Stora Enso (STE) Investor Update summary

De-merger and Strategic Focus

• Decision to de-merge and create Europe's largest listed pure-play forest company, comprising over 1.2 million hectares of Swedish forest valued at approximately EUR 5.7 billion, with listings planned in Stockholm and Helsinki and headquarters in Falun, Sweden.

• The de-merger aims to unlock business potential, maximize shareholder value, optimize capital allocation, and reduce complexity, with completion targeted for the first half of 2027, pending board and shareholder approval.

• Major shareholders, representing 21% of shares and 55% of voting rights, support the demerger.

• Current shareholders will receive shares in the new forest company proportionate to their existing holdings, providing flexibility in investment allocation, with the share structure unchanged.

• Stora Enso will sharpen its focus on renewable packaging and materials, leveraging strong market positions and integrated, cost-competitive production, while the new forest company will pursue value creation through efficient management and new revenue streams.

Strategic Review and Organizational Changes

• A strategic review has been launched for Central European sawmills and building solutions, including potential divestment, as these assets lack synergies with the core packaging business.

• Operations in the reviewed business unit will continue as normal during the process, with timing of any divestment aimed at maximizing shareholder value.

• Leadership changes include appointing Tuomas Hallenberg as President and CEO of the Swedish Forest Business Entity and creating a new wood and energy business area led by Pauli Torikka.

• The new wood and energy business area will centralize wood sourcing, trading, and energy operations to drive profitability and operational synergies.

Wood Supply and Operational Impacts

• An 18-year wood supply agreement will be established between the two companies, with market-based pricing, gradually decreasing committed volumes to Stora Enso, and increasing third-party sales, supporting independence for both entities.

• The agreement secures a committed demand base for the new company and stable supply for Stora Enso.

• Currently, only about 7% of total wood procurement comes from the Swedish forest assets, with the majority already sourced externally, minimizing operational disruption.

• The pulp mills, including those in South America and the Nordics, remain integral to the packaging growth strategy, providing internal supply and competitive advantage.

• Both companies aim to maintain investment grade ratings post-demerger.