplier presented its defence and the appeal is still pending a decision from the Administrative Tax Entity Court. In parallel, the supplier filed an arbitration proceeding against Veracel in order to determine which company shall be responsible for eventual damages if the supplier is found guilty. In September 2013 the International Chamber of Commerce Arbitration Court decided that Veracel and the supplier shall share liability for any potential damages in the ratio Veracel 75% and the supplier 25%. Veracel's exposure amounts to approximately BRL 90 million (EUR 30 million). No provisions have been made in either Veracel's or Stora Enso's accounts for this case.

Class Action Lawsuits in USA

In the context of magazine paper sales in the USA in 2002 and 2003, Stora Enso Oyj (SEO) and Stora Enso North America (SENA) were sued in a number of class action (and other civil) lawsuits filed in the USA by various magazine paper purchasers that claimed damages for alleged antitrust violations. In December 2010 a US federal district court granted a motion for summary judgement dismissing the direct purchaser class action claims on SEO and SENA. Following appeal, a federal court of appeals on 6 August 2012 upheld the district court's ruling as to SEO, but reversed the district court's ruling as to SENA and referred that part of the case back to the district court for a jury trial to determine whether SENA's conduct did violate the federal antitrust

laws. The trial of the case against SENA was scheduled to begin in August 2013. Because Stora Enso disposed of SENA in 2007, Stora Enso's liability, if any, would have been determined by the provisions in the SENA Sales and Purchasing Agreement. On 17 July 2013, Stora Enso reached an agreement (which is subject to approval by the US federal district court) to settle the cases filed by the direct magazine paper purchasers without any admission of liability by SENA or SEO. Stora Enso has paid into escrow USD 8 million to cover the cost of settling those claims, which cost has been recorded in the third quarter 2013 accounts. The only remaining case that is pending, filed on behalf of indirect purchasers of publication paper in the California state court, has been stayed pending final resolution of the direct purchaser case. In previous periods the cases were disclosed as a contingent liability.

Legal Proceedings in Finland

On 3 December 2009 the Finnish Market Court fined Stora Enso for competition law infringements in the market for roundwood in Finland from 1997 to 2004. Stora Enso did not appeal against the ruling.

On 31 March 2011 Metsähallitus of Finland initiated legal proceedings against Stora Enso, UPM and Metsäliitto claiming compensation for damages allegedly suffered due to the competition law infringements. The total claim against all the defendants amounts to approximately EUR 160 million and the secondary claim against Stora Enso to approximately EUR 85 million.

In addition, Finnish municipalities and private forest owners have initiated similar legal proceedings. The total amount claimed from all the defendants amounts to approximately EUR 75 million and the secondary claims and claims solely against Stora Enso to approximately EUR 25 million.

Stora Enso denies that Metsähallitus and other plaintiffs have suffered any damages whatsoever and will forcefully defend itself. No provisions have been made in Stora Enso's accounts for these lawsuits.

In August 2013 the Supreme Administrative Court gave its decision concerning the water treatment lagoon in the environmental permit related to the closure of Kemijärvi Pulp Mill. The Court ordered Stora Enso to deliver a new action plan for removing the majority of the sludge from the basin at the Kemijärvi site to the State Administrative Agency by the end of 2014. The Agency was ordered to evaluate the costs to Stora Enso against the environmental benefits. No provisions have been made in Stora Enso's accounts for this case.

Changes in Group Management

On 17 September Stora Enso announced that it had appointed Seppo Parvi as its new Chief Financial Officer. He is currently Chief Financial Officer and Executive Vice President, Food and Medical Business Area, at Ahlstrom Corporation. He will join Stora Enso at the latest during the first quarter of 2014.

Share Capital

During the quarter no A shares were converted into R shares.

On 30 September 2013 Stora Enso had 177 146 372 A shares and 611 473 615 R shares in issue of which the Company held no A shares or R shares.

This report is unaudited.

Helsinki, 22 October 2013 Stora Enso Oyj Board of Directors

Financials

Basis of Preparation

This unaudited interim financial report has been prepared in accordance with the accounting policies set out in International Accounting Standard 34 on Interim Financial Reporting and in the Group's Annual Report for 2012.

The Group has applied the following amendment effective from 1 January 2013 that requires restatement of previous financial statements:

IAS 19 Employee Benefits (amendment) eliminates the 'corridor method', streamlines the presentation of changes in assets and liabilities arising from defined benefit plans and enhances the disclosure requirements arising from the standard. The Group has not applied the 'corridor method'. The effects of this amendment on the Group financial statements are not material. The effects on the Condensed Consolidated Income Statement are the following:

	As published	Adjustment	Restated
EUR million	2012	2012	2012
Operational EBIT	618	12	630
Operating profit (IFRS)	689	12	701
Net financial items	-207	-13	-220
Profit before tax	482	-1	481
Income tax	9	-	9
Net profit for the period	491	-1	490
Attributable to:
Owners of the Parent	481	-1	480
Non-controlling interests	10	-	10
	491	-1	490
Total equity	5 876	-14	5 862
Post-employment benefit provisions	462	18	480
Deferred tax liabilities	344	-4	340

Effects of Changes to IAS 19 Employee Benefits

The following standards have also been applicable for the first time effective from 1 January 2013:

• IAS 1 Presentation of Financial Statements (amendment) introduces changes to the presentation of items of other comprehensive income. Items that could be reclassified to profit or loss at a future point in time now have to be presented separately from items that will never be reclassified. The amendment affected presentation only and had no impact on the Group's financial position or performance.
• IFRS 7 Financial Instruments: Enhanced disclosure requirements related to offsetting of financial assets and financial liabilities. The amendment might have some effect on presentation in the financial statements but had no impact on the Group's financial position or performance.
• IFRS 13 Fair Value Measurement establishes the definition of fair value and introduces a single IFRS framework for measuring fair value while seeking to increase consistency and comparability by requiring disclosures about fair value measurements applied in the financial statements of an entity. The application of IFRS 13 has not materially affected the fair value measurements carried out by the Group. The new standard also requires specific disclosures on fair values, some of which replace existing disclosure requirements in other standards. Some of these disclosures are specifically required for financial instruments, thereby affecting the interim financial statement. The additional disclosures are included in this Interim Review.
• IAS 12 Income Taxes (amendment) provides additional regulation on deferred tax in the case of recovery of underlying assets. The amendment is not relevant to the Group.
• IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine introduces accounting treatment for stripping costs arising in the mining industry. The interpretation is not relevant to the Group.

All figures in this Interim Review have been rounded to the nearest million, unless otherwise stated.

							Change	Change	Change
							%	%	%
				Q1-	Q1-		Q3/13–	Q3/13–	Q1-Q3/13–
EUR million	Q3/13	Q2/13	Q3/12	Q3/13	Q3/12	2012	Q3/12	Q2/13	Q1-Q3/12
Sales	2 556	2 717	2 694	7 940	8 088	10 815	-5.1	-5.9	-1.8
Other operating income	29	25	47	87	171	219	-38.3	16.0	-49.1
Materials and services	-1 612	-1 776	-1 725	-5 112	-5 192	-6 974	6.6	9.2	1.5
Freight and sales
commissions	-236	-249	-256	-743	-748	-1 008	7.8	5.2	0.7
Personnel expenses	-309	-362	-329	-1 024	-1 038	-1 349	6.1	14.6	1.3
Other operating expenses	-134	-160	-125	-479	-416	-578	-7.2	16.3	-15.1
Share of results of equity
accounted investments	9	14	8	49	17	108	12.5	-35.7	188.2
Depreciation and impairment	-145	-135	-149	-466	-435	-532	2.7	-7.4	-7.1
Operating Profit	158	74	165	252	447	701	-4.2	113.5	-43.6
Net financial items	-56	-47	-63	-159	-170	-220	11.1	-19.1	6.5
Profit before Tax	102	27	102	93	277	481	-	277.8	-66.4
Income tax	-18	-6	-21	-4	-53	9	14.3	-200.0	92.5
Net Profit for the Period	84	21	81	89	224	490	3.7	300.0	-60.3
Attributable to:
Owners of the Parent	82	19	80	84	218	480	2.5	n/m	-61.5
Non-controlling interests	2	2	1	5	6	10	100.0	-	-16.7
	84	21	81	89	224	490	3.7	300.0	-60.3
Earnings per Share
Basic earnings per share,
EUR	0.11	0.02	0.11	0.11	0.28	0.61	-	n/m	-60.7
Diluted earnings per share, EUR	0.11	0.02	0.11	0.11	0.28	0.61	-	n/m	-60.7

Condensed Consolidated Income Statement

Consolidated Statement of Comprehensive Income

EUR million	Q3/13	Q2/13	Q3/12		Q1-Q3/13 Q1-Q3/12	2012
Net profit for the period	84	21	81	89	224	490
Other Comprehensive Income
Items that will Not be Reclassified to Profit and Loss
Actuarial losses on defined benefit plans	-2	-	-8	-2	-16	-184
Share of other comprehensive income of equity
accounted investments that will not be reclassified Income tax relating to items that will not be	-	-	-	-1	-5	-5
reclassified	1	-	2	1	5	35
	-1	-	-6	-2	-16	-154
Items that may be Reclassified Subsequently to Profit and Loss
Share of other comprehensive income of equity accounted investments that may be reclassified	1	10	-4	14	-11	1
Currency translation movements on equity net investments (CTA) Currency translation movements on non	-32	-174	20	-129	20	-29
controlling interests	-3	-4	-2	-4	-2	-3
Net investment hedges	-8	27	-17	6	-25	-17
Currency and commodity hedges	7	-19	36	-23	42	34
Available-for-sale financial assets	69	-135	66	-107	-134	-178
Income tax relating to items that may be
reclassified	1	-2	-4	3	-5	-3
	35	-297	95	-240	-115	-195
Total Comprehensive Income	118	-276	170	-153	93	141
Total Comprehensive Income Attributable to:
Owners of the Parent	119	-274	171	-154	89	134
Non-controlling interests	-1	-2	-1	1	4	7
	118	-276	170	-153	93	141

Condensed Consolidated Statement of Cash Flows

EUR million	Q1-Q3/13	Q1-Q3/12
Cash Flow from Operating Activities
Operating profit	252	447
Hedging result from OCI	-23	41
Adjustments for non-cash items	439	401
Change in net working capital	96	-40
Cash Flow Generated by Operations	764	849
Net financial items paid	-124	-206
Income taxes paid, net	-32	-91
Net Cash Provided by Operating Activities	608	552
Cash Flow from Investing Activities
Acquisitions of subsidiaries and business operations, net of acquired cash	-	-11
Acquisitions of equity accounted investments	-55	-99
Acquisitions of available-for-sale investments	-9	-
Proceeds from sale of fixed assets and shares, net of disposed cash	15	6
Proceeds from disposal of available-for-sale investments	43	-
Capital expenditure	-275	-377
Proceeds from/payments of non-current receivables, net	98	-42
Net Cash Used in Investing Activities	-183	-523
Cash Flow from Financing Activities
Proceeds from issue of new long-term debt	151	1 472
Long-term debt, payments	-143	-476
Change in short-term borrowings	75	-189
Dividends paid	-237	-237
Dividend to non-controlling interests	-6	-3
Net Cash Used in/Provided by Financing Activities	-160	567
Net Increase in Cash and Cash Equivalents	265	596
Translation adjustment	-14	-30
Net cash and cash equivalents at the beginning of period	1 845	1 134
Net Cash and Cash Equivalents at Period End	2 096	1 700
Cash and Cash Equivalents at Period End	2 097	1 708
Bank Overdrafts at Period End	-1	-8
Net Cash and Cash Equivalents at Period End	2 096	1 700
Acquisitions
Cash and cash equivalents, net of bank overdraft	-	2
Fixed assets	-	6
Working capital	-	8
Tax assets and liabilities	-	1
Interest-bearing liabilities and receivables	-	-5
Fair Value of Net Assets Acquired	-	12
Value of previously held equity interests	-	-3
Total Purchase Consideration	-	9
Less cash and cash equivalents in acquired companies	-	-2
Net Purchase Consideration	-	7
Cash part of the consideration, net of acquired cash	-	11
Payment concerning unfinished 2011 acquisition	-	-4
Net Purchase Consideration	-	7

EUR million	Q1-Q3/13	2012	Q1-Q3/12
Carrying value at 1 January	5 541	5 437	5 437
Acquisition of subsidiary companies	-	6	6
Additions in tangible and intangible assets	237	536	334
Additions in biological assets	12	20	13
Disposals	-21	-2	-2
Depreciation and impairment	-466	-532	-435
Translation difference and other	-63	76	109
Statement of Financial Position Total	5 240	5 541	5 462
Borrowings
EUR million	30 Sep 13	31 Dec 12	30 Sep 12
Non-current borrowings	3 884	4 341	4 434
Current borrowings	1 263	793	778
	5 147	5 134	5 212
	Q1-Q3/13	2012	Q1-Q3/12
Carrying value at 1 January	5 134	4 373	4 373
Proceeds of borrowings (net)	82	712	768
Translation difference and other	-69	49	71
Statement of Financial Position Total	5 147	5 134	5 212

Property, Plant and Equipment, Intangible Assets, Goodwill and Biological Assets

Condensed Consolidated Statement of Financial Position

EUR million		30 Sep 13	31 Dec 12	30 Sep 12
Assets
Non-current Assets
PPE*, goodwill and other intangible assets	O	5 015	5 319	5 243
Biological assets	O	225	222	219
Emission rights	O	18	30	39
Equity accounted investments	O	1 972	1 965	1 978
Available-for-sale: Interest-bearing	I	10	96	92
Available-for-sale: Operative	O	355	451	500
Non-current loan receivables	I	79	134	226
Deferred tax assets	T	165	143	124
Other non-current assets	O	17	23	41
		7 856	8 383	8 462
Current Assets
Inventories	O	1 459	1 458	1 526
Tax receivables	T	14	19	18
Operative receivables Interest-bearing receivables	O I	1 636 236	1 687 297	1 754 186
Cash and cash equivalents	I	2 097	1 850	1 708
		5 442	5 311	5 192
Total Assets		13 298	13 694	13 654
Equity and Liabilities
Owners of the Parent		5 381	5 770	5 725
Non-controlling Interests		86	92	89
Total Equity		5 467	5 862	5 814
Non-current Liabilities
Post-employment benefit provisions	O	465	480	348
Other provisions	O	119	142	141
Deferred tax liabilities	T	318	340	427
Non-current debt	I	3 884	4 341	4 434
Other non-current operative liabilities	O	8	12	27
Current Liabilities		4 794	5 315	5 377
Current portion of non-current debt	I	602	181	208
Interest-bearing liabilities	I	661	612	570
Operative liabilities	O	1 732	1 685	1 639
Tax liabilities	T	42	39	46
		3 037	2 517	2 463
Total Liabilities		7 831	7 832	7 840
Total Equity and Liabilities		13 298	13 694	13 654

* PPE = Property, Plant and Equipment

Items designated with "O" comprise Operating Capital

Items designated with "I" comprise Interest-bearing Net Liabilities

Items designated with "T" comprise Net Tax Liabilities

Statement of Changes in Equity

CTA = Cumulative Translation Adjustment OCI = Other Comprehensive Income NCI = Non-controlling Interests EAI = Equity Accounted Investments

i ion E U R l l m Ba lan 3 1 De 2 0 1 1 t ce a c	S ha re Ca ita l p 1 3 4 2	S ha re Pr ium em d an Re ser ve fun d 7 7	In d ste ve No n Re ict d str e ity Eq Fu d u n 6 3 3	Tr ea su ry S ha res -1 0	Ste p Ac is it ion q u Re lua ion t va Su lus rp 4	Av i la b le a for -Sa le F ina ia l nc As set s 5 4 1	Cu rre nc y d an Co d ity mm o He dg es -1 7	O C I o f Eq ity u Ac d te co un In stm ts ve en -2 9	C T A d an Ne t In stm t ve en He dg es 3 2	Re ine d ta ing Ea rn s 3 3 0 0	At i bu b le tr ta Ow f to ne rs o he Pa t t ren 5 8 7 3	No n l l ing ntr co o In ter est s 8 7	To l ta 5 9 6 0
Pr f i for he io d t t o p er	-	-	-	-	-	-	-	-	-	2 1 8	2 1 8	6	2 2 4
O C I be for tax e la ing In tax t to co me re f O C I ts	-	-	-	-	-	-1 3 4 -1	4 2 -1 0	-1 6	-5 6	-1 6 5	-1 2 9	-2	-1 3 1
co mp on en o To l Co he ive ta mp re ns In co m e	- -	- -	- -	- -	- -	-1 3 5	3 2	- -1 6	1	2 0 7	- 8 9	- 4	- 9 3
iv i de d D n	-	-	-	-	-	-	-	-	-	-2 3 7	-2 3 7	-2	-2 3 9
Ba lan 3 0 Se 2 0 1 2 t ce a p	1 3 4 2	7 7	6 3 3	-1 0	4	4 0 6	1 5	-4 5	3 3	3 2 7 0	5 7 2 5	8 9	5 8 1 4
f i for he io d Pr t t o p er	-	-	-	-	-	-	-	-	-	2 6 2	2 6 2	4	2 6 6
be for O C I tax e la ing In tax t to co me re	-	-	-	-	-	-4 4	-8	1 2	-4 1	-1 6 8	-2 4 9	-1	-2 5 0
f O C I ts co mp on en o Co ive To l he ta mp re ns In co m e	- -	- -	- -	- -	- -	- -4 4	4 -4	- 1 2	-2 -4 3	3 0 1 2 4	3 2 4 5	- 3	3 2 4 8
Ba lan 3 1 De 2 0 1 2 t ce a c	1 3 4 2	7 7	6 3 3	-1 0	4	3 6 2	1 1	-3 3	-1 0	3 3 9 4	5 7 7 0	9 2	5 8 6 2
Pr f i for he io d t t o p er	-	-	-	-	-	-	-	-	-	8 4	8 4	5	8 9
O C I be for tax e la ing In tax t to co me re	-	-	-	-	-	-1 0 7	-2 3	1 3	-1 2 3	-2	-2 4 2	-4	-2 4 6
f O C I ts co mp on en o	-	-	-	-	-	1	4	-	-2	1	4	-	4
To l Co he ive ta mp re ns In co m e	-	-	-	-	-	-1 0 6	-1 9	1 3	-1 2 5	8 3	-1 5 4	1	-1 5 3
iv i de d D n	-	-	-	-	-	-	-	-	-	-2 3 7	-2 3 7	-7	-2 4 4
S ha ba d p ts re- se ay me n	-	-	-	-	-	-	-	-	-	1	1	-	1
C ion in A N I E I tra t ns ac l la ion f Ca t tre nc e o asu ry	-	-	-	-	-	-	-	-	-	1	1	-	1
ha s res	-	-	-	1 0	-	-	-	-	-	-1 0	-	-	-
3 0 Se 2 0 1 3 Ba lan t ce a p	1 3 4 2	7 7	6 3 3	-	4	2 5 6	-8	-2 0	-1 3 5	3 2 3 2	5 3 8 1	8 6	5 4 6 7

Stora Enso Oyj Business ID 1039050-8

	20(26)
Commitments and Contingencies
EUR million	30 Sep 13	31 Dec 12	30 Sep 12
On Own Behalf
Pledges	-	1	1
Mortgages	6	6	10
On Behalf of Equity Accounted Investments
Guarantees	554	653	582
On Behalf of Others
Guarantees	5	5	5
Other Commitments, Own
Operating leases, in next 12 months	63	92	89
Operating leases, after next 12 months	498	497	498
Other commitments	5	5	5
Total	1 131	1 259	1 190
Pledges	-	1	1
Mortgages	6	6	10
Guarantees	559	658	587
Operating leases	561	589	587
Other commitments	5	5	5

Capital commitments

The Group's direct capital expenditure contracts, excluding acquisitions, amounted to EUR 81 million (compared with EUR 120 million at 30 September 2012 and EUR 72 million at 31 December 2012).

Total 1 131 1 259 1 190

The Group's share of capital expenditure contracts in equity accounted investments, excluding acquisitions, amounted to EUR 106 million (compared with EUR 272 million at 30 September 2012 and EUR 213 million at 31 December 2012) of which Stora Enso has guaranteed EUR 51 million (compared with EUR 189 million at 30 September 2012 and EUR 189 million at 31 December 2012).

Sales by Segment
EUR million	Q3/13	Q2/13	Q1/13	2012	Q4/12	Q3/12	Q2/12	Q1/12
Printing and Reading	1 041	1 101	1 123	4 839	1 194	1 227	1 191	1 227
Biomaterials	242	257	257	1 012	256	268	246	242
Building and Living	460	500	441	1 684	456	403	444	381
Renewable Packaging	829	835	820	3 216	798	812	827	779
Other	612	685	721	2 684	673	645	663	703
Inter-segment sales	-628	-661	-695	-2 620	-650	-661	-650	-659
Total	2 556	2 717	2 667	10 815	2 727	2 694	2 721	2 673

EUR million	Q3/13	Q2/13	Q1/13	2012	Q4/12	Q3/12	Q2/12	Q1/12
Printing and Reading	13	-17	2	223	59	53	43	68
Biomaterials	17	14	22	82	28	32	15	7
Building and Living	24	28	4	29	7	1	11	10
Renewable Packaging	100	77	68	273	55	83	73	62
Other	30	22	22	23	9	9	2	3
Operational EBIT	184	124	118	630	158	178	144	150
Fair valuations and non
operational items*	-3	-17	-7	-59	-14	-13	-34	2
Non-recurring Items	-23	-33	-91	130	110	-	45	-25
Operating Profit
(IFRS)	158	74	20	701	254	165	155	127
Net financial items	-56	-47	-56	-220	-50	-63	-70	-37
Profit/Loss before Tax	102	27	-36	481	204	102	85	90
Income tax expense	-18	-6	20	9	62	-21	-16	-16
Net Profit/Loss	84	21	-16	490	266	81	69	74

Operational EBIT by Segment

* Fair valuations and non-operational items include equity incentive schemes, synthetic options net of realised and open hedges, CO2 emission rights, valuations of biological assets related to forest assets in EAI and Group's share of tax and net financial items of EAI.

NRI by Segment
EUR million	Q3/13	Q2/13	Q1/13	2012	Q4/12	Q3/12	Q2/12	Q1/12
Printing and Reading	8	-30	-84	70	67	-	13	-10
Biomaterials	-1	11	-	-7	-7	-	-	-
Building and Living	-	-	-7	-	-	-	-	-
Renewable Packaging	-28	4	-	-53	-38	-	-	-15
Other	-2	-18	-	120	88	-	32	-
NRI on Operating
Profit	-23	-33	-91	130	110	-	45	-25
NRI on Financial items	-	-	-	34	11	-	9	14
NRI on tax	3	9	19	63	56	-	2	5
NRI on Net Profit	-20	-24	-72	227	177	-	56	-6
NRI on Net Profit attributable to
Owners of the Parent	-20	-24	-72	221	175	-	52	-6
Non-controlling interests	-	-	-	6	2	-	4	-
	-20	-24	-72	227	177	-	56	-6

EUR million	Q3/13	Q2/13	Q1/13	2012	Q4/12	Q3/12	Q2/12	Q1/12
Printing and Reading	-1	-	-	-1	-	-	-	-1
Biomaterials	-2	-11	-3	-29	6	-7	-24	-4
Building and Living	-	-	-	-3	-1	-	-	-2
Renewable Packaging	-1	-	-	-1	-	-	-	-1
Other	1	-6	-4	-25	-19	-6	-10	10
Fair Valuations and Non-operational Items on Operating Profit	-3	-17	-7	-59	-14	-13	-34	2

Fair Valuations and Non-operational Items* by Segment

* Fair valuations and non-operational items include equity incentive schemes, synthetic options net of realised and open hedges, CO2 emission rights, valuations of biological assets related to forest assets in EAI and Group's share of tax and net financial items of EAI.

Operating Profit/Loss by Segment EUR million Q3/13 Q2/13 Q1/13 2012 Q4/12 Q3/12 Q2/12 Q1/12 Printing and Reading 20 -47 -82 292 126 53 56 57 Biomaterials 14 14 19 46 27 25 -9 3 Building and Living 24 28 -3 26 6 1 11 8 Renewable Packaging 71 81 68 219 17 83 73 46 Other 29 -2 18 118 78 3 24 13 Operating Profit (IFRS) 158 74 20 701 254 165 155 127 Net financial items -56 -47 -56 -220 -50 -63 -70 -37 Profit/Loss before Tax 102 27 -36 481 204 102 85 90 Income tax expense -18 -6 20 9 62 -21 -16 -16 Net Profit/Loss 84 21 -16 490 266 81 69 74

Key Exchange Rates for the Euro

One Euro is	Closing Rate		Average Rate
	30 Sep 13	31 Dec 12	30 Sep 13	31 Dec 12
SEK	8.6575	8.5820	8.5798	8.7067
USD	1.3505	1.3194	1.3172	1.2856
GBP	0.8361	0.8161	0.8522	0.8111

Transaction Risk and Hedges in Main Currencies as at 30 September 2013

EUR million	USD	SEK	GBP
Estimated annual net operating cash flow exposure	1 020	-840	500
Transaction hedges as at 30 Sep 2013	-480	420	-250
Hedging Percentage as at 30 Sep 2013 for Next 12 Months	47%	50%	50%

Additional USD and GBP hedges for 13-15 months increase the hedging percentages by 1% and 4% respectively.

Changes in Exchange Rates on Operational EBIT

Operational EBIT: Currency Strengthening of + 10%	EUR million

USD	102
SEK	-84
GBP	50

The sensitivity is based on estimated next 12 months net operating cash flow. The calculation does not take into account currency hedges, and assumes no changes occur other than a single currency exchange rate movement. Weakening would have the opposite impact.

Fair Values of Financial Instruments

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

• Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
• Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly;

• Level 3: techniques which use inputs which have a significant effect on the recorded fair values that are not based on observable market data.

The valuation techniques are described in more detail in the Financial Statements.

Carrying Amounts of Financial Assets and Liabilities by Measurement and Fair Value Categories:
30 September 2013

		Financial Items
		at Fair Value		Available	Carrying
	Loans and	through Income	Hedging	for-Sale Financial	Amounts by Balance	Fair
EUR million	Receivables	Statement	Derivatives	Assets	Sheet Item	Value
Financial Assets
Available-for-sale	-	-	-	365	365	365
Non-current loan
receivables	79	-	-	-	79	79
Trade and other
operative receivables	1 334	-	-	-	1 334	1 334
Interest-bearing
receivables	114	87	35	-	236	236
Current investments
and cash	2 097	-	-	-	2 097	2 097
Carrying Amount by
Category	3 624	87	35	365	4 111	4 111

		Financial
		Items at Fair Value		Measured	Carrying
		through		at	Amounts
		Income	Hedging	Amortised	by Balance	Fair
EUR million		Statement	Derivatives	Cost	Sheet Item	Value
Financial Liabilities
Non-current debt		-	4	3 880	3 884	4 084
Current portion of non
current debt		-	-	602	602	602
Interest-bearing
liabilities		103	33	525	661	661
Trade and other
operative payables		2	-	1 252	1 254	1 254
Bank overdrafts		-	-	1	1	1
Carrying Amount by
Category		105	37	6 260	6 402	6 602
EUR million	Level 1	Level 2	Level 3	Total
Derivative Financial
Assets	-	122	-	122
Available-for-sale
Financial Assets	10	-	355	365
Derivative Financial
Liabilities	-	142	-	142

EUR million	Unlisted Shares	Unlisted Interest bearing Securities	Total
Opening balance at 1 January 2013	451	90	541
Interest capitalised	-	9	9
Gains (losses) recognised in income statement	1	2	3
Gains in OCI transferred to income statement	-	-7	-7
Losses recognised in other comprehensive income	-103	-	-103
Additions	9	-	9
Disposals	-3	-94	-97
Closing Balance at 30 September 2013	355	-	355

Reconciliation of Level 3 Fair Value Measurement of Financial Assets: 30 September 2013

Unlisted shares

The unlisted shares comprise mainly PVO shares for which the valuation method is described in more detail in the Annual Report. The valuation is most sensitive to changes in electricity prices and discount rates. The discount rate of 4.52% used in the valuation model is determined using the weighted average cost of capital method. A +/- 5% change in the electricity price used in the DCF would change the valuation by +/- EUR 83 million and a +/- 1% change in the discount rate would change the valuation by -/+ EUR 121 million.

Unlisted Interest-bearing Securities

During the third quarter, a EUR 99 million loan note issued by Papyrus Holding AB, classified on the balance sheet as unlisted interest-bearing security, was derecognised as a result of the Group receiving a cash prepayment of EUR 40 million, with the terms on the remaining portion of the loan being changed through mutual agreement. The new loan note has been classified in the balance sheet as a non-current loan receivable.

		Stora Enso Shares
--	--	-------------------

Trading volume	Helsinki		Stockholm
	A share	R share	A share	R share
July	50 650	58 513 352	88 966	20 992 907
August	53 767	60 489 856	119 134	21 501 028
September	236 269	77 663 812	280 592	25 103 493
Total	340 686	196 667 020	488 692	67 597 428
Closing Price	Helsinki, EUR		Stockholm, SEK
	A share	R share	A share	R share
July	6.12	5.58	52.95	48.32
August	6.10	5.85	53.40	51.25
September	6.56	6.27	56.95	54.65

Calculation of Key Figures

Operational return on capital	100 x	Operational EBIT
employed, operational ROCE (%)		Capital employed 1) 2)
Operational return on operating	100 x	Operational EBIT
capital, operational ROOC (%)		Operating capital 1) 2)
Return on equity, ROE (%)	100 x	Profit before tax and non-controlling items – taxes
		Total equity 2)
Equity ratio (%)	100 x	Total equity
		Total assets
Interest-bearing net liabilities		Interest-bearing liabilities – interest-bearing assets
Debt/equity ratio		Interest-bearing net liabilities
		Equity 3)
		Fixed asset
CEPS		Net profit/loss for the period 3) – depreciation and impairment
		Average number of shares
EPS		Net profit/loss for the period 3)
		Average number of shares
Operational EBIT		Operating profit/loss excluding NRI and fair valuations of the
		segments and Stora Enso's share of operating profit/loss
		excluding NRI and fair valuations of its equity accounted
		investments (EAI)
Operational EBITDA		Operating profit/loss excluding fixed asset depreciation and
		impairment, share of results of equity accounted investments,
		NRI and fair valuations
Net debt to operational EBITDA		Interest-bearing net liabilities
ratio		Operational EBITDA
Last twelve months (LTM)		Twelve months preceding the reporting date
1) Capital employed = Operating capital – Net tax liabilities
2) Average for the financial period

3) Attributable to owners of the Parent

For further information, please contact:

Jyrki Tammivuori, acting CFO, tel. +358 2046 21043 Ulla Paajanen-Sainio, SVP, Investor Relations, tel. +358 40 763 8767 Hanne Karrinaho, Head of Global Communications, tel. +358 2046 21446

Stora Enso's full year 2013 results will be published on 5 February 2014.

ANALYST CONFERENCE CALL

CEO Jouko Karvinen, acting CFO Jyrki Tammivuori and SVP Investor Relations Ulla Paajanen-Sainio will be hosting a combined conference call and webcast today at 16.00 Finnish time (15.00 CET, 14.00 UK time, 09.00 US Eastern time).

If you wish to participate, please dial:

Continental Europe and UK	+44 (0)20 3427 1906
Finland	+358 (0)9 6937 9543
Sweden	+46 (0)8 5065 3936
US	+1 212 444 0481
Confirmation Code:	3288537

The live webcast may be accessed at www.storaenso.com/investors

Stora Enso is the global rethinker of the paper, biomaterials, wood products and packaging industry. We always rethink the old and expand to the new to offer our customers innovative solutions based on renewable materials. Stora Enso employs some 28 000 people worldwide, and our sales in 2012 amounted to EUR 10.8 billion. Stora Enso shares are listed on NASDAQ OMX Helsinki (STEAV, STERV) and Stockholm (STE A, STE R). In addition, the shares are traded in the USA as ADRs (SEOAY) in the International OTCQX over-thecounter market.

It should be noted that certain statements herein which are not historical facts, including, without limitation those regarding expectations for market growth and developments; expectations for growth and profitability; and statements preceded by "believes", "expects", "anticipates", "foresees", or similar expressions, are forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Since these statements are based on current plans, estimates and projections, they involve risks and uncertainties, which may cause actual results to materially differ from those expressed in such forward-looking statements. Such factors include, but are not limited to: (1) operating factors such as continued success of manufacturing activities and the achievement of efficiencies therein, continued success of product development, acceptance of new products or services by the Group's targeted customers, success of the existing and future collaboration arrangements, changes in business strategy or development plans or targets, changes in the degree of protection created by the Group's patents and other intellectual property rights, the availability of capital on acceptable terms; (2) industry conditions, such as strength of product demand, intensity of competition, prevailing and future global market prices for the Group's products and the pricing pressures thereto, price fluctuations in raw materials, financial condition of the customers and the competitors of the Group, the potential introduction of competing products and technologies by competitors; and (3) general economic conditions, such as rates of economic growth in the Group's principal geographic markets or fluctuations in exchange and interest rates.

www.storaenso.com www.storaenso.com/investors

STORA ENSO OYJ