Holmen

Quarterly Report • Feb 4, 2010

Year-end Report for 2009

		Quarter		Full year
MSEK	4-09	3-09	4-08	2009	2008
Net turnover	4 659	4 387	5 043	18 071	19 334
Operating profit*	392	442	284	1 620	1 051
Profit after tax	225	280	271	1 006	642
Earnings per share, SEK	2.7	3.3	3.2	12.0	7.6
Return on equity, %	5.5	7.0	6.9	6.4	3.9

* The operating profit for full year 2008 includes items affecting comparability of cost SEK 361 million.

• Profit after tax for 2009 was SEK 1 006 million (2008: SEK 642 million).
• Earnings per share were SEK 12.0 (7.6). Return on equity totalled 6.4 per cent (3.9).
• The Board proposes a lowered dividend of SEK 7 (9) per share.
• Operating profit for 2009 amounted to SEK 1 620 (1 051) million. The result of 2008 included items affecting comparability which totalled cost SEK 361 million. Higher newsprint and paperboard prices improved profit. Weak demand led to considerable production curtailments, which had a negative effect on the result.

In the fourth quarter, operating profit reached SEK 392 million, which was SEK 50 million lower than during the third quarter of 2009. The quarter includes seasonally higher costs as well as provisions and write-downs of SEK 125 million. The earnings trend for all business areas, except for Holmen Paper, was positive.

Demand was weak in the Group's product areas during the year. In Europe demand for newsprint fell by 14 per cent and for virgin fibre board by 9 per cent compared to 2008.

Holmen Paper		Quarter			Full year
MSEK	4-09	3-09	4-08	2009	2008
Net turnover	2 310	2 348	2 854	9 303	10 443
Operating costs	-2 126	-2 024	-2 617	-8 084	-9 268
Depreciation according to plan	-218	-217	-217	-878	-896
Items affecting comparability	-	-	-	-	-361
Operating profit	-34	107	20	340	-81
Capital expenditure	94	114	108	287	679
Operating capital	8 789	9 170	10 237	8 789	10 237
Operating margin, % *	-2	5	1	4	3
Return on operating capital, % *	-2	5	1	4	3
Production, 1 000 tonnes	437	431	500	1 715	2 033
Deliveries, 1 000 tonnes	456	455	539	1 745	2 044

* Excl. items affecting comparability.

The market for newsprint remained weak during the fourth quarter with demand in Europe around 14 per cent lower than in the same quarter in 2008. For the whole of 2009, deliveries of newsprint to Europe fell by 14 per cent from the level achieved in the preceding year. Along with weak demand outside Europe, this resulted in low capacity utilisation at European producers.

Demand for MF Magazine in Europe was 20 per cent lower in 2009 than in 2008. The decline for SC Paper was 9 per cent and for coated paper 22 per cent.

Holmen Paper's deliveries dropped to 1 745 000 tonnes, compared to 2 044 000 tonnes in 2008, as a consequence of low demand and capacity closures. The decline mainly affected standard newsprint and coated paper, while Holmen Paper's deliveries of MF Magazine were more favourable. Deliveries were unchanged from the third quarter.

Holmen Paper's operating profit for 2009 was SEK 340 million compared to SEK 280 million for 2008 (excluding items affecting comparability). Sales prices were higher, but the weak market entailed extensive production curtailments and an increase in sales outside Europe. Lower costs of wood and recovered paper made a positive impact on profit, but energy costs rose.

Compared with the third quarter, operating profit in the fourth quarter fell by SEK 141 million to reach a loss of SEK 34 million. The costs of energy, personnel and maintenance displayed a seasonal increase. The figure for the fourth quarter includes a SEK 15 million provision for staff cuts in Braviken. Cuts affecting about 100 people are in progress and are expected to make their full impact on costs towards the end of 2010. Price negotiations for 2010 are under way but not complete. However, lower prices are expected, which has entailed write-downs of finished goods; this reduced profit by SEK 50 million.

Iggesund Paperboard		Quarter			Full year
MSEK	4-09	3-09	4-08	2009	2008
Net turnover	1 260	1 223	1 194	5 023	4 860
Operating costs	-1 027	-1 008	-1 085	-4 244	-4 173
Depreciation according to plan	-93	-86	-93	-361	-368
Operating profit	140	128	16	419	320
Capital expenditure	75	54	98	260	327
Operating capital	4 114	4 143	4 254	4 114	4 254
Operating margin, %	11	11	1	8	7
Return on operating capital, %	14	12	2	10	8
Production, paperboard, 1 000 tonnes	118	118	113	471	491
Deliveries, paperboard, 1 000 tonnes	123	118	115	477	494

The virgin fibre board market recovered in the autumn. During the fourth quarter, deliveries from European producers to Europe were 2 per cent higher than in the corresponding quarter the preceding year – which was, however, a weak period. For the whole of 2009 the decline was 9 per cent. Prices were stable in the fourth quarter. During the autumn, Iggesund Paperboard increased prices for folding boxboard in the UK market and announced price rises in the rest of Europe for 2010.

Iggesund Paperboard's deliveries amounted to 477 000 tonnes in 2009, which was 3 per cent lower than in the preceding year. Deliveries were higher in the fourth quarter than in the third.

Iggesund Paperboard's operating profit for 2009 reached SEK 419 million (320). The price increases implemented in the second half of 2008, along with a weaker British pound and Swedish krona, had a positive impact on results. Production curtailments and high manufacturing costs adversely affected

profit, particularly in the first half of 2009. A paperboard machine (BM 1) at Workington Mill was permanently shut down in December. Provisions and impairment losses resulting from the shutdown had an adverse effect of SEK 75 million on profit for the full year.

Compared to the third quarter, profit for the fourth quarter rose by SEK 12 million to SEK 140 million. The growth is primarily attributable to higher deliveries and lower consumption rates in production. The fourth quarter includes costs of SEK 60 million related to the closure of BM 1 at Workington Mill. Profit for the third quarter incorporates costs of SEK 15 million related to the same closure.

In conjunction with the closure of BM 1, capacity on the remaining paperboard machine at Workington Mill was upgraded. The resulting annual capacity of the mill is 200 000 tonnes (previously 250 000) – a volume that is better aligned to the market. The change involves employee cutbacks at the mill that affect about 100 people.

Holmen Timber		Quarter		Full year
MSEK	4-09	3-09	4-08	2009	2008
Net turnover	155	142	109	553	499
Operating costs	-129	-120	-107	-501	-452
Depreciation according to plan	-7	-8	-9	-31	-34
Operating profit	19	13	-7	21	13
Capital expenditure	69	40	-11	110	19
Operating capital	396	324	366	396	366
Operating margin, %	12	10	-7	4	3
Return on operating capital, %	21	17	-8	6	4
Production, 1 000 m3	76	75	72	291	279
Deliveries, 1 000 m3	76	76	63	313	266

The consumption of sawn timber in Europe was lower in 2009 than in the preceding year. The supply of raw materials was also limited to many sawmills. Along with the low demand, this led to sizeable production curtailments among European producers. The market improved, however, because the supply of available products and stock levels were low. The prices of sawn timber rose as of spring 2009, following the substantial drop from peak prices in mid-2007.

Holmen Timber's deliveries increased to 313 000 cubic metres in 2009, compared to 266 000 cubic metres in 2008. The level of deliveries during the fourth quarter remained high.

Holmen Timber's operating profit for 2009 reached SEK 21 million (13). Higher deliveries and lower raw material costs had a positive impact, although the average price level was lower.

Compared to the third quarter, operating profit climbed during the fourth quarter by SEK 6 million to SEK 19 million. The improvement is attributable to a rise in sales prices. The price of raw materials, which dropped at the start of the year, increased during the second half of the year.

The construction of Braviken Sawmill near Norrköping is in progress. Production is scheduled to start at the turn of 2010/2011.

Holmen Skog	Quarter				Full year
MSEK	4-09	3-09	4-08		2009	2008
Net turnover	1 306	1 048	1 365		4 799	5 443
Operating costs	-1 083	-926	-1 151		-4 184	-4 769
Depreciation according to plan	-9	-6	-9		-27	-26
Earnings from operations	214	116	205		589	648
Change in value of forests	-35	31	-26		16	-16
Operating profit	179	147	179		605	632
Capital expenditure	54	4	9		69	21
Operating capital	11 384	11 437	11 415		11 384	11 415
Return on operating capital, %	6	5	6		5	6
Harvesting company forests, 1 000 m3	859	704	770		2 897	2 649

Demand for saw timber remained high in the fourth quarter and timber prices rose in large parts of Sweden. A normal level of demand was noted for pulpwood and market prices remained unchanged.

Holmen Skog's operating profit for 2009 was SEK 605 million (632). This figure includes a change of SEK 16 million (negative 16) in the value of the company's forests calculated in accordance with IAS 41.

Earnings from operations (i.e. earnings before changes in the value of forests) decreased by

SEK 59 million to SEK 589 million due to lower prices, while increased harvesting of the company's forests had a positive impact on earnings. The extent of silviculture rose, leading to higher costs.

Compared to the third quarter, earnings from operations for the fourth quarter rose by SEK 98 million to SEK 214 million. Higher volumes of harvesting in the company's forests and seasonally lower silviculture costs had a favourable impact on the result.

Holmen Energi	Quarter			Full year
MSEK	4-09	3-09	4-08	2009	2008
Net turnover	465	363	501	1 628	1 834
Operating costs	-320	-286	-386	-1 194	-1 488
Depreciation according to plan	-7	-5	-5	-21	-19
Operating profit	138	72	110	414	327
Capital expenditure	19	15	35	88	76
Operating capital	3 207	3 175	3 006	3 207	3 006
Return on operating capital, %	17	9	15	13	11
Production of hydro power, GWh	355	229	311	1 090	1 128

Operating profit for 2009 reached SEK 414 million (327), and the improvement stems from higher prices. Production was two per cent lower than during a normal year.

Compared to the third quarter, operating profit climbed by SEK 66 million to SEK 138 million in the fourth quarter. Prices were better and production was higher than usual for this time of year. The levels in Holmen's water storage reservoirs were normal at the end of 2009.

5

Year-end Report for 2009

Net financial items and financing

Net financial items for 2009 amounted to cost SEK 255 million (cost 311). Lower market interest rates reduced the borrowing cost to 3.5 per cent (4.5), while, net debt was on average somewhat higher than in the preceding year.

Cash flow from current operations totalled SEK 2 873 million, of which a reduction in tied up working capital accounted for SEK 678 million. Cash flow absorbed by investment activities was SEK 818 million. Dividend of SEK 756 million was paid to shareholders in the second quarter.

Since the turn of the year, the Group's financial net debt has decreased by SEK 1 821 million to SEK 5 683 million. The debt/equity ratio was 0.34. The equity ratio was 51 per cent.

Financial liabilities totalled SEK 6 091 million, of which SEK 2 298 million were current liabilities. Liquid funds and financial receivables reached SEK 407 million. In the fourth quarter, Holmen raised two new MTN loans, totalling SEK 1 500 million with four-year maturities, and entered into an agreement for a new seven-year credit facility of SEK 1 300 million. The Group subsequently has long-term committed credit facilities of SEK 7 480 million.

In December Standard & Poor's lowered its long-term corporate credit rating of Holmen from BBB+ to BBB. At the same time the short-term rating was lowered to A-2/K-2.

Equity

In 2009, the Group's equity increased by SEK 863 million to SEK 16 504 million. Profit for the year reached SEK 1 006 million, and the dividend paid was SEK 756 million. Equity has also been affected by other comprehensive income which consists of items such as actuarial revaluation of pension liability, currency revaluation of loans, revaluation of transaction hedges and restatement of assets in foreign entities as well as tax on these items. In 2009, other comprehensive income was SEK 613 million. This is mainly attributable to currency hedges with negative fair value that have expired and have therefore been realised and recognised in the income statement, and to the fact that the strengthened Swedish krona reduced the negative fair value of outstanding transaction hedges.

Tax

The stated tax charge totalled SEK 360 million, corresponding to 26.4 per cent of profit before tax. The tax cost includes SEK 30 million from a successful tax dispute resolution during the second quarter.

Judgment on tax case

On 15 January 2010, Stockholm County Administrative Court announced its judgment on the tax case involving Holmen's subsidiary MoDo Capital AB. Under the Court's judgment, MoDo Capital's depreciation deduction for the 1997 tax year is disallowed, which results in a tax cost estimated at a total of SEK 640 million. Holmen has previously provided information about the dispute in the Annual Report and Holmen has already made provision for the estimated tax cost. It is not anticipated that the judgment will have any impact on the Group result. Holmen will appeal against the judgment at the Administrative Court of Appeal.

Hedging exchange rates and electricity prices

The Group hedges parts of its future estimated net flows in foreign currencies. Operating profit for 2009 includes a loss of SEK 408 million (loss of 336) in currency hedging.

At year-end, some 90 per cent of the Group's estimated net flows in euro for 2010 were hedged at an exchange rate of SEK 9.7, for 2011 about 85 per cent at SEK 10.6, and for 2012 about 25 per cent at SEK 10.5. Four months' estimated flows in dollars were hedged at an exchange rate of SEK 6.9. The fair value of currency hedges not yet recognised in the income statement amounted to negative SEK 45 million at the end of 2009.

For the 2010–2012 period, the price of the Group's estimated net consumption of electricity in Sweden has been fully hedged, while some 85 per cent has been hedged for the 2013–2015 period.

Investments

Cash flow absorbed by investment activities totalled SEK 818 million in 2009 (1 124). Depreciation and amortisation according to plan reached SEK 1 320 million (1 343). The year's investments included a new hydro power station in Iggesund, improved water purification at Iggesund Mill and the ongoing investment in a new sawmill at Braviken.

Employees

The average number of employees (full-time equivalents) in the Group was 4 577 (4 829). The reduction is mainly due to the closure of Wargön Mill and staff cuts at Hallsta Paper Mill.

Share buy-backs

At the 2009 AGM, Holmen's shareholders renewed the Board's mandate to make decisions to buy back up to 10 per cent of all the company's shares. No buy-backs took place during the year. The company already owns 0.9 per cent of the shares to secure the company's undertaking pursuant to the call option scheme for employees.

Year-end Report for 2009

The Board proposes that the AGM to be held on 24 March 2010 authorises the Board to buy back and transfer up to 10 per cent of all the company's own shares.

Dividend

The Board proposes that the AGM to be held on 24 March 2010 resolves in favour of paying a lowered dividend of SEK 7 (9) per share. The proposed record date for dividend is 29 March 2010.

The reason for the proposed reduction in dividend is that profitability is under downward pressure in the industry, mainly for paper products. The Group is also implementing investments, such as constructing a new sawmill. Holmen is reformulating its dividend target; in the past it was 5–7 per cent of the Group's equity, but future dividend will be based on the Group's profitability situation, future investment plans and the goal of having a strong financial position with a debt/equity ratio of 0.3–0.8.

Nomination committee proposals to the 2010 AGM

Holmen's nomination committee proposes the re-election of these board members: Fredrik Lundberg (who is also proposed for re-election as Chairman of the Board), Carl Bennet, Magnus Hall, Carl Kempe, Curt Källströmer, Hans Larsson, Ulf Lundahl and Göran Lundin. Lilian Fossum has declined re-election.

The nomination committee also proposes that the AGM elects Louise Lindh as a new Board member. Louise Lindh is 30 years old and has an MBA. She is Executive Vice President of Fastighets AB L E Lundberg and is a board member of Hufvudstaden AB.

The nomination committee's other proposals will be presented in the notice to the AGM.

For the period until the 2010 AGM, Holmen's nomination committee consists of: Mats Guldbrand, L E Lundbergföretagen; Alice Kempe, Kempe Foundations; Håkan Sandberg, Handelsbanken incl. pension fund; and Fredrik Lundberg, chairman of the Board. The chairman of the nomination committee is Mats Guldbrand.

Significant risks and uncertainties

The weak economy creates continued uncertainty about the market trend for the Group's products. The Group's and the parent company's significant risks and uncertainties relate primarily to changes in demand and the prices of its products, the cost of important input goods, and to changes in exchange rates. For a more detailed description of material risks and uncertainties see pages 45–46 and Note 27 in Holmen's annual report for 2008. In the tax case relating to Holmen's French subsidiary, the decision by the County Administrative Court, which was in favour of the company, has come into legal effect. The outcome had no impact on the result. For up-to-date information on the tax dispute affecting Holmen's subsidiary MoDo Capital AB, see the Judgment on tax case section on page 6 of this year-end report.

Related party transactions

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

Stockholm, 4 February 2010 Holmen AB (publ)

Magnus Hall President and CEO

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

Interim report for January–March will be published on 6 May 2010.

For further information please contact:

Magnus Hall, President and CEO, tel. +46 8 666 21 05 Anders Almgren, CFO, tel. +46 8 666 21 16 Ingela Carlsson, Public Relations Director, tel. +46 8 666 21 15

Accounting principles

The year-end report for the Group has been prepared in accordance with IAS 34 Interim Financial Reporting, the Swedish Annual Accounts Act and the Swedish Securities Market Act. For the Parent company the year-end report has been prepared in accordance with the Swedish Annual Accounts Act and the Swedish Securities Market Act, which complies with Recommendation RFR 2.2 Accounting for Legal Entities, issued by the Swedish Financial Reporting Board. The parent company's and the Group's accounting policies used in the report are unchanged from the latest published annual report with the exception that the Group has applied a new presentation of results in accordance with changes in IAS 1 Presentation of Financial Statements. The introduction of IFRS 8 Operating Segments has no effect on the Group's definition of segments. The figures in tables are rounded off.

The Group

		Quarter		Full year
Income statement, MSEK	4-09	3-09	4-08	2009	2008
Net turnover	4 659	4 387	5 043	18 071	19 334
Other operating income	188	128	199	600	755
Change in inventory of finished products	-163	-127	-147	-381	106
Raw materials, goods for resale and consumables	-2 267	-2 163	-2 701	-9 017	-10 929
Personnel costs	-699	-614	-720	-2 662	-2 965
Other operating costs	-945	-891	-1 040	-3 709	-3 885
Depreciation according to plan	-334	-322	-333	-1 320	-1 343
Write-downs	-22	-	-1	-22	-57
Change in value of biological assets	-35	31	-26	16	-16
Interest in earnings of associated companies	10	13	10	45	50
Operating profit	392	442	284	1 620	1 051
Financial income	4	2	7	12	17
Financial costs	-63	-57	-96	-267	-328
Profit before tax	332	386	195	1 366	740
Tax	-107	-106	76	-360	-98
Profit for the period	225	280	271	1 006	642
Earnings per share, before dilution, SEK	2.7	3.3	3.2	12.0	7.6
Earnings per share, after dilution, SEK	2.7	3.3	3.2	12.0	7.6
Operating margin, % *	8.4	10.1	5.6	9.0	7.3
Return on capital employed, % *	7.0	7.8	4.9	7.2	6.1
Return on equity, %	5.5	7.0	6.9	6.4	3.9

		Quarter			Full year
Statement of comprehensive income, MSEK	4-09	3-09	4-08	2009	2008
Profit for the period	225	280	271	1 006	642
Other comprehensive income
Cash flow hedges	-17	683	-751	910	-964
Actuarial gains and losses related to pensions,			32
including payroll tax	-8	43		15	-169
Translation difference on foreign operation	57	-438	366	-256	445
Hedge of currency risk in foreign operation	-39	305	-423	254	-541
Tax attributable to items stated direct in equity	17	-272	308	-310	452
Total other comprehensive income	10	322	-468	613	-778
Total comprehensive income	234	602	-197	1 619	-135

* Excl. items affecting comparability.

	2009	2009	2008
Balance sheet, MSEK	31 December	30 September	31 December
Fixed assets
Intangible fixed assets	27	30	106
Tangible fixed assets	12 473	12 502	13 142
Biological assets	11 109	11 121	11 080
Shares in associated companies	1 770	1 760	1 824
Other shares and participations	10	11	11
Long-term financial receivables	166	170	87
Deferred tax receivables	304	305	342
Total fixed assets	25 859	25 899	26 593
Current assets
Inventories	2 850	2 967	3 434
Accounts receivables	2 712	2 765	3 144
Other short-term operating receivables	513	581	689
Short-term financial receivables	60	32	88
Liquid funds	182	390	653
Total current assets	6 317	6 735	8 009
Total assets	32 176	32 634	34 602
Equity	16 504	16 270	15 641
Long-term liabilities
Long-term financial liabilities	3 472	2 538	3 223
Deferred tax liabilities	5 045	5 168	4 819
Pension provisions	320	299	354
Other provisions	1 102	1 084	1 080
Total long-term liabilities	9 939	9 089	9 475
Short-term liabilities
Short-term financial liabilities	2 298	4 042	4 756
Liabilities to suppliers	1 911	1 539	2 282
Short-term provisions	274	239	277
Other operating liabilities	1 250	1 456	2 171
Total short-term liabilities	5 733	7 276	9 486
Total liabilities	15 672	16 364	18 960
Total equity and liabilities	32 176	32 634	34 602
Debt/equity ratio	0.34	0.39	0.48
Equity ratio, %	51.3	49.9	45.2
Operating capital	26 929	27 420	27 623
Capital employed	22 188	22 557	23 146
Financial net debt	5 683	6 287	7 504
Pledged assets	21	21	25
Contingent liabilities	140	146	671

		Full year
Change in equity, MSEK	2009	2008
Opening balance	15 641	16 932
Profit for the period	1 006	642
Other comprehensive income	613	-778
Buy-backs of company´s own shares	-	-153
Premiums received or issued call options	-	15
Dividend	-756	-1 017
Closing balance	16 504	15 641

Share structure
Share	Votes	No. of shares	No. of votes	Quota value	MSEK
A	10	22 623 234	226 232 340	50	1 131.2
B	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 own B-shares		-760 000	-760 000
Total number of shares in issue		83 996 162	287 605 268

Issued call options, B-shares (exercise period 2013) 758 300

Cash flow analysis, MSEK		Quarter		Full year
	4-09	3-09	4-08	2009	2008
Current operations
Profit before tax	332 308	386 397	195 424	1 366 1 163	740 1 797
Adjustments for items not included in cash flow *
Paid income tax Cash flow from current operations	-130	-123	108	-334	-192
before changes in working capital	510	661	727	2 195	2 345
Cash flow from changes in working capital
Change in inventories	115	216	-38	621	-373
Change in operating receivables	55	52	210	445	-40
Change in operating liabilities	147	-70	-384	-389	-273
Cash flow from current operations	828	859	514	2 873	1 660
Investment activities
Acquisition of fixed assets	-293	-164	-243	-759	-1 160
Sale of fixed assets	7	12	12	45	37
Change in long term financial receivables	-24	-80	-	-104	-
Cash flow from investment activities	-309	-232	-232	-818	-1 124
Financing activities
Change in financial liabilities and receivables	-727	-702	39	-1 766	866
Buy-back / sale of own shares etc. **	-	-	-		- -138
Dividend paid to the parent company's shareholders	-	-	-	-756	-1 017
Cash flow from financing activities	-727	-702	39	-2 522	-289
Cash flow for the period	-209	-75	320	-467	247
Opening liquid funds	390	470	324	653	394
Exchange rate difference in liquid funds	-4	-5	9	-4	12
Closing liquid funds	177	390	653	182	653

		Quarter			Full year
Change in financial net debt, MSEK	4-09	3-09	4-08	2009		2008
Opening financial net debt	-6 287	-7 270	-7 189	-7 504		-5 977
Cash flow from current operations	828	859	514	2 873		1 660
Cash flow from investment activities (excl financial
receivables)	-285	-152	-232		-714	-1 124
Buy-back / sale of own shares etc. **	-	-	-		-	-138
Dividend paid	-	-	-		-756	-1 017
Actuarial revaluation of pension provision	-8	41	39		13	-162
Currency effects and changes in fair value	69	234	-636		405	-746
Closing financial net debt	-5 683	-6 287	-7 504	-5 683		-7 504

* The adjustments consist primarily of depreciation according to plan and write-downs of fixed assets, 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.

** Consists of buy-back of own shares (cost SEK 153 million) and received premiums of issued call options (SEK 15 million) related to an incentive scheme.

The Parent Company

		Quarter		Full year
Income statement, MSEK	4-09	3-09	4-08	2009	2008
Operating income	3 652	3 342	3 907	13 884	14 978
Operating costs	-3 398	-3 103	-3 932	-13 022	-14 792
Operating profit	254	239	-25	861	186
Net financial items	- 439	381	-490	746	-761
Profit after net financial items	-185	620	-515	1 607	-575
Appropriations	452	-85	36	388	-56
Profit before tax	267	534	-479	1 995	-630
Tax	-174	-112	165	-331	195
Profit for the period	93	423	-314	1 664	-436

	2009	2008
Balance sheet, MSEK	31 December	31 December
Fixed assets	19 659	20 963
Current assets	4 661	6 140
Total assets	24 320	27 103
Restricted equity	5 915	5 915
Non-restricted equity	4 776	2 553
Untaxed reserves	2 363	2 751
Provisions	1 185	1 031
Liabilities	10 081	14 853
Total equity and liabilities	24 320	27 103
Pledged assets	6	6
Contingent liabilities	717	766

Sales to Group companies accounted for SEK 103 million (134) of operating income for 2009.

Net financial items for 2009 include dividends from and impairment losses relating to subsidiaries totalling SEK 720 million (15) and gains of SEK 254 million (loss of 541) on hedges of equity in foreign subsidiaries.

In 2009 the parent company's investments in tangible and intangible fixed assets reached SEK 40 million (57).

			2009		2008				Full year
Quarterly figures, MSEK	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1	2009	2008
Income statement
Net turnover	4 659	4 387	4 496	4 529	5 043	4 591	4 826	4 875	18 071	19 334
Operating costs	-3 943	-3 636	-3 806	-3 789	-4 437	-3 909	-4 178	-4 107	-15 175	-16 630
Depreciation according to plan	-334	-322	-333	-332	-333	-337	-339	-334	-1 320	-1 343
Interest in earnings of associated companies	10	13	15	7	10	16	12	12	45	50
Items affecting comparability *	-	-	-	-	-	-298	-63	-	-	-361
Operating profit	392	442	372	415	284	64	257	446	1 620	1 051
Net financial items	-60	-55	-66	-74	-89	-85	-73	-64	-255	-311
Profit before tax	332	386	306	341	195	-22	185	383	1 366	740
Tax	-107	-106	-51	-96	76	-2	-61	-111	-360	-98
Profit for the period	225	280	256	245	271	-24	124	271	1 006	642
Earnings per share, after dilution, SEK	2.7	3.3	3.0	2.9	3.2	-0.3	1.5	3.2	12.0	7.6
Net turnover
Holmen Paper	2 310	2 348	2 361	2 284	2 854	2 517	2 547	2 525	9 303	10 443
Iggesund Paperboard	1 260	1 223	1 274	1 266	1 194	1 210	1 219	1 237	5 023	4 860
Holmen Timber	155	142	130	127	109	116	124	149	553	499
Holmen Skog	1 306	1 048	1 163	1 283	1 365	1 208	1 433	1 436	4 799	5 443
Holmen Energi Elimination of intra-group sales	465 -837	363 -737	359 -791	442 -872	501 -980	442 -902	392 -890	499 -972	1 628 -3 236	1 834 -3 745
Group	4 659	4 387	4 496	4 529	5 043	4 591	4 826	4 875	18 071	19 334
Operating profit
Holmen Paper	-34	107	150	117	20	80	100	80	340	280
Iggesund Paperboard	140	128	77	73	16	127	61	116	419	320
Holmen Timber	19	13	5	-16	-7	-1	-2	23	21	13
Holmen Skog	179	147	144	134	179	150	152	151	605	632
Holmen Energi	138	72	59	144	110	33	58	125	414	327
Group central costs and other	-50	-43	-51	-47	-30	-21	-50	-48	-191	-149
Elimination of internal operating profit	0	16	-11	9	-4	-6	1	0	13	-10
Items affecting comparability *	-	-	-	-	-	-298	-63	-	-	-361
Group	392	442	372	415	284	64	257	446	1 620	1 051
Operating margin, % **
Holmen Paper	-1.5	4.6	6.3	5.1	0.7	3.2	3.9	3.2	3.7	2.7
Iggesund Paperboard	11.1	10.5	6.1	5.8	1.4	10.5	5.0	9.3	8.3	6.6
Holmen Timber	12.2	9.5	3.5	-12.4	-6.8	-1.1	-1.5	15.3	3.8	2.5
Group	8.4	10.1	8.3	9.2	5.6	7.5	6.4	9.2	9.0	7.3
Return on operating capital, % **
Holmen Paper	-1.5	4.5	6.0	4.6	0.8	3.2	4.0	3.3	3.5	2.8
Iggesund Paperboard	13.6	12.1	7.2	6.9	1.5	12.1	5.8	11.1	9.9	7.5
Holmen Timber	21.0	16.7	5.6	-17.7	-7.9	-1.3	-2.1	26.2	6.2	3.5
Holmen Skog	6.3	5.1	5.0	4.7	6.3	5.3	5.4	5.3	5.3	5.6
Holmen Energi	17.3	9.1	7.7	19.1	14.8	4.5	7.9	16.9	13.3	11.1
Group	5.8	6.4	5.5	6.1	4.1	5.1	4.5	6.4	5.9	5.0
Key ratios
Return on capital employed, % **	7.0	7.8	6.6	7.3	4.9	6.3	5.6	7.8	7.2	6.1
Return on equity, %	5.5	7.0	6.6	6.4	6.9	-0.6	3.0	6.4	6.4	3.9
Deliveries
Newsprint and magazine paper, 1 000 tonnes	456	455	437	397	539	493	508	503	1 745	2 044
Paperboard, 1 000 tonnes	123	118	119	117	115	124	127	127	477	494
Sawn timber, 1 000 m³ Harvesting company forests, 1 000 m³	76 859	76 704	80 753	81 580	63 770	66 631	66 714	72 534	313 2 897	266 2 649
Production of hydro power, GWh	355	229	203	304	311	176	254	388	1 090	1 128

* Item affecting comparability in the third quarter of 2008 relates to a provision of costs for the closure of Wargön Mill of SEK 298 million.

The second quarter figure includes a net cost of SEK 63 million for the closure of PM 2 at Hallsta Paper Mill and the fire at Braviken Paper Mill.

** Excl. items affecting comparability.

Full year review, MSEK	2009	2008	2007	2006	2005	2004	2003	2002	2001	2000
Income statement Net turnover		19 334	19 159	18 592	16 319	15 653	15 816	16 081	16 655	15 155
Operating costs	18 071 -15 175	-16 630	-15 548	-14 954	-13 205	-12 570	-12 306	-12 205	-12 460	-11 843
Depreciation according to plan	-1 320	-1 343	-1 337	-1 346	-1 167	-1 156	-1 166	-1 153	-1 126	-1 045
Interest in earnings of associated companies	45	50	12	11	20	25	-6	-10	-3	552
Items affecting comparability *	-	-361	557	-	-	-	-	-	-620	2 023
Operating profit	1 620	1 051	2 843	2 303	1 967	1 952	2 338	2 713	2 446	4 842
Net financial items	-255	-311	-261	-247	-233	-206	-212	-149	-152	-101
Profit before tax	1 366	740	2 582	2 056	1 734	1 746	2 126	2 564	2 294	4 741
Tax	-360	-98	-1 077	-597	-478	-471	-675	-605	-108	-769
Profit for the year	1 006	642	1 505	1 459	1 256	1 275	1 451	1 959	2 186	3 972
Earnings per share, after dilution, SEK	12.0	7.6	17.8	17.2	14.8	15.1	17.5	23.6	26.4	44.7
Operating profit by business area
Holmen Paper	340	280	623	754	631	487	747	1 664	2 410	1 389
Iggesund Paperboard	419	320	599	752	626	809	1 001	818	455	569
Holmen Timber	21	13	146	80	13	5	18	-6	-79	-116
Holmen Skog	605	632	702	643	537	586	516	450	455	466
Holmen Energi	414	327	272	197	301	178	193	-26	49	99
Group central costs and eliminations	-178	-159	-56	-123	-141	-113	-137	-187	-224	-112
Items affecting comparability *	-	-361	557	-	-	-	-	-	-620	2 023
Divested activities	-	-	-	-	-	-	-	-	-	524
Group	1 620	1 051	2 843	2 303	1 967	1 952	2 338	2 713	2 446	4 842
Balance sheet
Fixed assets	25 694	26 506	26 153	25 354	25 793	23 381	20 940	21 357	19 150	18 955
Current assets	6 075	7 268	6 549	6 138	5 709	5 149	4 743	4 922	5 366	5 330
Financial receivables	407	828	541	649	712	459	675	688	432	2 015
Total assets	32 176	34 602	33 243	32 141	32 214	28 989	26 358	26 967	24 948	26 300
Equity	16 504	15 641	16 932	16 636	16 007	15 635	15 366	15 185	14 072	17 014
Deferred tax liability	5 045	4 819	5 482	5 030	5 143	5 177	4 557	4 370	4 014	4 264
Financial liabilities	6 091	8 332	6 518	6 634	7 351	5 335	4 044	4 496	3 593	1 721
Operating liabilities	4 536	5 809	4 310	3 841	3 713	2 842	2 391	2 916	3 269	3 301
Total equity and liabilities	32 176	34 602	33 243	32 141	32 214	28 989	26 358	26 967	24 948	26 300
Cash flow
Current operations	2 873	1 660	2 476	2 358	2 471	2 331	2 443	3 498	3 786	1 925
Investment activities	-818	-1 124	-1 315	-947	-3 029	-1 195	-726	-1 810	-1 669	-2 019
Cash flow after capital expenditure	2 054	536	1 161	1 411	-558	1 136	1 717	1 688	2 117	-94
Key ratios
Return on capital employed, % **
Return on equity, %
	7	6	10	10	9	10	12	16	18	15
	6	4	9	9	8	8	10	14	16	24
Debt/equity ratio	0.34	0.48	0.35	0.36	0.41	0.31	0.22	0.25	0.22	-0.02
Dividend Ordinary dividend, SEK	7 ***	9	12	12	11	10	10	11	10	9

* Items affecting comparability in 2008 of cost SEK 361 million relate to provisions and costs due to restructure and closure of mills and result effects from fire. Items affecting comparability in 2007 relate to a write-down of goodwill and tangible fixed assets of SEK -1 603 million within Holmen Paper, a reversed write-down of SEK 60 million within Holmen Timber, and a positive revaluation of forests by SEK 2 100 million within Holmen Skog.

** Excl. items affecting comparability.

*** Proposal of the Board.

Stated in accordance with IFRS from 2004. As far as Holmen is concerned, the principal difference between IFRS and previous accounting principles is that forest assets are valued and stated in the accounts at fair value, that goodwill is no longer depreciated according to plan, and that the fair value of financial assets and liabilities that are hedged are taken into the balance sheet.

Holmen in brief

Holmen's business concept is to develop and run profitable business within three product-oriented business areas for printing paper, paperboard and sawn timber as well as two raw material-oriented business areas for forest and energy. Europe is the key market.

The business area Holmen Paper manufactures printing paper for daily newspapers, magazines, directories, advertising material and books at two Swedish mills and one Spanish mill. Iggesund Paperboard produces paperboard for packaging and graphic purposes at one Swedish and one English mill. Holmen Timber produces sawn timber in one Swedish sawmill. Annual production capacity is 1 940 000 tonnes of printing paper, 530 000 tonnes of paperboard (after the structural change at Workington Mill) and 340 000 cubic metres of sawn timber.

Holmen Skog manages the Group's forest covering just over one million hectares. The annual volume harvested in company forests is some 2.5 million cubic metres. Holmen Energi is responsible for the Group's hydro power assets and for developing the Group's business within the energy sector. Normal yearly production amounts to some 1 100 GWh of electric power at wholly and partly owned hydro power stations in Sweden. Holmen Skog and Holmen Energi are also responsible for the Group's wood and electricity supply in Sweden.

Press and analyst conference

On the publication of the interim report, a press and analyst conference will be held at 16.00 CET on Thursday February 4. Venue: IVA Konferenscenter, Grev Turegatan 16, Stockholm. Holmen President and CEO Magnus Hall 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)8 505 598 53 (within Sweden), +44 (0)203 043 24 36 (from the rest of Europe) or +1 866 458 40 87 (from the US) no later than 15.55 CET.

Annual Report 2009

The Annual Report for 2009 will be posted in the week starting 8 March to shareholders who have indicated their wish to receive it. In connection with the distribution of the shareholder magazine Holmen Business Report, new shareholders will be informed how to order and cancel printed and electronically transmitted financial information via the website under Shareholder service. Financial information may also be ordered via the company's website under Publications and order.

Annual General Meeting 2010

Annual General Meeting will be held in Stockholm on 24 March 2010.

Financial reports in 2010

6 May 2010	Interim report January–March

• 11 August 2010 Interim report January–June
• 26 October 2010 Interim report January–September

In its capacity as issuer, Holmen AB is releasing the information in this Year-end Report for 2009 in accordance with Chapter 17 of the Swedish Securities Market Act (2007:528). The information was distributed to the media for publication at 13.20 CET on Thursday 4 February 2010.