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Stora Enso - Change in the reporting of costs related to growth of biological assets

Stora Enso is changing its reporting regarding the costs related to the growth of biological assets (i.e. growing trees) starting from the fourth quarter of 2016.

Costs related to the development of biological assets are capitalised on the balance sheet during the growth cycle (i.e. until the time of harvesting). At harvesting, the capitalised costs are transferred from biological assets to inventory. Prior to the change, Stora Enso has included the costs related to the growth of biological assets in its operational EBITDA.

Starting from the fourth quarter of 2016, these growth costs will be excluded from operational EBITDA and presented as Operational decrease in the value of biological assets. The reason for the change is to align the reporting of the growth costs with industry benchmarks.

This change will affect the following key figures:

· operational EBITDA

· operational EBITDA margin

· net debt to last 12 months' operational EBITDA ratio

There will be no impact on operational EBIT, the subtotals of the official Condensed Consolidated Income Statement or the group's other IFRS figures.

The new definition of the non-IFRS measure of operational EBITDA is: operating profit/loss excluding operational decrease in the value of biological assets, fixed asset depreciation and impairment, share of results of equity accounted investments, IAC and fair valuations.

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