Holmen

Quarterly Report • Apr 26, 2016

Holmen's interim report January–March 2016

		Quarter		Full year
SEKm	1-16	4-15	1-15	2015
Net sales	3 828	3 689	4 154	16 014
Operating profit excl. items affecting comparability	580	376	396	1 700
Operating profit	348	-555	396	769
Profit after tax excl. items affecting comparability	450	326	298	1 323
Profit after tax	222	-438	298	559
Return on capital employed, %*	9.1	5.7	5.9	6.4
Return on equity, %	4.3	-8.4	5.6	2.6
Earnings per share, SEK	2.6	-5.2	3.5	6.7
Cash flow before investments	542	775	522	2 526
Debt/equity ratio	0.21	0.23	0.26	0.23

*Excluding items affecting comparability, which are included in operating profit at SEK -232 million (0).

• Operating profit for the first quarter of 2016 was SEK 580 million, excluding items affecting comparability, which were SEK 184 million higher than in the first quarter of 2015 and SEK 204 million higher than in the fourth quarter. A shutdown for rebuild of a board machine had a negative effect of just over SEK 60 million on earnings for the quarter, but this was offset by a dispute over water costs for a corresponding amount being settled in Holmen's favour. Earnings from timber trading were high and depreciation decreased. Both the first quarter of 2015 and the fourth quarter of 2015 were negatively affected by maintenance and rebuilding shutdowns.
• Operating profit after items affecting comparability amounted to SEK 348 million. The quarter was impacted by a net amount of SEK -232 million in items affecting comparability regarding the sale of the Group's Spanish operations and insurance compensation for reconstruction following the fire at Hallsta Paper Mill.
• Profit after tax for January–March amounted to SEK 222 million (298), which corresponds to earnings per share of SEK 2.6 (3.5). Excluding items affecting comparability, profit after tax amounted to SEK 450 million (298) and earnings per share was SEK 5.4 (3.5).

Forest

Holmen performs active and sustainable forestry on over a million hectares of its own land.

		Quarter		Full year
SEKm	1-16	4-15	1-15	2015
Net sales	1 368	1 335	1 503	5 481
of which from own forests	297	296	325	1 301
Operating costs	-1 157	-1 168	-1 281	-4 813
Depreciation and amortisation according to plan	-7	-9	-6	-29
Earnings from operations	205	158	216	638
Change in value of forests	62	71	23	267
Operating profit	267	228	239	905
Investments, net	-10	8	4	31
Operating capital	17 636	17 589	17 381	17 589
Return on operating capital, %	6	5	5	5
Harvesting ow n forests, '000 m3	715	686	820	3 213

Demand for logs and pulpwood in Sweden was normal in the first quarter. Selling prices were largely unchanged.

Earnings from operations for January–March decreased by SEK 11 million to SEK 205 million compared with the same period last year, owing mainly to lower harvesting volumes. Operating profit, which includes a change in value of SEK 62 million, totalled SEK 267 million (239). Profit was higher than normal as a result of high earnings from timber trading.

Compared with the fourth quarter, earnings from operations rose by SEK 47 million mainly as a result of seasonally lower costs and higher earnings from timber trading than usual.

Consumer board

Holmen is a market leader in the highest quality segments for consumer packaging and consumer board for advanced graphics printing.

		Quarter		Full year
SEKm	1-16	4-15	1-15	2015
Net sales	1 364	1 255	1 431	5 472
Operating costs	-1 005	-979	-1 126	-4 127
EBITDA	358	276	304	1 346
Depreciation and amortisation according to plan	-122	-126	-124	-499
Operating profit	236	151	180	847
Investments	166	112	104	324
Operating capital	6 587	6 622	6 838	6 622
EBITDA margin, %	26	22	21	25
Operating margin, %	17	12	13	15
Return on operating capital, %	14	9	11	12
Production, paperboard, '000 tonnes	117	120	118	502
Deliveries, paperboard, '000 tonnes	129	116	129	499

The market for consumer board was stable in the first quarter. Demand decreased by 2 per cent compared with the same period last year. Prices were stable.

Holmen's consumer board deliveries amounted to 129 000 tonnes during January–March, which was the same level as last year.

Operating profit for January–March was SEK 236 million (180). Production and deliveries were good during the quarter. Production at Workington was shut down for a month for the rebuilding of the board machine in order to raise capacity by 20 000 tonnes and improve product quality. This had a negative effect on earnings for the quarter by just over SEK 60 million, although this was offset by a settlement in Holmen's favour of a dispute over water costs which resulted in the refund of SEK 60 million. Earnings for the first quarter of last year were negatively affected by SEK 60 million from a maintenance shutdown.

Operating profit was up by SEK 85 million compared with the fourth quarter. Operating profit for the previous quarter was impacted by costs and production losses from a maintenance shutdown at Iggesund Mill.

Start-up of the rebuilt board machine in Workington is according to plan but is expected to have an adverse effect on production and cost levels in the second quarter of around SEK 40 million compared with the normal level of production.

Paper

Holmen produces paper that takes advantage of the properties of fresh fibre to provide cost-effective alternatives to traditional paper choices.

		Quarter		Full year
SEKm	1-16	4-15	1-15	2015
Net sales	1 308	1 463	1 447	6 148
Operating costs	-1 143	-1 311	-1 373	-5 634
EBITDA	165	153	74	514
Depreciation and amortisation according to plan	-108	-147	-147	-588
Operating profit*	57	6	-73	-74
Investments	95	92	147	347
Operating capital	3 406	3 558	4 674	3 558
EBITDA margin, %*	13	10	5	8
Operating margin, %*	4	0	-5	-1
Return on operating capital, %*	7	1	neg	neg
Production, '000 tonnes	293	301	308	1 287
Deliveries, '000 tonnes	273	317	306	1 325

* Excluding items affecting comparability

Demand for printing paper in Europe decreased by 4 per cent during January–February compared with the same period in 2015. Selling prices increased slightly for some products in the first quarter.

Holmen's deliveries in the first quarter amounted to 273 000 tonnes, which was 11 per cent lower than the same period last year as a result of production losses following the fire at Hallsta Paper Mill. The fire, which occurred in November 2015, resulted in a 100 000 tonnes production loss, 60 000 tonnes of which were in the first quarter of 2016. Production has been back in full operation since the beginning of March. Production losses and additional costs resulting from the fire are covered by insurance.

Operating profit for January–March was SEK 57 million (-73), excluding items affecting comparability. A better product mix following the launch of the new UNIQ product and lower depreciation had a positive effect on earnings. Earnings for the first quarter of 2015 included SEK 70 million in costs relating to a rebuilding shutdown.

Compared with the fourth quarter, operating profit excluding items affecting comparability increased by SEK 51 million, mainly as a result of lower depreciation. Slightly higher selling prices had a positive effect on earnings but were offset by higher energy costs.

In March Holmen entered into an agreement to sell its newsprint mill in Madrid to International Paper, expected to come into effect in the second quarter. International Paper will continue producing newsprint at the mill until the second half of 2017, when it will be converted to containerboard production. Until then, Holmen will sell the newsprint produced at the mill.

The sale of the mill in Madrid and insurance compensation for reconstruction following the fire at Hallsta had a net effect of SEK -232 million on earnings, which is treated as an item affecting comparability.

Wood products

Holmen produces wood products for the joinery and construction industry at two large-scale sawmills that are integrated with the Group's paper and consumer board mills.

		Quarter		Full year
SEKm	1-16	4-15	1-15	2015
Net sales	353	306	339	1 314
Operating costs	-337	-282	-312	-1 228
EBITDA	16	24	27	86
Depreciation and amortisation according to plan	-21	-19	-19	-77
Operating profit	-5	5	7	9
Investments	4	28	5	103
Operating capital	953	924	918	924
EBITDA margin, %	4	8	8	7
Operating margin, %	-1	2	2	1
Return on operating capital, %	neg	2	3	1
Production, '000 m3	185	199	197	734
Deliveries, '000 m3	209	174	188	730

Market conditions for wood products stabilised in the first quarter and prices were largely unchanged following significant decreases in 2015.

Holmen's deliveries of wood products amounted to 209 000 cubic metres, which was just over 10 per cent higher than for the same period last year.

Operating profit for January–March was SEK -5 million (7). The decrease was due to lower selling prices.

Compared with the fourth quarter, profit decreased by SEK 10 million. Deliveries were high but average prices were lower, partly as a result of a changed sales mix.

Renewable energy

Holmen produces renewable hydro and wind-based electricity.

		Quarter		Full year
SEKm	1-16	4-15	1-15	2015
Net sales	108	93	117	359
Operating costs	-43	-57	-26	-161
Depreciation and amortisation according to plan	-6	-6	-5	-22
Operating profit	60	30	86	176
Investments	5	14	5	18
Operating capital	3 428	3 351	3 429	3 351
Operating margin, %	55	33	73	49
Return on operating capital, %	7	4	10	5
Production hydro and w ind pow er, GWh	373	349	377	1 441

Operating profit for January–March amounted to SEK 60 million (86). The decrease was due to lower electricity prices.

Compared with the fourth quarter, operating profit rose by SEK 30 million as a result of seasonally higher production and costs having decreased from a high level.

Net sales

Net financial items and financing

Net financial items for January–March totalled SEK -15 million (-28). Borrowing costs fell to an average of 1.3 per cent (1.9).

Cash flow from operating activities totalled SEK 542 million. Cash flow from investing activities was SEK -262 million.

The Group's net financial debt decreased by SEK 323 million to SEK 4 476 million in the first quarter. The debt/equity ratio was 0.21 at the end of the first quarter. Financial liabilities including pension provisions totalled SEK 4 743 million, SEK 2 359 million of which consisted of current liabilities. Cash, cash equivalents and financial receivables totalled SEK 268 million. The Group has unused contractually agreed credit facilities of SEK 3 692 million, which mature in 2020.

Tax

Recognised tax for January–March amounted to SEK -111 million (-70). Recognised tax as a proportion of profit before tax was 33 (19) per cent, which was higher than normal as a result of the sale of the Spanish operations.

Equity

In January–March, the Group's equity increased by SEK 80 million to SEK 20 933 million. Profit for the period totalled SEK 222 million. In addition, other comprehensive income totalled SEK -142 million.

Hedging exchange rates and electricity prices

The Group hedges parts of future estimated net flows in foreign currencies. Operating profit for January– March includes currency hedges of SEK 36 million (-65). The fair value of currency hedges not yet recognised as income amounted to SEK 42 million at the end of the quarter.

The weaker Swedish krona had a positive impact of SEK 70 million on consolidated earnings compared with the first quarter of last year and of SEK 20 million compared with the fourth quarter. For the next 16 months, 90 per cent of expected flows in EUR/SEK are hedged at an average of 9.32. For other currencies, approximately 4 months of flows are hedged. Calculated on the basis of existing hedges and the exchange rates at the turn of the quarter (euro: 9.2, US dollar: 8.1 and sterling: 11.7), exchange rate differences are expected to have a negative impact of just under SEK 100 million on consolidated operating profit for 2016 compared with 2015. Calculated in a corresponding way, the second quarter is expected to be negatively affected by approximately SEK 40 million compared with the first quarter of 2016.

Prices for the Group's estimated net consumption of electricity in Sweden are 80–90 per cent hedged for 2016–2018, 60 per cent hedged for 2019–2020 and 40 per cent hedged for 2021.

Investments

Cash flow from investing activities for January–March was SEK -262 million (-249). Scheduled depreciation and amortisation totalled SEK 269 million (308).

Personnel

The average number of employees (full-time equivalents) in the Group was 3 193 (3 215).

Share buy-backs

At the 2016 AGM, the Board's authorisation to purchase up to 10 per cent of the company's shares was renewed. No buy-backs took place during the period. The company owns 0.9 per cent of all shares outstanding.

Dividend

Holmen's Annual General Meeting 2016 resolved in favour of paying a dividend of SEK 10.5 (10) per share. The dividend, totalling SEK 882 million, was paid on 20 April.

Material risks and uncertainties

The Group and the parent company's material risks and uncertainties relate primarily to changes in demand and the prices of its products, the cost of key input goods, and changes in exchange rates. For a more detailed description of material risks and uncertainties see Holmen's annual report for 2015, pages 42–45 and note 26.

Transactions with related parties

There were no transactions between Holmen and related parties that had a significant effect on the Company's financial position and performance.

Accounting policies

This report has been prepared in accordance with the Swedish Annual Accounts Act and Securities Market Act, and, for the Group, in accordance with IAS 34 Interim Financial Reporting. The parent company and the Group's accounting policies are unchanged from the latest published annual report. The figures in tables are rounded off. Information in accordance with IAS 34:16A has been submitted in the financial statements and in other parts of this interim report.

Stockholm, 26 April 2016 Holmen AB (publ.)

Henrik Sjölund President and CEO

The report has not been reviewed by the company's auditors.

For further information please contact:

Henrik Sjölund, President and CEO, tel. +46 8 666 21 05 Anders Jernhall, EVP and CFO, tel. +46 8 666 21 22 Ingela Carlsson, Communications Director, tel. +46 70 212 97 12

		Quarter		Full year
Income statement, SEKm	1-16	4-15	1-15	2015
Net sales	3 828	3 689	4 154	16 014
Other operating income	536	439	259	1 203
Change in inventories	-8	1	-75	-187
Raw materials and consumables	-2 136	-2 136	-2 200	-8 661
Personnel costs	-583	-585	-591	-2 335
Other operating costs	-953	-1 119	-864	-3 689
Depreciation and amortisation according to plan	-269	-313	-308	-1 240
Impairment losses	-123	-555	-	-555
Change in value of biological assets	62	71	23	267
Profit from investments in associates and joint ventures	-5	-47	-2	-46
Operating profit	348	-555	396	769
Finance income	0	0	0	1
Finance costs	-15	-18	-28	-91
Profit before tax	333	-572	368	679
Tax	-111	134	-70	-120
Profit for the period	222	-438	298	559
Earnings per share, SEK	2.6	-5.2	3.5	6.7
Operating margin, % *	15.1	10.2	9.5	10.6
Return on capital employed, % *	9.1	5.7	5.9	6.4
Return on equity, %	4.3	-8.4	5.7	2.6
* Excl. items affecting comparability.
		Quarter		Full year
Statement of comprehensive income, SEKm	1-16	4-15	1-15	2015
Profit for the period	222	-438	298	559
Other comprehensive income
Revaluations of defined benefit pension plans	33	283	85	208
Tax attributable to items that w ill not be reclassifed to profit for the period Items that will not be reclassifed to profit for the period	-6 27	-59 225	-17 68	-44 165
Cash flow hedging	-58	43	48	- 31
Translation difference on foreign operation	-146	-99	85	8
Hedging of currency risk in foreign operation	29	45	-5	22
Tax attributable to items that w ill be reclassifed to profit for the period	6	-16	-13	3
Items that will be reclassifed to profit for the period	-170	-26	115	1
Total other comprehensive income after tax	-142	198	183	166
Total comprehensive income	80	-240	480	724

		Jan-March
Change in equity, SEKm	2016	2015
Opening equity	20 853	20 969
Profit for the period	222	298
Other comprehensive income	-142	183
Total comprehensive income	80	480
Dividends paid	-	-
Closing equity	20 933	21 449

Share structure
		Votes No. of shares		No. of votes Quota value	SEKm
A-share	10	22 623 234	226 232 340		50 1 131.2
B-share	1		62 132 928 62 132 928		50 3 106.6
Total number of shares		84 756 162	288 365 268		4 237.8
Holding of ow n B-shares bought back		-760 000	-760 000
Total number of shares in issue		83 996 162	287 605 268

Balance sheet, SEKm	2016	2015
	31 March	31 December
Non-current assets
Intangible non-current assets	97	107
Property, plant and equipment	9 732	10 321
Biological assets	17 224	17 173
Investments in associates and joint ventures	1 857	1 914
Other shares and participating interests	3	4
Non-current financial receivables	34	43
Deferred tax assets	13	6
Total non-current assets	28 959	29 567
Current assets
Inventories	2 939	3 089
Trade receivables	2 009	1 987
Current tax receivable	11	12
Other operating receivables	515	519
Current financial receivables	66	61
Cash and cash equivalents	169	221
Asset held for sale	564	-
Total current assets	6 273	5 889
Total assets	35 232	35 456
Equity	20 933	20 853
Non-current liabilities
Non-current financial liabilities	2 304	2 295
Pension provisions	80	130
Other provisions	603	585
Deferred tax liabilities	5 513	5 508
Total non-current liabilities	8 500	8 519
Current liabilities
Current financial liabilities	2 359	2 698
Trade payables	1 732	1 916
Current tax liability	104	53
Provisions	303	157
Other operating liabilities	1 216	1 259
Liabilities attributable to assets held for sale	85	-
Total current liabilities	5 799	6 085
Total liabilities	14 299	14 603
Total equity and liabilities	35 232	35 456
Debt/equity ratio, times	0.21	0.23
Equity/assets ratio, %	59.4	58.8
Operating capital	30 909	31 155
Capital employed	25 410	25 653
Net financial debt	4 476	4 799
Pledged collateral	151	148
Contingent liabilities	118	122

	Carrying amount		Fair value
Financial instruments, SEKm	2016	2015	2016	2015
	31 March	31 December	31 March	31 December
Assets at fair value	121	138	121	138
Assets at acquisition cost	2 248	2 278	2 245	2 275
Liabilities at fair value	501	467	501	467
Liabilities at acquisition cost	6 295	6 820	6 295	6 820

Holmen measures financial instruments at fair value or acquisition cost in the balance sheet depending on classification. In addition to items in net financial debt, with the exception of the pension liability, financial instruments cover trade receivables and trade payables. Financial instruments measured at fair value in the balance sheet belong to measurement level 2 pursuant to IFRS 7.

All of the Group's derivatives are covered by ISDA or FEMA agreements, which entails a right to offset assets and liabilities in relation to the same counterparty in the case of a credit event. Assets and liablities are not offset in the report. Recognised derivatives totalled SEK 121 million on the asset side and SEK 501 million on the liabilities side.

		Quarter		Full year
Cash flow statement, SEKm	1-16	4-15	1-15	2015
Operating activities
Profit before tax	333	-572	368	679
Adjustments for non-cash items *	517	1 049	309	1 802
Paid income taxes	-95	7	-255	-398
Cash flow from operating activities
before changes in working capital	754	485	421	2 083
Cash flow from changes in working capital
Change in inventories	131	-73	53	123
Change in trade receivables and other operating receivables	-133	353	-58	275
Change in trade payables and other operating liabilities	-211	10	106	45
Cash flow from operating activities	542	775	522	2 526
Investing activities
Acquisition of non-current assets	-276	-302	-252	-874
Disposal of non-current assets	15	35	2	50
Change in non-current financial receivables	-	-7	1	-8
Cash flow from investing activities	-262	-275	-249	-832
Financing activities
Change in financial liabilities and current financial receivables	-331	-523	-278	-819
Dividends paid to the shareholders of the parent company	-	-	-	-840
Cash flow from financing activities	-331	-523	-278	-1 659
Cash flow for the period	-51	-23	-5	35
Opening cash and cash equivalents	221	245	187	187
Exchange difference in cash and cash equivalents	-1	-1	1	-0
Closing cash and cash equivalents	169	221	182	221
Change in net financial debt, SEKm		Quarter		Full year
	1-16	4-15	1-15	2015
Opening net financial debt	-4 799	-5 661	-5 907	-5 907
Cash flow from operating activities	542	775	522	2 526
Cash flow from investing activities (excl financial
receivables)	-262	-268	-250	-824
Dividends paid	-	-	-	-840
Revaluations of defined benefit pension plans	33	281	83	206
Foreign exchange effects and changes in fair value	10	73	-36	40
Closing net financial debt	-4 476	-4 799	-5 587	-4 799

* The adjustments consist primarily of depreciation according to plan, impairment losses, change in value of biological assets, change in provisions, interests in earnings of associated companies, currency effects and revaluations of financial instruments as

well as capital gains/losses on sale of fixed assets.

Parent company

		Quarter		Full year
Income statement, SEKm	1-16	4-15	1-15	2015
Operating income	3 628	3 464	3 848	14 686
Operating costs	-3 297	-3 736	-3 654	-14 361
Operating profit	330	- 272	194	324
Net financial items	-285	-245	-27	- 163
Profit after net financial items	45	-516	167	161
Appropriations	86	349	8	821
Profit before tax	131	-167	176	982
Tax	-97	-25	-34	-244
Profit for the period	34	-192	141	738
Statement of comprehensive income, SEKm	1-16	Quarter 4-15	1-15	Full year 2015
Profit for the period	34	-192	141	738
Other comprehensive income
Cash flow hedging	-49	26	65	-30
Tax attributable to other comprehensive income	11	-6	-14	7
Items that will be reclassifed to profit for the period	-38	20	51	-23
Total comprehensive income	-4	-172	192	715

	2016	2015
Balance sheet, SEKm	31 March	31 December 31 December
Non-current assets	17 780	18 163
Current assets	4 608	4 578
Total assets	22 388	22 741
Restricted equity	5 915	5 915
Non-restricted equity	4 432	4 436
Untaxed reserves	2 109	1 994
Provisions	1 480	1 512
Liabilities	8 453	8 884
Total equity and liabilities	22 388	22 741
Pledged collateral	151	148
Contingent liabilities	87	89

Sales to Group companies accounted for SEK 18 million (28) of operating income in January–March.

Net financial items include the SEK 29 million (-5) result from hedging equity in foreign subsidiaries and the SEK -303 million (0) impairment loss on shares in subsidiaries.

Balance sheet appropriations include group contributions of SEK 200 million (-99).

The parent company's investments in property, plant and equipment and intangible non-current assets totalled SEK 8 million (5).

Quarterly figures, SEKm	2016		2015			Full year
	Q1	Q4	Q3	Q2	Q1	2015
Income statement
Net sales	3 828	3 689	4 032	4 139	4 154	16 014
Operating costs	-3 036	-3 078	-3 323	-3 475	-3 472	-13 348
Profit from investments in associates and joint ventures	-5	7	4	-2	-2	7
Depreciation and amortisation according to plan	-269	-313	-311	-309	-308	-1 240
Change in value of forests	62	71	91	82	23	267
Operating profit excl. items affecting comparability	580	376	493	435	396	1 700
Items affecting comparability*	-232	-931	-	-	-	-931
Operating profit	348	-555	493	435	396	769
Net financial items	-15	-17	-20	-25	-28	-90
Profit before tax	333	-572	473	410	368	679
Tax	-111	134	-95	-88	-70	-120
Profit for the period	222	-438	377	322	298	559
Earnings per share, SEK	2.6	-5.2	4.5	3.8	3.5	6.7
Net sales
Forest	1 368	1 335	1 240	1 403	1 503	5 481
Consumer board	1 364	1 255	1 439	1 348	1 431	5 472
Paper	1 308	1 463	1 636	1 602	1 447	6 148
Wood products	353	306	291	378	339	1 314
Renew able energy	108	93	65	83	117	359
Elimination of intra-group net sales	-672	-764	-639	-675	-682	-2 760
Group	3 828	3 689	4 032	4 139	4 154	16 014
Operating profit/loss by business area**
Forest	267	228	217	222	239	905
Consumer board	236	151	285	231	180	847
Paper	57	6	10	-17	-73	-74
Wood products	-5	5	-10	7	7	9
Renew able energy	60	30	22	38	86	176
Group-w ide	-35	-45	-31	-45	-43	-163
Group	580	376	493	435	396	1 700
Operating margin, % **
Consumer board	17.3	12.0	19.8	17.1	12.6	15.5
Paper	4.4	0.4	0.6	-1.1	-5.1	-1.2
Wood products	-1.4	1.8	-3.6	1.7	2.2	0.7
Group	15.1	10.2	12.2	10.5	9.5	10.6
EBITDA by business area**
Forest	211	167	133	146	222	668
Consumer board	358	276	410	355	304	1 346
Paper	165	153	158	130	74	514
Wood products	16	24	9	26	27	86
Renew able energy	66	36	28	43	91	198
Group-w ide	-29	-39	-24	-38	-37	-138
Group	787	618	713	662	681	2 673
Return on operating capital, % **
Forest	6.1	5.2	5.0	5.1	5.5	5.2
Consumer board	14.3	9.0	16.7	13.5	10.6	12.5
Paper	6.6	0.6	0.9	neg	neg	neg
Wood products	neg	2.4	neg	2.9	3.3	1.0
Renew able energy	7.1	3.6	2.6	4.4	10.0	5.2
Group	7.5	4.7	6.1	5.3	4.9	5.3
Key indicators
Return on capital employed, % **	9.1	5.7	7.3	6.4	5.9	6.4
Return on equity, %	4.3	-8.4	7.2	6.1	5.6	2.6
Deliveries
Harvesting ow n forests, '000 m³	715	686	789	917	820	3 213
Paperboard, '000 tonnes	129	116	132	122	129	499
Printing paper, '000 tonnes	273	317	356	346	306	1 325
Saw n timber, '000 m³	209	174	159	208	188	730
Ow n production of hydro and w ind pow er, GWh	373	349	349	366	377	1 441

* Items affecting comparability in operating profit in Q1 2016 refers to impairment losses on non-current assets, provisions for costs and the

effects of a fire.

** Excl. items affecting comparability.

Full year review, SEKm	2015	2014	2013	2012	2011	2010	2009	2008	2007	2006
Income statement Net sales	16 014	15 994	16 231	17 852	18 656	17 581	18 071	19 334	19 159	18 592
Operating costs	-13 348	-13 270	-13 919	-15 224	-15 501	-15 077	-15 191	-16 614	-15 637	-15 069
Profit from investments in associates and joint ventures	7	-7	3	47	84	28	45	50	12	11
Depreciation and amortisation according to plan	-1 240	-1 265	-1 370	-1 313	-1 260	-1 251	-1 320	-1 343	-1 337	-1 346
Change in value of forests	267	282	264	350	-	52	16	-16	89	115
Operating profit excl. items affecting comparability	1 700	1 734	1 209	1 713	1 979	1 332	1 620	1 412	2 286	2 303
Items affecting comparability	-931	-450	-140	-193	3 593	264	-	-361	557	-
Operating profit	769	1 284	1 069	1 520	5 573	1 596	1 620	1 051	2 843	2 303
Net financial items	-90	-147	-198	-227	-244	-208	-255	-311	-261	-247
Profit before tax	679	1 137	871	1 294	5 328	1 388	1 366	740	2 582	2 056
Tax	-120	-230	-160	559	-1 374	-684	-360	-98	-1 077	-597
Profit for the year	559	907	711	1 853	3 955	704	1 006	642	1 505	1 459
Diluted earnings per share, SEK	6.7	10.8	8.5	22.1	47.1	8.4	12.0	7.6	17.8	17.2
Operating profit by business area*
Forest	905	817	924	931	739	818	605	632	702	643
Consumer board	847	674	433	596	863	817	419	320	599	752
Paper	-74	141	-309	94	228	-618	340	280	623	754
Wood products	9	37	-75	-130	-136	20	21	13	146	80
Renew able energy	176	212	371	355	406	495	414	327	272	197
Group-w ide	-163	-146	-136	-132	-120	-200	-178	-159	-56	-123
Group	1 700	1 734	1 209	1 713	1 980	1 332	1 620	1 412	2 286	2 303
EBITDA by business area*
Forest	668	563	694	614	769	794	616	674	639	556
Consumer board	1 346	1 161	878	959	1 186	1 141	780	688	954	1 108
Paper	514	725	429	862	1 002	229	1 218	1 176	1 537	1 667
Wood products	86	160	45	-10	-26	49	52	47	169	104
Renew able energy	198	233	391	374	425	516	435	346	289	214
Group-w ide	-138	-126	-121	-123	-116	-198	-176	-160	-54	-115
Group	2 673	2 717	2 315	2 676	3 240	2 531	2 925	2 771	3 534	3 534
Deliveries
Harvesting ow n forests, '000 m³	3 213	3 297	3 465	3 211	2 988	2 999	2 897	2 649	2 575	2 618
Paperboard, '000 tonnes	499	493	469	485	474	464	477	494	516	536
Printing paper, '000 tonnes	1 325	1 305	1 574	1 651	1 668	1 732	1 745	2 044	2 025	2 021
Saw n timber, '000 m³ Ow n production of hydro and w ind pow er, GWh	730 1 441	725 1 113	686 1 041	660 1 353	487 1 235	285 1 149	313 1 090	266 1 128	262 1 193	248 934
Balance sheet
Non-current assets	29 524	30 221	30 652	30 664	30 334	26 028	25 694	26 506	26 153	25 354
Current assets	5 607	5 964	5 774	6 005	6 642	6 950	6 075	7 268	6 549	6 138
Financial receivables	325	249	327	377	240	454	407	828	541	649
Total assets	35 456	36 434	36 753	37 046	37 217	33 432	32 176	34 602	33 243	32 141
Equity	20 853	20 969	20 854	20 813	19 773	16 913	16 504	15 641	16 932	16 636
Deferred tax liability	5 508	5 480	5 804	5 504	6 630	5 910	5 045	4 819	5 482	5 030
Financial liabilities and interest-bearing provisions	5 124	6 156	6 443	6 967	6 499	6 227	6 091	8 332	6 518	6 634
Operating liabilities	3 971	3 829	3 653	3 762	4 313	4 382	4 536	5 809	4 310	3 841
Total equity and liabilities	35 456	36 434	36 753	37 046	37 217	33 432	32 176	34 602	33 243	32 141
Cash flow
Operating activities	2 526	2 176	2 011	2 254	2 101	1 523	2 873	1 660	2 476	2 358
Investing activities	-832	-834	-869	-1 920	-1 733	-1 597	-818	-1 124	-1 315	-947
Cash flow after investments	1 693	1 342	1 142	334	368	-74	2 054	536	1 161	1 411
Key indicators Return on capital employed, % *	6	6	4	7	9	6	7	6	10	10
Return on equity, %	3	4	3	9	23	4	6	4	9	9
Return on equity, % *	7	6	4	6	8	4	6	4	9	9
Debt/equity ratio	0.23	0.28	0.29	0.32	0.32	0.34	0.34	0.48	0.35	0.36
Dividend Dividend, SEK	10.5	10	9	9	8	7	7	9	12	12

* Excl. items affecting comparability

Holmen in brief

Holmen's strategy is to own forest and renewable energy assets and to develop industrial operations in consumer board, paper and wood products. The substantial forest and renewable energy assets should deliver stable revenue that grows over time. Large-scale industrial operations at efficient facilities should provide good profitability through the refining of forest raw material into high-performance consumer board, cost-effective paper and wood products for the joinery and construction industries.

The aim is for forest and renewable energy, which constitute two-thirds of the Group's assets, to provide a stable return on capital employed of at least 5 per cent, and for the industrial business to consistently return more than 10 per cent. Taken together, this means that the Group's return should exceed 7 per cent.

Press and analyst conference

Following publication of the interim report, a press and analyst conference will be held at 14.30 CET on Tuesday, 26 April. Venue: Tändstickspalatset, Kreugersalen. Västra Trädgårdsgatan 15, Stockholm. Holmen President and CEO Henrik Sjölund will present and comment on the report. The presentation will be held in English.

The conference is also directly available as a webcast on Holmen's website, www.holmen.com. You may also participate in the conference by telephone, by calling +46 (0)8 505 564 74 (within Sweden), +44 (0)203 364 53 74 (from the rest of Europe) or +1 855 753 22 30 (from the US) no later than 14.25 CET.

Financial reports

17 August 2016	Interim report January–June 2016
26 October 2016	Interim report January–September 2016
8 February 2017	Year-end report 2016

This is information that Holmen AB is obliged to disclose under the Swedish Securities Market Act and the Swedish Financial Instruments Trading Act. The information was submitted for publication on 26 April 2016 at 11.15 CET.

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This is a translation of the Swedish interim report of Holmen Aktiebolag (publ.). In the event of inconsistency between the English and the Swedish versions, the Swedish version shall prevail.