Trading Statement

10 December 2015

Powerflute

Trading Statement

Powerflute Oyj ("Powerflute" or the "Group") today provides an update on trading and on the outlook for the year ending 31 December 2015.

The Group has performed strongly during the second half of the year in both its Coreboard and Cores and Packaging Papers activities and the outlook for 2016 remains positive.

In Coreboard and Cores, the US business continues to enjoy favourable market conditions and is performing well. In China, while the competitive environment has become more challenging as the year has progressed, margins have been maintained. In Europe, actions taken earlier in the year to address the cost base and concentrate sales into more attractive markets are beginning to deliver benefits and recent announcements by competitors of price increases for both coreboard and cores are expected to contribute to further forward momentum in 2016.

Market conditions for Packaging Papers have softened slightly compared with earlier in the year, but continue to compare favourably with prior periods. The annual planned maintenance stop in September was completed successfully, with the restart in line with the planned schedule and the various projects undertaken all delivering benefits in line with or ahead of our expectations.

The results for the year will be affected by non-recurring items related to the acquisition and integration of Corenso. However, these items continue to be in line with or lower than the estimates previously provided and the integration of Corenso is progressing well.

The outcome for the year remains dependent upon a number of factors, including the extent to which production units continue to operate through the Christmas and New Year holiday periods and the impact of fluctuations in exchange rates on open foreign currency hedging positions. However, assuming no material change in exchange rates between now and the year-end, we currently expect that EBITDA before non-recurring items for the full year will be in the range €53 million to €55 million and that net debt at the year-end will be in the range €42 million to €46 million.

The Group will release its results for the year ended 31 December 2015 in March 2016.

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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 sourced 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.