Note 18 Shareholders' Equity

Under the Articles of Association, the minimum issued share capital of the Company is EUR 850 million and the maximum EUR 3 400 million, within the limits of which it may be increased or reduced without amendment to the Articles; the minimum number of shares that may be issued is 500 million and the maximum number 2 000 million. Series A shares entitle the holder to one vote per share whereas Series R shares entitle the holder to one vote per ten shares with a minimum of one vote, though the nominal value of both shares is the same. The maximum number of Series A shares is 500 million and Series R shares, 1 600 million, the aggregate not exceeding 2 000 million. Series A shares may be converted into Series R shares at any time at the request of a shareholder. At 31 December 2004 the Company’s fully paid-up share capital as entered in the Finnish Trade Register was EUR 1 423.3 (EUR 1 469.3) million.

As from 1997, the Finnish Companies Act determined that the individual nominal value of shares would no longer be a fixed sum, but would instead represent the total value of the issued share capital divided by the number of shares in issue. The current nominal value of each issued share is EUR 1.70, unchanged from the previous year.

At 31 December 2004 Stora Enso Oyj held shares with an acquisition cost of EUR 180.8 (EUR 258.0) million, comprising 12 300 Series A shares along with 16 795 984 Series R shares, and representing 2.2% of the share capital and 0.9% of voting rights.

At the end of 2004 Directors and Management Group members owned 35 121 (34 175) Series A shares and 192 534 (2 862 910) Series R shares, representing less than 0.1% of the total voting rights of the Company. A full description of Company Option Programmes, along with full details of Director and Executive interests, is shown at Note 28; at 31 December 2004 none of these Programmes impacted on the issued share capital.

At 31 December 2004 shareholder equity amounted to EUR 8 051.1 (7 952.9) million against a market capitalisation on the Helsinki Stock Exchang of EUR 9.5 (EUR 9.3) billion; the market values of the shares were EUR 11.55 (EUR 11.00) for A shares and EUR 11.27 (EUR 10.68) for the R shares.

Change in Share Capital

	Series A	Series R	Total

At 1 January 2002	184 273 585	722 479 714	906 753 299
Warrants exercised and registered 10 Jan	-	1 158 000	1 158 000
Cancellation of repurchased shares 3 Apr	-813 200	-7 319 800	-8 133 000
Conversion of Series A shares to Series R shares 16'27 Sep	-1 143 700	1 143 700	-
At 31 December 2002	182 316 685	717 461 614	899 778 299
Warrants exercised and registered 9 Jan	-	3 000	3 000
Cancellation of repurchased shares 31 Mar	-93 800	-35 500 000	-35 593 800
Conversion of Series A shares to Series R shares 16 June	-16 118	16 118	-
Conversion of Series A shares to Series R shares 15 July	-1 400	1 400	-
Conversion of Series A shares to Series R shares 15 Aug	-34 200	34 200	-
Conversion of Series A shares to Series R shares 15 Sept	-21 841	21 841	-
Conversion of Series A shares to Series R shares 15 Oct	-502 923	502 923	-
Conversion of Series A shares to Series R shares 17 Nov	-121 166	121 166	-
Conversion of Series A shares to Series R shares 12 Dec	-314 157	314 157	-
Warrants exercised and registered 12 Dec	-	75 000	-
At 31 December 2003	181 211 080	683 051 419	864 262 499
Warrants exercised and registered 8 Jan	-	27 000	27 000
Warrants exercised and registered 15 Jan	-	195 000	195 000
Conversion of Series A shares to Series R shares 15 Jan	-27 906	27 906	-
Conversion of Series A shares to Series R shares 16 Feb	-10 341	10 341	-
Warrants exercised and registered 4 Mar	-	75 000	75 000
Cancellation of repurchased shares 5 Apr	-8 100	-27 800 000	-27 808 100
Warrants exercised and registered 8 Apr	-	492 000	492 000
Conversion of Series A shares to Series R shares 15 Apr	-1 036 667	1 036 667	-
Conversion of Series A shares to Series R shares 14 May	-32 437	32 437	-
Conversion of Series A shares to Series R shares 15 June	-25 053	25 053	-
Conversion of Series A shares to Series R shares 15 July	-9 805	9 805	-
Conversion of Series A shares to Series R shares 16 Aug	-477	477	-
Conversion of Series A shares to Series R shares 15 Sept	-1 000 100	1 000 100	-
Conversion of Series A shares to Series R shares 15 Oct	-2 517	2 517	-
Conversion of Series A shares to Series R shares 15 Nov	-500	500	-
Conversion of Series A shares to Series R shares 15 Dec	-8 654	8 654	-
At 31 December 2004	179 048 523	658 194 876	837 243 399
Conversion of Series A shares to Series R shares 17 Jan	-114	114	-
Shares in Issue at 17 January 2005	179 048 409	658 194 990	837 243 399

Number of votes as at 31 December 2004	179 048 523	65 819 488	244 868 011

Share Capital at 31 December 2004, EUR million	304.4	1 118.9	1 423.3

Share Capital at 31 December 2003, EUR million	308.1	1 161.2	1 469.3

Share Capital at 31 December 2002, EUR million	309.9	1 219.7	1 529.6

Nominal value for all shares is EUR 1.70. The shares in issue at 17 January 2005 represent the total shares eligible to vote at the forthcoming Annual General Meeting.

Treasury Shares

	Number of Shares in 2004			Cost in EUR million
	Series A	Series R	Total	2002	2003	2004

Shares held at 1 January	8 100	26 181 379	26 189 479	125.5	314.9	258.0
Total shares repurchased in the year	12 300	18 461 600	18 473 900	287.3	319.6	199.0
Shares cancelled	-8 100	-27 800 000	-27 808 100	-97.4	-376.0	-275.8
Shares allocated to Option Programmes	-	-48 048	-48 048	-0.5	-0.5	-0.4
Total Shares held at 31 December	12 300	16 794 931	16 807 231	314.9	258.0	180.8

The Annual General Meeting on 18 March 2004 decided to reduce the Company's share capital by EUR 47.3 million by cancelling 8 100 A shares and 27 800 000 R shares; these shares were repurchased between March 2003 and February 2004 under authorisation granted by the previous Annual General Meeting.

Quarterly Share Repurchases

	Number of Shares			Cost in EUR million
	Series A	Series R	Total	Series A	Series R	Total

January - March	-	4 011 200	4 011 200	-	42.7	42.7
April - June	9 700	6 567 600	6 577 300	0.1	69.9	70.0
July - September	2 600	5 820 000	5 822 600	-	62.8	62.8
October - December	-	2 062 800	2 062 800	-	23.5	23.5
Total Shares Repurchased	12 300	18 461 600	18 473 900	0.1	198.9	199.0
Shares allocated to Option Programmes	-	-48 048	-48 048	-	-0.4	-0.4
Net Share Repurchases in 2004	12 300	18 413 552	18 425 852	0.1	198.5	198.6

Net Share Repurchases in 2003	16 500	33 423 848	33 440 348	0.2	318.9	319.1

Net Share Repurchases in 2002	99 200	25 623 660	25 722 860	1.2	285.6	286.8

Quarterly Values per Share

	Series A			Series R
EUR	Lowest	Average	Highest	Lowest	Average	Highest

January - March	-	-	-	10.09	10.68	11.05
April - June	10.37	10.62	10.88	10.33	10.64	10.90
July - September	10.79	10.84	11.01	10.51	10.78	11.20
October - December	-	-	-	11.03	11.38	11.50
Summary for 2004	10.37	10.66	11.01	10.09	10.77	11.50

Summary for 2003	9.00	9.60	11.41	8.70	9.54	11.52

Summary for 2002	9.93	12.28	15.01	9.90	11.14	15.31

At 31 December 2004 the Group’s distributable equity amounted to EUR 3 674.6 (EUR 2 418.9) million, being Retained Earnings of
EUR 5 950.7 (EUR 5 586.7) less EUR 2 276.1 (EUR 3 167.8) million for non-distributable translation differences, treasury shares and untaxed reserves.