POWR.L Regulatory News (POWR)

15 May 2015

Powerflute

Trading Statement

Powerflute Oyj ("Powerflute" or the "Group") today provides the following update on trading during the four months to 30 April 2015 and on the outlook for the remainder of the year ending 31 December 2015.

Consistent with the trends described in the preliminary results announcement made on 25 March 2015, the Group is continuing to enjoy a positive start to the year in both Coreboard and Cores and Packaging Papers.

In Coreboard and Cores, performance for the full year is now expected to be significantly ahead of initial expectations. Market conditions in the US and China continue to be favourable and both regions are performing strongly, with volumes and operating margins above expected levels. The Nordic region continues to perform well and the transition to a new long-term supply agreement with the former owner of the Corenso businesses has gone smoothly. While conditions elsewhere in Europe are, as expected, more challenging, our businesses in the UK, France, Germany and the Netherlands are all performing in line with or slightly ahead of our initial expectations. We continue to be very pleased with the progress made with separation of the recently acquired companies from their previous owner and their integration into Powerflute and the costs related to these activities are now expected to be somewhat lower than previously estimated.

Packaging Papers is also performing well, achieving growth in both revenue and margins compared with the prior year's already very strong comparatives. This is due to a combination of continuing good operational performance, healthy underlying market conditions and the favourable movement of the US Dollar against the Euro which has impacted positively on average selling prices.

Accordingly, in the absence of any marked change in market conditions or in the general economic environment, the performance of the Group for the first half is expected to be particularly strong and we currently expect that the outcome for full year will be significantly ahead of current market expectations.

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About Powerflute

Powerflute is a paper and packaging group quoted on the AIM market of the London Stock Exchange (Ticker: POWR) which seeks to acquire businesses with strong fundamentals whose performance can be improved through a combination of management focus and targeted investment.

The Group currently has two main activities; Packaging Papers which trades under the name Powerflute and operates a paper mill in Kuopio, Finland producing a specialised form of Nordic semi-chemical fluting used in the manufacture of high-performance corrugated board; and Coreboard and Cores, which trades under the name Corenso and is a leading international manufacturer of high performance coreboard and cores, with coreboard mills in the United States and Europe and a network of core producing facilities in Europe, North America and China.

Nordic semi-chemical fluting is made from locally soured birch and boxes manufactured using it demonstrate superior strength and moisture resistance and are used for transportation of fruit and vegetables, high-value industrial goods such as electrical appliances and automotive components. The Kuopio mill is one of only three suppliers of Nordic semi-chemical fluting in Europe.

Cores and coreboard are manufactured from recycled paper and are used for applications in paper, packaging, textiles, steel, aluminium and many other industries. Coreboard and cores produced by Corenso demonstrate superior strength and rigidity and are suitable for use in the most demanding applications.

For further information, please visit www.powerflute.com.