Trading Statement

13 January 2015

POWERFLUTE

TRADING STATEMENT

Powerflute Oyj ("Powerflute" or the "Company"), the paper and packaging group, today provides the following update on trading for the year ended 31 December 2014.

The Group continued to perform well during the second half of the year and before exceptional expenses relating to the acquisition of Corenso, performance was in line with our expectations.

The Packaging Papers activity continued to enjoy broadly favourable market conditions and healthy demand, achieving average selling prices which were comparable to those achieved in the first half and benefiting from stable raw material costs. Production and deliveries during the second half were lower than those of the first half due to the combined impact of the planned annual maintenance shutdown, investment-related stoppages and some minor mechanical issues which were quickly resolved. Total annual production and deliveries were broadly similar to those of the previous year, while the EBITDA from operating activities showed some improvement over the prior year.

The acquisition of Corenso was completed as expected on 1 December 2014 and during the month of December, Corenso performed in line with the trends outlined in the Admission Document published on 30 September 2014. The actions required to achieve initial separation of Corenso from its previous owner Stora Enso were completed smoothly and our plans for the integration of Corenso into Powerflute are progressing well.

The Group begins 2015 with healthy order books in each of its businesses and despite recent uncertainty over economic conditions in certain countries of the Eurozone, the outlook for the year remains broadly positive.

The Group will announce its Preliminary Results for the year ended 31 December 2014 on or about Wednesday, 25 March 2015.

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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.