Holmen

Quarterly Report • Oct 26, 2012

SEKm	Quarter January-September 2012 3-12 2-12 3-11				2011	Full year 2011
Net turnover	4 230	4 569	4 518	13 577	14 026	18 656
EBITDA	615	694	838	2 097	2 511	3 240
Operating profit*	394	488	519	1 442	1 570	5 573
Profit after tax*	249	313	343	950	1 015	3 955
Earnings per share, SEK*	3.0	3.7	4.1	11.3	12.1	47.1
Return on equity, %*	5.0	6.4	8.1	6.4	8.1	23.1

*In Q4 2011 revaluation of forest was included: + SEK 3 593 million before tax and SEK 2 648 million after tax.

• Profit after tax for January–September 2012 was SEK 950 million (January–September 2011: SEK 1 015 million).
• Earnings per share amounted to SEK 11.3 (12.1).
• Return on equity was 6.4 per cent (8.1).
• Operating profit totalled SEK 1 442 million (1 570). The contribution from currency hedges fell, while the change in the value of forests rose.
• The operating profit from the third quarter was SEK 394 million, SEK 94 million lower than in the preceding quarter. Earnings at Holmen Skog were low but improved at Iggesund Paperboard as a result of good production and a high level of deliveries. Staff costs were seasonally low.
• The market situation for paperboard was stable during the quarter, while demand for printing paper and sawn timber was weak.

Holmen Paper			Quarter		January-September
SEKm	3-12	2-12	3-11	2012	2011	2011
Net sales	2 001	2 090	2 102	6 184	6 487	8 631
Operating costs	-1 765	-1 819	-1 802	-5 450	-5 674	-7 629
EBITDA	237	270	300	734	813	1 002
Depreciation and amortisation according to plan	-191	-193	-195	-577	-582	-774
Operating profit	46	77	105	157	231	228
Investments	47	39	52	114	149	210
Operating capital	6 046	6 246	6 855	6 046	6 855	6 606
EBITDA margin, %	12	13	14	12	13	12
Operating margin, %	2	4	5	3	4	3
Return on operating capital, %	3	5	6	3	4	3
Production, '000 tonnes	407	425	416	1 254	1 278	1 673
Deliveries, '000 tonnes	414	419	402	1 239	1 246	1 668

Demand for printing paper in Europe remained weak in the third quarter. Magazine paper deliveries to Europe were 7 per cent lower in January– September than in the same period last year. The decline for newsprint was 10 per cent. Prices fell slightly around mid-year.

Deliveries by Holmen Paper totalled 1 239 000 tonnes in the first nine months of the year. This was slightly lower than the same period last year, as a result of the closure of a paper machine in Madrid in spring 2011. Deliveries of the strategic products MF Magazine and book paper continued to rise. A major maintenance shutdown limited production in the third quarter.

Holmen Paper reports an operating profit of SEK 157 million (231) for the January–September period. Lower prices for recovered paper and rationalisations carried out has to a certain degree counterbalanced lower contribution from currency hedges.

Compared with the second quarter, profit declined by SEK 31 million to SEK 46 million. Earnings were negatively affected by somewhat lower selling prices and lower production levels, whereas staff costs were seasonally low. Results were not affected by the stronger Swedish krona during the third quarter, as the impact is delayed by currency hedges.

On 2 October, it was announced that production at Hallsta Paper Mill was to be concentrated at the two paper machines with strong positions in MF Magazine and book paper, with a capacity of 525 000 tonnes. The third machine at the mill, which produces approximately 140 000 tonnes of SC paper annually, is intended to be closed down in the second half of 2013. At the same time, investments in energy efficiency measures that will improve competitiveness are planned. Overall, this is expected to result in a reduction of approximately 230 employees in the workforce. The result for the third quarter does not take into account any costs relating to the planned adjustment.

Iggesund Paperboard		Quarter		January-September		Full year
SEKm	3-12	2-12	3-11	2012	2011	2011
Net sales	1 261	1 212	1 296	3 804	3 892	5 109
Operating costs	-980	-999	-1 016	-3 016	-2 970	-3 923
EBITDA	281	213	279	788	922	1 186
Depreciation and amortisation according to plan	-104	-79	-80	-263	-241	-323
Operating profit	177	134	199	525	681	863
Investments	436	371	336	1 275	740	1 120
Operating capital	6 084	5 819	4 705	6 084	4 705	5 041
EBITDA margin, %	22	18	22	21	24	23
Operating margin, %	14	11	15	14	17	17
Return on operating capital, %	12	9	17	12	20	19
Production, paperboard, '000 tonnes	129	119	108	375	358	471
Deliveries, paperboard, '000 tonnes	126	118	121	368	365	474

The market for SBB and FBB was stable during the quarter. Deliveries to Europe during January– September were 3 per cent lower than in the corresponding period last year, as a result of a weak opening of the year.

Iggesund Paperboard's deliveries amounted to 368 000 tonnes in the first nine months of the year, 3 000 tonnes higher than the same period last year.

Operating profit for Iggesund Paperboard in January–September totalled SEK 525 million (681).The decline was attributable to lower contributions from currency hedges.

Compared with the second quarter, profit rose by SEK 43 million to SEK 177 million. Production and delivery volumes were high and costs seasonally low. Depreciation increased by SEK 25 million in

connection with the new recovery boiler at Iggesund Mill that entered service in June. Results were not affected by the stronger Swedish krona during the third quarter, as the impact is delayed by currency hedges.

The new biofuel boiler in Workington is planned to enter service in spring 2013. The total investment in the biofuel boiler and the recovery boiler is estimated at SEK 3.4 billion, of which SEK 2.5 billion has been paid out to date.

In September, it was announced that the workforce at Iggesund Mill was to be reduced from 900 to 800 employees over a two-year period. The intention is for the reduction to take place through natural attrition.

Holmen Timber	Quarter			January-September		Full year
SEKm	3-12	2-12	3-11	2012	2011	2011
Net sales	264	313	254	874	626	875
Operating costs	-255	-305	-252	-861	-640	-902
EBITDA	8	7	2	12	-14	-26
Depreciation and amortisation according to plan	-31	-31	-32	-92	-82	-109
Operating profit	-23	-24	-30	-80	-95	-136
Investments	4	1	20	6	335	365
Operating capital	1 436	1 513	1 526	1 436	1 526	1 507
EBITDA margin, %	3	2	1	1	-2	-3
Operating margin, %	-9	-8	-12	-9	-15	-16
Return on operating capital, %	-6	-6	-8	-7	-9	-9
Production, '000 m3	147	164	152	484	403	560
Deliveries, '000 m3	151	181	141	505	343	487

The market for sawn timber remained weak. Selling prices were more or less unchanged.

Deliveries by Holmen Timber totalled 505 000 cubic metres during the first nine months of the year, an increase of 162 000 cubic metres from the same period last year, mainly as a result of increased deliveries from Braviken Sawmill. Certain production curtailments were made during the third quarter.

For the January–September period, Holmen Timber reported an operating loss of SEK 80 million (-95). This loss was attributable to a weak market and high raw material prices.

Compared with the second quarter, the operating loss was reduced by SEK 1 million, to SEK -23 million. Staff costs were seasonally low, compensating for a lower level of deliveries and production.

Holmen Skog		Quarter			January-September
SEKm	3-12	2-12	3-11	2012	2011	2011
Net sales	1 310	1 578	1 469	4 583	4 759	6 348
of which from own forests	323	356	357	962	1 071	1 457
Operating costs	-1 252	-1 421	-1 309	-4 199	-4 175	-5 579
Depreciation and amortisation according to plan	-8	-7	-7	-21	-21	-30
Earnings from operations	50	150	153	363	563	739
Change in value of forests*	120	111	11	319	0	3 593
Operating profit	170	261	164	682	563	4 332
Operating profit excl. items affecting comp*.	170	261	164	682	563	739
Investments	116	10	26	151	41	42
Operating capital	16 621	16 360	12 654	16 621	12 654	16 278
Return on operating capital, %	4	6	5	6	6	6
Harvesting company forests, '000 m3	760	790	734	2 195	2 190	2 988

*Revaluation of forests amounts in Q4 2011 to SEK 3 593 million and is stated as items affecting comparability.

Demand for both timber and pulpwood in Sweden was weak in the third quarter and market prices declined.

Holmen Skog's operating profit for January– September amounted to SEK 682 million (563). Earnings from operations totalled SEK 363 million (563). The decline was attributable to a fall of just over 10 per cent in selling prices and higher felling costs as a result of a storm in central Sweden at the turn of the year.

The change in value was reported as SEK million 319 (0), which was higher than normal and resulted from a lower-than-planned volume of felling.

Compared with the second quarter, earnings from operations fell by SEK 100 million to SEK 50 million. The decline arose primarily as a result of a writedown of the value of felling rights, as well as higher costs. Lower selling prices also had negative impact.

Holmen Energi		Quarter			January-September
SEKm	3-12	2-12	3-11	2012	2011	2011
Net sales	358	413	437	1 268	1 367	1 807
of which from own hydro power	90	113	142	372	388	552
Operating costs	-303	-336	-324	-1 002	-1 064	-1 383
Depreciation and amortisation according to plan	-5	-5	-5	-15	-14	-19
Operating profit	50	72	108	252	289	406
Investments	5	8	4	15	11	16
Operating capital	3 198	3 206	3 246	3 198	3 246	3 253
Return on operating capital, %	6	9	13	10	12	13
Production of company hydro power, GWh	282	332	342	992	852	1 230

Holmen Energi's profit for January–September amounted to SEK 252 million (289). With high levels of precipitation during the spring and summer, production up to now this year has been 25 per cent higher than normal, and 15 per cent higher than in the same period last year. Lower market prices for electricity brought down the average price of Holmen Energi's own production by nearly 20 per cent between the periods.

Compared with the second quarter, profit fell by SEK 22 million to SEK 50 million. Production was high for the time of year, but somewhat lower than during the second quarter. The market price for electricity fell, but the effect on earnings was mitigated by price hedges.

The levels in Holmen's water storage reservoirs were normal at the end of the period.

Net financial items and financing

Net financial items for January–September amounted to SEK -173 million (-186). During the period, interest expense of SEK 43 million (22) was capitalised in connection with major investment projects and consequently reduced the recognised interest expense. The major share pertains to projects completed in June 2012. The cost of borrowing was 4.2 per cent (4.4).

Cash flow from operating activities totalled SEK 1 769 million. Cash flow from investing activities was SEK -1 583 million. SEK 672 million in dividends was paid in the second quarter.

During January–September, the Group's net financial debt increased by SEK 425 million to SEK 6 684 million. The debt/equity ratio was 0.33 and the equity/assets ratio 53 per cent. Financial liabilities including pension provisions totalled SEK 6 983 million, SEK 3 638 million of which was represented by current liabilities. Cash, cash equivalents and financial receivables totalled SEK 299 million. The Group has unused long-term contractually agreed credit facilities of SEK 5 246 million, maturing in 2016–2017.

Equity

In January–September, the Group's equity increased by SEK 190 million to SEK 19 963 million. Profit for the period totalled SEK 950 million. The dividend paid was SEK 672 million. In addition, other comprehensive income totalled SEK -89 million.

Tax

Recognised tax for January–September amounted to SEK -319 million. Recognised tax, as a proportion of profit before tax, was 25 per cent.

The Swedish government has proposed a reduction in corporation tax, from 26.3 to 22 per cent, to take effect from the beginning of 2013. If the parliament approves the proposal, Holmen's recognised tax for the fourth quarter will benefit to the extent of approximately SEK 900 million, mainly as a result of a lower deferred tax liability for biological assets.

Hedging exchange rates and electricity prices

The Group hedges parts of future estimated net flows in foreign currencies. Operating profit for January– September includes currency hedges of SEK 239 million (462). At end of the quarter, the Group had hedged its anticipated currency flows for the next four months. Longer-term hedges have been obtained for certain transactions. The fair value of currency hedges not yet recognised as income amounted to SEK 56 million at the end of the quarter.

Prices for the Group's estimated net consumption of electricity in Sweden over the remainder of 2012 are fully hedged. For the 2013–2015 period, approximately 90 per cent has been hedged while for the 2016–2021 period the figure is approximately 40 per cent.

Investments

Cash flow from investing activities in January–September was SEK -1 583 million (-1 243). Scheduled depreciation and amortisation totalled SEK 974 million (941). The majority of the investments were in the new recovery boiler and turbine at Iggesund Mill and the new biofuel boiler in Workington.

Personnel

The average number of employees (full-time equivalents) in the Group was 3 979 (4 069). The reduction is mainly attributable to cutbacks in Holmen Paper.

Share buy-backs

At the 2012 AGM, the Board received authorisation to purchase up to 10 per cent of the company's shares. No buy-backs took place during the period. The company already owns 0.9 per cent of all shares outstanding, in order to secure the company's commitments pursuant to the call option scheme for employees.

Material risks and uncertainties

The Group's 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 2011 (pages 28–31 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

The 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 report has been prepared in accordance with the Swedish Annual Accounts Act and the Swedish Securities Market Act, which complies with Recommendation RFR 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. The figures in tables are rounded off.

Stockholm, 26 October 2012 Holmen AB (publ.)

Magnus Hall President and CEO

Year-end report for 2012 will be published on 7 February 2013.

For further information please contact:

Magnus Hall, President and CEO, tel. +46 8 666 21 05 Anders Jernhall, CFO, tel. +46 8 666 21 22 Ingela Carlsson, Public Relations Director, tel. +46 70 212 97 12

Review report

Introduction

We have reviewed the condensed interim financial information (interim report) for the Holmen Group as per 30 September 2012 and the nine-month reporting period ending on that date. The Board of Directors and the CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

Focus and scope of the review

We conducted our review in accordance with the Standard on Review Engagements (SÖG) 2410 "Review of Interim Financial Information Performed by the Independent Auditors of the Entity". A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and is substantially smaller in scope than an audit conducted in accordance with ISA and other generally accepted auditing standards.

The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that could have been identified in an audit. Therefore, the conclusion expressed on the basis of a review does not give the same level of assurance as a conclusion expressed on the basis of an audit.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report was not, in all material respects, prepared for the Group in accordance with IAS 34 and the Swedish Annual Accounts Act, and, for the Parent Company, in accordance with the Swedish Annual Accounts Act.

Stockholm, 26 October 2012

KPMG AB

George Pettersson Authorised public accountant

Group income statement

		Quarter			January-September
Income statement, SEKm	3-12	2-12	3-11	2012	2011	2011
Net sales	4 230	4 569	4 518	13 577	14 026	18 656
Other operating income	161	165	66	469	479	661
Change in inventories	-42	-2	10	-33	209	176
Raw materials and consumables	-2 290	-2 490	-2 315	-7 462	-7 768	-10 280
Staff costs	-561	-645	-560	-1 828	-1 803	-2 477
Other operating costs	-891	-915	-898	-2 652	-2 660	-3 580
Depreciation and amortisation according to plan	-340	-317	-319	-974	-941	-1 260
Change in value of biological assets	120	111	11	319	-	3 593
Interest in earnings of associates	8	13	6	27	28	84
Operating profit	394	488	519	1 442	1 570	5 573
Finance income	0	2	4	5	10	12
Finance costs	-65	-55	-68	-178	-196	-256
Profit before tax	330	436	455	1 270	1 384	5 328
Tax	-81	-123	-112	-319	-368	-1 374
Profit for the period	249	313	343	950	1 015	3 955
Earnings per share, basic, SEK	3.0	3.7	4.1	11.3	12.1	47.1
Earnings per share, diluted, SEK	3.0	3.7	4.1	11.3	12.1	47.1
Operating margin, % *	9.3	10.7	11.5	10.6	11.2	10.6
Return on capital employed, % *	5.9	7.5	9.0	7.4	9.2	8.5
Return on equity, %	5.0	6.4	8.1	6.4	8.1	23.1

Statement of comprehensive income,		Quarter		January-September		Full year
SEKm	3-12	2-12	3-11	2012	2011	2011
Profit for the period	249	313	343	950	1 015	3 955
Other comprehensive income
Cash flow hedging	-25	21	-180	-74	-504	-523
Actuarial gains and losses in respect of pensions,
incl. special employer's contribution	59	-29	-79	69	-85	-184
Translation difference on foreign operation	-145	8	110	-166	109	-4
Hedging of currency risk in foreign operation	79	16	-21	109	-45	31
Tax attributable to other comprehensive income	-29	-3	74	-26	167	174
Total other comprehensive income	-61	14	-96	-89	-357	-506
Total comprehensive income	188	327	247	862	658	3 448

* Excl. items affecting comparability.

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
Issued call options, B shares*		758 300

* Exercise period May-June 2013. The exercise price is SEK 224.50 per share.

Group financial statement

	2012	2012	2011
Balance sheet, SEKm	30 September	30 June	31 December
Non-current assets
Intangible non-current assets	28	29	26
Property, plant and equipment	12 680	12 609	12 516
Biological assets	16 214	15 990	15 771
Interests in associates	1 832	1 830	1 815
Other shares and participating interests	13	13	13
Non-current financial receivables	57	73	82
Deferred tax assets	176	183	194
Total non-current assets	31 000	30 728	30 416
Current assets
Inventories	3 261	3 399	3 556
Trade receivables	2 507	2 487	2 366
Current tax receivable	85	87	26
Other operating receivables	309	531	694
Current financial receivables	54	39	46
Cash and cash equivalents	189	113	112
Total current assets	6 404	6 656	6 800
Total assets	37 403	37 385	37 217
Equity	19 963	19 776	19 773
Non-current liabilities
Non-current financial liabilities	3 102	3 214	3 319
Pension provisions	243	316	358
Other provisions	498	491	472
Deferred tax liabilities	6 657	6 616	6 630
Total non-current liabilities	10 501	10 638	10 780
Current liabilities
Current financial liabilities	3 638	3 341	2 822
Trade payables	2 246	2 346	2 655
Current tax liability	5	35	13
Provisions	120	132	157
Other operating liabilities	930	1 118	1 016
Total current liabilities	6 939	6 971	6 663
Total liabilities	17 440	17 609	17 443
Total equity and liabilities	37 403	37 385	37 217
Debt/equity ratio, times	0.33	0.34	0.32
Equity/assets ratio, %	53.4	52.9	53.1
Operating capital	33 128	32 853	32 469
Capital employed	26 647	26 421	26 032
Net financial debt	6 684	6 645	6 259
Pledged collateral	6	6	6
Contingent liabilities	100	103	118

	January-September
Change in equity, SEKm	2012	2011
Opening equity	19 773	16 913
Profit for the period	950	1015
Other comprehensive income	-89	-357
Total comprehensive income	862	658
Dividends paid	-672	-588
Closing equity	19 963	16 983

Group cash flow statement

		Quarter			January-September
Cash flow analysis, SEKm	3-12	2-12	3-11	2012	2011	Full year 2011
Operating activities
Profit before tax	330	436	455	1 270	1 384	5 328
Adjustments for non-cash items *	240	212	285	647	803	-2 561
Paid income taxes	-88	7	-161	-322	-396	-557
Cash flow from operating activities
before changes in working capital	483	655	579	1 595	1 791	2 210
Cash flow from changes in working capital
Change in inventories	115	70	-259	280	-307	-237
Change in trade receivables and other operating receivables	165	-48	309	150	53	64
Change in trade payables and other operating liabilities	-253	41	96	-255	99	63
Cash flow from operating activities	509	719	726	1 769	1 636	2 101
Investing activities
Acquisition of non-current assets	-622	-452	-449	-1 615	-1 301	-1 849
Disposal of non-current assets	5	6	2	13	18	58
Change in non-current financial receivables	13	-1	0	19	41	58
Cash flow from investing activities	-603	-447	-446	-1 583	-1 243	-1 733
Financing activities
Change in financial liabilities and current financial receivables	172	412	-279	566	105	139
Dividends paid to the shareholders of the parent company	-	-672	-	-672	-588	-588
Cash flow from financing activities	172	-260	-279	-106	-483	-448
Cash flow for the period	79	12	0	81	-90	-80
Opening cash and cash equivalents	113	101	104	112	193	193
Exchange difference in cash and cash equivalents	-3	0	0	-3	2	-1
Closing cash and cash equivalents	189	113	105	189	105	112

		Quarter			January-September
Change in net financial debt, SEKm	3-12	2-12	3-11	2012	2011	Full year 2011
Opening net financial debt	-6 645	-6 207	-6 345	-6 259	-5 772	-5 772
Cash flow from operating activities	509	719	726	1 769	1 636	2 101
Cash flow from investing activities (excl financial
receivables)	-616	-446	-446	-1 602	-1 284	-1 791
Dividends paid	-	-672	-	-672	-588	-588
Actuarial revaluation of pension liability	58	-28	-77	68	-82	-182
Foreign exchange effects and changes in fair value	10	-11	-32	12	-84	-28
Closing net financial debt	-6 684	-6 645	-6 174	-6 684	-6 174	-6 259

* The adjustments consist primarily of depreciation according to plan, 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.

The Parent company

		Quarter			January-September
Income statement, SEKm	3-12	2-12	3-11	2012	2011	Full year 2011
Operating income	3 895	4 193	3 869	12 459	12 261	16 434
Operating costs	-3 760	-3 998	-3 606	-11 876	-11 335	-15 616
Operating profit	135	194	264	583	926	818
Net financial items	200	47	299	530	693	855
Profit after net financial items	335	241	563	1 113	1 619	1 673
Appropriations	12	-5	-45	38	-114	-41
Profit before tax	347	237	518	1 150	1 505	1 632
Tax	-89	-110	-139	-288	-401	-443
Profit for the period	258	127	379	863	1 104	1 189
Statement of comprehensive income,		Quarter		January-September		Full year
SEKm	3-12	2-12	3-11	2012	2011	2011
Profit for the period	258	127	379	863	1 104	1 189
Other comprehensive income
Cash flow hedging	-49	2	-207	-113	-661	-811
Tax attributable to other comprehensive income	13	-1	55	30	174	213
Total other comprehensive income	-36	2	-153	-83	-487	-598
Total comprehensive income	222	129	226	780	616	591

Balance sheet, SEKm	2012	2012	2011
	30 September		30 June 31 december
Non-current assets	20 361	20 253	20 324
Current assets	5 415	5 552	5 724
Total assets	25 776	25 805	26 048
Restricted equity	5 915	5 915	5 915
Non-restricted equity	5 346	5 124	5 238
Untaxed reserves	2 521	2 533	2 559
Provisions	1 301	1 348	1 389
Liabilities	10 693	10 884	10 946
Total equity and liabilities	25 776	25 805	26 048
Pledged collateral	6	6	6
Contingent liabilities	75	76	95

Sales to Group companies accounted for SEK 71 million (80) of operating income for January–September.

Net financial items include the result from hedging equity in foreign subsidiaries totalling SEK 109 million (-45) and Group contributions of SEK 544 million (935).

The parent company's investments in property, plant and equipment and intangible non-current assets totalled SEK 36 million (30).

The Group

		2012			2011			January-September		Full year
Quarterly figures, SEKm	Q3	Q2	Q1	Q4	Q3	Q2	Q1	2012	2011	2011
Income statement
Net sales	4 230	4 569	4 778	4 630	4 518	4 787	4 721	13 577	14 026	18 656
Operating costs	-3 623	-3 888	-3 996	-3 956	-3 697	-3 989	-3 858	-11 507	-11 544	-15 501
Interest in earnings of associates	8	13	6	56	6	5	18	27	28	84
Depreciation and amortisation according to plan	-340	-317	-317	-319	-319	-316	-306	-974	-941	-1 260
Change in value of forests	120	111	88	-	11	6	-17	319	-	-
Items affecting comparability*	-	-	-	3 593	-	-	-	-	-	3 593
Operating profit	394	488	560	4 003	519	492	558	1 442	1 570	5 573
Net financial items	-64	-52	-56	-58	-64	-64	-58	-173	-186	-244
Profit before tax	330	436	504	3 945	455	428	501	1 270	1 384	5 328
Tax	-81	-123	-116	-1 005	-112	-125	-131	-319	-368	-1 374
Profit for the period	249	313	389	2 939	343	302	370	950	1 015	3 955
Diluted earnings per share, SEK	3.0	3.7	4.6	35.0	4.1	3.6	4.4	11.3	12.1	47.1
Net sales
Holmen Paper	2 001	2 090	2 093	2 144	2 102	2 215	2 170	6 184	6 487	8 631
Iggesund Paperboard	1 261	1 212	1 332	1 216	1 296	1 340	1 257	3 804	3 892	5 109
Holmen Timber	264	313	298	249	254	221	151	874	626	875
Holmen Skog	1 310	1 578	1 695	1 589	1 469	1 594	1 697	4 583	4 759	6 348
Holmen Energi	358	413	497	440	437	436	494	1 268	1 367	1 807
Elimination of intra-group net sales	-964	-1 036	-1 136	-1 008	-1 038	-1 020	-1 047	-3 136	-3 105	-4 113
Group	4 230	4 569	4 778	4 630	4 518	4 787	4 721	13 577	14 026	18 656
Operating profit/loss by business area**
Holmen Paper	46	77	34	-3	105	70	57	157	231	228
Iggesund Paperboard	177	134	214	182	199	238	244	525	681	863
Holmen Timber	-23	-24	-34	-40	-30	-38	-27	-80	-95	-136
Holmen Skog	170	261	250	176	164	178	221	682	563	739
Holmen Energi	50	72	130	116	108	75	107	252	289	406
Group-w ide	-27	-33	-35	-21	-26	-31	-44	-95	-99	-120
Group	394	488	560	410	519	492	558	1 442	1 570	1 980
Operating margin, % **
Holmen Paper	2.3	3.7	1.6	-0.1	5.0	3.1	2.6	2.5	3.6	2.6
Iggesund Paperboard	14.1	11.0	16.1	14.9	15.4	17.8	19.4	13.8	17.5	16.9
Holmen Timber	-8.6	-7.5	-11.3	-16.2	-12.0	-17.2	-17.9	-9.1	-15.2	-15.5
Group	9.3	10.7	11.7	8.9	11.5	10.3	11.8	10.6	11.2	10.6
EBITDA by business area**
Holmen Paper	237	270	227	189	300	262	251	734	813	1 002
Iggesund Paperboard	281	213	295	263	279	319	325	788	922	1 186
Holmen Timber	8	7	-3	-13	2	-8	-8	12	-14	-26
Holmen Skog	58	157	169	185	160	179	245	384	584	769
Holmen Energi	55	77	134	121	112	80	111	266	303	425
Group-w ide	-25	-30	-33	-16	-15	-24	-60	-88	-98	-115
Group	615	694	789	729	838	808	864	2 097	2 511	3 240
Return on operating capital, % **
Holmen Paper	3.0	4.9	2.1	-0.2	6.1	4.0	3.3	3.3	4.4	3.3
Iggesund Paperboard	11.9	9.5	16.3	14.9	17.0	20.9	22.3	12.5	20.0	18,7
Holmen Timber	-6.2	-6.2	-8.8	-10.7	-8.1	-10.6	-8.4	-7.0	-9.0	-9.5
Holmen Skog	4.1	6.4	6.2	4.9	5.2	5.7	7.0	5.6	6.0	5.7
Holmen Energi	6.3	9.0	16.0	14.3	13.3	9.2	13.2	10.4	11.9	12.5
Group	4.8	6.0	6.9	5.4	7.2	6.9	7.9	5.9	7.4	6.8
Key indicators
Return on capital employed, % **	5.9	7.5	8.7	6.7	9.0	8.7	9.9	7.4	9.2	8.5
Return on equity, %	5.0	6.4	7.9	64.0	8.1	7.3	8.8	6.4	8.1	23.1
Deliveries
New sprint and magazine paper, '000 tonnes	414	419	406	422	402	426	419	1 239	1 246	1 668
Paperboard, '000 tonnes	126	118	123	109	121	127	118	368	365	474
Saw n timber, '000 m³	151	181	173	145	141	123	78	505	343	487
Harvesting company forests, '000 m³	760	790	645	798	734	792	664	2 195	2 190	2 988
Production of company hydro pow er, GWh	282	332	378	378	342	234	276	992	852	1 230

* Items affecting comparability in the forth quarter 2011 refers to revaluation of forest.

** Excl. items affecting comparability.

The Group

Full year review, SEKm	2011	2010	2009	2008	2007	2006	2005	2004	2003
Income statement
Net sales	18 656	17 581	18 071	19 334	19 159	18 592	16 319	15 653	15 816
Operating costs	-15 501	-15 077	-15 191	-16 614	-15 637	-15 069	-13 287	-12 631	-12 306
Interest in earnings of associates	84	28	45	50	12	11	20	25	-6
Depreciation and amortisation according to plan	-1 260	-1 251	-1 320	-1 343	-1 337	-1 346	-1 167	-1 156	-1 166
Change in value of forests	-	52	16	-16	89	115	82	61	-
Items affecting comparability *	3 593	264	-	-361	557	-	-	-	-
Operating profit	5 573	1 596	1 620	1 051	2 843	2 303	1 967	1 952	2 338
Net financial items	-244	-208	-255	-311	-261	-247	-233	-206	-212
Profit before tax	5 328	1 388	1 366	740	2 582	2 056	1 734	1 746	2 126
Tax	-1 374	-684	-360	-98	-1 077	-597	-478	-471	-675
Profit for the year	3 955	704	1 006	642	1 505	1 459	1 256	1 275	1 451
Diluted earnings per share, SEK	47.1	8.4	12.0	7.6	17.8	17.2	14.8	15.1	17.5
Operating profit by business area**
Holmen Paper	228	-618	340	280	623	754	631	487	747
Iggesund Paperboard	863	817	419	320	599	752	626	809	1 001
Holmen Timber	-136	20	21	13	146	80	13	5	18
Holmen Skog	739	818	605	632	702	643	537	586	516
Holmen Energi	406	495	414	327	272	197	301	178	193
Group-w ide	-120	-200	-178	-159	-56	-123	-141	-113	-137
Group	1 980	1 332	1 620	1 412	2 286	2 303	1 967	1 952	2 338
EBITDA by business area**
Holmen Paper	1 002	229	1 218	1 176	1 537	1 667	1 358	1 214	1 497
Iggesund Paperboard	1 186	1 141	780	688	954	1 108	976	1 152	1 335
Holmen Timber	-26	49	52	47	169	104	38	28	40
Holmen Skog	769	794	616	674	639	556	483	553	545
Holmen Energi	425	516	435	346	289	214	319	196	210
Group-w ide	-116	-198	-176	-160	-54	-115	-122	-96	-123
Group	3 240	2 531	2 925	2 771	3 534	3 534	3 052	3 047	3 504
Deliveries
New sprint and magazine paper, '000 tonnes	1 668	1 732	1 745	2 044	2 025	2 021	1 764	1 731	1 655
Paperboard, '000 tonnes	474	464	477	494	516	536	492	501	481
Saw n timber, '000 m³	487	285	313	266	262	248	229	195	189
Harvesting company forests, million m³	3.0	3.0	2.9	2.6	2.6	2.6	2.3	2.6 1 054	2.7
Production of company hydro pow er, GWh	1 230	1 145	1 090	1 128	1 193	934	1 236		867
Balance sheet
Non-current assets	30 334	26 028	25 694	26 506	26 153	25 354	25 793	23 381	20 940
Current assets	6 642	6 950	6 075	7 268	6 549	6 138	5 709	5 149	4 743
Financial receivables Total assets	240 37 217	454 33 432	407 32 176	828 34 602	541 33 243	649 32 141	712 32 214	459 28 989	675 26 358
Equity	19 773	16 913	16 504	15 641	16 932	16 636	16 007	15 635	15 366
Deferred tax liability	6 630	5 910	5 045	4 819	5 482	5 030	5 143	5 177	4 557
Financial liabilities and interest-bearing provisions	6 499	6 227	6 091	8 332	6 518	6 634	7 351	5 335	4 044
Operating liabilities	4 313	4 382	4 536	5 809	4 310	3 841	3 713	2 842	2 391
Total equity and liabilities	37 217	33 432	32 176	34 602	33 243	32 141	32 214	28 989	26 358
Cash flow
Operating activities	2 101	1 523	2 873	1 660	2 476	2 358	2 471	2 331	2 443
Investing activities	-1 733	-1 597	-818	-1 124	-1 315	-947	-3 029	-1 195	-726
Cash flow after investments	368	-74	2 054	536	1 161	1 411	-558	1 136	1 717
Key indicators
Return on capital employed, % **	9	6	7	6	10	10	9	10	12
Return on equity, %	23	4	6	4	9	9	8	8	10
Debt/equity ratio	0.32	0.34	0.34	0.48	0.35	0.36	0.41	0.31	0.22
Dividend Ordinary dividend, SEK	8	7	7	9	12	12	11	10	10

* Items affecting comparability in 2011 refers to revaluation of forest. 2010 refers to w rite-dow n of fixed assets (SEK -555 million), provisions for restructuring (SEK -231 million) and revaluation of forest (SEK +1050 million). 2008 refers to provisions and costs due to restructure and closure of mills and result effects from fire (SEK -361 million). 2007 relate to a w rite-dow n of goodw ill and tangible fixed assets of SEK -1 603 million w ithin Holmen Paper, a reversed w rite-dow n of SEK 60 million w ithin Holmen Timber, and a positive revaluation of forests by SEK 2 100 million w ithin Holmen Skog.

** Excl. items affecting comparability.

Stated in accordance w ith IFRS from 2004. As far as Holmen is concerned, the principal difference betw een IFRS and previous accounting principles is that forest assets are valued and stated in the accounts at fair value, that goodw ill 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 magazines, directories, advertising material, books and daily newspapers at two Swedish mills and one Spanish mill. Iggesund Paperboard produces paperboard for consumer packaging and graphics printing at one Swedish and one English mill. Holmen Timber produces sawn timber at two Swedish sawmills. Annual production capacity is 1 750 000 tonnes of printing paper, 530 000 tonnes of paperboard and 870 000 cubic metres of sawn timber.

Holmen Skog manages the Group's forests covering just over one million hectares. The annual volume harvested in company forests is some 3.2 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 14.30 CET on Friday, October 26. 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 14.25 CET.

Financial reports

7 February 2013	Year-end report 2012
24 April 2013	Interim report January-March 2013
14 August	Interim report January-June 2013
24 October	Interim report January-September 2013

In its capacity as issuer, Holmen AB is releasing the information in this interim report for January-September 2012 in accordance with Chapter 17 of the Swedish Securities Market Act (2007:528). The information was distributed to the media for publication at 12.30 CET on Friday September 26, 2012.

_______________________________________________________________________________________

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.