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2016-05-16

Rottneros: INTERIM REPORT JANUARY – MARCH 2016

* Profit after net financial items amounted to SEK 69 million (103) for the
first quarter of 2016.
* Cash flow before investments totalled SEK 29 million (62). Rottneros is
debt-free and at the end of the quarter, cash and cash equivalents totalled
SEK 159 million (116).
* Net turnover for the first quarter was SEK 432 million (454).
* NBSK pulp price quotation continued to decline and was USD 792 on the
average during the first quarter. Denominated in SEK, the quotation was 11
per cent lower than in the first quarter of 2015 and 4 per cent lower than
in the fourth quarter of 2015.
* Production volumes in the first quarter increased by 1 per cent and
delivery volumes by 2 per cent, compared with the same period last year.
Growth was limited to some degree by production disturbances at Vallvik
Mill.
* During the quarter, it was decided that a new energy- and
emission-efficient biomass boiler would be installed at Rottneros Mill.
Following the investment, energy consumption at both mills will for all
practical purposes be fossil-free.
* The Board of Directors has appointed Lennart Eberleh as new President and
CEO of Rottneros AB. He will take up his post on 1 September 2016.
* The Board of Directors has resolved to increase its proposed dividend for
2015 and recommends that the Annual General Meeting approve an ordinary
dividend of SEK 0.30 per share and an extra dividend of SEK 0.20 per share,
i.e. a total dividend of SEK 0.50 per share.

Comments by the President

A strong quarter despite lower prices

The Rottneros Group reports a strong first quarter. Corrective measures within
the scope of our development programme Agenda 500 continue to bear fruit, in
the form of increased efficiency and a steadily rising pace of production.
Both mills report good profitability. The impact of the action programme is
emphasised by the strong results for the quarter, despite lower prices in
both USD and SEK. The average of published prices for NBSK pulp fell by 13
per cent in USD and 11 per cent in SEK, compared with the first quarter last
year.

Production volumes in the first quarter increased by 1 per cent compared with
the same period in 2015. Growth was limited to some degree by production
disturbances at Vallvik. However, production there improved gradually during
the quarter and a new monthly record was set after the quarter in April.

Our market remains stable and prices for long-fibre sulphate pulp are showing
signs of an upturn since the end of the quarter. Several major players have
announced price rises. With our plans both to expand in selected niches and
to further improve efficiency we have a strong position from which to move
forward.

High investment activity

The current year is dominated by an intensive focus on investments within the
Agenda 500 programme. In all, the Group is investing more than SEK 250
million over the year, in capacity expansion, energy efficiency, product
quality and environmental improvements. The investments are highly
value-creating and the investment amount is relatively evenly spread between
the two mills. Installations under these investments will for the most part
take place during the autumn maintenance shutdowns.

The Board has also allocated SEK 98 million to Rottneros Mill for a new
biomass boiler, which is due to be commissioned at around mid-year 2017.
Energy consumption at the mill will become entirely fossil-free and at the
same time energy efficiency will increase substantially. As part of the
investment we will also remodel the mill’s energy system to bring about major
energy and environmental gains. Overall, it is estimated that this highly
value-creating investment will result in annual savings of around SEK 25
million.

Solid balance sheet creating sound platform for extra dividend

The Group’s solid finances and the Board’s objective of improving the
Company’s capital structure are the basis on which the Board recently revised
its dividend proposal. Under the proposal, the Company will pay an extra
dividend of SEK 0.20 per share for 2015, in addition to an ordinary dividend
of SEK 0.30. At year-end, the Company was debt-free, had a substantial
liquidity reserve and reported an equity/assets ratio of 76 per cent. As a
result of the proposed extra dividend, Rottneros’ capital structure will be
improved.

New President and CEO
Another important event during the quarter was the appointment of Lennart
Eberleh as new President and CEO. He has more than 20 years’ experience of a
variety of management positions in the paper industry, and will continue the
work of implementing the Agenda 500 programme and further advancing
Rottneros’ world-leading position in specialised pulp. He will take up his
post on 1 September 2016.

Per Lundeen

(For the complete interim report see attached file)

For more information, please visit.www.rottneros.com

Vallvik, 16 May 2016

Per Lundeen

Chief Executive Officer and President

Rottneros discloses the information provided herein pursuant to the Securities
Markets Act and/or the Financial Instruments Trading Act. This information
was submitted for publication on 16 May 2016 at 8.00 am. A Swedish and an
English version of this report have been drawn up. The Swedish version shall
prevail in the event of differences between the two reports.

Författare NGN

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