Stora Enso Oyj - Inside information

Stora Enso announces intent to acquire forest assets in conjunction with planned structural changes in Bergvik Skog AB

STORA ENSO OYJ STOCK EXCHANGE RELEASE 27 November 2017 at 9.00 EET
Shareholders representing 98% of the owners in Bergvik Skog AB, a Swedish forest
holding company, have agreed to initiate discussions, based on a non-binding
letter of intent, aiming at structural changes in Bergvik Skog Group. These
shareholders are Stora Enso, Länsförsäkringar, FAM, BillerudKorsnäs, Kåpan
Pension, Tredje AP-fonden, Persson Invest, Karl Hedin AB and Tham Invest.

“The wood supply agreement with Bergvik Skog, established 15 years ago, expires
next year. Together with our partners, we have had a successful journey which
now comes to an end. The planned transaction is a natural next step for us, as
we strongly believe in the bioeconomy and want to secure our competitive raw
material supply in the long term. We will seek support from the remaining 2%
outstanding shareholders as well as all other relevant stakeholders”, says Karl
-Henrik Sundström, CEO of Stora Enso.

Bergvik Skog’s Swedish forest assets are owned by its subsidiaries Bergvik Väst
AB and Bergvik Öst AB, representing approximately 83% and 17% respectively. As a
result of the planned restructuring, Stora Enso would transform its current
ownership of 49.3% in Bergvik Skog, to a direct holding of approximately 70% of
the value of the forest assets in Bergvik Väst. Further, approximately 15% of
Bergvik Väst would be directly owned by FAM, and approximately 15% directly
owned by a consortium of smaller shareholders. BillerudKorsnäs would acquire
Bergvik Öst. The remaining assets of Bergvik Skog would be liquidated or
contributed to the forest holding entities.

The restructuring of Bergvik Skog would involve dividing the company’s assets
between the owners. The financial impacts for Stora Enso are estimated to be the
following:

Bergvik Skog is currently reported as an equity accounted investment. As a
result of the restructuring, Bergvik Väst would be consolidated as a subsidiary.
The transaction would result in a cash out effect of EUR 250–300 million. Stora
Enso’s current debt would increase by approximately EUR 800 million. The net
debt to EBITDA ratio would increase by approximately 0.6. The ratio was 1.8 in
the end of Q3/2017. Capital employed would increase by approximately EUR 1
billion, resulting in a decrease in ROCE of approximately 1%-point. Bergvik Väst
owns approximately 1.9 million hectares of forest land of which approximately
1.6 million hectares are productive forests. The balance sheet value of the
fixed assets of Bergvik Väst amounts to approximately EUR 4 billion.

The final agreements are currently under negotiations between the parties with
the aim of initiating the transactions during the first half of 2018. During the
transaction and transition period, there will be business as usual for Bergvik
Skog. The final agreements are subject to relevant approvals.

About Bergvik Skog AB
Bergvik Skog AB owns approximately 2.3 million hectares of land in Sweden and
about 0.1 million hectares in Latvia, and is one of Europe’s largest private
-sector forest owners. In addition to certified wood fibre sales, the company
leases out land for hunting and fishing. Bergvik Skog produces annually about 60
million seedlings in its three nurseries. Bergvik Skog is contributing to
increasing the use of renewable energy through production of biofuels from
forests, and development of wind power. Bergvik Skog AB was founded in 2004 to
acquire Stora Enso’s and Korsnäs’ forestland in Sweden.

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 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