Stora Enso Oyj — Earnings Release 2014

Feb 4, 2015

Stora Enso Fourth Quarter and Full Year Results 2014

Stora Enso Fourth Quarter and Full Year Results 2014

Transformation in progress, clear improvement in results, dividend proposal
stable at EUR 0.30

Helsinki, Finland, 2015-02-04 12:00 CET (GLOBE NEWSWIRE) -- STORA ENSO OYJ
STOCK EXCHANGE RELEASE 4 February 2015 at 13.00 EET

Q4/2014 (compared with Q4/2013)*

-- Sales at EUR 2 552 (EUR 2 612) million declined by 2.3%, sales excluding
the structurally declining paper and divested businesses increased 1.4%.
-- Operational EBIT EUR 209 (EUR 152) million, 38% higher than a year ago due
to cost management.
-- Cash flow from operations EUR 442 (EUR 462) million, cash flow after
investing activities EUR 178 (EUR 246) million.
-- Net debt to operational EBITDA 2.6 (2.9); liquidity EUR 1.4 (EUR 2.1)
billion.
-- Operational ROCE 9.7% (7.0%); operational ROCE excluding transformational
investment projects 13.1% (9.0%).

Full year 2014 (compared with 2013)*

-- Sales EUR 10 213 (EUR 10 563) million declined by 3.3%, sales excluding
paper and divested businesses increased 1.3%.
-- Operational EBIT EUR 810 (EUR 578) million, an increase of EUR 232 million
or 40%, due to lower costs.
-- EPS excluding non-recurring items EUR 0.40 (EUR 0.40).
-- Strong cash flow from operations at EUR 1 139 (EUR 1 252) million, cash
flow after investing activities EUR 255 (EUR 481) million.

Stora Enso's CEO Karl-Henrik Sundström comments on the fourth quarter and
full-year 2014 results:
“Stora Enso reported yet another stable quarter. Despite some headwind in the
market, our sales increased by 1.4% compared to the fourth quarter of 2013,
excluding the structurally declining paper business and divested businesses.
Today, our growth businesses form already 62% of our total sales. The
significant improvement in operational EBIT is a result of our own initiatives
to transform our business and improve cost efficiency. Return on capital
employed increased from 7.0% to 9.7%. It amounted to 13.1% when excluding our
transformational investment projects and we reached our strategic ROCE target
of 13%.

Stora Enso is transforming into a renewable materials growth company. In
December, Montes del Plata Pulp Mill reached break-even which was a major
milestone. We started lignin extraction, as scheduled, at our Sunila Pulp Mill
in early 2015. We continue investing in biomaterials and will open a new
Innovation Centre in the Stockholm area to boost innovation within renewable
materials. The Guangxi consumer board mill project, which is slightly delayed
due to the permitting process, is expected to be operational in mid-2016.
Towards the end of this year, we look forward to start producing kraftliner,
virgin-fibre-based containerboard, at our Varkaus Mill in Finland. Moreover,
Stora Enso invests EUR 43 million in a new production line for wooden building
elements located in Varkaus. The production is scheduled to begin during the
second quarter of 2016. We are also investing EUR 27 million to improve
quality, cost-competitiveness and capacity of the consumer board machine at the
Imatra Mills in Finland.

In addition, we have made progress in streamlining the business. The divestment
of the Uetersen paper mill in Germany is expected to be completed in the first
quarter. We completed also the divestment of the coreboard and core
manufacturer Corenso business operation in late 2014. Earlier in 2014, we
divested our ownership in the kaolin business in the USA. We continue our
non-core asset disposal programme also in the coming year.

During the year, we shut down one paper machine at Veitsiluoto Mill in Finland.
Also the Corbehem Mill in France was closed permanently.

The Renewable Packaging division has now been split into two divisions:
Consumer Board and Packaging Solutions. The new structure is intended to
strengthen our focus on customers, business performance and growth. It will
also mean greater transparency in financial reporting.

I am also pleased that we have been recognised as a leader in disclosing
climate change data. The international non-governmental organisation CDP has
given us the highest possible score in the Nordic Climate Disclosure Leadership
Index in the CDP Nordic 2014 Report.

When it comes to outlook, the first quarter 2015 sales are estimated to be
roughly similar to the amount of EUR 2 552 million in the fourth quarter of
2014. Operational EBIT is expected to be in line with the amount of EUR 209
million recorded in the fourth quarter of 2014.”

“I would like to thank our employees for your commitment, our customers for
your business and our investors for your trust. We work hard to keep creating
value, today and tomorrow.”

Transformation

-- Stora Enso's share of Montes del Plata Pulp Mill production in 2014 was 240
000 tonnes and the mill reached break-even in December.
-- Stora Enso Guangxi consumer board mill construction is proceeding. It is
expected to be operational in mid-2016. The previous target was set for
early 2016.
-- Conversion of Varkaus Mill fine paper machine in Finland for
virgin-fibre-based containerboard is proceeding as planned and expected to
start at end of 2015.

Restructuring and non-core asset divestments

-- The divestment of the Corenso business operations was completed on 1
December 2014.
-- The previously announced divestment of Uetersen Mill is expected to be
completed during Q1/2015.

KEY FIGURES*

EUR million Q4/14 Q4/13 Change Q3/14 Change 2014 2013 Change
Q4/14- Q4/14- 2014-
Q4/13 Q3/14 2013

---

Sales 2 552 2 612 -2.3% 2 514 1.5% 10 213 10 563 -3.3%
Operational 308 260 18.5% 333 -7.5% 1 269 1 090 16.4%
EBITDA
Operational 209 152 37.5% 210 -0.5% 810 578 40.1%
EBIT
Operating -95 -210 54.8% 215 -144.2% 400 50 n/m
profit (IFRS)
Profit before 32 111 -71.2% 116 -72.4% 399 350 14.0%
tax excl. NRI
Loss/profit -193 -281 31.3% 144 -234.0% 120 -189 163.5%
before tax
Net loss/profit -134 -160 16.3% 123 -208.9% 90 -71 226.8%
for the period
Net 3 274 3 191 2.6% 3 459 -5.3% 3 274 3 191 2.6%
interest-beari
ng liabilities
Operational 9.7% 7.0% 9.7% 9.5% 6.5%
ROCE
Earnings per 0.06 0.15 0.12 0.40 0.40
share (EPS)
excl. NRI, EUR
EPS (basic), -0.15 -0.18 0.15 0.13 -0.07
EUR
Debt/equity 0.65 0.61 0.66 0.65 0.61
ratio
Average number 27 987 28 453 -1.6% 29 627 -5.5% 29 009 28 921 0.3%
of employees
TRI rate 12.4 11.9 4.2% 14.1 -12.1% 12.5 14.0 -10.7%
LTA rate 5.2 5.3 -1.9% 6.0 -13.3% 5.2 6.0 -13.3%

---

* Data for the comparative periods in 2013 have been restated following
adoption of the new reporting standards: IFRS 10 Consolidated Financial
Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in
Other Entities. Data for the comparative periods have been restated in all
tables affected.
Operational EBIT comprises the operating profit excluding NRI and fair
valuations of the segments and Stora Enso's share of the operating profit
excluding NRI and fair valuations of its equity-accounted investments (EAI).
Fair valuations and non-operational items include equity incentive schemes,
synthetic options net of realised and open hedges, CO2 emission rights and
valuations of biological assets and the Group's share of tax and net financial
items of EAI.
NRI = Non-recurring items. These are exceptional transactions that are not
related to normal business operations. The most common non-recurring items are
capital gains, additional write-downs or reversals of write-downs, provisions
for planned restructuring and penalties. Non-recurring items are normally
disclosed individually if they exceed one cent per share.
TRI (Total recordable incidents) rate = number of incidents per one million
hours worked.
LTA (Lost-time accident) rate = number of lost-time accidents per one million
hours worked.

EVENTS TODAY

Press conference and webcast
Stora Enso's CEO Karl-Henrik Sundström and CFO Seppo Parvi will present the
results in a press conference which will be webcast. The event will be held in
English and take place at Stora Enso's Head Office, Kanavaranta 1, Helsinki at
14:00 EET (13:00 CET) today. There will be a possibility to ask questions after
the presentation. The live webcast may be accessed at
http://www.goodmood.fi/webcaster/accounts/storaenso/live/

Webcast and conference call for analysts and investors
CEO Karl-Henrik Sundström, CFO Seppo Parvi, and SVP, Head of Investor Relations
Ulla Paajanen-Sainio will host a combined conference call and webcast today at
16:00 EET (15:00 CET, 14:00 UK time, 09:00 EDT). The live webcast may be
accessed at http://edge.media-server.com/m/p/jb9e76x6.

Analyst and investor conference call dial-in details:
UK +44(0)20 3427 1914
Finland +358 (0)9 6937 9543
Sweden +46 (0)8 5033 6539
US +1 212 444 0481
Confirmation Code: 6686909

The links to the webcasts are also available on the Stora Enso website:
www.storaenso.com/investors

For further information, please contact:
Seppo Parvi, CFO, tel. +358 2046 21205
Ulla Paajanen-Sainio, SVP, Investor Relations, tel. +358 2046 21242
Ulrika Lilja, EVP, Global Communications, tel. +46 1046 71668

Stora Enso's first quarter 2015 results will be published on 22 April 2015.
Stora Enso's Capital Markets Day will take place in London on 28 May 2015.

www.storaenso.com
www.storaenso.com/investors

Stora Enso is a leading global provider of renewable solutions in packaging,
biomaterials, wood and paper. Our aim is to replace non-renewable materials by
innovating and developing new products and services based on wood and other
renewable materials. We employ some 27 000 people in more than 35 countries,
and our sales in 2014 were EUR 10.2 billion. Stora Enso shares are listed on
NASDAQ OMX Helsinki (STEAV, STERV) and Stockholm (STE A, STE R). In addition,
the shares are traded in the USA as ADRs (SEOAY) on the International OTCQX
over-the-counter market.

STORA ENSO OYJ

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