Stora Enso Fourth Quarter and Full Year Results 2005

STORA ENSO OYJ Stock Exchange Release 2 February 2006 at 12.00


Stora Enso Fourth Quarter and Full Year Results 2005
Proposed dividend unchanged at EUR 0.45 per share


Fourth Quarter Results

Stora Enso's earnings per share were EUR 0.13 (EUR 0.08) excluding non-
recurring items. Operating profit excluding non-recurring items rose by
13.8% to EUR 120.9 (EUR 106.2) million, which is 3.3% of sales. Profit
before tax amounted to EUR 96.4 (EUR 93.0) million excluding non-recurring 
items. There were several non-recurring items in the fourth quarter related 
to the previously announced Profit 2007 and Asset Performance Review (APR) 
programmes. The non-recurring items totalled EUR -439.4 million, comprising 
EUR -285.8 million of writedowns, EUR -18.7 million of restructuring charges 
with immediate cash impact and EUR -134.9 million of provisions, mainly 
related to redundancies, which will have a cash impact mostly during 2006.

Sales at EUR 3 636.1 million were 13.0% higher than the previous
quarter's EUR 3 219.2 million. Cash flow from operations was EUR 169.7
(EUR 349.9) million and cash flow after investing activities EUR 109.7
(EUR 93.6) million. Cash earnings per share were EUR 0.50 (EUR 0.44)
excluding non-recurring items.


EUR million          2004      2005    Q4/04    Q1/05    Q2/05    Q3/05    Q4/05
Sales            12 395.8  13 187.5  3 241.9  3 144.9  3 187.3  3 219.2  3 636.1

EBITDA 1)2)       1 508.4   1 487.4    332.7    388.8    298.4    388.6    411.6
Operating
 profit 2)4)        426.7     357.5     66.9    112.7     17.7    106.2    120.9
Non-recurring
 items              369.7    -451.4    179.9        -    -12.0        -   -439.4
Operating
 margin 2)4), %       3.4       2.7      2.1      3.6      0.6      3.3      3.3
Operating
 profit4)           796.4     -93.9    246.8    112.7      5.7    106.2   -318.5
Profit before
 tax and minority
 interests 2)4)     359.6     273.1     48.7     83.6      0.1     93.0     96.4
Profit before
 tax and minority
 interests 4)       729.3    -178.3    228.6     83.6    -11.9     93.0   -343.0
Net profit for
 the period 4)      838.1    -126.3    174.4     60.0     -8.6     66.5   -244.2
   
EPS 2), Basic,EUR    0.25      0.28     0.03     0.07     0.00     0.08     0.13
EPS, Basic, EUR      0.89     -0.16     0.18     0.07    -0.01     0.08    -0.31
CEPS 2)3), EUR       1.67      1.70     0.38     0.41     0.35     0.44     0.50
ROCE 2), %            3.0       3.1      1.6      4.1      0.6      3.7      4.1

1) EBITDA = Earnings before Interest, Taxes, Depreciation and Amortisation
2) Excluding net non-recurring items. Exceptional transactions that
are not related to normal business operations are accounted for as non-
recurring items. The most common non-recurring items are capital gains,
additional write-downs, restructuring provisions and penalties. Non-
recurring items are normally specified individually if they exceed one
cent per share.
3) CEPS = (Net profit for the period + depreciation and
amortisation)/average number of shares
4) The comparative figures exclude goodwill amortisation of EUR 90.3
million for 2004 and EUR 24 million for Q4/2004


Full year results

Full year sales increased by EUR 791.7 million to EUR 13 187.5
million, an increase of 6.4%. Operating profit, excluding nonrecurring
items, decreased by EUR 69.2 million to EUR 357.5 million. Earnings per
share excluding non-recurring items increased by EUR 0.03 to EUR 0.28.
Cash earnings per share were EUR 1.70 (EUR 1.67) excluding non-recurring
items.

Cash flow from operations was EUR 1 057.0 (EUR 1 200.1) million and cash
flow after investing activities EUR -88.3 (EUR 220.5) million.


Short-term Outlook

Commenting on the outlook, Stora Enso's CEO Jukka Härmälä said, "In
Europe a slight pick-up in advertising and direct marketing is expected
to stimulate demand for advertising-driven papers. Demand for newsprint
and magazine paper is good and forecast to grow moderately in 2006, with
demand for SC paper in particular recovering following a weak 2005.
Prices are expected to rise as a result of the year-end contract negotiations.
The fine paper market is heading into a seasonally good first quarter and
the demand outlook is favourable, which should support some price increases.
In packaging board order books are good in most grades and demand is expected 
to remain firm with some price improvements. Demand for wood products is 
steady, but continuing oversupply in Europe is keeping the market challenging."

In North America print advertising is forecast to remain healthy.
However, increases in postal rates may have some negative impact on the
growth in magazine and catalogue markets, and only modest demand growth
is anticipated in magazine and coated fine paper. A further decline in
newsprint demand is predicted. Prices are expected to remain firm in
magazine and coated fine paper, and to improve in newsprint.

In Asia demand for coated fine paper is slowing following the normal
seasonal pattern.

At Port Hawkesbury Mill in Canada labour negotiations have been ongoing
for over 20 months. The machines have been at a standstill since 24
December 2005.As the negotiating parties could not reach an agreement, 
a lockout was declared on 26 January 2006.


For further information, please contact:

Jukka Härmälä, Chief Executive Officer, tel. +358 2046 21404
Hannu Ryöppönen, CFO, tel. +44 20 7016 3114
Kari Vainio, EVP, Corporate Communications, tel. +44 7799 348 197 
Keith B Russell, SVP, Investor Relations, tel. +44 7775 788 659



Stora Enso Fourth Quarter and Full Year Results 2005


Summary of Fourth Quarter Results (compared with previous quarter)
* Sales were EUR 3 636.1 (EUR 3 219.2) million.
* Operating profit was EUR 120.9 (EUR 106.2) million excluding non-
recurring items.
* Profit before tax was EUR 96.4 (EUR 93.0) million excluding non-
recurring items.
* Earnings per share were EUR 0.13 (EUR 0.08) excluding non-
recurring items.
* Cash earnings per share were EUR 0.50 (EUR 0.44) excluding non-
recurring items.
* Non-recurring items totalled EUR -439.4 million.

In the fourth quarter market demand for publication paper in Europe
was stronger than in the previous quarter. Prices were generally
stable during the quarter. Producer inventories increased moderately.
Fine paper demand was stronger than in the previous quarter and prices
were stable. Demand for packaging boards remained good and some price
increases were implemented. Markets for wood products were relatively
stable and prices remained largely unchanged.

In North America demand was stronger than in the previous quarter in
publication paper but weaker in coated fine paper. However, some of the
previously announced price increases were implemented in the beginning of
the fourth quarter and then maintained.

Paper and board deliveries totalled 3 752 000 tonnes, which is 317 000
tonnes more than the previous quarter's 3 435 000 tonnes. Production
increased by 54 000 tonnes from the previous quarter's 3 772 000 tonnes
to 3 826 000 tonnes. Deliveries of wood products totalled
1 706 000 cubic metres, which was 67 000 cubic metres more than the
previous quarter's 1 639 000 cubic metres.

EUR million          2004      2005    Q4/04    Q1/05    Q2/05    Q3/05    Q4/05
Sales            12 395.8  13 187.5  3 241.9  3 144.9  3 187.3  3 219.2  3 636.1

EBITDA 1)2)       1 508.4   1 487.4    332.7    388.8    298.4    388.6    411.6
Operating
 profit 2)4)        426.7     357.5     66.9    112.7     17.7    106.2    120.9
Non-recurring
 items              369.7    -451.4    179.9        -    -12.0        -   -439.4
Operating
 margin 2)4), %       3.4       2.7      2.1      3.6      0.6      3.3      3.3
Operating
 profit 4)          796.4     -93.9    246.8    112.7      5.7    106.2   -318.5
Profit before
 tax and minority
 interests 2)4)     359.6     273.1     48.7     83.6      0.1     93.0     96.4
Profit before
 tax and minority
 interests 4)       729.3    -178.3    228.6     83.6    -11.9     93.0   -343.0
Net profit for
 the period 4)      838.1    -126.3    174.4     60.0     -8.6     66.5   -244.2
   
EPS 2), Basic,EUR    0.25      0.28     0.03     0.07     0.00     0.08     0.13
EPS, Basic, EUR      0.89     -0.16     0.18     0.07    -0.01     0.08    -0.31
CEPS 2)3), EUR       1.67      1.70     0.38     0.41     0.35     0.44     0.50
ROCE 2), %            3.0       3.1      1.6      4.1      0.6      3.7      4.1

1) EBITDA = Earnings before Interest, Taxes, Depreciation and Amortisation
2) Excluding net non-recurring items. Exceptional transactions that
are not related to normal business operations are accounted for as non-
recurring items. The most common non-recurring items are capital gains,
additional write-downs, restructuring provisions and penalties. Non-
recurring items are normally specified individually if they exceed one
cent per share.
3) CEPS = (Net profit for the period + depreciation and
amortisation)/average number of shares
4) The comparative figures exclude goodwill amortisation of EUR 90.3
million for 2004 and EUR 24 million for Q4/2004


Fourth Quarter Results (compared with previous quarter)

Sales at EUR 3 636.1 million were 13.0% higher than the previous
quarter's EUR 3 219.2 million. Higher volumes in all paper and board
segments accounted for about 5 percentage points of the increase and
consolidation of the German paper merchant Schneidersöhne Group for
the whole quarter for about 8 percentage points.

Operating profit excluding non-recurring items rose by 13.8% to EUR 120.9
(EUR 106.2) million, which is 3.3% of sales. The main reason for the
increase in profitability was higher sales volume partly offset by higher
transportation, energy and maintenance-related costs. Operating profit
increased in Publication Paper and Fine Paper, but decreased in all other
segments. Operating profit includes a negative non-cash effect of EUR 2.0
million due to valuation of share-based compensation. The thirteen-day
strike at Langerbrugge Mill, Belgium in November had a EUR 4.6 million
negative impact on the fourth quarter results. The fair valuation of net
assets related to the acquisition of Schneidersöhne Group led to a EUR
4.5 million lower contribution from fair valued inventory.

There were several non-recurring items in the fourth quarter related to
the previously announced Profit 2007 and Asset Performance Review (APR)
programmes. The non-recurring items totalled EUR -439.4 million,
comprising EUR -285.8 million of write-downs, EUR -18.7 million of
restructuring charges with immediate cash impact and EUR -134.9 million
of provisions, mainly related to redundancies, which will have a cash
impact mostly during 2006.

The share of associated company results amounted to EUR 24.4 (EUR 11.8)
million, due primarily to income from forest-holding associates in
Finland and Sweden.

Net financial items were EUR -48.9 (EUR -25.0) million. Net interest rose
to EUR -53.4 (EUR -43.8) million, mainly due to an increase in average
net debt and no longer capitalising the interest cost of the Kvarnsveden
Mill investment.. Net foreign exchange gains were EUR 1.2 (losses EUR
3.7) million. Other financial items totalled EUR 3.3 (EUR 22.5) million,
mainly related to unrealised changes in fair values of financial
instruments, including the option programmes.

Profit before tax amounted to EUR 96.4 (EUR 93.0) million excluding non-
recurring items.

Net taxes totalled a positive EUR 98.8 (EUR -26.5) million, leaving a net
loss for the quarter of EUR 244.2 million (EUR 66.5 million profit). The
tax impact of the non-recurring items was a positive EUR 94.8 million.
The profit attributable to minority shareholders was EUR 0.6 (EUR 0.1)
million, leaving a loss of EUR 244.9 million attributable to Company
shareholders.

Earnings per share were EUR 0.13 (EUR 0.08) excluding non-recurring
items. Earnings per share including non-recurring items were EUR -0.31
(EUR 0.08).

The return on capital employed was 4.1% (3.7%) excluding non-recurring
items. Capital employed was EUR 12 103.0 million on 31 December 2005, a
net increase of EUR 363.2 million.

Capital Structure
EUR million                            31 Dec 2004    30 Sep 2005    31 Dec 2005

 Fixed assets                             10 848.2       11 621.1       11 616.8
 Working capital                           1 301.3        1 635.2        1 761.1
Operating Capital                         12 149.5       13 256.3       13 377.9
 Net tax liabilities                      -1 493.8       -1 516.5       -1 274.9
Capital Employed                          10 655.7       11 739.8       12 103.0
 Associated companies                        568.1          687.9          719.9
Total                                     11 223.8       12 427.7       12 822.9
   
 Shareholders’ equity                      8 036.3        7 631.3        7 645.3
 Minority interests                          136.1           97.6           93.6
 Interest-bearing net liabilities          3 051.4        4 698.8        5 084.0
Financing Total                           11 223.8       12 427.7       12 822.9


Financing

Cash flow from operations was EUR 169.7 (EUR 349.9) million and cash flow
after investing activities EUR -109.7 (EUR 93.6) million. Cash earnings 
per share were EUR 0.50 (EUR 0.44) excluding non-recurring items.

At the end of the period, interest-bearing net liabilities were EUR 5084.0 
million, an increase of EUR 385.2 million. Unutilised credit facilities and 
cash and cash-equivalent reserves totalled EUR 2.1 billion.

Shareholders' equity amounted to EUR 7.6 billion or EUR 9.70 (EUR 9.67)
per share, compared with the market capitalisation on the Helsinki Stock
Exchange on 31 December 2005 of EUR 9.3 billion.

The debt/equity ratio at 31 December 2005 was 0.66 (0.62). The currency
effect on equity was EUR -14.6 million net of the hedging of equity
translation risks.


Cash Flow
EUR million                                    2004   Q3/05    Q4/05        2005

 Operating profit                             706.1   106.2   -318.5       -93.9
 Adjustments                                1 039.1   299.1    567.8     1 439.4
 Change in working capital                   -545.1   -55.4    -79.6      -288.5
Cash Flow from Operations                   1 200.1   349.9    169.7     1 057.0
 Capital Expenditure                         -979.6  -256.3   -279.4    -1 145.3
Cash Flow After Investing Activities          220.5    93.6   -109.7       -88.3


Capital Expenditure for the Fourth Quarter and Full Year 2005

Capital expenditure for the fourth quarter totalled EUR 279.4 million,
giving a total for the whole year of EUR 1 145.3 million, which was in
line with depreciation for the year.

The main ongoing projects during the year were the new paper machine 12
at Kvarnsveden Mill (EUR 351.3 million), the Skoghall Energy 2005 project
(EUR 88.1 million) and rebuilding paper machine 5 at Corbehem Mill (EUR
38.7 million).

During the quarter, Stora Enso signed an agreement with Gaofeng Forest -
Pulp & Paper Company to purchase 34 000 ha of timber and land use rights
in Guangxi, China. The Group also bought 37 000 ha of land for plantations 
in Southern Brazil and 20 000 ha in Uruguay during the year. A total of 
EUR 57.7 million was invested in purchasing land use rights and land during 
the year.


Fourth Quarter Events

In December it was decided to upgrade and modernise board machine 2 (BM2)
at Fors Mill in Sweden to improve product quality and cost efficiency,
and increase production flexibility. Capital expenditure on the project,
which is scheduled to start in 2006 and be completed in 2007, will amount
to EUR 35 million.



Stora Enso Full Year Results 2005


Financial Results 2005 (compared with previous year)

Sales increased by EUR 791.7 million to EUR 13 187.5 million, an increase
of 6.4%. Acquisition of the German paper merchant Schneidersöhne Group
accounted for EUR 354.6 million of the increase; the remainder was due
mainly to increased prices, partially offset by lower deliveries.

Operating profit, excluding non-recurring items, decreased by EUR 69.2
million to EUR 357.5 million. Operating profit was lower in all segments
except Publication Paper and Fine Paper. The main reasons for the
decrease in profits were lower sales volumes and higher variable costs,
especially for transportation, wood and energy. However, higher product
prices and decreased fixed costs had positive impacts on operating
profit. The fair valuation of net assets related to the acquisition of
Schneidersöhne Group led to a EUR 7.2 million lower contribution from
fair valued inventory. The strengthening of the US dollar increased
operating profit by EUR 33.6 million.

During the second and third quarters of 2005 there was a labour dispute
in Finland. The labour dispute reduced operating profit by approximately
EUR 150 million in the second quarter and by approximately EUR 40 million
in the third quarter compared with full production. Two important
achievements resulted from the dispute: the ability to continue
production uninterrupted over Christmas and Midsummer, and new rules on
outsourcing. The full benefits of these new opportunities will
materialise over time.

In North America the Profit Enhancement Programme launched in 2002 was
largely concluded. The targeted EBITDA improvement of USD 145 million was
achieved. EBITDA for the full year 2005 for the North American operations
was USD 275.8 million or EUR 221.6 million (USD 136.2 million or EUR
109.5 million in 2004). Operating profit in the second half offset the
loss in the first half of the year. Cash flow after investing activities
was USD 192.9 million or EUR 155.0 million (USD 69.4 million or EUR -55.8
million in 2004). Stora Enso merged its North American division into its
global product divisions on 1 September 2005.

The Company launched a profitability improvement programme, Profit 2007,
and an Asset Performance Review (APR) during 2005 to improve the
competitiveness of its European production base. Profit 2007 has targeted
an improvement in annual pre-tax profit of EUR 300 million from mid 2007
onwards. There were several non-recurring items in 2005 related to these
two programmes. The non-recurring items totalled EUR -451.4 million,
comprising EUR -297.8 million of write-downs, EUR 18.7 million of
restructuring charges with immediate cash impact and EUR -134.9 million
of provisions, mainly related to redundancies, which will have a cash
impact mostly during 2006.

The share of results in associated companies amounted to EUR 67.2 (EUR
38.9) million, including EUR 56.5 million from Bergvik Skog and EUR 21.4
million from Tornator.

The direct contribution from the Veracel Pulp Mill joint venture is
reflected in two places in Stora Enso's Income Statement, divided between
Fine Paper segment operating profit and share of result in associated
companies.

Net financial items were EUR -151.6 (EUR -106.0) million. Net interest
costs for the year totalled EUR -165.0 million, which is 3.7% of interest-
bearing net liabilities and EUR 23.7 million more than for the previous
year, mainly due to increased average indebtedness. Foreign exchange
gains in financial items were EUR 14.4(EUR -1.1) million. Other financial 
items totalled EUR -1.0 (EUR 36.4) million, mostly due to unrealised 
changes in fair values of financial instruments.

Profit before taxes and minority interests, excluding non-recurring
items, amounted to EUR 273.1 (EUR 359.6) million.

Net taxes totalled a positive EUR 52.0 (EUR 108.8) million and the
average tax rate was 29.1% (28.9%). The net loss for the year amounted to
EUR 126.3 million (profit of EUR 747.8 million) and the profit
attributable to minority shareholders was EUR 3.7 (EUR 8.1) million,
leaving a loss of EUR 130.0 (profit of EUR 739.7) million attributable to
Company shareholders.

Earnings per share excluding non-recurring items increased by EUR 0.03 to
EUR 0.28. Earnings per share including non-recurring items were EUR -0.16
(EUR 0.89).

The return on capital employed was 3.1% (3.0%) before non-recurring
items. Capital employed was EUR 12 103.0 million at the end of the
period, a net increase of EUR 1 447.3 million partly due to the
acquisition of Schneidersöhne Group and increased inventories. The
currency effect increased the capital employed by EUR 386.4 million.


Financing

Cash flow from operations was EUR 1 057.0 (EUR 1 200.1) million and cash
flow after investing activities EUR -88.3 (EUR 220.5) million. Cash earnings 
per share were EUR 1.70 (EUR 1.67) excluding non-recurring items.

At the end of the year, interest-bearing net liabilities were EUR
5 084.0 million, up EUR 2 032.6 million mainly due to weak cash flow,
acquisitions and share buy-backs. The currency effect increased the
interest-bearing net liabilities by EUR 353.2 million.

The debt/equity ratio at 31 December 2005 was 0.66 (0.38). The currency
effect on equity was EUR 91.6 million net of the hedging of equity
translation risks. Share buy-backs decreased equity by EUR 344.7 (EUR
198.6) million during the year.


Inspections by Competition Authorities

There have been no new material developments concerning the inspections.
In May 2004 Stora Enso was the subject of inspections carried out by the
European Commission and the Finnish Competition Authority at locations in
Europe and received subpoenas issued by the US Department of Justice as
part of preliminary anti-trust investigations into the paper industry in
Europe and the USA. The investigations by the authorities in both Europe
and the USA are at a fact-finding stage only and no formal allegations
have been made against the Group or any of its employees. Coincident with
these investigations, Stora Enso has been named in a number of class
action lawsuits filed in the USA. No provision has been made.


Changes in Group Composition

In March Stora Enso Timber acquired the remaining 34% shareholding in the
Estonian Stora Enso Timber AS, formerly AS Sylvester, and thus gained
100% ownership of the company. The debt-free purchase price was EUR 42
million.

Also in March Stora Enso acquired UPM's 29% minority shareholding in
Corenso United Oy Ltd and thus gained 100% ownership of the company.

In April the previously announced acquisition of the French paper
merchant Papeteries de France ("PdF") was closed. The debt-free purchase
rice was EUR 17 million.

In September Stora Enso finalised its previously announced acquisition of
the German paper merchant Schneidersöhne Group. The debt-free purchase
price was EUR 442 million.


Changes in Organisational Structure

In March Stora Enso announced a change to its organisational structure.
The new organisation focuses on broadening the experience of a number of
key managers, reducing the number of management levels within Stora Enso,
expanding in emerging markets and developing global product divisions.
The new organisation structure took effect from 1 May 2005.

Stora Enso merged its North American division into its global product
divisions in order to streamline its organisational structure with effect
from 1 September 2005.


Changes in Executive Management Group (EMG)

Björn Hägglund, Deputy CEO, retired on 1 June 2005.

Stora Enso modified its Corporate Governance on 1 June 2005. The specific
role of Deputy CEO was discontinued; the Chief Financial Officer (CFO)
acts as deputy to the CEO.

Hannu Ryöppönen was appointed CFO and Senior Executive Vice President,
Finance, Accounting, Legal Affairs and Investor Relations and member of
the EMG as of 1 September 2005. He succeeded Esko Mäkeläinen, who retired
at the end of the year.

Kai Korhonen, previously head of the Paper product area, was appointed
Senior Executive Vice President, Stora Enso Packaging Boards as of 1 May
2005. He continued to be a member of the EMG.

Pekka Laaksonen, previously head of the Packaging Boards product area,
was appointed Senior Executive Vice President, Stora Enso Fine Paper as
of 1 May 2005. He continued to be a member of the EMG.

Arno Pelkonen, previously head of Forest Products, was appointed Senior
Executive Vice President, Strategy and Emerging Markets as of 1 May 2005.
He continued to be a member of the EMG until he announced his resignation
from Stora Enso on 12 January 2006.

Jussi Huttunen, previously head of Fine Paper, was appointed Senior
Executive Vice President, Market Services as of 1 May 2005. He continued
to be a member of the EMG.

Elisabet Salander Björklund, previously head of Wood Supply, was
appointed Senior Executive Vice President, Stora Enso Forest Products and
member of the EMG as of 1 May 2005.

Christer Ågren, previously head of Corporate Human Resources and TQM, was
appointed Senior Executive Vice President, IT, HR and Business Excellence
and member of the EMG as of 1 May 2005.

Lars Bengtsson, Senior Executive Vice President of Stora Enso's North
American operations and member of the Stora Enso Executive Management
Group, retired on 31 December 2005.


Personnel

The average number of employees increased by 2 387 persons during the
year to 46 166. The largest decrease was in Finland and the largest
increase in Germany due to the acquisition of Schneidersöhne Group. On 31
December 2005 there were 46 664 employees, 1 357 more than at the end of
2004.


Share Capital

During the year 2005 a total of 42 600 A shares and 31 857 600 R shares, 
with a combined nominal value of EUR 54.2 million, were repurchased by the 
Company, representing 3.9% of the shares and 1.3% of the voting rights. The 
average price paid for A shares was EUR 10.83 and for R shares EUR 10.82.

The Annual General Meeting (AGM) of Stora Enso Oyj on 22 March 2005
decided to lower the Company's share capital by EUR 41.3 million through
the cancellation of 16 300 A shares and 24 250 000 R shares. These shares
had been repurchased at a cost of EUR 265.7 million, under the
authorisation of the 2004 AGM, and the reduction in share capital was
registered in the Finnish Trade Register on 31 March 2005.

The 2005 AGM also authorised the Board to repurchase and dispose of not
more than 17 900 000 A shares and 62 150 000 R shares in the Company. The
repurchases started on 30 March 2005 and by 31 December 2005 the Company
had repurchased a total of 38 600 A shares at an average price of EUR
10.74 and 23 164 400 R shares at an average price of EUR 10.59 under the
new authorisation.

By 31 December 2005 the Company had allocated 29 079 of the repurchased R
shares under the terms of the Stora Enso North America Option Plan.

During the year a total of 872 445 A shares were converted into R shares.
The latest conversion was recorded in the Finnish Trade Register on 15
December 2005.

At the year end Stora Enso had 178 159 778 A shares and 634 817 321 R
shares in issue, of which the Company held 38 600 A shares and
24 373 452 R shares with a nominal value of EUR 41.5 million. The holding
represents 3.0% of the Company's share capital and 1.0% of the voting
rights.


Events after the Period

On 5 January Stora Enso announced that after the detailed due diligence
process it had decided to withdraw from the project in consumer board
production in China announced in August 2005.


Short-term Outlook

In Europe a slight pick-up in advertising and direct marketing is
expected to stimulate demand for advertising-driven papers. Demand for
newsprint and magazine paper is good and forecast to grow moderately in
2006, with demand for SC paper in particular recovering following a weak
2005. Prices are expected to rise as a result of the year-end contract
negotiations. The fine paper market is heading into a seasonally good
first quarter and the demand outlook is favourable, which should support
some price increases. In packaging board order books are good in most
grades and demand is expected to remain firm with some price
improvements. Demand for wood products is steady, but continuing
oversupply in Europe is keeping the market challenging.

In North America print advertising is forecast to remain healthy.
However, increases in postal rates may have some negative impact on the
growth in magazine and catalogue markets, and only modest demand growth
is anticipated in magazine and coated fine paper. A further decline in
newsprint demand is predicted. Prices are expected to remain firm in
magazine and coated fine paper, and to improve in newsprint.

In Asia demand for coated fine paper is slowing following the normal
seasonal pattern.

At Port Hawkesbury Mill in Canada labour negotiations have been ongoing
for over 20 months. The machines have been at a standstill since 24
December 2005.As the negotiating parties could not reach an agreement, 
a lockout was declared on 26 January 2006.


Annual General Meeting

The Annual General Meeting will be held at 16.00 (Finnish time) on
Tuesday 21 March 2006 at the Marina Congress Center, Katajanokanlaituri
6, Helsinki, Finland.


Proposals to the Annual General Meeting

Authorisation to repurchase shares

The Board of Directors will propose to the Annual General Meeting
cancellation of the shares held by the Company and seek a new
authorisation to repurchase shares.


Auditor

Shareholders representing more than 50% of the votes in the Stora Enso
Oyj have confirmed that they will propose to the AGM that Authorised
Public Accountants PricewaterhouseCoopers Oy be elected to act as auditor
of the Company until the end of the following AGM.


Distribution of Dividend

The Board of Directors will propose to the Annual General Meeting that a
dividend of EUR 0.45 per share be paid for the financial year ending 31
December 2005. If the proposal is approved, the dividend payment will be
issued on 5 April 2006 to shareholders entered on the dividend record
date of 24 March 2006 in the register of shareholders maintained by the
Finnish Central Securities Depository, Swedish VPC and Deutsche Bank
Trust Company Americas.


New Board Member

The Nomination Committee will propose to the Annual General Meeting that
Ms Dominique Hériard Dubreuil be elected as a new member of the Board of
Directors. Mr Harald Einsmann is not seeking re-election.


This report is unaudited.


Helsinki, 2 February 2006
Stora Enso Oyj
Board of Directors




Segments (compared with the previous quarter)

Publication Paper
                                                                         Change%
EUR million           2004     2005    Q1/05    Q2/05    Q3/05    Q4/05    Q4/Q3

Sales              4 621.4   4675.9  1 104.4  1 125.3  1 166.0  1 280.2      9.8
Operating profit*    104.6    193.3     21.6     31.5     67.9     72.3      6.5
% of sales             2.3      4.1      2.0      2.8      5.8      5.6
ROOC, %**              2.4      4.4      2.0      2.8      5.9      6.4
Deliveries, 1000 t   7 315    7 008    1 685    1 708    1 734    1 881      8.5
Production, 1000 t   7 317    7 087    1 759    1 587    1 849    1 892      2.3

* Excluding non-recurring items and goodwill amortisation 
** ROOC = 100% x Operating profit/Operating capital


Publication paper sales were EUR 1 280.2 million, 10% up on the previous
quarter due to the traditional year-end seasonal peak in sales and the
further strengthening of the US dollar. Operating profit was EUR 72.3
million, slightly up on the previous quarter, as the positive effect of
substantially higher deliveries was almost offset by higher variable
costs resulting from energy price increases.

In Europe demand for newsprint and coated magazine paper in the fourth
quarter was higher than in the previous quarter but slightly lower than
in the fourth quarter of 2004, whereas demand for uncoated magazine paper
was higher than in both these quarters. Shipments to overseas are
recovering and capacity utilisation has improved. Producer inventories
were low. Prices remained stable.

In North America demand for uncoated and coated magazine paper remained
healthy but started levelling off towards the end of the quarter following 
the normal seasonal pattern. Demand for newsprint was stronger than in 
the previous quarter but clearly weaker than in the fourth quarter of 2004. 
Coated magazine paper inventories were high. Newsprint and uncoated magazine 
paper prices rose.

In Europe industry order books are modest in coated magazine paper but
strong in all other publication paper grades according to industry
statistics. The predicted healthy growth in the global economy in 2006
should stimulate demand for advertising-driven paper grades and support
the price rises underway.

In North America the market for magazine paper is expected to remain firm
at unchanged prices. A newsprint price increase in February has been
announced.


Fine Paper
                                                                         Change%
EUR million           2004     2005    Q1/05    Q2/05    Q3/05    Q4/05    Q4/Q3
Sales              2 668.8  2 690.3    708.7    618.3    625.4    737.9     18.0
Operating profit*     54.5     62.2     48.1    -13.6     -1.2     28.9      N/A
% of sales             2.0      2.3      6.8     -2.2     -0.2      3.9
ROOC, %**              1.9      2.2      6.8     -1.9     -0.2      4.2
Deliveries, 1000 t   3 596    3 521      960      808      811      942     16.2
Production, 1000 t   3 727    3 554      943      715      914      982      7.4

* Excluding non-recurring items and goodwill amortisation 
** ROOC = 100% x Operating profit/Operating capital


Fine paper sales were EUR 737.9 million, up 18% on the previous quarter
due to higher volume as the previous quarter was still impacted by the
labour dispute. Operating profit was EUR 28.9 million, up EUR 30.1
million on the previous quarter due to increased sales.

In Europe demand for fine paper strengthened in the fourth quarter and
during the year, with total demand in 2005 higher than in 2004. Prices
were stable. Supply chain inventories were normal at the end of the year.

In North America demand for coated fine paper was slightly weaker than in
the previous quarter and a year ago, and total demand in 2005 was less
than in 2004. Deliveries by local producers increased as imports from
overseas decreased. Inventories were normal. Coated fine paper prices
rose slightly during the quarter, ending higher than a year ago.

In Asia coated fine paper demand and prices were stable during the
quarter.

Economic growth should stimulate demand for fine paper in North America
and Europe in the first quarter.


Merchants

Merchant sales were EUR 478.5 million, up 62% on the previous quarter due
to the acquisition of Schneidersöhne. Operating loss was EUR 1.9 million,
a deterioration of EUR 2.8 million on the previous quarter due to the
lower contribution of fair valued inventory related to the acquisition of
Schneidersöhne amounted to EUR 4.5 million. Extensive integration of the
recent acquisitions is in progress.


Packaging Boards
                                                                         Change%
EUR million           2004     2005    Q1/05    Q2/05    Q3/05    Q4/05    Q4/Q3
Sales              3 053.4  3 190.2    794.5    768.2    788.7    838.8      6.4
Operating profit*    271.3    220.0     72.0     11.9     73.5     62.6    -14.8
% of sales             8.9      6.9      9.1      1.5      9.3      7.5
ROOC, %**              9.0      7.3      9.3      1.5      9.6      8.3
Deliveries, 1000 t   3 499    3 621      929      873      890      929      4.4
Production, 1000 t   3 475    3 678    1 002      715    1 009      952     -5.6

* Excluding non-recurring items and goodwill amortisation 
**ROOC = 100% x Operating profit/Operating capital


Packaging board sales were EUR 838.8 million, up 6% on the previous
quarter as sales volumes rose. Operating profit was EUR 62.6 million,
down 15% on the previous quarter because production volumes were lower
and costs higher due to scheduled maintenance.

Demand has generally been good with some price increases.

Demand is forecast to remain firm for most products .The order book is
good in most grades.


Wood Products
                                                                         Change%
EUR million           2004     2005    Q1/05    Q2/05    Q3/05    Q4/05    Q4/Q3
Sales              1 566.8  1 588.3    366.9    433.7    398.0    389.7     -2.1
Operating profit*     34.7     -3.1     -4.0      9.9     -1.8     -7.2      N/M
% of sales             2.2     -0.2     -1.1      2.3     -0.5     -1.8
ROOC, %**              5.2     -0.5     -2.3      5.5     -1.0     -4.2
Deliveries, 1000 m3  6 664    6 741    1 541    1 855    1 639    1 706      4.1

* Excluding non-recurring items and goodwill amortisation 
**ROOC = 100% x Operating profit/Operating capital


Wood product sales were EUR 389.7 million, down 2% on the previous
quarter following seasonal trends in product mix and invoicing via
distribution companies. Operating loss was EUR 7.2 million, a
deterioration of EUR 5.4 million on the previous quarter due to generally
poor operating conditions, particularly high raw material costs and
seasonal maintenance stoppages in Central Europe. Several restructuring
initiatives to improve efficiency are ongoing.

Demand is expected to remain steady in Japan and most of Europe. In the
USA the outlook is good in the short term, but may weaken as the housing
market cools. Suppliers' margins will remain under pressure due to rising
wood raw material, energy and ocean freight costs, and continuing
oversupply in Europe.


Wood Supply

Deliveries to the Group's mills in Finland, Sweden, the Baltic States,
Russia and Continental Europe totalled 10.4 million cubic metres, up 7%
on the previous quarter mainly due to more stable production in Finnish
pulp and paper mills. Operating loss excluding non-recurring items was
EUR 3.7 million (EUR 0.3 million).

Stocks of short-fibre pulpwood declined to more normal levels, but the
oversupply of coniferous pulpwood persisted. The supply of sawlogs was
tight in some mills in Continental Europe, and stocks in the Baltic
States decreased from high levels.


Financials
Key Ratios   Q1/04  Q2/04  Q3/04  Q4/04   2004  Q1/05  Q2/05  Q3/05  Q4/05   2005

Earnings per share
 (basic), EUR 0.49   0.06   0.16   0.18   0.89   0.07  -0.01   0.08  -0.31   -0.16

Earnings  per share excl. 
 non-recurring items,
 EUR          0.06   0.06   0.10   0.03   0.25   0.07   0.00   0.08   0.13    0.28

Cash earnings per share 
(CEPS),EUR    0.55   0.43   0.51   0.54   2.02   0.41   0.35   0.44   0.42    1.62

CEPS excl. non-recurring 
 items,EUR    0.41   0.43   0.45   0.38   1.67   0.41   0.35   0.44   0.50    1.70

Return on capital employed
(ROCE),%       7.9    2.2    7.6    8.3    6.3    4.1    0.2    3.7  -10.7    -0.8

ROCE excl.non-recurring 
 items, %      3.7    2.2    4.9    1.6    3.0    4.1    0.6    3.7    4.1     3.1

Return on equity
 (ROE), %     20.6    2.7    6.6    7.4    9.2    3.0   -0.4    3.5  -12.6    -1.6

Debt/equity
 ratio        0.39   0.42   0.42   0.38   0.38   0.51   0.58   0.62   0.66    0.66

Equity per share,
 EUR          9.46   9.54   9.70   9.80   9.80   9.46   9.46   9.67   9.70    9.70

Equity ratio,
 %            47.7   48.2   48.5   49.8   49.8   45.8   45.0   43.2   42.8    42.8

Operatin g profit,
 % of sales    7.3    1.9    6.8    6.9    5.7    3.6    0.2    3.3   -8.8    -0.7
 
Operating profit  excl. non-recurring items,
 % of sales    3.4    1.9    4.3    1.3    2.7    3.6    0.6    3.3    3.3     2.7

Capital expenditure, EUR
million      216.1  281.1  268.1  214.3  979.6  356.6  253.0  256.3  279.4  1145.3

Capital expenditure,
 % of sales    7.2    9.1    8.8    6.6    7.9   11.3    7.9    8.0    7.7     8.7

Capital employed, EUR
 million     10564  10816  10830  10656  10656  11119  11273  11740  12103   12103

Interest-bearing net liabilities, EUR
 million      3105   3356   3343   3052   3052   3928   4340   4699   5084    5084

Average number of
 employees   42446  43795  44045  43779  43779  44870  45670  46418  46166   46166

Average number of shares (million)
 periodic    835.3  831.8  826.3  822.0  828.8  816.3  800.0  790.5  788.6   798.7
 cumulative  835.3  833.6  831.1  828.8  828.8  816.3  808.1  802.1  798.7   798.7
 cumulative,
  diluted    836.0  834.4  831.9  829.4  829.4  816.9  808.7  802.6  799.2   799.2


Key Exchange Rates for the Euro 
One Euro is         Closing Rate                         Average Rate
            31 Dec 2004      31 Dec 2005       31 Dec 2004        31 Dec 2005
SEK           9.0206           9.3885            9.1253              9.2824
USD           1.3621           1.1797            1.2440              1.2446
GBP           0.7051           0.6853            0.6786              0.6839
CAD           1.6416           1.3725            1.6166              1.5087


Condensed Consolidated Income Statement
EUR million                                              2004               2005

Sales                                                12 395.8           13 187.5
 Other operating income                                 180.7               87.1
 Materials and services                              -6 561.5           -7 239.3
 Freight and sales commissions                       -1 367.8           -1 493.0
 Personnel expenses                                  -1 937.3           -2 216.6
 Other operating expenses                              -831.8             -991.9
 Depreciation and impairment                         -1 172.0           -1 427.7
Operating Profit                                        706.1              -93.9
 Share of results of associated companies                38.9               67.2
 Net financial items                                   -106.0             -151.6
Profit before Tax                                       639.0             -178.3 
 Income tax                                             108.8               52.0
Net Profit for the Period                               747.8             -126.3
   
Attributable to:
 Company shareholders                                   739.7             -130.0
 Minority interests                                       8.1                3.7
                                                        747.8             -126.3
Key Ratios
 Basic earnings per share, EUR                           0.89              -0.16
 Diluted earnings per share, EUR                         0.89              -0.16


Condensed Consolidated Cash Flow Statement
EUR million                                                     2004        2005

Cash Flow from Operating Activities
 Operating profit                                              706.1       -93.9
 Adjustments                                                 1 039.1     1 439.4
 Change in disability pension scheme                          -179.9
 Change in net working capital                                -365.2      -288.5
 Change in short-term interest-bearing receivables             444.3         9.8
Cash Flow Generated by Operations                            1 644.4     1 066.8
 Net financial items                                          -124.8      -117.5
 Income taxes paid                                            -114.2      -209.0
Net Cash Provided by Operating Activities                    1 405.4       740.3

Cash Flow from Investing Activities
 Acquisitions of group companies                              -176.4      -323.9
 Acquisitions of associated companies                         -250.4       -55.7
 Proceeds from sale of fixed assets and shares                 253.9       104.9
 Capital expenditure                                          -979.6    -1 145.3
 Proceeds from the long-term receivables, net                 -182.5        98.3
Net Cash Used in Investing Activities                       -1 335.0    -1 321.7

Cash Flow from Financing Activities
 Change in long-term liabilities                             1 261.2       671.3
 Change in short-term borrowings                              -694.4       674.9
 Dividends paid                                               -375.7      -365.3
 Minority dividends                                             -1.9        -0.2
 Options exercised                                               1.6         0.0
 Purchase of own shares                                       -198.6      -344.7
Net Cash Used in Financing Activities                          -10.8       636.0

Net Increase in Cash and Cash Equivalents                       59.6        54.6
 Cash and bank in acquired companies                            45.9        10.3
 Cash and bank in sold companies                               -29.5         0.0
 Translation differences on cash holdings                       -3.2        12.2
 Cash and bank at the beginning of period                      201.5       274.3
Cash and Cash Equivalents at Period End                        274.3       351.4

Acquisitions of Subsidiary Companies
 Cash and cash equivalents                                      45.9        10.3
 Working capital                                                44.0       171.4
 Operating fixed assets                                        183.3       274.3
 Interest bearing assets                                         0.7         0.0
 Tax liabilities                                               -19.2       -59.8
 Interest bearing liabilities                                  -11.4      -274.6
 Non-cash share exchange                                        -3.9        -5.0
 Minority interests                                            -69.9        93.3
 Fair value of net assets                                      169.5       209.9
 Goodwill                                                        6.9       114.0
Total Purchase Consideration                                   176.4       323.9


Transaction Risk and Hedges in 2005

EUR million              EUR     USD    GBP     SEK    CAD    JPY  Other    Total
Sales                  6 500   3 400    800   1 200    100    200  1 000   13 200
Costs                 -6 500  -1 900   -200  -2 100   -200      0   -800  -11 700
Net operating cash flow    0   1 500    600    -900   -100    200    200    1 500
   
Transaction hedges as 
 at 31 Dec.                      601    147    -553      0     68
Hedging percentage as
 at 31 Dec.                    40.1%  24.5%   61.4%   0.0%  34.0%
Average hedging percentage
 during 2005                   31.7%  19.9%   26.6%  21.2%  41.9%          


Condensed Consolidated Balance Sheet

Assets
EUR million                                        31 Dec 2004        31 Dec 2005
   
Fixed and Other Long-term Assets
 Fixed assets                                    O    10 650.8           11 092.7
 Biological assets                               O        64.6               76.8
 Emission rights                                 O         0.0               43.7
 Investment in associated companies              I       568.1              719.9
 Listed securities                               I       220.1              211.6
 Unlisted shares                                 O       132.8              403.6
 Non-current loan receivables                    I       233.1              127.6
 Deferred tax assets                             T        11.4               72.2
 Other non-current assets                        O       210.5              269.4
                                                      12 091.4           13 017.5
Current Assets
 Inventories                                     O     1 771.3            2 150.5
 Tax receivables                                 T       160.9              108.5
 Operative receivables                           O     1 865.3            2 157.9
 Interest-bearing receivables                    I       248.7              309.2
 Cash and cash equivalents                       I       274.3              351.4
                                                       4 320.5            5 077.5
   
Total Assets                                          16 411.9           18 095.0


Shareholders' Equity and Liabilities
EUR million                                        31 Dec 2004        31 Dec 2005
   
 Shareholders’ equity                                  8 036.3            7 645.3
 Minority interests                                      136.1               93.6
Total Equity                                           8 172.4            7 738.9
   
Long-term Liabilities 
 Pension provisions                              O       637.8              494.0
 Other provisions                                O        60.9              142.6
 Deferred tax liabilities                        T     1 314.6            1 076.2
 Long-term debt                                  I     3 328.1            4 353.9
 Long-term operative liabilities                 O       174.0              204.7
                                                       5 515.4            6 271.4
Current Liabilities
 Current portion of long-term debt               I       102.1              385.0
 Interest-bearing liabilities                    I       597.4            1 345.0
 Operative liabilities                           O     1 673.1            1 975.4
 Tax liabilities                                 T       351.5              379.3
                                                       2 724.1            4 084.7
   
Total Liabilities                                      8 239.5           10 356.1
   
Total Shareholders’ Equity and Liabilities            16 411.9           18 095.0

Items designated with "O" are included in operating capital. 
Items designated with "I" are included in interest-bearing net liabilities.
Items designated with "T" are included in the tax liability.


Statement of Changes in Shareholders' Equity
                                                          
                        Share    Share Treasury                Retained 
EUR million           Capital  Premium  Shares    OCI      CTA Earnings    Total

Balance at 31 December 2003
                      1 469.3  1 237.4  -258.0   114.6  -197.1  5 702.7  8 068.9

Restatement of opening balance
 Finnish Statutory Pension
  Scheme                    -        -       -       -       -   -130.8   -130.8
Balance at 1 January 2004
 (restated)           1 469.3  1 237.4  -258.0   114.6  -197.1  5 571.9  7 938.1
Repurchase of Stora Enso Oyj
 shares                     -        -  -198.6       -       -        -   -198.6
Cancellation of Stora Enso Oyj
 shares                 -47.3   -228.5   275.8       -       -        -      0.0
Dividend
 (EUR 0.45 per share)       -        -       -       -       -   -375.7   -375.7
Options exercised         1.3      0.3       -       -       -        -      1.6
Net profit for the
 period                     -        -       -       -   -11.7    739.7    728.0
OCI entries                 -        -       -   -47.0       -        -    -47.0
Translation adjustment      -        -       -       -   -10.1        -    -10.1
Balance at 31 December 2004   
                      1 423.3  1 009.2  -180.8    67.6  -218.9  5 935.9  8 036.3
Repurchase of Stora
Enso Oyj shares             -        -  -344.7       -       -        -   -344.7
Cancellation of Stora Enso Oyj
 shares                 -41.2   -224.4   265.6       -       -        -      0.0
Dividend
 (EUR 0.45 per share)       -        -       -       -       -   -365.3   -365.3
Buy-out of minority
 interests                  -        -       -       -       -    -43.2    -43.2
Net profit for the
 period                     -        -       -       -     0.2   -130.0   -129.8
OCI entries                 -        -       -   400.4       -        -    400.4
Translation adjustment      -        -       -       -    91.6        -     91.6
Balance at 31 December 2005 
                      1 382.1    784.8  -259.9   468.0  -127.1  5 397.4  7 645.3

CTA = Cumulative Translation Adjustment
OCI = Other Comprehensive Income


Property, Plant and Equipment, Intangible Assets and Goodwill 
EUR million                                                      2004        2005
 Carrying value at 1 January                                 12 535.3    10 715.4
 Acquisition of subsidiary companies                            190.2       388.3
 Additions                                                      975.1     1 129.6
 Additions in biological assets, IAS 41                           4.5        15.7
 Disposals                                                   -1 635.3           -
 Depreciation, amortisation and impairment                   -1 172.0    -1 427.7
 Translation difference and other                              -182.4       391.9
Balance Sheet Total                                          10 715.4    11 213.2

Borrowings
EUR million                                                      2004        2005
 Non-current borrowings                                       3 328.1     4 353.9
 Current borrowings                                             699.5     1 730.0
                                                              4 027.6     6 083.9
 Carrying value at 1 January                                  5 174.2     4 027.6
 Debt acquired with new subsidiaries                             11.4       274.6
 Debt disposed with sold subsidiaries                        -1 518.8         0.0
 Proceeds from / payments of borrowings (net)                   552.5     1 346.2
 Translation difference and other                              -191.7       435.5
Total Borrowings                                              4 027.6     6 083.9


Commitments and Contingencies
EUR million                                         31 Dec 2004       31 Dec 2005

On Own Behalf
 Pledges given                                              0.8               1.1
 Mortgages                                                118.8             212.8
On Behalf of Associated Companies
 Mortgages                                                  0.8               0.8
 Guarantees                                               209.3             359.3
On Behalf of Others
 Pledges given                                              0.0               0.0
 Mortgages                                                  0.0               0.0
 Guarantees                                                 6.8              13.7
Other Commitments, Own
 Leasing commitments, in next 12 months                    32.6              36.9
 Leasing commitments, after next 12 months                159.2             145.4
 Pension liabilities                                        2.2               0.7
 Other commitments                                         92.5              97.6
Total                                                     623.0             868.3

 Pledges given                                              0.8               1.1
 Mortgages                                                119.6             213.6
 Guarantees                                               216.1             373.0
 Leasing commitments                                      191.8             182.3
 Pension liabilities                                        2.2               0.7
 Other commitments                                         92.5              97.6
Total                                                     623.0             868.3


Net Fair Values of Derivative Financial Instruments
EUR million                  31 Dec 2004               31 Dec 2005
                                Net Fair     Positive     Negative       Net Fair
                                  Values  Fair Values  Fair Values         Values
 Interest rate swaps               151.3        121.9        -33.8           88.1
 Interest rate options               1.0          1.4        - 3.3           -1.9
 Cross-currency swaps              -11.6          0.0        - 6.5           -6.5
 Forward contracts                  89.5          7.4        -37.9          -30.5
 FX options                          1.8          4.5        -10.2           -5.7
 Commodity contracts                23.6        134.3        - 4.7          129.6
 Equity swaps                      -11.4         27.5        -29.3           -1.8
Total                              244.2        297.0       -125.7          171.3


Nominal Values of Derivative Financial Instruments
EUR million                                        31 Dec 2004        31 Dec 2005

Interest Rate Derivatives
 Interest rate swaps
  Maturity under 1 year                                   66.5              620.1
  Maturity 2–5 years                                     953.4            1 000.6
  Maturity 6–10 years                                  1 469.9            1 738.3
                                                       2 489.8            3 359.0

 Interest rate options                                   198.4              673.8
Total                                                  2 688.2            4 032.8

Foreign Exchange Derivatives
 Cross-currency swap agreements                          102.7               72.3
 Forward contracts                                     2 479.8            2 442.1
 FX Options                                              588.3            1 071.3
Total                                                  3 170.8            3 585.7

Commodity Derivatives
 Commodity contracts                                     442.7              391.0
Total                                                    442.7              391.0

Equity swaps
 Equity swaps                                            359.5              408.5
Total                                                    359.5              408.5


Sales by Segment
EUR million
    Q1/04   Q2/04   Q3/04   Q4/04    2004   Q1/05   Q2/05   Q3/05   Q4/05    2005

Publication Paper
   1076.9  1130.9  1144.3  1269.3  4621.4  1104.4  1125.3  1166.0  1280.2  4675.9
Fine Paper
    664.1   651.3   674.7   678.7  2668.8   708.7   618.3   625.4   737.9  2690.3
Merchants
    160.3   148.5   145.7   183.4   637.9   182.1   217.4   295.2   478.5  1173.2
Packaging Boards
    764.7   777.9   742.6   768.2  3053.4   794.5   768.2   788.7   838.8  3190.2
Wood Products
    373.1   419.2   388.5   386.0  1566.8   366.9   433.7   398.0   389.7  1588.3
Wood Supply
    634.9   621.4   568.3   657.0  2481.6   674.7   563.2   612.4   651.6  2501.9
Other
   -656.1  -646.3  -631.0  -700.7 -2634.1  -686.4  -538.8  -666.5  -740.6 -2632.3
Total Sales
   3017.9  3102.9  3033.1  3241.9 12395.8  3144.9  3187.3  3219.2  3636.1 13187.5


Operating Profit by Segment excluding Non-recurring items and
 Goodwill Amortisation
EUR million
    Q1/04   Q2/04   Q3/04   Q4/04    2004   Q1/05   Q2/05   Q3/05   Q4/05    2005
Publication Paper 
     14.8     6.9    44.4    38.5   104.6    21.6   31.5     67.9    72.3   193.3
Fine Paper
     12.4    -2.2    30.4    13.9    54.5    48.1  -13.6     -1.2    28.9    62.2
Merchants 
      3.3     2.4     1.6     3.9    11.2     2.7    1.6      0.9    -1.9     3.3
Packaging Boards  
     82.3    64.6    84.8    39.6   271.3    72.0   11.9     73.5    62.6   220.0
Wood Products
     11.4    21.3    10.9    -8.9    34.7    -4.0    9.9     -1.8    -7.2    -3.1
Wood Supply 
     31.3     3.3     3.1    -5.4    32.3     3.1  -10.9     -0.3    -3.7   -11.8
Other   
    -29.4   -15.9   -21.9   -14.7   -81.9   -30.8  -12.7    -32.8   -30.1  -106.4

Operating Profit  excl.
 Goodwill Amortisation 
    126.1    80.4   153.3    66.9   426.7   112.7   17.7    106.2   120.9   357.5
 Goodwill amortisation
    -22.7   -21.9   -21.7   -24.0   -90.3       -      -        -       -       -
 Non-recurring items 
    115.7       -    74.1   179.9   369.7       -   -12.0       -  -439.4  -451.4
Operating Profit (IFRS)
    219.1    58.5   205.7   222.8   706.1   112.7     5.7   106.2  -318.5   -93.9
 Net financial items 
    -20.3   -26.2   -27.0   -32.5  -106.0   -43.1   -34.6   -25.0   -48.9  -151.6
 Associated companies
     -2.3    16.7    10.2    14.3    38.9    14.0    17.0    11.8    24.4    67.2
Profit before Tax and Minority Interests
    196.5    49.0   188.9   204.6   639.0    83.6   -11.9    93.0  -343.0  -178.3
 Income tax expense
    214.6     5.0   -56.6   -54.2   108.8   -23.6     3.3   -26.5    98.8    52.0
Net Profit
    411.1    54.0   132.3   150.4   747.8    60.0    -8.6    66.5  -244.2  -126.3


Non-recurring Items by Segment
EUR million
    Q1/04   Q2/04   Q3/04   Q4/04    2004   Q1/05   Q2/05   Q3/05   Q4/05    2005
 Publication Paper 
        -       -    30.8    45.6    76.4       -       -       -  -201.6  -201.6
 Fine Paper
        -       -    29.9    37.0    66.9       -       -       -   -40.8   -40.8
 Merchants
        -       -       -     0.8     0.8       -       -       -    -7.9    -7.9
 Packaging Boards
        -       -    11.6    67.0    78.6       -       -       -  -144.4  -144.4
 Wood Products
        -       -       -    16.4    16.4       -   -12.0       -   -41.2   -53.2
 Wood Supply
    115.7       -       -    10.6   126.3       -       -       -    -3.5    -3.5
 Other 
        -       -     1.8     2.5     4.3       -       -       -       -       -
Total Non-recurring Items 
    115.7       -    74.1   179.9   369.7       -   -12.0       -  -439.4  -451.4


Operating Profit by Segment
EUR million
    Q1/04   Q2/04   Q3/04   Q4/04    2004   Q1/05   Q2/05   Q3/05   Q4/05    2005
 Publication Paper
     14.8     6.9    75.2    84.1   181.0    21.6    31.5    67.9  -129.3    -8.3
 Fine Paper 
     12.4    -2.2    60.3    50.9   121.4    48.1   -13.6    -1.2   -11.9    21.4
 Merchants 
      3.3     2.4     1.6     4.7    12.0     2.7     1.6     0.9    -9.8    -4.6
 Packaging Boards 
     82.3    64.6    96.4   106.6   349.9    72.0    11.9    73.5   -81.8    75.6
 Wood Products
     11.4    21.3    10.9     7.5    51.1    -4.0    -2.1    -1.8   -48.4   -56.3
 Wood Supply
    147.0     3.3     3.1     5.2   158.6     3.1   -10.9    -0.3    -7.2   -15.3
 Other 
    -29.4   -15.9   -20.1   -12.2   -77.6   -30.8   -12.7   -32.8   -30.1  -106.4

Operating Profit excl.
 Goodwill Amortisation 
    241.8    80.4   227.4   246.8   796.4   112.7     5.7   106.2  -318.5   -93.9
 Goodwill amortisation    
    -22.7   -21.9   -21.7   -24.0   -90.3       -       -       -       -       -
Operating Profit
    219.1    58.5   205.7   222.8   706.1   112.7     5.7   106.2  -318.5   -93.9
 Net financial items
    -20.3   -26.2   -27.0   -32.5  -106.0   -43.1   -34.6   -25.0   -48.9  -151.6
 Associated companies
     -2.3    16.7    10.2    14.3    38.9    14.0    17.0    11.8    24.4    67.2
Profit before Tax and Minority  Interests 
    196.5    49.0   188.9   204.6   639.0    83.6   -11.9    93.0  -343.0  -178.3
 Income tax expense  
    214.6     5.0   -56.6   -54.2   108.8   -23.6     3.3   -26.5    98.8    52.0
Net Profit
    411.1    54.0   132.3   150.4   747.8    60.0    -8.6    66.5  -244.2  -126.3


Stora Enso Shares

Closing Price        Helsinki, EUR           Stockholm, SEK       New York, USD
                 A share     R share     A share      R share          ADRs
October            10.75       10.67      102.50       102.00         12.83
November           11.03       10.89      105.00       104.00         12.84
December           11.46       11.44      108.00       107.50         13.52


Trading Volume       Helsinki                 Stockholm            New York
                 A share      R share     A share     R share          ADRs
October          3 199 656   75 535 464   197 145    14 949 366     1 909 600
November          38 034     62 667 795   179 670    11 395 489     1 545 100
December          72 197     56 839 488   178 276    17 285 127     1 936 000

Total            3 309 887  195 042 747   555 091    43 629 982     5 390 700



www.storaenso.com
www.storaenso.com/investors


Publication dates for financial information
Interim Review for January – March 2006         26 April 2006
Interim Review for January – June 2006          26 July 2006
Interim Review for January – September 2006     26 October 2006

Annual General Meeting                          21 March 2006


It should be noted that 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 within the meaning of the United States Private Securities
Litigation Reform Act of 1995. 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.


STORA ENSO OYJ

p.p.    Jussi Siitonen  Jukka Marttila

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