Rottneros

Interim Report January–September 2010

		Quarter	Interim period
	III 2010	II 2010	III 2009	Jan-Sep 2010 Jan-Sep 2009
Net turnover, SEK m	413	462	345	1,282	1,145
Income after net financial items, SEK m	64	50	43	125	-69
Earnings per share after net financial items, SEK1	0.42	0.32	2.38	0.82	-3.83
Profit/loss after tax, SEK m	56	50	43	117	-69
Earnings per share after tax, SEK1	0.37	0.32	2.38	0.76	-3.83
Cash flow per share, SEK1	0.07	0.28	2.80	0.62	4.31
	30-09-2010	30-06-2010	30-09-2009	31-12-2009
Shareholders' equity per share, SEK1	8.03	7.59	37.97	7.14
Equity/assets ratio, %	81	78	50	78

1 There w as a reverse share split in April 2010, w here ten existing shares w ere combined into one share. The comparison periods have been adjusted for this reverse split.

Profit after net financial items amounted to SEK 125 (-69) million for the period January to September 2010. Operating profit amounted to SEK 123 (-172) million for the first nine months of 2010. Profit after net financial items amounted to SEK 64 (43) million for the third quarter of 2010.
Cash flow from operating activities amounted to SEK 163 (85) million for the period January to September 2010.
An interest-bearing net receivable of SEK 116 million was reported as at 30 September 2010, compared with SEK 10 million at the start of the year
Pulp bales produced at Vallvik Mill. Demand for pulp continues to be good, although the strong krona has led to a reduction in net proceeds.

CEO's statement

Rottneros' profit before tax amounted to SEK 64 million in the third quarter of the year, which was about 30 per cent higher than the previous quarter. Return on capital employed for the quarter amounted to 21 per cent. Vallvik Mill was producing at full steam during the quarter, while Rottneros Mill had its planned long holiday break. The negative impact of this shutdown on the quarterly result amounted to almost SEK 10 million. Production at both mills has been excellent and the quality of the outcome has been very good. During the quarter, the board approved the investment in a biological water treatment plant at Vallvik Mill, which has been under discussion for a long time. The plant will be installed in 2011 and be fully operational towards the end of the year.

A lot of preparatory work was done at Vallvik Mill prior to the extended shutdown in the autumn, which is taking place now in October and will last for almost three weeks. Preparations included building up stock levels to cover the supply of customers during the standstill. The negative impact that the loss of production and major periodic maintenance work will have on the result for the last quarter of the year will be approximately SEK 35 million.

As I wrote in my last CEO statement, the fairly weak demand for pulp in China in 2010 has now resulted in price reductions for all pulp qualities. Since the summer, the main reference mark for pulp prices – namely NBSK, i.e. bleached long-fibre sulphate pulp – has fallen in China from just under USD 900 to just over USD 800 per tonne. This has resulted in market leaders in North America reducing their price by USD 50 per tonne in their home territory. There has not been a reduction in the official prices of NBSK in Europe, but the weakened dollar in relation to the Euro has given European purchasers of pulp a considerable cost relief. The impact of the strong krona is significant for Rottneros, as our costs are almost entirely in SEK and the underlying revenues are completely dominated by USD. The average USD rate was SEK 7.27 for the third quarter and SEK 6.71/USD at the end of the quarter, a change of eight per cent.

Several leading pulp market observers consider that this price reduction is less than previously anticipated, which may be due to a combination of a weaker dollar rate, an increase in purchases from China and increased paper production in Europe. These observers expect that pulp prices rise again after the turn of the year, at least in dollars.

Ole Terland President and CEO

THE PULP MARKET

Market and products

Demand for all pulp grades in Europe and North America continued to be strong during the third quarter of 2010, while purchases have reduced in China. The lower level of purchases in China resulted in price reductions for pulp in Asia in the late summer. For mechanical grades of pulp, the reduction in price spread to Europe while the price of chemical pulp, mainly NBSK, only reduced marginally in Europe.

Statistics for bleached chemical market pulp for the total global market showed that deliveries during the period January to August 2010 amounted to 25.9 (26.1) million tonnes, which was 0.8% lower than the same period in 2009. Ninety-one per cent (91% for the same period in 2009) of the global supply capacity for bleached chemical pulp was utilised for the period January to August. An estimated 92%

(86%) of production capacity was utilised for the same period.

Global producer stocks of bleached chemical pulp amounted to 3.6 million tonnes at the end of August. Stock has consequently risen by 0.7 million tonnes compared with the start of the year. The level of stock was 0.5 million tonnes higher compared with the same period of the previous year.

Long-fibre chemical pulp (NBSK) (produced at Vallvik)

The price was USD 799 per tonne at the beginning of the year and USD 973 at the end of September. The market for long-fibre chemical pulp is good. Producer stock levels for long fibre chemical pulp are normal for 28 days' production.

Delivery cap August 2010 2009) and p 95% (86%). pacity utilisati 0 was 92% ( production cap on for the pe 91% for the pacity utilisat eriod January same period ion was arou to in nd

Mechanical Rottneros) pulp and d CTMP ( (produced at

The price o USD 600 pe at the start CTMP did n year as fo recovery sin price in Euro tonne at the of short-fibre er tonne in the of the year. not increase or chemical nce the end f ope was appr end of Septe CTMP was e Western Eu The price a as much at pulp. There for the first q roximately US ember. approximate uropean mark nd demand the start of t e has been quarter and t SD 780-800 p ely ket for the a the per

Delivery cap August 201 capacity utili pacity utilisati 10 was 92% isation was 9 on for the pe % (83%) a 8% (73%). eriod January and producti to on

PRODUCTI ION AND DE ELIVERIES

The Group's a combine 400,000 ton period Janu 248,000 (24 2009 include at Rockham of. s pulp mills at ed producti nes per ye uary to Sept 9,200) tonne ed 11,100 to mmar Mill, wh t Rottneros a on capacity ar. Productio tember 2010 es. The first n onnes relating ich has now and Vallvik ha y of almo on during t 0 amounted nine months g to producti been dispos ave ost the to of on sed

Deliveries d 2010 amou Deliveries fo included 29, mill at Miran the mill at disposed of. by just unde to Septembe during the pe unted to 24 or the period 200 tonnes r nda, which ha Rockhamm . The stock o er 2,000 tonne er 2010. eriod January 49,900 (294 January to S elating to del as now been ar, which h of finished pro es during the y to Septemb 4,800) tonne September 20 iveries from t wound up, a has now be oducts reduc period Janua ber es. 009 the and een ced ary

PRODUCTION (TONNES)
	Jul-Sep 2010	Jul-Sep 2009	Jan-Sep 2010	Jan-Sep 2009
Sulphate pulp	54.900	44.100	145.500	143.600
Groundwood pulp	14.400	14.500	53.600	53.300
CTMP	13.300	12.300	48.900	52.300
TOTAL	82.600	70.900	248.000	249.200

16.700 13.900	53.600 50,800	58,300 55,800


89,700	249.900	294,800

		Maintenance shutdowns and seasonal variations

M Maintenance s shutdowns a and seasona

A du w pr An Va re th O se holiday shu uring July an ith minor an roduction cor n extended m allvik Mill d elating to main he period dur therwise, the easonal varia utdown took nd August 20 nual mainten rresponded t maintenance during the fo ntenance shu ring which th e Rottneros G tions to any a place at R 010, which wa nance work. to around 10 shutdown ta ourth quarte utdowns are r he shutdown Group is not appreciable e ottneros Mill as combined The loss of 0,000 tonnes. akes place at er. All costs recognised in takes place. t affected by extent. ldf.tsn.y

IN NVOICED SA ALES AND R RESULTS

Ja Ja anuary to anuary to Se September eptember 200 2010 com 09 mpared with h

G m 20 tu roup net turn million during 010. The ma urnover are: nover amount the period ain factors ex ted to SEK 1 January to xplaining this 1,282 (1,145) o September s increase in

higher pulp p prices in US SD – SEK 47 3 million
a weaker U USD – SEK - 91 million
lower deliv very levels – S SEK -175 mil lion, and
other chan nges – SEK -7 70 million.

Th th R he lower del he sale of R ottneros Mira ivery levels a Rockhammar anda. are mainly a Mill and the attributable to e closure of

Th (N U co SE of th he average p NBSK) increa SD 921 – wh onverted into EK 6,776 per f pulp in USD hen slowed sli price in USD o ased by 49% hile the aver o SEK increa r tonne, an in increased in ightly during t of long-fibre s % – from U rage price of ased from S ncrease of 40 n the first half the third quar sulphate pulp USD 619 to f NBSK pulp EK 4,853 to %. The price of 2010, and rter.

Th el fo co of am of he average ectricity exch or the perio ompared to S f the previous mounted to S f 2010. Sharp price of elec hange amoun od January SEK 0.39 per s year. The a SEK 0.73 per p increases in ctricity on the nted to SEK 0 to Septem kWh for the average price r kWh for the n energy cost e Nord Pool 0.52 per kWh mber 2010, same period e of electricity e first quarter ts resulting in )rnofpopoedlh,dyrn forced production stoppages at Rottneros Mill had a negative effect on the result for January to September 2010 of approximately SEK 30 million.

The shutdown carried out at Rottneros Mill during the third quarter of 2010 had a negative effect on the result of around SEK 15 million. A maintenance shutdown was carried out at both Rottneros Mill and Vallvik Mill during the third quarter of 2009.

The supply of wood functioned efficiently during the period. However, the cost of pulpwood increased throughout 2010. The cost of higher wood prices during the period January to September 2010 compared with the same period of the previous year amounted to SEK 67 million.

Group operating profit amounted to SEK 123 (-172) million for the period January to September 2010. Hedging activities realised during the period January to September 2010 amounted to SEK 16 (3) million.
Group profit after net financial items amounted to SEK 125 (-69) million, including net financial items of SEK 2 (103) million. Net financial items include financial exchange gains of SEK 5 (17) million. These amounts were largely countered by operating exchange losses on accounts receivable. Net financial items for the period January to September 2009 also include SEK 110 million as a result of writing off debts.
Profit after tax amounted to SEK 117 (-69) million.
Earnings per share after tax were SEK 0.76 (-3.83).
Cash flow per share amounted to SEK 0.62 (4.31).

July to September 2010 compared with July to September 2009

Group net turnover amounted to SEK 413 (345) million for the period July to September 2010. The main factors explaining this increase in turnover are:

higher pulp prices in USD SEK 133 million,
a weaker USD SEK -1 million,
lower delivery levels SEK -54 million, and
other changes SEK -10 million.

The lower delivery levels are primarily attributable to Vallvik Mill, which was to a great extent a consequence of delivery levels during the third quarter of 2009 like the second quarter of 2009 being unusually high.

The average price in USD of long-fibre sulphate pulp (NBSK) increased from USD 670 to USD 976, while the average price of NBSK pulp converted into SEK increased from SEK 4,880 to SEK 7,098 per tonne, an increase of 45%.

Group operating profit amounted to SEK 68 (-70) million for the third quarter of 2010. Hedging activities realised during the quarter amounted to SEK 13 (-4) million.
Group profit after net financial items amounted to SEK 64 (43) million, including net financial items of SEK -4 (113) million. The profit for the third quarter of 2009 included financial income from loan write-offs of SEK 110 million. Net financial items for the third quarter of 2010 include financial exchange losses of SEK -3 (7) million. These amounts were largely countered by operating exchange gains on accounts receivable.
Profit after tax amounted to SEK 56 (43) million.
Earnings per share after tax was SEK 0.37 (2.38).
Cash flow per share amounted to SEK 0.07 (2.80).

July to September 2010 compared with April to June 2010

Group net turnover reduced to SEK 413 million during the third quarter of 2010 compared to SEK 462 million in the second quarter. The main factors explaining this increase in turnover are:

higher pulp prices in USD SEK 14 million,
a weaker USD SEK -17 million,
lower delivery levels SEK -59 million, and
other changes SEK 13 million.

The average price of long-fibre sulphate pulp (NBSK) expressed in USD increased from USD 943 to USD 976 and the average price for NBSK pulp converted into SEK fell from SEK 7,156 to SEK 7,098 per tonne, a reduction of 1%.

Group operating profit amounted to SEK 68 million for the third quarter of 2010, which can be compared to the second quarter of 2010 when operating profit amounted to SEK 48 million. Hedging activities realised during the quarter amounted to SEK 13 (0) million.
Group profit after net financial items amounted to SEK 64 million in the third quarter of 2010, compared to SEK 50 million in the second quarter of 2010.

INVESTME NTS AND F INANCIAL P POSITION

Group i SEK 69 Septem nvestments i (8) million d ber 2010. n fixed asset during the pe ts amounted riod January to to
Group li at the SEK 11 iquid funds a end of the 1 million at th mounted to S third quarter he end of Dec SEK 165 milli r, compared cember 2009. on to .
On 30 S bearing (SEK 1 Interest-SEK 116 net rece 2009. September 20 liabilities am 101 million -bearing net 6 million com eivables of 1 010, the Grou mounting to S on 31 Dec receivables mpared with i 10 million on up had intere SEK 49 milli cember 200 s amounted interest-beari n 31 Decemb eston 9). to ng ber
Approve to SEK ed but unutilis 106 million on sed lines of c n 30 Septemb credit amount ber 2010. ted
The eq 30 Sept units hig uity/assets r ember 2010, gher than 31 ratio amounte , which is thr December 20 ed to 81% ree percenta 009. on age
Equity (SEK 7. per share 14 on 31 Dec amounted cember 2009 to SEK 8. ). 03

CASH FLO OW

Cash f investm for the included financia flow from o ents amount period Janua d cash flow l hedging. operating ac ted to SEK 1 ary to Septem of SEK 18 ( ctivities befo 163 (85) milli mber 2010 a (5) million fro ore on and om
Cash flo SEK 95 January of SEK primarily ow after inve 5 (195) million y to Septembe 118 million f y at Rockham esting activitie n. Cash flow er 2009 inclu for the sale o mmar Mill. es amounted for the peri ded an amou of fixed asse to od unt ets,

AVERAGE NUMBER O OF EMPLOY EES

The average during the pe e number of eriod January f employees y to Septemb was 311 (42 ber 2010. 29)

TAX

Deferred tax 30 Septemb SEK 16 milli The carry fo amounted to was no ca deferred tax x assets amo ber 2010, w on compared orward of ded o approximat arry forward assets have ounted to SE which is a d with 31 De ductions for u tely SEK 320 of deductio not been rec K 84 million reduction ecember 200 nutilised loss 0 million. The ons for whi corded. on of 09. ses ere ich

PARENT C OMPANY

The parent c amounted t January to S the Group company, w company's p to SEK 5 ( September 20 has been hich serves a rofit after net 26) million 010. All pulp centralised as a distributo t financial item for the peri invoicing with at the pare or for all of the ms od hin ent e

m at th Th en m mills and rece t normal rate herefore also he result inclu ntire Group, w million. ives sales co es. The notes apply to the udes hedging which affected ommission fo s relating to parent comp g activities rea d the result b r this service Group sales pany's sales. alised for the by SEK 16 (3)

Th am 20 sa SE of 20 qu SE he parent co mounted to S 010, compare ame period o EK 12 for the f SEK 17 mil 010 relates to uarter of 2 EK 110 millio mpany's loss SEK 2 millio ed to a profit of the previo e second qua lion included o dividends fro 2009 includ on. s after net fin n for the thir of SEK 92 m ous year and arter of 2010 in the secon om subsidiar des debt w nancial items rd quarter of million for the d a profit of 0. An amount nd quarter of ies. The third write-offs of

Th st he parent co tatement are ompany's ba provided on p lance sheet page 14. and income

S HARE INFO ORMATION

N NUMBER OF S SHARES

	30 September 2010
Registered number of shares	153,393,890
- of which treasury shares	821.965

Sh hare price

		LARGEST SHAREHOLDERS AT 30 SEPTEMBER 2010

Shareholder	Number of	Percentage
	shares (=votes)	of capital
Nemus Holding AB	30,857,435	20.1
Danske Bank A/S	6.451.273	4.2
DNB NOR Bank ASA Sverige	6.451.273	4.2
HSH Nordbank AG	5.599.860	3.6
Skagen Verkst Verdipapirfond	5.210.337	3.4
Case Asset Management AB	4.967.000	3.2
Robur Försäkring	4.626.585	3.0
Nordea Bank AB	3.500.521	2.3
Aliz Invest AB	3.485.000	2.3
Tanglin Asset Management AB	3.269.919	2.1
Total holdings of 10 largest shareholders	74.419.203	48.4
Rottneros AB (treasury stock from buy-back)	821.965	0.5
Other shareholders	78,152,722	51.1
TOTAL	153.393.890	100.0

Reverse share split

The Annual General Meeting in 2010 resolved to carry out a reverse share split, where ten existing shares were to be combined as one share. A directed new issue of 31 shares, as resolved at the Annual General Meeting, was implemented in April with a view to achieving a number of shares that was evenly divisible by ten. The record day for the reverse split was 7 May 2010 and the number of shares in Rottneros subsequently amounted to 153,393,890.

Evening out the holdings of minor shareholders

Minor shareholders, who owned less than 1,000 shares prior to the reverse split, were offered the opportunity to even out their holdings through commission-free trade. The total number of shareholders to which this offer applied was 5,300 shareholders, and 416 shareholders had sold on average 32 shares and 515 shareholders had purchased on average 30 shares when the offer expired on 28 May 2010. This yielded a net purchase of 5,313 shares at a price of 7.20.

Incentive programme

The AGM of Rottneros held on 22 April 2010 resolved to issue no more than 30 million subscription warrants to be used for an incentive programme for eight senior executives. In total, 12 million of these subscription warrants were transferred to those entitled to subscribe. The price per warrant amounted to SEK 0.10, and ten subscription warrants are required to subscribe for one new ordinary share. The issue price amounted to SEK 9.75 per share and shares can be subscribed for during the period 17 May 2011 to 16 May 2013. In the event that these rights are exercised in full, the dilution effect would amount to 0.8 per cent. Rottneros will cancel subscription warrants that are not transferred.

Sale of treasury shares

The AGM held in 2010 authorised the Board to take decisions regarding the transfer of shares in the company for the period up until the next AGM. No such transfer has taken place during the first six months of the year. Rottneros' holding of treasury shares amounted to 821,965 after the reverse split in May.

Transactions with closely related parties

No transactions have taken place between Rottneros and closely related parties that materially affect the company's financial position and performance.

Nomination Committee 2011

On 14 October 2010, Rottneros announced the Nomination Committee prior to the AGM for 2011. Olle Grundberg, Nemus Holding AB was appointed Chair of the Nomination Committee. Other members appointed are Jan Alkmark (Danske Bank A/S) and Kjell Ormegard (Chair of the Board of Rottneros AB). Shareholders wishing to submit views or put forward proposals for Rottneros' Nomination Committee can do this to Olle Grundberg, Chair of the Nomination Committee, [email protected].

RISK MANAGEMENT

The company's operational work involves a number of measures and strategies – for example, focusing on niches and various specific customer segments – aimed at reducing the Group's dependency on market pulp list prices and to moderate fluctuations in profitability over a business cycle. The factors that have the greatest impact on the Group's results are associated with exchange rates and the price of pulp, wood and electricity.

Profit/loss after financial items
	2010						2009
Group	III	II	I	IV	III	II		I Full year
Profit/loss after financial items	64	50	11	0	43	3	-115	-69
Whereof:
Currency hedges	13	0	3	-1	-1	-1	-2	-5
Pulp price hedges	-	-	-	-	-4	4	3	3
Electricity hedges	-	-	-	2	1	1	2	6
Total hedges	13	0	3	1	-4	-22	3	4
Green electricity	8	6	8	10	9	10	7	36

Currency exposure, USD and EUR

Although Rottneros issues invoices in different currencies, the underlying currency for pulp prices is mainly USD. Around 20% of the invoicing is contracted in SEK, with EUR as the invoicing currency. The underlying exposure to USD is thus very high, while the direct inflow of USD (the real flow) corresponds to just over 40%. However, the impact of exchange rate fluctuations on indirect exposure is delayed, as the normal duration of a contract is between one and three months.

The average USD exchange rate was 7% lower during the period January to September 2010 compared with the same period of the previous year, amounting to an average of SEK 7.35/USD compared to SEK 7.87/USD in the previous year. The impact on turnover of a lower average exchange rate for USD in relation to SEK during the period January to September 2010 amounted to SEK -91 million compared to the same period in 2009.

At the end of September 2010, currencies were hedged in the form of forward contracts concluded for EUR 20 million at an average rate of SEK 10.01/EUR, and USD 13 million at an average rate of USD 7.83/USD for deliveries made in 2010 and 2011. The outstanding positions in EUR were closed at the start of the fourth quarter, which will have a positive effect on the result for the fourth quarter of around SEK 16m.

For the fourth quarter of 2010 there are forward contracts of USD 8 million at an average rate of SEK 7.72/USD.

Pulp price

The price of pulp (NBSK) is set in USD, while production costs are largely incurred in local currencies. Pulp prices had not been hedged at the end of September.

Electricity

Twenty-two per cent of electricity consumption was hedged at on average SEK 0.42 per kWh for the fourth quarter of 2010. Twenty-two per cent of electricity consumption has been hedged at on average SEK 0.40 per kWh for 2011. The average price level for electricity on the Nord Pool exchange amounted to SEK 0.52 per kWh during the period January to September 2010.

For further information on risk, see pages 29 to 32 of the 2009 Annual Report.

MARKET VALUE (SEK million) SEPTEMBER 2010
Hedging	Hedged volume	Hedge price	Market value	Reference - spot rate 30 September 2010
Currency USD, forward	USD 13 m	7.83 SEK/USD	14	6.71 SEK/USD
Currency EUR, forward	EUR 20 m	10.01 SEK/EUR	17	9.15 SEK/EUR
Electricity	83,334 MWh	SEK 0.400/kWh	2	SEK 0.485/kWh
Total market value			33
MARKET VALUE (SEK million) SEPTEMBER 2009
			Market	Reference - spot rate
Hedging	Hedged volume	Hedge price	value	30 September 2009
Currency USD, forward	USD 4 m	7.02 SEK/USD	0	7.00 SEK/USD
Currency EUR, forward	EUR 4 m	10.09 SEK/EUR	0	10.23 SEK/EUR
Electricity	11,045 MWh	SEK 0.251/kWh	1	SEK 0.388/kWh
Total market value			1

The table above shows the market values of all hedging contracts. The valuation refers to the liquidation value; i.e. a valuation is made in accordance with the forward contracts on 30 September 2010. The reference value refers to the spot rate on 30 September and is provided as supplementary information. Hedging expires in 2010 and 2011. As a result of the application of IFRS/IAS, these market values are reflected in the balance sheet and, in some cases, in the income statement, but are also shown here as supplementary information.

ACCOUNTING PRINCIPLES

This interim report has been prepared in accordance with IAS 34, Interim Financial Reporting, which complies with Swedish law through the application of the Swedish Financial Reporting Board's Recommendation RFR 1.3, Supplementary Accounting Rules for Groups, as well as RFR 2.3, Accounting for Legal Entities, which are applied in respect of the parent company.

The accounting principles, definitions of key ratios and calculation methods are the same as those used in the last annual report, except for with respect to a number of amendments to existing standards and new interpretations that took effect on 1 January 2010. Revised IFRS 3 Business Combinations and amended IAS 27 Consolidated and Separate Financial Statements result in changes regarding consolidated financial statements and accounting for acquisitions. Rottneros have applied the revised standards with effect from 1 January 2010, but the changed accounting principles have not yet had any effect on recognised amounts.

FORECAST

The company is not providing an earnings forecast for 2010.

FORTHCOMING FINANCIAL INFORMATION

26 January 2011 Year-end Release for 2010 19 April 2011 Interim Report Jan-March 2011 20 July 2011 Interim Report Jan-June 2011 20 October 2011 Interim Report Jan-Sept 2011 27 January 2012 Year-end Release for 2011

The AGM for Rottneros AB will be held in Sunne on Tuesday, 19 April 2011.

For more information, please visit Rottneros' updated website, www.rottneros.com.

Stockholm, 22 October 2010

Ole Terland President and Chief Executive Officer

REVIEW REPORT

We have reviewed this report for the period 1 January 2010 to 30 September 2010 for Rottneros AB (publ). 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.

We conducted our review in accordance with the Swedish Standard on Review Engagements SÖG 2410, Review of Interim Report Performed by the Independent Auditor 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 is substantially less in scope than an audit conducted in accordance with Standards on Auditing in Sweden, RS, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

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

Stockholm, 22 October 2010 Öhrlings PricewaterhouseCoopers AB

Magnus Brändström Authorised Public Accountant

President Ole Terland and CFO Tomas Hedström will be available on tel. +46 (0)8 590 010 70 on 22 October between 08.00 and 08.45.

Analyst and press conference

Analysts and journalists are invited to an analyst and press conference on 22 October at 10.00.

Location: Rottneros Head Office, World Trade Center, Kungsbron 1, C6, Sweden

Please register with Hella Wopfner [email protected] Telephone: +46 (0)8-590 010 12

Rottneros AB (publ) Corp. ID no. 556013-5872 Box 70 370, SE-107 24 Stockholm, Sweden Tel. +46 8 590 010 00, fax +46 8 590 010 01 www.rottneros.com

Rottneros discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. This information was submitted for publication on 22 October 2010 at 08.00. A Swedish and an English version of this report have been drawn up. The Swedish version shall apply in the event of differences between the two reports.

DEFINITIONS OF KEY RATIOS

Equity/assets ratio:

Shareholders' equity as a percentage of the balance sheet total

Interest-bearing net receivables/liabilities:

Liquid assets minus interest-bearing liabilities

Debt/equity ratio:

Interest-bearing net receivables/liabilities divided by shareholders' equity

Operating margin:

Operating profit after depreciation as a percentage of net turnover for the period

Profit margin:

Profit after net financial items as a percentage of net turnover for the period

Net profit/loss:

Net profit/loss is the profit/loss after tax

Earnings per share:

Net profit/loss divided by the average number of shares

Return on capital employed:

Profit after net financial items plus interest expense for the past twelve-month period divided by the average capital employed for the period in question

Capital employed:

Balance sheet total less non-interest-bearing operating liabilities including deferred tax liabilities

Return on equity:

Net profit for the past twelve-month period as a percentage of average shareholders' equity for the period in question

Interest coverage ratio:

Profit after net financial items plus interest expense, divided by interest expense

P/E ratio:

Share price at the end of the period in relation to earnings per share after tax

Direct yield:

Dividend as a percentage of the share price at the end of the period

Operating cash flow/share:

Cash flow from operating activities and normal investments divided by the number of shares

CONSOLIDATED PROFIT/LOSS ACCOUNTS (SEK MILLION)
	Jul-Sep 2010		Jul-Sep 2009 Jan-Sep 2010 Jan-Sep 2009 Full year 2009
Net turnover	413	345	1,282	1,145	1,508
Change in inventories, finished goods	30	-59	-2	-196	-179
Other income	28	15	78	117	138
TOTAL INCOME	471	301	1,358	1,066	1,467
Raw materials and consumables	-244	-179	-736	-659	-881
Other costs	-95	-121	-280	-318	-413
Personnel costs	-44	-46	-153	-183	-235
Depreciation/amortisation and write-downs	-20	-25	-66	-78	-104
TOTAL OPERATING COSTS	-403	-371	-1,235	-1,238	-1,633
OPERATING INCOME	68	-70	123	-172	-166
Financial income	-3	127	6	127	124
Financial expenses	-1	-14	-4	-24	-27
Net financial items	-4	113	2	103	97
INCOME AFTER NET FINANCIAL ITEMS	64	43	125	-69	-69
Tax on income for the year	-8	0	-8	0	0
NET PROFIT/LOSS AFTER TAX	56	43	117	-69	-69

Earnings after tax/share (SEK)²	0.37	2.38	0.76	-3.83	-2.59

1 Profit after tax per share, after dilution, is the same as the profit after tax per share. The comparative figures have been adjusted for the reverse split of shares implemented during April 2010.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (SEK MILLION)
	Jul-Sep 2010		Jul-Sep 2009 Jan-Sep 2010 Jan-Sep 2009 Full year 2009
NET PROFIT/LOSS AFTER TAX	56	43	117	-69	-69
Other comprehensive income
Cash-flow hedging, income before tax	17	-	28	-3	2
Cash-flow hedging, tax effect	-5	1	-8	1	-1
Exchange rate differences	0	1	-	-1	-1
Reclassification adjustment Miranda1	-	-	-	-54	-54
TOTAL OTHER COMPREHENSIVE INCOME	12	2	20	-57	-54
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	68	45	137	-126	-123
KEY INDICATORS THAT AFFECT TURNOVER
Pulp price NBSK, USD 1	976	670	921	619	657
USD/SEK 2	7.27	7.29	7.35	7.87	7.65
Pulp price NBSK, SEK	7,098	4,880	6,776	4,853	4,989
Rottneros' deliveries, tonnes	75,800	89,700	249,900	294,800	376,700

1 Source: PIX/Market Pulse.

2 Source: Sw edish central bank yearly average.

3 Cumulative amount of exchange rate differences reclassified from equity to profit or loss according to IAS 21.

CONSOLIDATED BALANCE SHEET (SEK MILLION)
	Sep 2010	Sep 2009	Dec 2009
Intangible fixed assets	1	9	8
Tangible fixed assets	685	701	677
Financial fixed assets	154	165	164
Total fixed assets	840	875	849
Inventories	211	211	215
Current receivables	301	254	230
Liquid funds	165	26	111
Total current assets	677	491	556
TOTAL ASSETS	1,517	1,366	1,405
Shareholders' equity	1,226	684	1,089
Longterm liabilities
Interest-bearing	11	378	57
Non interest-bearing	1	-	1
Total longterm liabilities	12	378	58
Current liabilities
Interest-bearing	38	55	44
Non interest-bearing	241	249	214
Total current liabilities	279	304	258
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES	1,517	1,366	1,405

CASH-FLOW ANALYSIS (SEK MILLION)
		Jan-Sep 2010 Jan-Sep 2009 Full year 2009
Operating income	123	-172	-166
Adjustment for non cash-flow items
Depreciation/amortisation and write-downs	66	80	104
Profit/loss from disposal of fixed assets	-10	-55	-59
Profit from disposal of CO2 allowances	-	-	-3
Other non cash-flow items	5	37	37
	184	-110	-87
Paid financial items	-4	-22	-28
Received/paid taxes	-1	-1	5
Cash-flow from current operations before change in working capital	179	-133	-110
Change in working capital	-16	218	194
Cash-flow from current operations	163	85	84
Acquisition of fixed assets	-69	-8	-10
Sale of fixed assets	11	118	120
Change in long-term receivables	-10	-	5
Cash-flow from investing activities	-68	110	115
Proceeds from the issue of shares	1	-	182
New loans	-	1	92
Repayment of loans	-42	-215	-4 07
Cash-flow from financing activities	-41	-214	-133
Cash-flow for the year	54	-19	66
Liquid funds at beginning of year	111	45	45
Cash-flow for the year	54	-19	66
Translation difference in liquid funds	0	0	0
Liquid funds at end of year	165	26	111

SHARE DATA¹
		Sep 2010	Sep 2009	2009	2008	2007	2006	2005
Shares, opening2	No.	1,525,719	180,212	180,212	180,212	180,212	180,212	180,212
Shares issued2	No.	0	-	1,345,507	-	-	-	-
No. of company's own shares bought back2	No.	-1,373,147	-	-	-	-	-	-
Repurchased treasury shares2	No.	-	-	-	-	-	-	-
Shares closing2	No.	152,572	180,212	1,525,719	180,212	180,212	180,212	180,212
Average number of shares2	No.	152,572	18,021	26,884	18,021	18,021	18,021	18,021
Operating profit or loss/share2,5	SEK	0.81	-9.52	-6.18	-16.95	-19.99	-0.43	-4.95
Earnings after net financial items/share5	SEK	0.82	-3.83	-2.58	-21.33	-21.30	-1.29	-5.70
Earnings after tax/share5	SEK	0.76	-3.83	-2.59	-18.35	-16.69	-0.45	-3.49
Operating cash flow/share3,5	SEK	0.62	4.31	2.74	-13.34	-5.59	1.93	-22.80
Equity/share5	SEK	8.03	37.97	7.14	44.96	58.29	77.83	84.53
Dividend5	SEK	-	-	-	-	-	1.00	1.00
Dividend/equity/share	%	-	-	-	-	-	1,3	1,2
Share price at end of period5	SEK	5.35	22.10	6.90	10.50	23.10	65.50	68.00
Share price/equity/share	Times	0.7	0.6	1.0	0.2	0.4	0.8	0.8
P/E ratio/share	Times	5.2	Neg	Neg	Neg	Neg	Neg	Neg
Direct yield4	%	-	-	-	-	-	1.5	1.4

¹ No key ratios were influenced by any dilution effect.

² The number of shares is stated in thousands, excluding treasury shares held by Rottneros.

³ Cash-flow after normal investments but excluding strategic investments.

4 Direct yield is calculated in relation to the closing listed price.

5 There was a reverse share split in April 2010, where ten existing shares were combined

into one share. The comparison periods have been adjusted for this reverse split.

KEY RATIOS EIGHT QUARTERS
			2010				2009	2008
	III	II	I	IV	III	II	I	IV
Net turnover, SEK m	413	462	407	363	345	367	433	534
Return on equity after full tax, %	10.1	9.2	5.2	Neg	Neg	Neg	Neg	Neg
Return on capital employed, %	10.7	9.5	6.1	Neg	Neg	Neg	Neg	Neg
Equity/assets ratio, %	81	78	76	78	50	43	38	4 0
Equity/share, SEK 1	8.03	7.59	7.26	7.14	37.97	35.48	38.78	44.96
Earnings after tax/share, SEK 1	0.37	0.32	0.07	-0.01	2.38	0.15	-6.37	-9.83
Operating cash flow/share, SEK 1	0.07	0.28	0.26	-0.08	2.80	0.58	0.93	-5.46
Operating margin, %	16.71	10.32	1.68		1.50 -20.27		2.29 -25.44 -25.10

¹ There was a reverse share split in April 2010, where ten existing shares were combined into one share. The comparison periods have been adjusted for this reverse split.

Closing shareholders' equity	1,226	684	1,089
Issue of new shares	0	-	402
Total comprehensive income for the period	137	-126	-123
Opening shareholders' equity	1,089	810	810
		Jan-Sep 2010 Jan-Sep 2009 Full year 2009
CHANGE IN SHAREHOLDERS' EQUITY (SEK MILLION)

QUARTERLY DATA (SEK MILLION)

			2010				2009				2008
	III	II	I	IV	III	II	I	IV	III	II	I
Net turnover	413	462	407	363	345	367	433	534	601	780	748
Operating profit/loss before depreciation	88	61	40	32	-45	31	-80	4	14	-19	-81
Depreciation/amortisation and write-downs	-20	-13	-33	-26	-25	-23	-30	-139	-27	-29	-29
Operating profit/loss	68	48	7	6	-70	8	-110	-135	-13	-48	-110
Net financial items	-4	2	4	-6	113	-5	-5	-34	-24	-9	-12
Profit/loss after financial items	64	50	11	0	43	3	-115	-169	-37	-57	-122
Tax	-8	0	0	0	0	0	0	-9	13	17	3 3
Profit/loss after tax	56	50	11	0	43	3	-115	-178	-24	-40	-89

Pulp production, 1,000 tonnes	82.6	84.0	81.4	86.7	70.9	88.8	89.5	119.5	136.3	162.6	184.3
Pulp deliveries, 1,000 tonnes	75.8	86.8	87.3	81.9	89.7	99.4	105.7	118.4	137.1	186.3	176.1

PARENT COMPANY PROFIT/LOSS ACCOUNTS (SEK MILLION)
	Jul-Sep 2010		Jul-Sep 2009 Jan-Sep 2010 Jan-Sep 2009 Full year 2009
Net turnover	403	346	1,260	1,154	1,516
Other income	20	1	42	36	50
TOTAL INCOME	423	347	1,302	1,190	1,566
Raw materials and consumables	-399	-342	-1,247	-1,137	-1,487
Other costs	-19	-23	-54	-116	-142
Personnel costs	-4	-5	-19	-22	-32
Depreciation	-1	-1	-2	-3	-3

TOTAL OPERATING COSTS	-423	-371	-1,322	-1,278	-1,664
OPERATING INCOME	0	-24	-20	-88	-98
Financial income	0	120	30	137	175
Financial expenses	-2	-4	-5	-23	-44
Net financial items	-2	116	25	114	131
INCOME AFTER NET FINANCIAL ITEMS	-2	92	5	26	33
Tax on income for the year	-9	-	-9	-	-27

PARENT COMPANY BALANCE SHEET (SEK MILLION)
	Sep 2010	Sep 2009	Dec 2009
Intangible fixed assets	-	2	1
Tangible fixed assets	1	1	1
Financial fixed assets	384	404	386
Total fixed assets	385	407	388
Current receivables	713	835	820
Liquid funds	58	4	23
Total current assets	771	839	843
TOTAL ASSETS	1,156	1,246	1,231
Shareholders' equity	930	576	934
Longterm liabilities
Interest-bearing	-	362	42
Total longterm liabilities	-	362	42
Current liabilities
Interest-bearing	34	49	38
Non interest-bearing	192	259	217
Total current liabilities	226	308	255
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES	1,156	1,246	1,231

SIX YEAR REVIEW
	Jan-Sep 2010 Jan-Sep 2009		2009	2008	2007	2006	2005
							Remaining operations	Total
KEY INDICATORS THAT AFFECT TURNOVER
Pulp price NBSK, USD 1	921	619	657	852	794	675	611
USD/SEK 2	7.35	7.87	7.65	6.58	6.76	7.37	7.48
Pulp price NBSK, SEK	6,776	4,853	4,989	5,617	5,368	4,977	4,565
Rottneros' deliveries, tonnes	249,900	294,800	376,700	617,900	714,700	699,500	666,700
Turnover and income, SEK million
Net turnover	1,282	1,145	1,508	2,663	2,927	2,690	2,411	2,429
Profit/loss before depreciation	189	-94	-62	-82	75	148	9	48
Depreciation	-66	-78	-104	-224	-435	-155	-138	-138
Operating profit/loss after depreciation	123	-172	-166	-306	-360	-7	-129	-90
Net financial items	2	103	97	-79	-24	-16	-12	-13
Profit/loss after net financial items	125	-69	-69	-385	-384	-23	-141	-103
Profit/loss after tax	117	-69	-69	-331	-301	-8	-91	-63
Balance sheet items, SEK million
Fixed assets	840	875	849	1,149	1,123	1,363	1,435
Inventories	211	211	215	447	493	397	430
Current receivables	301	254	230	391	572	570	595
Liquid funds	165	26	111	45	121	122	125
Assets from discontinued operations	-	-	-	-	-	-	26
Shareholders' equity	1,226	684	1,089	810	1,050	1,403	1,523
Long-term interest-bearing liabilities	11	378	57	692	173	177	180
Long-term non interest-bearing liabilities	1	0	1	14	49	85	118
Current interest-bearing liabilities	38	55	44	82	452	304	375
Current non interest-bearing liabilities	241	249	214	434	585	483	405
Liabilities from discontinued operations	-	-	-	-	-	-	10
Balance sheet total	1,517	1,366	1,405	2,032	2,309	2,452	2,611
Finaical ratios
Operating margin, %	9.6	-15.0	-11.0	-11.5	-12.3	-0.3	-5.3	-3.7
Profit margin, %	9.8	-6.0	-4.6	-14.4	-13.1	-0.9	-5.8	-4.2
Return on capital employed, %	10.7	Neg	Neg	Neg	Neg	Neg	Neg	Neg
Return on equity after full tax, %	10.1	Neg	Neg	Neg	Neg	Neg	Neg	Neg
Equity/assets ratio, %	81	50	78	40	45	57	58	58
Debt/equity ratio, Times	-0.1	0.6	0.1	1.0	0.6	0.3	0.4	0.4
Interest cover, Times	32.1	Neg	Neg	Neg	Neg	Neg	Neg	Neg
Other
Capital expenditure, SEK m	69	8	10	191	163	113	234	234
Average no. of employees	311	429	387	667	718	754	804	804

¹ Source: PIX/Market Pulse.

² Source: Swedish central bank yearly average.

Rottneros, a company that was originally established in the 1600s, is an independent and flexible supplier of customised paper pulp of high quality. Rottneros has been able to adapt in order to meet high customer expectations by continually developing its products and maintaining high levels of delivery reliability, technical support and service.

Rottneros has an annual production capacity of almost 400,000 tonnes of pulp at two mills in Sweden. Increasingly intensive product development in line with the requirements of customers will result in profitability that is higher and more stable throughout the business cycle.

Rottneros AB (publ) Box 70 370, SE-107 24 Stockholm, Sweden Visiting address: World Trade Center, Kungsbron 1, C6, Stockholm, Sweden Telephone +46 (0)8-590 010 00, Fax +46 (0)8-590 1010 01 [email protected] www.rottneros.com