Growing a sustainable futureWe are a forest owner that converts the raw material into

everything from wood for climate smart building to

renewable packaging, magazines and books, with

energy partly generated by own hydro- and wind power

Holmen

2

The climate benefits of forestry are obvious

Fossil emissions reduced by 85%

Substitution

Carbon sequestration1,3 Million tonnes

CO2

1,8 Million tonnes

CO2

0,4 Million tonnes

CO2

+

‒

2,7 Million tonnes

CO2 per year

Holmen

Snygg mellanbild skog (helskärm)

3

ForestForest

1.0 million ha productive forest land

(1.3 million ha total land area)

Holmen

Growth & price inflation drives value

4

200

300

400

500

600

19

99

20

01

20

03

20

05

20

07

20

09

20

11

20

13

20

15

20

17

20

19

Price

Real Nominal

SEK/m3sub

0

20

40

60

80

100

120

140

19

48

19

55

19

65

19

75

19

88

19

93

20

00

20

10

20

19

Forest holdingsm3 growing stock solid over bark/ha

Holmen

Major expansions create shortageSweden imports >10% of its need for pulpwood

Holmen

New revenue opportunities for a land owner

6

Leasing to wind farms and conversion to infrastructure & housing

Holmen

41 bn SEK market value

7Source: Holmen

Based on transactions in the areas we have forest

Total land

area, tha

Productive

land, tha

North 890 690

Middle 310 260

South 100 90

Total 1 300 1 040

Holmen

Location key value driver

8

100

200

300

400

500

600

700

800

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

Forest land prices, SEK/m3

South Middle North

Source: Holmen and LRF Konsult

Holmen

Forest profit stabilised at a higher level

9

*Excl items affecting comparability

9051 001 1 069

1 185 1 172 1 191

0

200

400

600

800

1 000

1 200

1 400

15 16 17 18 19 Q2-19 -Q1-20

SEKm Operating profit*

Holmen

Board for premium applications

550 000 tonnes per year

Holmen

2,4

2,5

2,6

2,7

2,8

2,9

3,0

3,1

3,2

3,3

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

M1

2

Mton European SBB and FBB demand

Solid European board demand

11Source: RISI, FOEX and CEPI

Stable prices

500

600

700

800

900

1 000

1 100

1 200

1 300

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

EUR/ton Prices

Pulp FBB

Holmen

Deliveries at record levels in Q1

12

110

120

130

140

150

Q1

-17

Q2

-17

Q3

-17

Q4

-17

Q1

-18

Q2

-18

Q3

-18

Q4

-18

Q1

-19

Q2

-19

Q3

-19

Q4

-19

Q1

-20

kton Holmen's deliveries, quarterly

Source: Holmen

* Q2-19 – Q1-20

400

440

480

520

560

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

M1

2 *

kton Holmen's deliveries, annually

Holmen

Weak paperboard performance in 2019

13

*Excl items affecting comparability

Major maintenance stops & production disturbances

847903

764689

435486

0

200

400

600

800

1 000

15 16 17 18 19 Q2-19 -

Q1-20

SEKm Operating profit*

0

5

10

15

20

25

30

15 16 17 18 19 Q2-19 -

Q1-20

% Profitability*

EBITDA margin Return on capital employed

Holmen

Grow sales in premium segment

14

Food

Pri

ce

Beverages Other

PharmaTobacco

Confectionary

Cosmetics

Holmen

Paper offering cost savings

1.1 million tonnes per year

Holmen

Focused on magazine & book paper

16Source: PPPC, Euro-Graph, Holmen

Accounts for 90% of sales

0

200

400

600

800

1 000

2010 2019

kton Holmen’s magazine & book papers

+50%

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

20 000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 M12

kton Printing paper demand WE

Newsprint Coated magazine Uncoated magazine & book

Holmen

Prices declining

17Source: RISI, FOEX, PPPC, Euro-Graph

Market balance deteriorated during 2019

300

400

500

600

700

800

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

EUR/ton

Newsprint 45 g SC Gravure 56 g LWC Offset 60 g

Holmen

Good product mix

18Source: Holmen

200

220

240

260

280

300

Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20

kton Holmen's deliveries

Weakening demand in recent month

Holmen

Return on capital 23% in paper

19

*Excl items affecting comparability

-74

289 288329

509473

-100

0

100

200

300

400

500

600

15 16 17 18 19 Q2-19 -

Q1-20

SEKm Operating profit*

-5

0

5

10

15

20

25

30

15 16 17 18 19 Q2-19 -

Q1-20

% Profitability*

EBITDA margin Return on capital employed

Holmen

Gain market by offering cost savings

20

Lighter paper reduces printing & distribution costs

39%more print

surface

Holmen

21

Wood for climate smart building

1 million m³ per year

Holmen

Gradually increasing wood products demand

22Source: FAO Forestry statistics & woodstat

China has emerged as a large consumer

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014 2015 2016 2017 2018 2019

Mm3Consumption of wood products

Europe North America China Other Asia MENA

Holmen

Building in wood benefits the climate

23Source: Wood products: Skogsindustrierna; Concrete & Steel: Macrobond statistics for Europe

80

90

100

110

120

130

140

150

160

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Index

Wood products Concrete products for construction purposes Steel

Holmen

Strong deliveries in Q1

24

Source: Holmen

* Q2-19 – Q1-20

160

180

200

220

240

260

Q1

-17

Q2

-17

Q3

-17

Q4

-17

Q1

-18

Q2

-18

Q3

-18

Q4

-18

Q1

-19

Q2

-19

Q3

-19

Q4

-19

Q1

-20

'000 m3 Holmen´s deliveries, quarterly

Demand weakend in some markets during April

500

600

700

800

900

1 000

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

M1

2 *

'000 m3 Holmen´s deliveries, annually

Holmen

Price drop hurts profitability

25

*Excl items affecting comparability

9

-3

80

246

6211

-50

50

150

250

15 16 17 18 19 Q2-19 -

Q1-20

SEKm Operating profit*

-10

0

10

20

30

15 16 17 18 19 Q2-19 -

Q1-20

% Profitability*

EBITDA margin Return on capital employed

Holmen

Braviken investment finalised

26

Ramp-up on hold until market conditions improve

Holmen

Energy from hydro & wind

1 200 GWh per year

Holmen

Nordic prices normally tracks coal power

28

0

10

20

30

40

50

60

70

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

EUR/MWh Electricity prices and marginal cost for coal fired power

Nordic Countries Germany Marginal cost for coal fired power

Low prices in Q1 due to ample supply & low demand

Holmen

Limited impact of lower prices

29

176

120 135

181

336 335

0

100

200

300

400

15 16 17 18 19 Q2-19 -

Q1-20

SEKm Operating profit

0

3

6

9

12

15

15 16 17 18 19 Q2-19 -

Q1-20

% Return on capital employed

80 MSEK gain from sale of wind farm in 2019

Holmen

EU phasing out fossil fuels

30Source: IEA & Holmen estimate

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

1990 1995 2000 2005 2010 2015

TWh European electricity production

Renewable Nuclear Fossil

Holmen

31

• Letar efter en annan bild på vindkraftspark!

Operational by the end of 2021

Building 440 GWh wind power on our own land

Holmen

32

Financial performance

Holmen

Stable profitability

33

*Excl items affecting comparability

1 700

2 162 2 166

2 4762 345 2 330

0

500

1 000

1 500

2 000

2 500

3 000

15 16 17 18 19 Q2-19 -

Q1-20

SEKm Operating profit*

0

5

10

15

20

25

15 16 17 18 19 Q2-19 -

Q1-20

% Margins*

EBITDA margin Operating margin

Holmen

Capital employed

Good cash-flow & solid financial position

34

0

10

20

30

40

50

15 16 17 18 19 I/20

% Debt/equity ratio

Forest

Renewable Energy

Paperboard

Paper

Wood Products

0

1 000

2 000

3 000

15 16 17 18 19 Q2-19 -Q1-20

SEKm Cash flow

Capital expenditure*

Dividend

Cashflow before capex and WC

* Excl sale of the newsprint mill in Spain (2016) and acquisition of loan relating partly owned wind power company (2018)

Holmen

35

The forest offers sustainable alternatives

Concrete & steel

Wood products

Plastic Board and paper

Fossil fuelsRenewable energy

from bio, hydro & wind

Holmen

36

Ambition to grow the value

of the forest and industry