AssiDomän's financial targets adjusted

AssiDomän's financial targets adjusted AssiDomän's future strategy, financial targets and dividend policy were presented at a Capital Market Day in Färna, Skinnskatteberg on 22 August 2001. The presentations from the Capital Market day are available on AssiDomän's website at 15.00 hrs UK time: www.asdo.se Changed structure During the past year extensive restructuring has been carried out within AssiDomän. The sack paper operations and sack conversion, as well as barrier coating, were sold in August 2000. In May this year, the corrugated board operations were also sold. These changes have radically altered the company's profit and loss account and balance sheet. The balance sheet has also been affected by a revaluation of AssiDomän's timberland assets to MSEK 17,500 at year-end 2000, as well as an MSEK 4,411 redemption payment to shareholders in March. As already announced, AssiDomän's Board will also convene an extraordinary general meeting in the autumn and propose that an additional MSEK 12,000 be transferred to shareholders through a new redemption programme. These major changes mean that the Group's assets today mainly comprise timberland, not industrial facilities. The forest assets are sometimes designated as a real asset with some other characteristics. This has made it necessary to adapt the Group's financial targets to the new structure. In this connection, account has also been taken of the fact that the previous targets were set against the background of a period with high inflation, while we are now in a period where low inflation is anticipated, which also affects return requirements. Growth and return targets The overall target is to create a good return for the company's shareholders. In the case of AssiDomän, this means the following: Growth and return from operating activities - Earnings from operating activities to increase by at least 3% per year (over a business cycle). - Visible return from operating activities on net operating assets to be at least 5% per year (over a business cycle). Appreciation of forest assets - In addition to visible return from operating activities, forest assets appreciate. Part of this appreciation will be realized annually through land transactions. Dividend policy - Over the long term the ordinary dividend should correspond to 70-80% of profit after tax including capital gains. AssiDomän's consolidation requirements and financial position in general will also be taken into account. The dividend target will first apply to the dividend for 2002, when the company has been operating with its new structure for a full year. Financial targets - The interest coverage ratio to be no less than 2.0. - AssiDomän's target is a net debt/equity ratio of approximately 1.0. - However, the capital structure must be able to vary between years. A higher level of debt may be desirable if interest rates are expected to fall or if there is an upward economic trend. Large, stable cash flows allow higher debt and therefore a higher return on equity. - It will be possible to use share buy-backs to change the capital structure. AssiDomän AB Corporate Communications 22 August 2001 AssiDomän's operations focus on ownership, management and utilization of forest assets, 2.4 billion hectares of productive timberland in Sweden. The Group also includes sawmill operations and the Frövi cartonboard mill. The company has some 2,000 employees and annual sales of MSEK 7,200. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/08/22/20010822BIT00110/bit0001.doc http://www.waymaker.net/bitonline/2001/08/22/20010822BIT00110/bit0001.pdf