Rottneros

Interim Report January-March 2012

		Full year
	I 2012	IV 2011	I 2011	2011
Net turnover, SEK m	371	337	400	1,513
Income after net financial items, SEK m1	-4	-44	19	28
including items affecting comparability	-4	-44	19	-120
Earnings per share after net financial items, SEK1	-0.03	-0.29	0.12	0.18
including items affecting comparability	-0.03	-0.29	0.12	-0.79
Profit/loss after tax, SEK m1	-4	-48	14	4
including items affecting comparability	-4	-48	14	-144
Earnings per share after tax, SEK1	-0.03	-0.32	0.09	0.02
including items affecting comparability	-0.03	-0.32	0.09	-0.95
Cash flow before investments per share, SEK	-0.21	-0.15	-0.16	0.23
Cash flow per share, SEK	-0.32	-0.69	-0.27	-0.74
	31-03-2012	31-12-2011	31-03-2011
Shareholders' equity per share, SEK	6.64	6.65	8.13
Equity/assets ratio, %	75	75	83

1 Excluding total w rite-dow ns and one-off costs of SEK 148 million in the full year 2011.

x Loss after net financial items amounted to SEK -4 million for the first quarter of 2012, compared with a loss of SEK -44 million for the fourth quarter of 2011 and a profit of SEK 19 million for the first quarter of 2011.
x The USD price for chemical pulp is increasing and price increases of USD 20-30 per tonne have been announced for April (to USD 870 per tonne). However, the average price in Swedish kronor during the first quarter of 2012 was less than it was in the fourth quarter of 2011.
x Global stock levels for pulp are falling and deliveries of pulp to Asia are strong. There has simultaneously been a reduction in the cost of timber and electricity, which has a positive impact on margins.
x Cash flow from operating activities amounted to SEK -32 (-25) million for the first quarter of 2012. This negative cash flow is largely explained by investments implemented at the end of 2011 being paid for at the start of 2012. Measuring the porosity of pulp at Vallvik Mill.

CEO's statement

The beginning of 2012 was significantly more stable than the end of 2011 from the perspective of a pulp supplier. Strong deliveries to China, which started before and continued after the turn of the year, have altered the momentum of the global pulp market. The price falls have been transformed into an upturn. Demand has primarily been for short-fibre chemical pulp, as the price fell too low and there was a very significant price difference in relation to long-fibre pulp; more than USD 200 per tonne compared with the normal historical difference of USD 50-100 per tonne. The PIX Europe price index for short-fibre pulp rose by over USD 100 per tonne in 2012, while the index for long-fibre pulp rose by just over USD 10 per tonne, which means that the price difference is now normal. The Swedish krona strengthened in relation to the US dollar during the first quarter of the year, so that the PIX index in Swedish kronor is now lower than it was at the turn of the year. However, there is momentum in the market. All of the major market pulp suppliers announced price increases for both March and yet again for April so that the list price in Europe now amounts to USD 870 per tonne for long-fibre chemical pulp. These price increases will gradually have an impact during the spring; this combined with falling pulpwood prices will mean that our margins will improve once again. Our operational surplus for the quarter was SEK 10 million and our operating loss after depreciations was SEK -3 million.

It finally looks as though CTMP prices will follow chemical pulp prices upwards. Three price increases have already been made this year in Asia, albeit from a low level. In the course of the significant price rise for chemical pulp following the global financial crisis in 2008/09, CTMP prices became entrenched at a low level, with an ensuing negative impact for both the Canadian and Nordic forestry industry, which persisted until 2012. We are now seeing a high demand for primarily long-fibre CTMP for the packaging sector in Asia, where this pulp's unique combination of properties makes it possible to manufacture packaging that is both rigid and light. Better demand including improved sales prices combined with low timber and electrical energy prices mean that the low margins will now improve.

Despite the improving position for both of our two main products, a shadow is being cast over an old and proud Rottneros product, namely groundwood pulp. We are the last remaining supplier of bleached fine groundwood pulp and have therefore been able to retain a good price level. However, non-integrated groundwood pulp customers in the tough and vulnerable printing paper sector are losing both volume and market shares and are increasingly being forced to discontinue this paper production. We are still hoping for renewed opportunities in Japan where groundwood pulp is traditionally used for thin printing paper. We are also attempting to offer the board market an extremely high bulk pulp to keep the cost of board to a minimum without impairing the stiffness of the product.

Ole Terland President and CEO

THE PULP MARKET

Markets and products

Several price increases were made for short-fibre chemical pulp during the first quarter of 2012. The price of long-fibre chemical market pulp also increased in March and April, which is expected to have a positive effect on prices during the second quarter. There is high demand for chemical pulp.

Statistics for bleached chemical market pulp for the total global market showed that deliveries during January and February 2012 amounted to 6.84 (6.48) million tonnes, which was 5.5% higher than the same period of 2011. Ninety-three per cent (89% for the same period of 2011) of the global supply capacity for bleached chemical pulp was utilised for the period January to February 2012. An estimated 94% (96%) of production capacity was utilised during the same period.

Global producer stocks of bleached chemical pulp amounted to 3.9 million tonnes at the end of February. Stock levels thus remained the same compared with the beginning of the year.

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

The PIX price for bleached long-fibre sulphate pulp in Europe was USD 834 per tonne at the beginning of the year and USD 844 per tonne at the end of March, with a low point of USD 826 at the start of February. However, a strong Swedish krona at the end of the quarter meant that the price in SEK is lower than at the beginning of the year. The long-fibre chemical pulp market is w approximate Price increa announced f stock levels correspondin well balance ely 120,000 to ases of US for April (to U for long-fibr ng to 31 days ed, with sto onnes at the SD 20-30 p USD 870 per re chemical p s' production. ock reducing end of Febru per tonne w tonne). Produ pulp are nor by uary. were ucer mal,

Supplies o increased d were 6.1% Delivery cap to February same perio utilisation wa of bleached during Janua higher than pacity utilisati y 2012 amou od of 2011 as around 93 long-fibre ary and Feb the same ion during the unted to 96% ) and prod % (97%). chemical ruary 2012 period of 20 e period Janu % (93% for duction capa pulp and 011. uary the acity

Mechanical (produced a pulp and CT at Rottneros TMP s)

The price o USD 570-59 market at th of USD 30 first quarter Demand for cent during with the sam 0.5 million to of short-fibre 90 per tonne he beginning 35 per tonne of 2012, wh r CTMP is hi January an me period of 2 onnes during e CTMP wa e in the We of the year. e was annou ich had an im igh. Deliverie nd February 2011. Deliver January and as approxima estern Europ A price incre unced during mpact on pri es rose by 9 2012 compa ries amounte February 20 ately pean ease the ces. per ared ed to 12.

Delivery cap February 2 capacity utili pacity utilisat 2012 was 9 isation was 9 ion for the p 99% (96%) 6% (104%). period Januar and produc ry to ction

PRODUCTI ION AND DE ELIVERIES

The Group's combined a 400,000 ton (88,500) ton Mill's produc mill's produc result of mar s pulp mills at annual prod nnes. Produ nnes for Janu ction of CTMP ction of groun rket-related p t Rottneros an duction capa uction amou ary to March P increased s ndwood pulp production res nd Vallvik hav acity of alm nted to 81, 2012. Rottne slightly, while fell sharply a strictions. ve a most ,900 eros e the as a

Deliveries du 84,700 (83, sulphate pu compared w uring the first ,400) tonnes ulp have in with the same t quarter of 20 s. Vallvik Mi ncreased by e period of th 012 amounte ll's deliveries y 5,000 ton he previous y ed to s of nnes year. This the qua pulp 201 pro s is largely du reby deliverie arter of 2012 p fell sharply 11, as a cons duct. ue to higher d es of, CTMP 2. However, d y compared sequence of demand. Dem increased du deliveries of with the firs a weaker m mand for, and uring the first groundwood st quarter of arket for this

PRO ODUCTION (TO ONNES)
	Jan-Mar 2012	Jan-Mar 2011
Sul phate pulp	50,900	50,600
Gro oundwood pulp	10,700	19,300
CTM MP	20,300	18,600
TOT TAL	81,900	88,500

DEL LIVERIES (TON NNES)
	Jan-Mar 2012	Jan-Mar 2011
Sul phate pulp	52,800	47,800
Gro oundwood pulp	12,400	17,800
CTM MP	19,500	17,800

TOT

TAL

Ma intenance sh hutdowns an nd seasonal variations

84,700

83,400

A h July ma at V thir shu the Gro app holiday shutd y and August intenance wo Vallvik Mill, w d quarter. utdowns are r shutdown ta oup is not af preciable exte down takes p t, which is co ork. There is which this yea Costs rel recognised in akes place. O ffected by se ent. place at Rott mbined with a maintenan ar will be take lating to n the period Otherwise, th easonal varia tneros Mill in minor annual ce shutdown en during the maintenance during which he Rottneros ations to any dtdfsnlneehsy

INVOICING AND RESULTS

January to March 2012 compared with January to March 2011

DEVIATION ANALYSIS
	Jan-Mar 2012	Jan-Mar 2011
NBSK PIX	833	954
SEK/USD	6.75	6.49
NBSK SEK	5,620	6,192
OPERATING INCOME	-3	21
Price		-47
Currency		12
Volume		-17
Variable costs		20
Other		8
TOTAL		-24

Group net turnover amounted to SEK 371 (400) million for January to March 2012. The average price of long-fibre sulphate pulp (NBSK) in USD fell by 13% (from USD 954 to USD 833), while the average price of NBSK pulp converted into SEK fell from SEK 6,192 to SEK 5,620 per tonne, a reduction of 9%.

The average price of electricity on the Nord Pool electricity exchange amounted to SEK 0.35 per kWh for January to March 2012, compared with SEK 0.58 per kWh for the same period of the previous year.

Group operating loss amounted to SEK -3 (21) million for January to March 2012. Hedging activities realised for the first quarter of 2012 amounted to SEK -2 (13) million.
Group loss after net financial items amounted to SEK -4 (19) million and includes net financial items of SEK -1 (-2) million. Net financial items include financial exchange losses of SEK 0 (-2) million.
Loss after tax amounted to SEK -4 (14) million.
Earnings per share after tax were SEK -0.03 (0.09).
Cash flow per share amounted to SEK -0.32 (-0.27).

January to March 2012 compared with October to December 2011

DEVIATION ANALYSIS
	Jan-Mar 2012	Oct-Dec 2011
NBSK PIX	833	887
SEK/USD	6.75	6.75
NBSK SEK	5,620	5,985
OPERATING INCOME	-3	-43
Price		-26
Currency		0
Volume		-5
Variable costs		22
Other		49
TOTAL		40

Group net turnover amounted to SEK 371 million for the first quarter of 2012 compared with SEK 337 million for the fourth quarter of 2011. The average price of long-fibre sulphate pulp (NBSK) in USD fell from USD 887 to USD 833, while the average price of NBSK pulp converted into SEK fell from SEK 5,985 to 5,620 per tonne, a reduction of 6%.

The average price of electricity on the Nord Pool electricity exchange amounted to SEK 0.35 per kWh for the first quarter of 2012, compared with SEK 0.33 per kWh for the fourth quarter of 2011.

Group operating loss amounted to SEK -3 million for the first quarter of 2012, which can be compared with the fourth quarter of 2011 when the operating loss amounted to SEK -43 million. The annual maintenance shutdown took place at Vallvik Mill during the fourth quarter of 2011. This shutdown resulted in a loss of production and higher maintenance costs, and it is considered that the result for the fourth quarter was adversely affected by approximately SEK 25 million. Hedging activities realised during the first quarter of 2012 resulted in a loss of SEK -2 (-13) million.
Group loss after net financial items amounted to SEK -4 million for the first quarter of 2012, compared with SEK -44 million for the fourth quarter of 2011.

INVESTME NTS AND F INANCIAL P POSITION

Group i SEK 16 investments (16) million f in fixed asse for January to ets amounted o March 2012 d to 2.
The Gr million a SEK 21 oup's liquid at the end of million at the funds amou f March 2012 e end of Dece unted to SEK 2, compared ember 2011. K 14 with
The Gro SEK 88 on 31 liabilities million o oup had tota million on 31 December s amounted on 31 Decem al interest-bea 1 March 2012 2011). Inte to SEK 74 ber 2011). aring liabilitie 2 (SEK 47 mi rest-bearing million (SEK es of illion net K 26
Approve in total total a SEK 150 ed but unutilis to SEK 71 m pproved cre 0 million. sed credit fac million on 31 edit facilities cilities amoun March 2012 s amounted nted and to
The eq 2012, w 2011. uity/assets ra which is the atio was 75% same as o % on 31 Ma n 31 Decem arch mber
Equity (SEK 6. per share 65 on 31 Dec amounted cember 2011 to SEK 6 ). 6.64

CASH FLO OW

Cash f investm January SEK -3 negative an incre working investm and the quarter. flow from ents amounte y to March 20 (13) million e cash flow d ease in work capital was ents made high invoicin operating a ed to SEK -32 012 and inclu from financ during the qu king capital. s due to fin during the p ng towards th activities be 2 (-25) million uded cash flow ial hedging. arter was du The increas nal payments previous qua he end of the efore n for w of The ue to e in s of arter first
Cash flo SEK -48 ow after inve 8 (-41) for Jan esting activiti nuary to Marc ies amounted ch 2012. d to

AVERAGE NUMBER O OF EMPLOY EES

The average January to M e number of March 2012. employees w was 292 (307 ) for

TAX

Deferred tax 31 March 20 million comp deferred tax deductions There was a million, for w recorded. x assets amo 012, represe pared with 31 x assets corre for unutilised also a tax lo which deferre ounted to SE nting a redu 1 December espond to a d losses of oss carry-forw ed tax assets EK 71 million uction of SE 2011. Recor carry forwar SEK 271 mil ward of SEK s have not b n on EK 2 rded rd of lion. 148 been

PA ARENT COM PANY

The am 201 hed affe e parent com ounted to SE 12. The loss dging activitie ected the resu mpany's loss EK -9 (2) mill s after net es realised fo ult by SEK -2 after net fin lion for Janu financial ite or the entire G (13) million. nancial items ary to March ms includes Group, which

The stat e parent com tement can b mpany's bala e found on pa ance sheet age 13. and income

SH ARE INFOR RMATION

NUMBER OF SHARES

	31 March 2012
Registered number of shares	153.393.890
- of which treasury shares	821.965

Sha are price

Rottneros AB (treasury stock from buy-back) Other shareholders	821,965 74.739.193	48.8
Total holdings of 10 largest shareholders	77,832,732	50.7 0.5
NTC GIC Govt of Singapore Inv Corp	2,164,279	1.4
BBVA Ireland P.L.C	2,323,139	1.5
Aliz Invest AB	3,485,000	2.3
Nordea Bank AB	3.500.274	2.3
Robur Försäkring	4,795,614	3.1
HSH Nordbank AG	5.599.860	3.6
DNB NOR Bank ASA Sverige	6,451,273	4.2
Danske Bank A/S	6,451,273	4.2
Skagen Verkst Verdipapirfond	12,204,585	8.0
Nemus Holding AB	30,857,435	20.1
Shareholder	Number of shares (=votes)	Percentage of capital
LARGEST SHAREHOLDERS AT 31 MARCH 2012

Sale of treasury shares

The number of shares in Rottneros amounts to 153,393,890. Rottneros' holding of treasury shares amounts to 821,965 shares. The AGM held in 2011 authorised the Board to make decisions regarding the transfer of shares in the company for the period up until the next AGM. No such transfer has taken place so far.

Transactions with closely related parties

Rottneros has sold pulp to the Arctic Paper S.A. Group, which is a closely related party. This has been conducted on normal market terms.

Dividends

A resolution was made at the AGM on 19 April 2011 to issue a dividend of SEK 0.20 per share, which corresponds in total to SEK 31 million. This dividend was paid out in April 2011. The Board has proposed for the AGM on 19 April 2012 the issue of a dividend of SEK 0.10 per share for the financial year 2011.

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 dependence on market pulp list prices and moderating fluctuations in profitability over a business cycle. The factors that have the greatest impact on the Group's results are linked with exchange rates and the prices of pulp, timber and electricity.

Profit/loss after financial items
	2012					2011
Group	I	IV	III	II	I	Full year
Profit/loss after financial items	-4	-44	-132	37	19	-120
Whereof:
Currency hedges	2	-4	-1	5	7	7
Pulp price hedges	-	-	-	-	-	-
Electricity hedges	-4	-9	-5	1	6	-7
Total hedges	-2	-13	-6	6	13	0
Green electricity	5	3	5	6	6	20

Currency exposure, USD and EUR

Although Rottneros issues invoices in various currencies, the main underlying currency for pulp prices is predominantly USD. Around 10% of 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 45%. 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 4% higher for January to March 2012 compared with the same period of the previous year, amounting to an average of SEK 6.75/USD for the period compared with SEK 6.49/USD for January to March 2011. The impact on turnover of a higher average exchange rate for USD in relation to SEK during the first quarter of 2012 amounted to SEK 12 million compared to the first quarter of 2011.

At the end of March 2012, currencies were hedged in the form of forward contracts concluded for USD 28 million at an average rate of SEK 6.88/USD for deliveries in 2012. In addition to this, currencies were hedged in the form of forward contracts concluded for EUR 14 million at an average rate of SEK 9.18/EUR for electricity purchases for 2012 to 2015.

Pulp price

The price of pulp (NBSK) is set in USD, while manufacturing costs are largely incurred in local currencies. No pulp price hedging was used in the first quarter of 2012. However, at the beginning of April 2012, contracts were concluded for hedging the pulp price at USD 890 per tonne for 2,000 tonnes per month for the period April to December 2012.

Electricity

All physical electricity for the Swedish mills is purchased directly via the Nord Pool electricity exchange. Electricity prices are quoted in EUR. At the end of March 2012, the amount of electricity hedged corresponded to the proportion of forecast consumption shown in the table. Average prices in EUR/MWh are specified in the table, together with average prices in SEK/kWh (based on EUR forward exchange rates as of 31 March 2012).

	ELECTRICITY HEDGING AT 31 MARCH 2012
Year	Part hedged	EUR/MWh	SEK/kWh
2012 Q2-Q4	55%	48.7	0.45
2013	48%	45.4	0.41
2014	32%	46.5	0.43
2015	16%	49.0	0.45

Total EUR hedging of EUR 14 million was concluded at an average rate of SEK 9.18/EUR for electricity costs in 2012-2015.

The average price level for electricity on Nord Pool amounted to SEK 0.35 per kWh for January to March 2012.

See pages 32 to 36 of the Annual Report for 2011 for further information on risk.

MARKET VALUE (SEK million) MARCH 2012
Hedging	Hedged volume	Hedge price	Market value	Reference - spot rate 31 March 2012
Currency USD, forward sell	USD 28 m	6.88 SEK/USD	7	6.64 SEK/USD
Currency EUR, forward buy	EUR 14 m	9.18 SEK/EUR	-2	8.85 SEK/EUR
Electricity	372,860 MWh	SEK 0.428/kWh	-29	SEK 0.197/kWh
Total market value			-24

MARKET VALUE (SEK million) MARCH 2011
			Market	Reference - spot rate
Hedging	Hedged volume	Hedge price	value	31 March 2011
Currency USD, forward sell	USD 14 m	6.73 SEK/USD	6	6.34 SEK/USD
Currency EUR, forward sell	EUR 1 m	9.00 SEK/EUR	0	8.93 SEK/EUR
Electricity	382,108 MWh	SEK 0.431/kWh	16	SEK 0.565/kWh

Total market value 22

The table above shows the market values of all hedging. The valuation refers to the liquidation value; i.e. a valuation is made in accordance with the forward contracts on 31 March 2012. The reference value refers to the spot rate on 31 March and is provided as supplementary information. 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.

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 'Supplementary Accounting Rules for Groups' together with RFR 2 'Accounting for Legal Entities', in respect of the parent company.

Analyst and press conference

Analysts and journalists are invited to a meeting on Thursday 19 April at 13.00.

Location: City Conference Centre, Norra Latin, Drottninggatan 71 B, Stockholm, Sweden

Please register with Hella Wopfner, [email protected], telephone: +46 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 19 April 2012 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.

The accounting principles, definitions of key ratios and calculation methods are the same as those used in the latest annual report.

FORECAST FOR 2012

The company is not providing an earnings forecast for 2012.

FORTHCOMING FINANCIAL INFORMATION

18 July 2012 Interim Report January-June 2012 19 October 2012 Interim Report January-September 2012 24 January 2013 Year-end Report for 2012

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

Stockholm, 19 April 2012

Ole Terland ACCOUNTING PRINCIPLES President and Chief Executive Officer

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

DEFINITIONS OF KEY RATIOS

Equity/assets ratio

Shareholders' equity as a percentage of the balance sheet total.

Interest-bearing net assets/liabilities Liquid assets minus interest-bearing liabilities.

Debt/equity ratio

Interest-bearing net assets/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.

Cash flow before investments/share

Cash flow from operating activities divided by the number of shares.

GLOSSARY

BEK	Bleached Eucalyptus Kraft, bleached eucalyptus pulp.	Mechanical pulp	Pulp produced using a mechanical process for fibre separation and processing. Has a higher level of bulk, stiffness and opacity than chemical pulp.
Chemical pulp	Pulp produced by cooking pulpwood together with chemicals. Has higher brightness and strength than mechanical pulp.	NBSK	Northern Bleached Softwood Kraft: bleached long-fibre sulphate pulp. The leading indicator of world market prices.
CTMP	Chemi-Thermo-Mechanical Pulp. Development of TMP, where the raw material is impregnated with chemicals. Stronger than TMP.	TMP	Thermo-Mechanical Pulp: mechanical pulp produced using a technique in which the chips are preheated with steam.
ECF	Elemental Chlorine Free, sulphate pulp bleached using chlorine dioxide only.	UKP	Unbleached Kraft Pulp: unbleached sulphate pulp.
Groundwood pulp (SGP)	Mechanical pulp made from roundwood.

	Jan-Mar 2012		Jan-Mar 2011 Full year 2011
Net turnover	371	400	1,513
Change in inventories, finished goods	-19	20	60
Other income	21	24	90
TOTAL INCOME	373	444	1,663
Raw materials and consumables	-235	-264	-1,001
Other costs	-83	-91	-450
Personnel costs	-45	-50	-209
Depreciation/amortisation and write-downs	-13	-18	-120
TOTAL OPERATING COSTS	-376	-423	-1,780
OPERATING INCOME	-3	21	-117
Financial income	1	1	2
Financial expenses	-2	-3	-5
Net financial items	-1	-2	-3
INCOME AFTER NET FINANCIAL ITEMS	-4	19	-120
Tax on income for the year	0	-5	-24
NET PROFIT/LOSS AFTER TAX	-4	14	-144
Earnings after tax/share (SEK)1	-0.03	0.09	-0.95

CONSOLIDATED PROFIT/LOSS ACCOUNTS (SEK MILLION)

1 Profit after tax per share, after dilution, is the same as the profit after tax per share.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (SEK MILLION)
	Jan-Mar 2012		Jan-Mar 2011 Full year 2011
NET PROFIT/LOSS AFTER TAX	-4	14	-144
Other comprehensive income
Cash-flow hedging, income before tax	5	-3	-54
Cash-flow hedging, tax effect	-2	1	14
Exchange rate differences	0	0	1
Reclassification adjustment 3	0	0	0
TOTAL OTHER COMPREHENSIVE INCOME	3	-2	-39
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	-1	12	-183

KEY INDICATORS THAT AFFECT TURNOVER

Pulp price NBSK, USD 1	833	954	960
SEK/USD 2	6.75	6.49	6.50
Pulp price NBSK, SEK	5,620	6,192	6,229
Rottneros' deliveries, tonnes	84,700	83,400	311,400

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)
	Mar 2012	Mar 2011	Dec 2011
Intangible fixed assets	3	2	3
Tangible fixed assets	763	718	760
Financial fixed assets	77	141	78
Total fixed assets	843	861	841
Inventories	238	248	276
Current receivables	262	300	209
Liquid funds	14	86	21
Total current assets	514	634	506
TOTAL ASSETS	1,357	1,495	1,347
Shareholders' equity	1,013	1,240	1,014
Longterm liabilities
Interest-bearing	5	9	5
Non interest-bearing	16	0	11
Total longterm liabilities	21	9	16
Current liabilities
Interest-bearing	83	5	42
Non interest-bearing	240	241	275
Total current liabilities	323	246	317
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES	1,357	1,495	1,347

	CASH-FLOW ANALYSIS (SEK MILLION)

		Jan-Mar 2012 Jan-Mar 2011 Full year 2011
Operating income	-3	21	-117
Adjustment for non cash-flow items
Depreciation/amortisation and write-downs	13	18	120
Profit/loss from disposal of fixed assets	-	-	-4
Write-downs of receivables	-	-	72
Other non cash-flow items	-5	0	14
	5	39	8 5
Paid financial items	-1	0	0
Received/paid taxes	-2	-2	-1
Cash-flow from current operations before change in working capital	2	37	84
Change in working capital	-34	-62	-49
Cash-flow from current operations	-32	-25	35
Acquisition of fixed assets	-16	-16	-157
Sale of fixed assets	-	-	4
Change in long-term receivables	-	-	5
Cash-flow from investing activities	-16	-16	-148
New loans	42	-	37
Repayment of loans	-1	-28	-28
Utbetald utdelning	-	-	-30
Cash-flow from financing activities	41	-28	-21
Cash-flow for the year	-7	-69	-134
Liquid funds at beginning of year	21	155	155
Cash-flow for the year	-7	-69	-134
Translation difference in liquid funds	0	0	0
Liquid funds at end of year	14	86	21

SHARE DATA¹
		Jan-Mar 2012	Jan-Mar 2011	2011	2010	2009	2008	2007
Shares, opening2	No.	152,572	152,572	152,572	1,525,719	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	-	-	-
Shares closing2	No.	152,572	152,572	152,572	152,572	1,525,719	180,212	180,212
Average number of shares2	No.	152,572	152,572	152,572	152,572	26,884	18,021	18,021
Operating profit or loss/share2,5	SEK	-0.02	0.14	-0.77	0.90	-6.18	-16.95	-19.99
Earnings after net financial items/share5	SEK	-0.03	0.12	-0.79	0.90	-2.58	-21.33	-21.30
Earnings after tax/share5	SEK	-0.03	0.09	-0.95	0.82	-2.59	-18.35	-16.69
Operating cash flow/share3,5	SEK	-0.32	-0.27	-0.74	0.51	2.74	-13.34	-5.59
Equity/share5	SEK	6.64	8.13	6.65	8.05	7.14	44.96	58. 29
Dividend5,6	SEK	-	-	0.10	0.20	-	-	-
Dividend/equity/share	%	-	-	1.5	2.5	-	-	-
Share price at end of period5	SEK	2.71	5.05	2.11	4.37	6.90	10.50	23. 10
Share price/equity/share	Times	0.4	0.6	0.3	0.5	1.0	0.2	0.4
P/E ratio/share	Times	Neg	13.7	Neg	5.3	Neg	Neg	Neg
Direct yield4	%	-	-	4.7	4.6	-	-	-

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.

6 For 2011 proposed dividend is used.

KEY RATIOS EIGHT QUARTERS
	2012				2011			2010
	I	IV	III	II	I	IV	III	II
Net turnover, SEK m	371	337	367	409	400	402	413	462
Return on equity after full tax, %	Neg	Neg	Neg	8.5	10.4	10.8	10.1	9.2
Return on capital employed, %	Neg	Neg	Neg	11.0	11.9	11.6	10.7	9.5
Equity/assets ratio, %	75	75	78	83	83	82	81	7 8
Equity/share, SEK 1	6.64	6.65	7.03	8.00	8.13	8.05	8.03	7.59
Earnings after tax/share, SEK 1	-0.03	-0.32	-0.89	0.17	0.09	0.06	0.37	0.32
Cash flow before investments/share, SEK	-0.21	-0.15	0.18	0.36	-0.16	0.26	0.19	0.42
Operating cash flow/share, SEK 1	-0.32	-0.69	0.00	0.22	-0.27	-0.10	0.07	0.28
Operating margin, %	Neg	Neg	Neg	8.8	5.2	3.5	16.7	10.3

CHANGE IN SHAREHOLDERS' EQUITY (SEK MILLION)
	Jan-Mar 2012		Jan-Mar 2011 Full year 2011
Opening shareholders' equity	1,014	1,228	1,228
Total comprehensive income for the period	-1	12	-183
Dividend	-	-	-31
Closing shareholders' equity	1,013	1,240	1,014

QUARTERLY DATA (SEK MILLION)
	2012				2011				2010
	I	IV	III	II	I	IV	III	II	I
Net turnover	371	337	367	409	400	402	413	462	407
Operating profit/loss before depreciation	10	-40	-50	54	39	35	88	61	40
Depreciation/amortisation and write-downs	-13	-3	-81	-18	-18	-20	-20	-13	-33
Operating profit/loss	-3	-43	-131	36	21	15	68	48	7
Net financial items	-1	-1	-1	1	-2	-2	-4	2	4
Profit/loss after financial items	-4	-44	-132	37	19	13	64	50	11
Tax	0	-4	-4	-11	-5	-5	-8	0	0
Profit/loss after tax	-4	-48	-136	26	14	8	56	50	11

Pulp production, 1,000 tonnes	81.9	70.4	77.2	88.0	88.5	75.0	82.6	84.0	81.4
Pulp deliveries, 1,000 tonnes	84.7	72.7	74.3	81.0	83.4	80.4	75.8	86.8	87.3

PARENT COMPANY PROFIT/LOSS ACCOUNTS (SEK MILLION)
	Jan-Mar 2012		Jan-Mar 2011 Full year 2011
Net turnover	1	16	27
Other income	2	9	12
TOTAL INCOME	3	25	39
Raw materials and consumables	-	-8	-8
Other costs	-8	-8	-114
Personnel costs	-4	-7	-24
Depreciation	0	0	0
TOTAL OPERATING COSTS	-12	-23	-146
OPERATING INCOME	-9	2	-107
Profit from participations in group companies	-	-	16
Financial income, other	1	2	3
Financial expenses, other	-1	-2	-2
Net financial items	0	0	17
INCOME AFTER NET FINANCIAL ITEMS	-9	2	-90
Tax on income for the year	0	0	-1
NET PROFIT/LOSS AFTER TAX	-9	2	-91

PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME (SEK MILLION)
	Jan-Mar 2012		Jan-Mar 2011 Full year 2011
NET PROFIT/LOSS AFTER TAX	-9	2	-91
Other comprehensive income
TOTAL OTHER COMPREHENSIVE INCOME	-	-	-
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	-9	2	-91

PARENT COMPANY BALANCE SHEET (SEK MILLION)
	Mar 2012	Mar 2011	Dec 2011
Intangible fixed assets	3	1	2
Tangible fixed assets	1	1	1
Financial fixed assets	318	372	318
Total fixed assets	322	374	321
Current receivables	816	720	780
Liquid funds	2	34	8
Total current assets	818	754	788
TOTAL ASSETS	1,140	1,128	1,109
Shareholders' equity	965	1,097	973
Current liabilities
Interest-bearing	79	-	37
Non interest-bearing	96	31	99
Total current liabilities	175	31	136
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES	1,140	1,128	1,109

SIX YEAR REVIEW
		Jan-Mar 2012 Jan-Mar 2011	2011	2010	2009	2008	2007
KEY INDICATORS THAT AFFECT TURNOVER
Pulp price NBSK, USD 1	833	954	960	930	657	852	794
SEK/USD 2	6.75	6.49	6.50	7.21	7.65	6.58	6.76
Pulp price NBSK, SEK	5,620	6,192	6,229	6,705	4,989	5,617	5,368
Rottneros' deliveries, tonnes	84,700	83,400	311,400	330,300	376,700	617,900	714,700

Turnover and income, SEK million
Net turnover	371	400	1,513	1,684	1,508	2,663	2,927
Profit/loss before depreciation	10	39	4	224	-62	-82	75
Depreciation	-13	-18	-120	-86	-104	-224	-435
Operating profit/loss after depreciation	-3	21	-117	138	-166	-306	-360
Net financial items	-1	-2	-3	0	97	-79	-24
Profit/loss after net financial items	-4	19	-120	138	-69	-385	-384
Profit/loss after tax	-4	14	-144	125	-69	-331	-301
Balance sheet items, SEK million
Fixed assets	843	861	841	867	849	1 149	1 123
Inventories	238	248	276	213	215	447	493
Current receivables	262	300	209	259	230	391	572
Liquid funds	14	86	21	155	111	45	121
Shareholders' equity	1,013	1,240	1,014	1,228	1,089	810	1,050
Long-term interest-bearing liabilities	5	9	5	10	57	692	173
Long-term non interest-bearing liabilities	16	0	11	0	1	14	49
Current interest-bearing liabilities	83	5	42	29	44	82	452
Current non interest-bearing liabilities	240	241	275	227	214	434	585
Balance sheet total	1,357	1,495	1,347	1,494	1,405	2,032	2,309
Finaical ratios
Operating margin, %	-0.9	5.2	-7.8	8.2	-11.0	-11.5	-12.3
Profit margin, %	-1.2	4.7	-8.0	8.2	-4.6	-14.4	-13.1
Return on capital employed, %	Neg	11.9	Neg	11.6	Neg	Neg	Neg
Return on equity after full tax, %	Neg	10.4	Neg	10.8	Neg	Neg	Neg
Equity/assets ratio, %	75	83	75	82	78	40	4 5
Debt/equity ratio, Times	0.1	-0.1	0.0	-0.1	0.1	1.0	0.6
Interest cover, Times	Neg	25.2	Neg	26.2	Neg	Neg	Neg

Other Capital expenditure, SEK m	16	16	157	125	10	191	163
Average no. of employees	292	307	298	308	387	667	718

¹ Source: FOEX NBSK PIX.

² Source: Swedish central bank yearly average.

ROTTNEROS IN BRIEF

Rottneros has been a supplier of customised and high quality paper pulp since the 1600s.

Around 300 people are employed at Rottneros, which had a turnover of SEK 1.5 billion in 2011.

Rottneros produces market pulp; i.e. paper pulp sold on the open market in contrast to pulp that is produced at mills with integrated paper production.

The Rottneros Group has an annual production capacity of just under 400,000 tonnes of pulp at its two mills in Rottneros and Vallvik.

Vallvik Mill produces two grades of long-fibre sulphate pulp: fully bleached sulphate pulp (ECF - Elemental Chlorine Free) and unbleached sulphate pulp (UKP - Unbleached Kraft Pulp).

Rottneros Mill manufactures CTMP and groundwood pulp, which are mechanical grades of pulp.

Business concept

Rottneros' business concept is to be an independent and flexible supplier of high-quality, customised pulp. Rottneros adapts its product range to meet the needs and high expectations of customers by continuously developing its products and providing a high level of supply reliability, technical support and service.

Business model

Rottneros operates in the market for market pulp and is a global supplier of bleached and unbleached long fibre chemical pulp, together with mechanical CTMP and groundwood pulp.

Pulp is produced at two Swedish pulp mills. Vallvik Mill produces long fibre chemical bleached sulphate pulp and long fibre chemical unbleached pulp. Rottneros Mill manufactures mechanical CTMP pulp and groundwood pulp. The mills are independent profit centres and have their own sales organisations.

Adding value

Rottneros adds value by focusing on segments where the Group's production focus and applications have achieved, or can achieve, a strong position in the market for market pulp. Examples of this include pulp for electrical applications presenting high purity requirements, filters where air permeability is crucial, food packaging where the most important factor is its stiffness, and pulp for thin printing paper with high requirements for opacity where Rottneros is an important supplier.

An essential part of adding value is the effective and rational management of the input goods required for pulp production. Rottneros primarily uses three input goods:

x Pulpwood, which accounts for approximately 38 per cent of our costs.
x Electricity, which accounts for approximately eight per cent of our costs.
x Chemicals, which accounts for around seven per cent of our costs.

In order to achieve security and stability, Rottneros is looking for long-term relationships and contracts with the suppliers of these goods.

Operative objectives and strategies

Rottneros has a number of overall objectives for its operational activities that are intended to result in a competitive return for shareholders over a business cycle by creating value and yielding dividends. In order to achieve this objective, the Group needs to create added value for its customers as well as be an attractive employer and competitive producer.

One of our objectives is growth. In order to create a favourable environment for achieving this goal, Rottneros works according to two main strategies:

x Rottneros is looking for development opportunities to strengthen the existing pulp operation through strategic alliances in Sweden and abroad. The Group is also planning to further increase capacity at Vallvik Mill.
x Rottneros is preparing for a possible entry into related activities where the Group's knowledge of pulp refining is used and is a precondition and where there are clear synergy effects. One step in this development is that the Group is running projects in cooperation with industrial and financial partners aimed at leading to the production of highrefined biofuel at both mills.

Another objective is for Rottneros to gradually lay the foundation for less volatile movements in the share price over the course of a business cycle by focusing increasingly on more specialised grades of pulp.

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 Centre, Kungsbron 1, C6, Stockholm, Sweden Telephone +46 8-590 010 00, Fax +46 8-590 010 01 [email protected] www.rottneros.com