Stora Enso Oyj Half-year Report January-June 2021

HELSINKI, July 21, 2021

Strong performance and solid growth continue

Q2/2021 (year-on-year)

• Sales increased by 22.6% to EUR 2 592 (2 114) million, due to higher deliveries and prices.

• Operational EBIT increased to EUR 364 (178) million, due to higher prices and volumes, especially in Biomaterials, Wood Products, and Packaging Materials.

• Operational EBIT margin increased to 14.0% (8.4%).

• Operating profit (IFRS) decreased to EUR 182 (226) million.

• EPS was EUR 0.26 (0.19) and EPS excl. fair valuations (FV) was EUR 0.27 (0.13).

• Strong cash flow from operations amounted to EUR 463 (363) million. Cash flow after investing activities was EUR 339 (239) million.

• The net debt to operational EBITDA ratio was 1.8 (2.5). The target is to keep the ratio below 2.0.

• Operational ROCE excluding the Forest division increased to 18.1% (7.8%), and was clearly above the long-term target of more than 13%.

Q1–Q2/2021 (year-on-year)

• Sales were EUR 4 868 (4 321) million.

• Operational EBIT was EUR 692 (357) million.

Strategy implementation update

• The ramp-up of kraftliner production line at Oulu is proceeding ahead of schedule.

• Stora Enso and Tetra Pak partner to provide circular solutions to the market to significantly improve recycling of beverage cartons in Central and Eastern Europe.

• The feasibility study regarding a possible expansion of the pulp and board production at Skoghall is expected to be finalised by the end of 2021.

• Dispersion barrier coating started at the Forshaga site, and commercial customer qualifications are ongoing.

• The pilot plant for carbon for energy storage at Sunila started up during the quarter as planned, and production of Lignode® by Stora Enso is ramping up.

• The co-determination negotiations concerning closing down the pulp and paper production at the Veitsiluoto and Kvarnsveden sites were completed. The closures will take place during the third quarter of 2021.

• Stora Enso will divest its Sachsen paper mill in Germany to Model Group.

• Restructuring at Hylte was finalised, and production is now based solely on mechanical pulp (TMP).

Outlook

The global economy is recovering strongly from the impacts of the pandemic and demand for Stora Enso's products, except for graphic paper, continues to be very healthy.