Stora Enso Interim Review January-September 2009 

Early actions pay off - strong cash flow, all Business Areas profitable

STORA ENSO OYJ INTERIM REVIEW 22 October 2009 at 06.00 GMT

• EUR 216 million cash flow after capital expenditure
  • strongest quarter since fourth quarter of 2006
• Improved EUR 132 million operating profit excluding NRI and fair valuations
  • includes EUR -28 million non-cash impact from 2003-2009 wood supply inventory
    error 
• EUR 655 million non-recurring items, including EUR 71 million future cash
  impact, due to earlier announced impairment and restructuring costs
• Market outlook remains weak for fourth quarter of 2009 

Summary of Third Quarter Results 

Fair valuations include synthetic options net of realised and open hedges, CO2
emission rights, and valuations of biological assets mainly related to
associated companies' forest assets.
NRI = Non-recurring items. These are exceptional transactions that are not
related to normal business operations. The most common non-recurring items are
capital gains, additional write-downs, provisions for planned restructuring and
penalties. Non-recurring items are normally specified individually if they
exceed one cent per share.

Message from CEO Jouko Karvinen:
“Our third quarter was further proof of the power of early and proactive actions
in an exceptionally difficult operational environment. The clear improvement in
earnings - with all Business Areas in the black although the profits are still
unsatisfactory — was not achieved through market recovery, or only developments
in external costs, it was significantly due to our own actions.

“We understand that these actions, including the plans announced during the
third quarter, come with a heavy burden for our employees. This is why we
believe it is important for us actively to participate with the Ministry of
Employment and the Economy of Finland in proactively dealing with regional
structural changes and establishing new alternatives for people affected by the
ongoing change in the forest products industry. This applies also to Tolkkinen
in Finland, where we already have clear interest in our property, which is a
good sign of likely re-employment opportunities for our people. The speed and
magnitude of the change in the forest products industry requires co-operation
and looking forward - and that is exactly what we are doing together with local
and national authorities.

“Through dedicated efforts, in the third quarter we have been able to
demonstrate solid cash flow, improved earnings and a strong balance sheet. This
all has a purpose beyond the short term as well. It gives us a platform to build
our future - be it selectively improving our asset base in Europe, or selected
strategic investments in Latin America and China when the opportunity and time
are right.

“Looking forward, the markets remain generally weak and the structural
overcapacity in Europe continues to put pressure on prices in several product
ranges. That, combined with unclear macroeconomic and raw material cost
development trends, makes visibility poor and quarter-by-quarter predictions
difficult. We already know the fourth quarter will be negatively impacted by
seasonally weaker demand than in the third quarter, and by maintenance and
upgrade stoppages in certain segments, but we believe it is still too early, and
it would not be very productive to spend time on 2010 forecasts yet. We rather
continue to spend all of our energy on earnings and pricing quality — and timely
implementation of our cost-reduction and restructuring programmes. We will focus
on what we can do ourselves, we will not await or speculate about market
recovery or other external improvements, but rather build our own good times to
come.”

Near-term Outlook
The demand outlook for the Group's products remains challenging as no immediate
improvement in the market environment is anticipated. Most graphic papers are
under pressure, aggravated by weak advertising markets and structural changes in
paper consumption.

Despite slight seasonal improvement in Europe, demand for publication paper and
fine paper is predicted to be weaker in the fourth quarter than a year earlier,
resulting in oversupply. Demand is forecast to be better than a year earlier for
consumer board and weaker for industrial packaging and wood products.

In Europe prices for publication paper and fine paper are expected to remain
under pressure in the fourth quarter compared with the third quarter as supply
exceeds demand. Prices are forecast to increase for containerboard and to remain
largely unchanged for other industrial packaging grades and consumer board.
Prices for wood products are predicted to rise more slowly than in the last two
quarters as demand for sawnwood in construction markets seasonally slows down.

In China demand for uncoated magazine paper is forecast to be stronger than in
the third quarter but weaker than a year ago, leaving prices unchanged. Flat
demand is anticipated for coated fine paper with prices rising slowly.

In Latin America demand for coated magazine paper is expected to increase
slightly from the previous quarter but remain lower than a year earlier. Prices
are foreseen to remain under pressure.

Stora Enso maintains its earlier year-on-year cost deflation forecast before own
actions of approximately 4% for the full year 2009. The main contributor is
lower fibre costs, which account for half of the total cost deflation.

For further information, please contact:
Jouko Karvinen, CEO, tel. +358 2046 21410
Markus Rauramo, CFO, tel. +358 2046 21121
Lauri Peltola, Head of Group Communications, tel. +358 2046 21380
Ulla Paajanen-Sainio, Head of Investor Relations, tel. +358 2046 21242

Stora Enso’s full year 2009 results will be published on 4 February 2010.

STORA ENSO OYJ

Jari Suvanto Ulla Paajanen-Sainio

Attachments:
Full Stock Exchange Release