Stora Enso Oyj

Earnings Release • Dec 8, 2016

STORA ENSO OYJ STOCK EXCHANGE RELEASE 8 December 2016 at 14.00 EET

Change in the reporting of costs related to growth of biological assets

Stora Enso is changing its reporting regarding the costs related to the growth of biological assets (i.e. growing trees) starting from the fourth quarter of 2016.

Costs related to the development of biological assets are capitalised on the balance sheet during the growth cycle (i.e. until the time of harvesting). At harvesting, the capitalised costs are transferred from biological assets to inventory. Prior to the change, Stora Enso has included the costs related to the growth of biological assets in its operational EBITDA.

Starting from the fourth quarter of 2016, these growth costs will be excluded from operational EBITDA and presented as Operational decrease in the value of biological assets. The reason for the change is to align the reporting of the growth costs with industry benchmarks.

This change will affect the following key figures:

• operational EBITDA
• operational EBITDA margin
• net debt to last 12 months' operational EBITDA ratio

There will be no impact on operational EBIT, the subtotals of the official Condensed Consolidated Income Statement or the group's other IFRS figures.

The new definition of the non-IFRS measure of operational EBITDA is: operating profit/loss excluding operational decrease in the value of biological assets, fixed asset depreciation and impairment, share of results of equity accounted investments, IAC and fair valuations.

The historical figures are restated according to the new reporting structure and presented in the tables below.

RECONCILIATION OF OPERATIONAL PROFITABILITY

As published

EUR million			Q3/16	Q2/16		Q1/16	2015	Q4/15	Q3/15	Q2/15	Q1/15
Operational EBITDA			326	333		356	1 352	341	353	318	340
Equity accounted investments (EAI), operational			17	16		16	80	22	21	24	13
Depreciation and impairment excl. IAC			-124	-123		-124	-517	-121	-128	-135	-133
Operational EBIT			219	226		248	915	242	246	207	220
Fair valuations and non-operational items			-14	-15		-26	378	401	-25	15	-13
Items affecting comparability (IAC)			-9	37		-28	-234	-250	16	-8	8
Operating profit (IFRS)			196	248		194	1 059	393	237	214	215
Restated
EUR million			Q3/16	Q2/16		Q1/16	2015	Q4/15	Q3/15	Q2/15	Q1/15
Operational EBITDA			343		355	363	1 408	351	369	337	351
Equity accounted investments (EAI), operational			17		16	16	80	22	21	24	13
Operational decrease in the value of biological assets			-17		-22	-7	-56	-10	-16	-19	-11
Depreciation and impairment excl. IAC			-124	-123		-124	-517	-121	-128	-135	-133
Operational EBIT			219		226	248	915	242	246	207	220
Fair valuations and non-operational items			-14		-15	-26	378	401	-25	15	-13
Items affecting comparability (IAC)			-9		37	-28	-234	-250	16	-8	8
Operating profit (IFRS)			196		248	194	1 059	393	237	214	215
Change
EUR million			Q3/16	Q2/16		Q1/16	2015	Q4/15	Q3/15	Q2/15	Q1/15
Operational EBITDA			17	22		7	56	10	16	19	11
Equity accounted investments (EAI), operational			0	0		0	0	0	0	0	0
Operational decrease in the value of biological assets			-17	-22		-7	-56	-10	-16	-19	-11
Depreciation and impairment excl. IAC			0	0		0	0	0	0	0	0
Operational EBIT			0	0		0	0	0	0	0	0
Fair valuations and non-operational items			0	0		0	0	0	0	0	0
Items affecting comparability (IAC)			0	0		0	0	0	0	0	0
Operating profit (IFRS)			0	0		0	0	0	0	0	0
OPERATIONAL EBITDA BY SEGMENTS As published
EUR million	Q3/16	Q2/16	Q1/16			2015	Q4/15	Q3/15		Q2/15	Q1/15
Consumer Board	109	113		108		434	89		116	114	115
Packaging Solutions	37	33		23		147	37		32	38	40
Biomaterials	71	84		110		420	108		125	87	100
Wood Products	30	41		23		111	26		30	32	23
Paper	77	74		83		231	74		44	52	61
Other Total	2 326	-12 333		9 356		9 1 352	7 341		6 353	-5 318	1 340
Restated
EUR million	Q3/16	Q2/16	Q1/16		2015		Q4/15	Q3/15		Q2/15	Q1/15
Consumer Board	118	127	110			466	94	128		124	120
Packaging Solutions	37	33		23		147	37	32		38	40

Total	343	355	363	1 408	351	369	337	351
Other	2	-12	9	9	7	6	-5	1
Paper	77	74	83	231	74	44	52	61
Wood Products	30	41	23	111	26	30	32	23
Biomaterials	79	92	115	444	113	129	96	106
Packaging Solutions	37	33	23	147	37	32	38	40
Consumer Board	118	127	110	466	94	128	124	120

Change

EUR million	Q3/16	Q2/16	Q1/16	2015	Q4/15	Q3/15	Q2/15	Q1/15
Consumer Board	9	14	2	32	5	12	10	5
Packaging Solutions	0	0	0	0	0	0	0	0
Biomaterials	8	8	5	24	5	4	9	6
Wood Products	0	0	0	0	0	0	0	0
Paper	0	0	0	0	0	0	0	0
Other	0	0	0	0	0	0	0	0
Total	17	22	7	56	10	16	19	11

OPERATIONAL EBITDA MARGIN BY SEGMENTS

As published

%	Q3/16	Q2/16	Q1/16	2015	Q4/15	Q3/15	Q2/15	Q1/15
Consumer Board	18.2%	18.9%	19.1%	18.5%	15.9%	19.1%	18.9%	20.2%
Packaging Solutions	14.3%	12.8%	9.4%	16.1%	15.4%	14.2%	16.8%	18.1%
Biomaterials	21.3%	24.6%	31.3%	28.3%	28.9%	31.9%	23.9%	28.2%
Wood Products	7.8%	9.5%	6.0%	6.9%	6.6%	8.0%	7.3%	5.9%
Paper	9.7%	8.8%	9.7%	6.4%	8.3%	4.8%	5.7%	6.7%
Other	0.4%	-1.9%	1.4%	0.4%	1.1%	1.1%	-0.8%	0.2%
Total	13.6%	13.2%	14.6%	13.5%	13.7%	14.1%	12.4%	13.6%
Restated
%	Q3/16	Q2/16	Q1/16	2015	Q4/15	Q3/15	Q2/15	Q1/15
Consumer Board	19.7%	21.2%	19.5%	19.9%	16.8%	21.1%	20.6%	21.1%
Packaging Solutions	14.3%	12.8%	9.4%	16.1%	15.4%	14.2%	16.8%	18.1%
Biomaterials	23.7%	26.9%	32.8%	29.9%	30.2%	32.9%	26.4%	29.9%
Wood Products	7.8%	9.5%	6.0%	6.9%	6.6%	8.0%	7.3%	5.9%
Paper	9.7%	8.8%	9.7%	6.4%	8.3%	4.8%	5.7%	6.7%
Other	0.4%	-1.9%	1.4%	0.4%	1.1%	1.1%	-0.8%	0.2%
Total	14.3%	14.1%	14.8%	14.0%	14.1%	14.8%	13.2%	14.1%
Change
Percentage point	Q3/16	Q2/16	Q1/16	2015	Q4/15	Q3/15	Q2/15	Q1/15
Consumer Board	1.5	2.3	0.4	1.4	0.9	2.0	1.7	0.9
Packaging Solutions	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Biomaterials	2.4	2.3	1.5	1.6	1.3	1.0	2.5	1.7
Wood Products	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Paper	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Other	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Total	0.7	0.9	0.2	0.5	0.4	0.7	0.8	0.5

NET DEBT/LAST 12 MONTHS' OPERATIONAL EBITDA RATIO

As published
	Q3/16	Q2/16	Q1/16	2015	Q4/15	Q3/15	Q2/15	Q1/15
Net debt/last 12 months' operational EBITDA ratio	2.1	2.3	2.3	2.4	2.4	2.5	2.7	2.6
Restated
	Q3/16	Q2/16	Q1/16	2015	Q4/15	Q3/15	Q2/15	Q1/15
Net debt/last 12 months' operational EBITDA ratio	2.1	2.2	2.2	2.3	2.3	2.3	2.6	2.5
Change	Q3/16	Q2/16	Q1/16	2015	Q4/15	Q3/15	Q2/15	Q1/15
Net debt/last 12 months' operational EBITDA ratio	0.0	-0.1	-0.1	-0.1	-0.1	-0.2	-0.1	-0.1

For further information, please contact:

Ulrika Lilja, EVP Communications, tel. +46 72 221 9228

Investor enquiries:

Ulla Paajanen-Sainio, SVP, Investor Relations, tel. +358 40 763 8767

Stora Enso is a leading provider of renewable solutions in packaging, biomaterials, wooden constructions and paper on global markets. Our aim is to replace fossil based materials by innovating and developing new products and services based on wood and other renewable materials. We employ some 26 000 people in more than 35 countries, and our sales in 2015 were EUR 10.0 billion. Stora Enso shares are listed on Nasdaq Helsinki (STEAV, STERV) and Nasdaq 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. storaenso.com

STORA ENSO OYJ