Interim Report January-September 2002

INTERIM REPORT JANUARY - SEPTEMBER 2002 Quarter January-September MSEK 3-02 2-02 2002 2001 Net turnover 3,996 4,027 11,961 12,312 Operating profit 716 616 2,075 2,275 Profit after financial items 676 572 1,953 2,166 Profit after tax 510 514 1,523 1,958 Earnings per share 6.37 6.43 19.04 24.48 (before dilution), SEK Return on equity, % 14.2 14.8 14.5 19.3 * The Group's profit after financial items for January-September was MSEK 1,953 (January-September 2001: 2,166). Holmen Paper's operating profit declined by MSEK 515, while Iggesund Paperboard's rose by MSEK 263. * The third-quarter profit amounted to MSEK 676 (Q2 2002: 572). Holmen Paper's third-quarter profit was MSEK 129 higher than in the second quarter, and Iggesund Paperboard's was MSEK 42 higher. * Profit after tax for January-September was MSEK 1,523 (1,958), which corresponds to earnings per share of SEK 19.04 (24.48). The return on equity was 14.5 per cent (19.3). * The market for newsprint and magazine paper remained weak during the third quarter. Holmen Paper's deliveries rose slightly, but production was still curtailed due to the order situation. Prices were unchanged. Demand for paperboard was stable in Europe. Iggesund Paperboard's deliveries rose. Price increases have been announced. § BUSINESS AREAS Holmen Paper Quarter January-September Full year 3-02 2-02 2002 2001 2001 Net turnover, MSEK 2,122 2,029 6,045 6,474 8,757 Operating profit, MSEK 493 364 1,327 1,842 2,410 Operating margin, % 23 18 22 28 28 Return on operating capital, % 20 15 18 27 26 Production, 1,000 tonnes 403 376 1,141 1,198 1,586 Deliveries, 1,000 tonnes 396 383 1,124 1,131 1,525 The market for newsprint and magazine paper remained weak during the third quarter. Total deliveries of newsprint to Western Europe were eight per cent lower during January-September than for the corresponding period last year. However, the decline in deliveries from West European producers was only four per cent, owing to higher exports. Demand for SC and coated paper has been more stable, but additions to capacity have reduced the level of capacity utilisation. Holmen Paper's deliveries remained unchanged during January-September in relation to the corresponding period of last year. During the third quarter, deliveries rose by three per cent on the second quarter, but production was still curtailed due to the order situation. Prices were unchanged. The operating profit for January-September was MSEK 1,327 (1,842). The decline in the result is mainly due to lower prices, which was partly offset by the positive currency effects. A net amount of some MSEK 60 is included on account of the higher costs associated with the start-up of the new paper machine and income from the sale of the old machine at Hallsta Paper Mill. The third-quarter operating profit amounted to MSEK 493 (Q2 2002: 364). The improvement is mainly due to higher volumes and seasonally low costs. Iggesund Paperboard Quarter January-September Full year 3-02 2-02 2002 2001 2001 Net turnover, MSEK 1,270 1,209 3,684 3,286 4,467 Operating profit, MSEK 232 190 608 345 455 Operating margin, % 18 16 16 10 10 Return on operating 23 18 19 9 9 capital, % Production, paperboard, 1,000 tonnes 116 115 337 297 403 Deliveries, paperboard, 121 110 341 304 410 1,000 tonnes The consumption of virgin fibre-based paperboard in Western Europe was stable during the third quarter. Deliveries of virgin fibre-based paperboard from West European producers were four per cent higher during January-September than in the previous year, due to higher deliveries outside Western Europe. Iggesund Paperboard's deliveries during January-September were twelve per cent higher than for the corresponding period in 2001. During the third quarter, deliveries rose by nine per cent in relation to the previous quarter. Iggesund Paperboard has announced increases in the prices of solid bleached board and folding boxboard to come into effect in the fourth quarter. The operating profit for January-September amounted to MSEK 608 (345). The improvement is due to higher deliveries, positive currency effects and lower costs. The operating profit for the third quarter amounted to MSEK 232 (Q2 2002: 190). The improvement is mainly due to higher deliveries. Iggesund Timber Quarter January-September Full year 3-02 2-02 2002 2001 2001 Net turnover, MSEK 134 148 439 551 712 Operating loss, MSEK 1 2 9 55 79 Production, 1,000 m3 38 55 149 236 299 Deliveries own sawmills, 51 54 168 251 322 1,000 m3 The market for redwood products improved during the third quarter as a result of firmer demand. The operating result for January-September was a loss of MSEK 9 (loss 55). The improvement is mainly due to lower costs. The third-quarter result was a loss of MSEK 1 (Q2 2002: loss 2). Holmen Skog Quarter January-September Full year 3-02 2-02 2002 2001 2001 Net turnover, MSEK 739 929 2,616 2,985 3,982 of which external customers 404 561 1,529 1,696 2,306 Operating profit, MSEK 62 105 295 262 455 Wood consumption at Group's Swedish mills, 977 946 2,868 3,140 4,144 1,000 m3 Harvesting from company forests, 1,000 m3 575 639 1,744 1,461 2,394 The operating profit for January-September amounted to MSEK 295 (262). The improvement in the result was due to a higher level of harvesting from company forests, which was, however, offset by lower prices and higher harvesting costs. In the third quarter the result declined by MSEK 43 to MSEK 62, partly due to lower volumes harvested from company forests. Holmen Skog's result is largely generated by the sale of wood harvested from company forests. Holmen Kraft Quarter January-September Full year 3-02 2-02 2002 2001 2001 Net turnover, MSEK 247 247 789 822 1,108 of which external customers 72 85 280 326 439 Operating profit/loss, MSEK 25 2 9 56 49 Electric power consumption at Group's Swedish mills, GWh 1,037 971 2,890 3,009 3,998 Group production of electric 221 333 1,013 1,181 1,578 power, GWh The operating result for January-September was a loss of MSEK 9 (profit 56). The deterioration in the result is mainly due to lower production of electricity at the company's power stations. In relation to the second quarter, the result declined by MSEK 23 to a loss of MSEK 25, owing to lower electricity production at company-owned power stations. Holmen Kraft's result is mainly generated by electricity production at wholly and partly owned hydroelectric power stations. FINANCING Cash flow before capital expenditure and dividend was MSEK 2,674 for January-September. Capital expenditure amounted to MSEK 1,247 and the dividend to MSEK 800. The third-quarter cash flow before capital expenditure amounted to MSEK 946 and capital expenditure was MSEK 182. The Group's net financial debt amounted to MSEK 2,510 at 30 September. (31 December 2001: 3,161). The debt/equity ratio was 0.17 (0.22). The equity ratio was 58.8 per cent (56.4). Holmen's sales consist to a large extent of exports from Sweden. Currency exposure has been hedged for the remainder of 2002, approximately 80 per cent for 2003, some 40 per cent for 2004 and some 5 per cent for 2005. CAPITAL EXPENDITURE The Group's capital expenditure during January-September amounted to MSEK 1,247 (1,270), of which MSEK 747 relates to the new paper machine at Hallsta Paper Mill. Depreciation according to plan amounted to MSEK 863 (842). EMPLOYEES The average number of employees in the Group was 5,108 (full year 2001: 5,238). IMPORTANT EVENTS · The processing of certain permits that are necessary for the investment in a new paper machine at Holmen's Papelera Peninsular paper mill outside Madrid has taken longer than expected. This means that the decision to invest can now be expected during the first quarter of 2003. Other preparations are proceeding as planned. The new machine will have an annual capacity of 400,000 tonnes. As a result of planned transfer of products to other machines the net addition to standard newsprint will be some 200,000 tonnes. · In previous annual reports, Holmen has noted that in 1995 the EU Commission launched an investigation into the European newsprint market in order to determine the existence or not of restrictive practices in contravention of Article 81 in the Treaty of Rome. In August 2002, the Commission announced that this investigation had been dropped. Stockholm 29 October 2002 Göran Lundin President and CEO The interim report has not been subject to examination by the company's auditors. The year-end report for 2002 will be released on 5 February 2003. For further information please contact: Göran Lundin, President and CEO, tel +46 8 666 21 00 Anders Almgren, CFO, tel +46 8 666 21 16 Christer Lewell, Public Relations Director, tel +46 8 666 21 15. Holmen is a forest products industry group with the capacity to produce 2.3 million tonnes of paper and paperboard per year. The EU countries, which account for some 85 per cent of the Group's turnover, are by far the largest market. Holmen Paper produces paper for daily newspapers, magazines, directories and advertising matter at three Swedish mills and one Spanish mill. Iggesund Paperboard produces paperboard for packaging and graphic purposes at two Swedish mills and one English mill. Iggesund Timber produces sawn timber at one Swedish sawmill. Holmen Skog manages the Group's one million hectares of forests. The annual volume harvested from company forests is 2.5 million m3. Holmen Kraft produces some 1,100 GWh of electricity at wholly and partly owned hydroelectric power stations in Sweden. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/10/29/20021029BIT00420/wkr0001.doc The Full Report http://www.waymaker.net/bitonline/2002/10/29/20021029BIT00420/wkr0002.pdf The Full Report

About Us

Holmen’s business concept is to own and add value to the forest. The forest holdings form the basis of the business – an ecocycle in which the raw material grows and is refined into everything from wood for climate-smart building to renewable packaging, magazines and books. The forest is managed to provide a good annual return and stable value growth while our production operations are run with a focus on profitability and greater value added. In 2018 Holmen’s net sales were just over SEK 16 billion and the group has approx. 3 000 employees. Holmen’s shares are listed on Nasdaq Stockholm, Large Cap. For more information, visit holmen.com.

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