Financial results for Q1 2017

Financial results for
Q1 2017
CEO Karl-Henrik Sundström
CFO Seppo Parvi
27 April 2017

Disclaimer
It should be noted that Stora Enso and its business are exposed to various risks and uncertainties and certain
statements herein which are not historical facts, including, without limitation those regarding expectations for market
growth and developments; expectations for growth and profitability; and statements preceded by “believes”, “expects”,
“anticipates”, “foresees”, or similar expressions, are forward-looking statements. Since these statements are based on
current plans, estimates and projections, they involve risks and uncertainties which may cause actual results to
materially differ from those expressed in such forward-looking statements. Such factors include, but are not limited to: (1)
operating factors such as continued success of manufacturing activities and the achievement of efficiencies therein,
continued success of product development, acceptance of new products or services by the group’s targeted customers,
success of the existing and future collaboration arrangements, changes in business strategy or development plans or
targets, changes in the degree of protection created by the group’s patents and other intellectual property rights, the
availability of capital on acceptable terms; (2) industry conditions, such as strength of product demand, intensity of
competition, prevailing and future global market prices for the group’s products and the pricing pressures thereto, price
fluctuations in raw materials, financial condition of the customers and the competitors of the group, the potential
introduction of competing products and technologies by competitors; and (3) general economic conditions, such as rates
of economic growth in the group’s principal geographic markets or fluctuations in exchange and interest rates. All
statements are based on management’s best assumptions and beliefs in light of the information currently available to it
and Stora Enso assumes no obligation to publicly update or revise any forward-looking statement except to the extent
legally required.
27 April 20172
Stora Enso Q1 2017 results

• Sales 2 497 MEUR +2.1%, increased for the first time
in 5 years, +9.7% excluding paper
− Beihai, Varkaus and Murów ramp-up, higher volumes
• Operational EBIT 215 MEUR, EBIT margin 8.6%
− Hardwood pulp, paper prices and transformational costs
− Beihai cost 12 MEUR more, including 7.5 MEUR provision
related to turbine damage
• Cash flow from operations 178 (289) MEUR, after
investing activities 43 (96) MEUR
• Operational ROCE 10.0% (11.3%), excluding Beihai
Mill investment 12.9% (13.7%)
• Net debt to operational EBITDA decreased to 2.0 (2.2)
• 50 MEUR profit improvement programme proceeding
according to plan
27 April 2017
3
Transformation driving sales growth
Q1 2017 year-on-year

4
Underlying business showing good progress
Operational EBIT Q1 y-o-y
27 April 2017

Transformation steps since 2016
27 April 2017
5
Investments Divestment and closure
announcements
Beihai Mill start-up Arapoti Mill, Brazil
Varkaus LVL start-up IL Recycling AB, Sweden
Murów inauguration Hartola production unit, Finland
Varkaus kraftliner EBITDA break-even Kabel Mill, Germany
Beihai PE coating line Ongoing Suzhou Mill, China
Skoghall Mill, chemical plant Ongoing Heinola corrugated planned closure
Skutskär Mill, environmental investment Ongoing
Packaging machine manufacturing
company Formeca, Finland
Imatra PE coating line and automated
roll warehouse
Ongoing
Plan to shut down SC paper
machine at Kvarnsveden Mill
Skutskär pulp mill, fluff Ongoing
Lahti corrugated packaging investment Ongoing
Imatra, Ingerois and Fors MFC Ongoing
Heinola Fluting Mill capacity increase Ongoing
Hylte biocomposite granules Ongoing

Transformation – Beihai board mill is ramping
up ahead of plan
First LPB and CUK commercial deliveries
27 April 2017
6
kt
• Ramp-up ahead of plan and first
commercial deliveries of LPB and
CUK
• FBB deliveries have continued well
with increasing prices and volumes
• Full production expected in the first
half of 2018
• Production 87 000 tonnes in Q1
2017
• PE coating investment ready by
mid-2017
EBITDA
break-even
in Q1/18
*End of the year situation
*

Transformation journey
Growth businesses 70% of sales and 80% of operational EBIT
21%
12%
70%
-3%
35%
6%
62%
-3%
24%
12%
15%
17%
30%
2%
28%
11%
25%
10%
20%
6%
Sales 2006 Sales Q1/2017
Operational EBIT 2006 Operational EBIT Q1/2017
30% 70%
38% 80%
Consumer Board
Packaging Solutions(1)
Wood Products
Biomaterials
Paper(2)
Other & eliminations
(1) In 2006 included in Consumer Board
(2) In 2006 includes merchants
27 April 2017
7

Group sales growth 2%
Summary financials Q1 2017
27 April 20178
EUR million Q1/17 Q1/16
Change% Change%
Q1/17 /
Q1/16 Q4/16
Q1/17 /
Q4/16
Sales 2 497 2 445 2.1% 2 438 2.4%
Operational EBITDA 352 363 -3.0% 310 13.5%
Operational EBITDA margin 14.1% 14.8% 12.7%
Operational EBIT 215 248 -13.3% 191 12.6%
Operational EBIT margin 8.6% 10.1% 7.8%
Profit before tax excl. IAC 191 183 4.4% 110 73.6%
EPS excl. IAC, EUR 0.17 0.19 0.17
EPS (basic), EUR 0.14 0.15 0.12
Operational ROCE 10.0% 11.3% 8.9%
Operational ROCE excl. Beihai
project 12.9% 13.7% 12.1%
Cash Flow from Operations 178 289 461
Net debt/last 12 months’ operational
EBITDA 2.0 2.2 2.0

Consumer Board – First commercial deliveries of
LPB and CUK from Beihai Mill
Q1 y-o-y
27 April 20179
• Sales increased 8.3%, driven by Beihai
• Operational EBIT stable excluding the Beihai operations
− Higher volumes offset by slightly lower sales prices in local
currencies
− Beihai operational EBIT -33 (-21) MEUR including provision of 7.5
MEUR related to technical power turbine incident
− In Q2 expected to be approximately -18 (-18) MEUR
− 3.5 MEUR related to Bulleh Shah Packaging due to asset impairment
• Operational ROOC 12.2% (14.3%)
− Excluding Beihai Mill 38.0% (34.2%)
• Investment of 9 MEUR to MFC production in Imatra, Ingerois
and Fors mills
SalesMEUR
MEUR Operational EBIT

Packaging Solutions – Varkaus investment
paying off
Q1 y-o-y
27 April 201710
• Sales growth 18.4%
− Varkaus kraftliner mill, higher volumes in containerboard and corrugated business
• Operational EBIT 17 MEUR higher
− Varkaus kraftliner improved profitability 9 MEUR
− China packaging profitability increased 10 MEUR
− Including expensed Ostrołęka feasibility study 4 MEUR
• Varkaus kraftliner mill ramp-up proceeding and EBIT break-even
expected to be reached in Q2
• Stora Enso not to proceed with the plans for the expansion of Ostrołęka
RCP containerboard mill
• Operational ROOC 11.1% (3.2%)
• 28 MEUR investment for quality and capacity at Heinola Fluting Mill,
Finland
− ROOC expected to be above 20%

Biomaterials – Gradually improving pulp market
Q1 y-o-y
27 April 201711
• Sales increased 5.1%
− Higher pulp volumes supported by currency more than offset
lower sales prices, especially in hardwood pulp
• Operational EBIT decreased 31 MEUR
− Lower European hardwood pulp prices, higher variable costs, a
credit loss and building up innovation and R&D capabilities
• Turbine incident in Q4 2016 at Enocell Mill in Finland
caused 5 MEUR additional costs in Q1 2017
• Start-up process at the bagasse-to-xylose demonstration
plant in Raceland, USA proceeding as planned
− First batches of xylose expected to be delivered in 2017
• First commercial delivery of lignin from Sunila Mill shipped

Wood Products – New products and solutions
driving growth and profitability
Q1 y-o-y
27 April 201712
• Sales increased 8.9%
− Increased sales from strategic investments Varkaus LVL and
Murów sawmill
− Higher CLT and classic sawn volumes as well as prices
• Operational EBIT increased 6 MEUR
− Higher volumes and slightly higher sales prices, especially for
spruce
• CLT Feasibility study at Gruvön Mill, Sweden to be finalised
no later than in connection to the group’s Q2 report
• 12 MEUR investment of biocomposite granules in Hylte Mill
Sweden
• SE has been selected as supplier to various CLT buildings
in Europe and Australia

Paper – Stable sales excluding divestments
Q1 y-o-y
27 April 201713
• Sales increased slightly excluding the divestments of Kabel Mill,
Arapoti Mill and the closure of Suzhou Mill
• Operational EBITDA decreased 15 MEUR
− Lower sales prices in euros, stable variable costs, higher comparable
volumes and lower fixed costs
• Co-determination negotiations with employees at its
Kvarnsveden Mill in Sweden started regarding a plan to
reorganise the mill
− Includes a permanent closure of 100 000 tonnes of SC paper by the
end of Q2 2017
− The planned actions would affect a maximum of 140 employees
− The plan would result in annual cost savings of 12 MEUR
• Internal review on how to create the best conditions for the
Paper division to compete under increasing cost pressures and
declining market demand is proceeding as planned

Divisional targets Q1 16 Q1 17
Consumer Board Operational ROOC > 20% 14.3% 12.2%
Consumer Board excl. Beihai 34.2% 38.0%
Packaging Solutions Operational ROOC > 20% 3.2% 11.1%
Biomaterials Operational ROOC > 15% 13.1% 7.9%
Wood Products Operational ROOC > 18% 12.3% 16.4%
Paper Cash flow after investing activities to sales > 7% 5.3% 4.3%
Strategic targets ambitious, but reachable
Group targets Q1 16 Q1 17
Dividend To distribute 50% of net income over the cycle
Growth* To grow faster than the relevant market 2.4% (YoY) 9.7% (YoY)
Net debt to operational EBITDA <3.0x 2.2 2.0
Fixed costs to sales <20% 24.4% 24.1%
Debt to equity <80% 58% 46%
Operational ROCE >13% 11.3% 10.0%
Operational ROCE excl. Beihai 13.7% 12.9%
*Excluding Paper
27 April 2017
14

• Sales are estimated to be similar to or
slightly higher than the amount of 2 497
MEUR recorded in Q1 2017
• Operational EBIT is expected to be in line
with the 215 MEUR recorded in Q1 2017
• Operational EBIT estimate includes
negative impact of the ramp-up of Beihai
operations of 18 MEUR
• Impact of the annual maintenance
shutdowns is expected to be
approximately 30 MEUR higher than in
Q1 2017
27 April 2017
15
Guidance for Q2 2017
Compared to Q1 2017
Annual maintenance in Q2:
Packaging Solutions: Ostrołęka Mill
Biomaterials: Montes del Plata and
Sunila mills
Paper: Oulu Mill

• Sales growth of 9.7% excluding
Paper
• Underlying business shows good
progress and strong promise for the
future
• Strengthened balance sheet
• Healthy cash flow generation
• Moving from asset transformation to
innovation and sales transformation
27 April 2017
16
Promising start for 2017 – transformation projects
start to deliver sales growth

Welcome to Stora Enso CMD
on 8 November 2017 in London
27 April 2017
17

Operational EBIT by segments
EUR million Q117 Q116
Change%
Q117/Q116 Q416
Change%
Q117/Q416
Consumer Board 61 73 -16.4% 38 60.5%
% of sales 10.0% 12.9% 6.6%
Packaging Solutions 24 7 242.9% 19 26.3%
% of sales 8.3% 2.9% 6.7%
Biomaterials 53 84 -36.9% 40 32.5%
% of sales 14.4% 23.9% 11.5%
Wood Products 22 16 37.5% 17 29.4%
% of sales 5.3% 4.2% 4.3%
Paper 42 51 -17.6% 64 -34.4%
% of sales 5.6% 6.0% 8.4%
Other 13 17 -23.5% 13 0.0%
% of sales 2.0% 2.6% 2.0%
27 April 201719

Year-on-year net debt/EBITDA further
strengthened
27 April 2017
20
MEUR

Healthy cash flow generation continues
27 April 2017
21

Cash flow by divisions in Q1
27 April 201722

Capital allocation
Capex on its way to the level of depreciation
23 27 April 2017

Net Financials
24
EUR million
Q1
2017
Q1
2016
Change
MEUR
Q117/
Q116
Q4
2016
Change
MEUR
Q117/
Q416
Net interest expense -38 -31 -7 -40 2
Average interest rate* 4.4% 3.9% 4.3%
Foreign exchange gains and losses 15 2 13 -23 38
Other financial items. of which -6 -10 4 -6 -
Fair valuation of interest rate derivatives** - -3 3 - -
Fair valuation of long-term debt - - - - -
Pension costs (IAS 19R) -1 -2 1 -3 2
Other items -5 -5 - -3 -2
Total net financial items -29 -39 10 -69 40
* Quarterly gross interest expense divided by average gross debt
** Not hedge accounted interest rate derivatives.
27 April 2017

MEUR
Other loans / liabilitiesBonds Commercial papers
Revolving Credit Facility 700 MEUR matures in January 2019 and is fully undrawn
Maturity profile Q1 2017
0
100
200
300
400
500
600
700
800
900
1000
2017 2018 2019 2020 2021 2022 2023 2024-2035 2036
27 April 2017
25

Transaction risk and hedges Q1 2017
27 April 201726
€ million USD SEK GBP
Estimated annual net operating cash flow exposure 1250 -860 310
Transaction hedges -640 420 -160
Hedging percentage for the next 12 months 51% 49% 52%
Operating Profit: Currency effect +/- 10%*
Based on estimated 12 month net
operating cash flow exposure
€ million
USD 125
SEK -86
GBP 31
*Before currency hedges assuming no
other changes other than a single
currency rate movement occurs

Sensitivity analysis
Impact on operational EBIT
10% decrease in Impact*
Energy prices Positive 14 MEUR
Wood Prices Positive 180 MEUR
Chemical and filler prices Positive 35 MEUR
27 April 201727
10% increase in Impact*
Market pulp price, total Positive 120 MEUR
10% strengthening against Euro in the
value of**
Impact*
US dollar Positive 125 MEUR
Swedish krona Negative 86MEUR
British pound Positive 31 MEUR
Brazilian real Negative 15 MEUR
*Impact on operational EBIT for the next twelve months.
** Before FX hedges
An increase of energy, wood or chemical and filler prices or decrease of pulp prices, as well as weakening of
the currencies would have the opposite impact

28
Global bleached chemical market pulp inventories
by grade in tonnes and days of supply
Source: EPIS
27 April 2017

Pulp sensitivity analysis
10% change in prices, impact on operational EBIT
10% increase in Impact*
Hardwood pulp** prices Positive 45 MEUR
Softwood pulp prices Positive 50 MEUR
Fluff pulp prices Positive 15 MEUR
Dissolving pulp prices Positive 10 MEUR
Market pulp price, total Positive 120 MEUR
27 April 201729
* Impact on operational EBIT for the next twelve months. A decrease of pulp prices would have the opposite impact.
** Includes 675 000 tonnes from Montes del Plata

Stora Enso energy balance* Q1 2017
30
Impact on non-hedged
volume on operating profit
from 10% change in:
EUR million p.a.
Electricity market price ~7.2
Fossil fuel price ~8.4
*) Pulp, paper and board mills in Europe and overseas, incl. Beihai
TWh/a
27 April 2017

31
Stora Enso electricity procurement* Q1 2017
*) Pulp, paper and board mills in Europe and overseas, incl. Beihai from year 2017
27 April 2017

Permanent pulp, paper and board capacity
reductions since 2006
32
Mill Date Grade Capacity reduction, t
Corbehem PM 3 and PM 4 Jun 2006 LWC 250 000
Varkaus PM 1 End 2006 WFC 95 000
Berghuizer Mill Oct 2007 WFU 235 000
Reisholz Mill End 2007 SC 215 000
Summa Mill Jan 2008 Newsprint, uncoated mag, book paper 415 000
Anjala Mill PM1 Feb 2008 Coated magazine paper 155 000
Baienfurt Mill End 2008 FBB 190 000
Kabel Mill PM 3 End 2008 Coated magazine 140 000
Kemijärvi Pulp Mill April 2008 Long-fibre (SW) pulp 250 000
Norrsundet Pulp Mill Dec 2008 Long-fibre (SW), pulp 300 000
Varkaus Mill coreboard machine Dec 2008 Coreboard 100 000
Imatra PM 8 Mar 2010 WFU 210 000
Varkaus PM 2 and PM 4 Sep 2010 Newsprint, directory paper 290 000
Maxau PM 7 Nov 2010 Newsprint 195 000
Hylte PM1 Dec 2012 Newsprint 180 000
Ostroleka PM2 Jan 2013 Containerboard 85 000
Hylte PM2 May 2013 Newsprint 205 000
Kvarnsveden PM11 May 2013 Newsprint 270 000
Veitsiluoto PM1 Apr 2014 Coated magazine 190 000
Corbehem Mill July 2014 LWC 330 000
Varkaus Aug 2015 WFU 280 000
Suzhou Jun 2016 WFU 240 000
Total 4 820 000
27 April 2017

Permanent sawn wood capacity reductions
since 2006
Mill Date Capacity reduction, m3
Veitsiluoto Sawmill 2006 100 000
Honkalahti Sawmill 2006 90 000
Sauga Sawmill Jun 2007 130 000
Sollenau Sawmill 2007 110 000
Näpi Sawmill 2007-2008 100 000
Kotka Sawmill 2007-2008 70 000
Paikuse Sawmill End 2008 220 000
Zdirec Sawmill 2008 120 000
Ybbs Sawmill 2008 & Jun 2009 200 000
Kitee Sawmill 2008 & Jun 2009 130 000
Varkaus Sawmill Jun 2009 60 000
Tolkkinen Sawmill End 2009 260 000
Kopparfors Sawmill End 2011 310 000
Sollenau Sawmill Jul 2014 400 000
Total 2 300 000
27 April 2017
33

Kraftliner and testliner prices
27 April 2017
34
Source: FOEX

Pulp price development
27 April 2017
35
Source: FOEX

Pulp wood and saw log prices
Wood prices in Finland
27 April 2017
36
Source: METLA

Paper for recycling prices
27 April 2017
37
German RCP price development. free delivered
Source: Verband Deutscher Papierfabriken/Stora Enso

27 April 2017
38

Financial results for Q1 2017

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