Stora Enso Oyj - Other information disclosed according to the rules of the Exchange

Stora Enso introduces change in operational EBITDA definition, higher strategic target for Wood Products division and CAPEX for 2018

STORA ENSO OYJ STOCK EXCHANGE RELEASE 7 November 2017 at 18.30 EET
Change in operational EBITDA definition (non-IFRS measure)
Starting from the fourth quarter of 2017, Stora Enso will include the
operational EBITDA of its equity accounted investments (EAI) in the group’s
operational EBITDA. Previously Stora Enso has included the operational EBIT of
EAIs in the group’s operational EBIT only.

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 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, IACs and fair valuations. The
definition includes the respective items of subsidiaries, joint arrangements and
equity accounted investments.

The historical figures are restated according to the new reporting structure and
presented in the tables at the end of this release.

New strategic financial target for Wood Products division

Stora Enso’s Wood Products division’s financial target, the operational return
on operating capital (ROOC) percentage, has been raised from 18% to 20% to
reflect better the higher value-added business in the portfolio and the overall
performance potential of the division.

Capital expenditure for 2018

Stora Enso has successfully completed several major investments recently. The
group continues to gradually decrease its capital expenditure (excluding
investments to biological assets) to the level of depreciation. In 2018, the
estimated capital expenditure will be EUR 550–600 million, including EUR 100
million for biological assets. The forecasted annual depreciation is EUR 490–510
million and operational decrease in the value of biological assets EUR 50–70
million in 2018. Capital expenditure amounts do not include potential
acquisitions or divestments.

Reconciliation of operational profitability

As published

EUR million                  Q3/1  Q2/1  Q1/1   2016  Q4/16  Q3/16  Q2/16  Q1/16
                                7     7     7
Operational EBITDA            410   341   352  1 371    310    343    355    363
Equity accounted               20    15    14     80     31     17     16     16
investments (EAI),
operational
Operational decrease in the   -16   -18   -12    -65    -19    -17    -22     -7
value of biological assets
Depreciation and impairment  -124  -119  -139   -502   -131   -124   -123   -124
excl. IAC
Operational EBIT              290   219   215    884    191    219    226    248
Fair valuations and non         0    -6     5    -67    -12    -14    -15    -26
-operational items
Items affecting               -20    -8   -27    -34    -34     -9     37    -28
comparability (IAC)
Operating Profit (IFRS)       270   205   193    783    145    196    248    194

Restated

EUR million       Q3/1  Q2/1  Q1/1   2016  Q4/1  Q3/1  Q2/16  Q1/16
                     7     7     7            6     6
Equity accounted    22    18    17     92    33    21     19     19
investments
(EAI),
operational
excl.
depreciation
Operational        432   359   369  1 463   343   364    374    382
EBITDA
Equity accounted    -2    -3    -3    -12    -2    -4     -3     -3
investments
(EAI)
depreciation
Operational        -16   -18   -12    -65   -19   -17    -22     -7
decrease in the
value
of biological
assets
Depreciation and  -124  -119  -139   -502  -131  -124   -123   -124
impairment excl.
IAC
Operational EBIT   290   219   215    884   191   219    226    248
Fair valuations      0    -6     5    -67   -12   -14    -15    -26
and non
-operational
items
Items affecting    -20    -8   -27    -34   -34    -9     37    -28
comparability
(IAC)
Operating Profit   270   205   193    783   145   196    248    194
(IFRS)

Change

EUR million                        Q3/  Q2/  Q1/  2016  Q4/  Q3/16  Q2/16  Q1/16
                                    17   17   17         16
Equity accounted investments        22   18   17    92   33     21     19     19
(EAI), operational excl.
depreciation
Operational EBITDA                  22   18   17    92   33     21     19     19
Equity accounted investments       -20  -15  -14   -80  -31    -17    -16    -16
(EAI), operational
Equity accounted investments        -2   -3   -3   -12   -2     -4     -3     -3
(EAI) depreciation
Operational decrease in the value    0    0    0     0    0      0      0      0
of biological assets
Depreciation and impairment excl.    0    0    0     0    0      0      0      0
IAC
Operational EBIT                     0    0    0     0    0      0      0      0
Fair valuations and non              0    0    0     0    0      0      0      0
-operational items
Items affecting comparability        0    0    0     0    0      0      0      0
(IAC)
Operating Profit (IFRS)              0    0    0     0    0      0      0      0

Operational EBITDA by segment

As published

EUR million          Q3/17  Q2/17  Q1/17   2016  Q4/16  Q3/16  Q2/16  Q1/16
Consumer Board        127     111    119    447     92    118    127    110
Packaging Solutions     65     56     43    129     36     37     33     23
Biomaterials           124    100     90    361     75     79     92    115
Wood Products           37     43     31    118     24     30     41     23
Paper                   56     37     68    324     90     77     74     83
Other                    1     -6      1     -8     -7      2    -12      9
Total                  410    341    352  1 371    310    343    355    363

Restated

EUR million          Q3/17  Q2/17  Q1/17   2016  Q4/16  Q3/16  Q2/16  Q1/16
Consumer Board        128     113    117    452     93    119    128    112
Packaging Solutions     66     56     44    131     36     38     34     23
Biomaterials           124    100     90    361     75     79     92    115
Wood Products           37     43     31    118     24     30     41     23
Paper                   55     37     69    327     91     78     74     84
Other                   22     10     18     74     24     20      5     25
Total                  432    359    369  1 463    343    364    374    382

Change

EUR million          Q3/17  Q2/17  Q1/17  2016  Q4/16  Q3/16  Q2/16  Q1/16
Consumer Board          1       2     -2     5      1      1      1      2
Packaging Solutions      1      0      1     2      0      1      1      0
Biomaterials             0      0      0     0      0      0      0      0
Wood Products            0      0      0     0      0      0      0      0
Paper                   -1      0      1     3      1      1      0      1
Other                   21     16     17    82     31     18     17     16
Total                   22     18     17    92     33     21     19     19

Operational EBITDA margin by segment

As published

%                     Q3/17  Q2/17  Q1/17   2016  Q4/16  Q3/16  Q2/16  Q1/16
Consumer Board       19.9%   17.6%  19.5%  19.1%  15.9%  19.7%  21.2%  19.5%
Packaging Solutions   20.4%  17.9%  14.8%  12.4%  12.8%  14.3%  12.8%   9.4%
Biomaterials          32.7%  27.0%  24.4%  26.2%  21.5%  23.7%  26.9%  32.8%
Wood Products          8.9%   9.8%   7.5%   7.4%   6.1%   7.8%   9.5%   6.0%
Paper                  7.7%   5.1%   9.1%  10.0%  11.8%   9.7%   8.8%   9.7%
Other                  0.2%  -1.0%   0.2%  -0.3%  -1.1%   0.4%  -1.9%   1.4%
Total                 16.3%  13.5%  14.1%  14.0%  12.7%  14.3%  14.1%  14.8%

Restated

%                     Q3/17  Q2/17  Q1/17   2016  Q4/16  Q3/16  Q2/16  Q1/16
Consumer Board       20.0%   17.9%  19.6%  19.3%  16.0%  19.9%  21.4%  19.9%
Packaging Solutions   20.8%  17.9%  15.2%  12.5%  12.8%  14.7%  13.2%   9.4%
Biomaterials          32.7%  27.0%  24.4%  26.2%  21.5%  23.7%  26.9%  32.8%
Wood Products          8.9%   9.8%   7.5%   7.4%   6.1%   7.8%   9.5%   6.0%
Paper                  7.6%   5.1%   9.1%  10.1%  12.0%   9.7%   8.8%   9.8%
Other                  3.7%   1.6%   2.8%   3.0%   3.7%   3.6%   0.8%   3.9%
Total                 17.2%  14.2%  14.8%  14.9%  14.1%  15.2%  14.8%  15.6%

Change

Percentage point     Q3/17  Q2/17  Q1/17  2016  Q4/16  Q3/16  Q2/16  Q1/16
Consumer Board        0.1     0.3    0.1   0.2    0.1    0.2    0.2    0.4
Packaging Solutions    0.4      0    0.4   0.1      0    0.4    0.4      0
Biomaterials             0      0      0     0      0      0      0      0
Wood Products            0      0      0     0      0      0      0      0
Paper                 -0.1      0      0   0.1    0.2      0      0    0.1
Other                  3.5    2.6    2.6   3.3    4.8    3.2    2.7    2.5
Total                  0.9    0.7    0.7   0.9    1.4    0.9    0.7    0.8

Net debt/last 12 months’ operational EBITDA ratio

As published

                          Q3/17  Q2/17  Q1/17  2016  Q4/16  Q3/16  Q2/16  Q1/16

Net debt/last 12 months'   1.8     2.0    2.0   2.0    2.0    2.1    2.2    2.2
operational EBITDA ratio

Restated

                          Q3/17  Q2/17  Q1/17  2016  Q4/16  Q3/16  Q2/16  Q1/16

Net debt/last 12 months'   1.6     1.9    1.9   1.9    1.9    1.9    2.1    2.1
operational EBITDA ratio

Change

                          Q3/17  Q2/17  Q1/17  2016  Q4/16  Q3/16  Q2/16  Q1/16

Net debt/last 12 months'  -0.2    -0.1   -0.1  -0.1   -0.1   -0.2   -0.1   -0.1
operational EBITDA ratio

Capital Markets Day webcast
Stora Enso’s Capital Markets Day takes place in London tomorrow. You are welcome
to follow the presentations focusing on an update on Stora Enso’s strategy,
including an in-depth review of the Consumer Board, Packaging Solutions and
Biomaterials businesses in a live webcast starting at 11.30 UK time (12.30 CET,
13.30 EET) at https://edge.media-server.com/m6/p/w3h5m973.

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, wood and paper on global markets. 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 25 000 people in
more than 35 countries, and our sales in 2016 were EUR 9.8 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). storaenso.com (http://www.storaenso.com/)

STORA ENSO OYJ
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