Interim Report Q1/2015: Good profitability continued during Q1, UPM is well positioned for earnings growth

Press Release 28.4.2015 12:00 EEST

​UPM-Kymmene Corporation          Interim Report             28 April 2015 at 9:30 EET

Q1 2015 compared with Q1 2014

• Earnings per share excluding special items were EUR 0.29 (0.27), and reported EUR 0.29 (0.36)
• Operating profit excluding special items was EUR 204 million, 8.2% of sales (196 million, 7.9% of sales)
• Profitability was underpinned by the profit improvement actions and favourable exchange rates
• The UPM Lappeenranta Biorefinery started commercial production of advanced renewable diesel
• UPM invests in the top performing plywood business by expanding the Otepää mill in Estonia

Key figures Q1/2015 Q1/2014 Q4/2014 Q1-Q4/2014
Sales, EURm 2,486 2,481 2,531 9,868
EBITDA, EURm 325 323 334 1,306
   % of sales 13.1 13.0 13.2 13.2
Operating profit (loss), EURm 203 191 71 674
   excluding special items, EURm 204 196 230 847
   % of sales 8.2 7.9 9.1 8.6
Profit (loss) before tax, EURm 181 237 57 667
   excluding special items, EURm 182 176 216 774
Profit (loss) for the period, EURm 155 193 8 512
Earnings per share, EUR 0.29 0.36 0.01 0.96
   excluding special items, EUR 0.29 0.27 0.32 1.17
Operating cash flow per share, EUR 0.20 0.50 0.86 2.33
Equity per share at end of period, EUR 14.61 14.12 14.02 14.02
Gearing ratio at end of period, % 31 37 32 32
Net interest-bearing liabilities at end of period, EURm 2,419 2,777 2,401 2,401

Jussi Pesonen, President and CEO comments on the results:

“Our first quarter results improved year-on-year. This was an excellent achievement considering the headwind in the European energy and paper markets. The results were underpinned by our profit improvement actions as well as by favourable exchange rates. In the upcoming quarters, the profit improvement programme and growth projects will continue to strengthen our results.

I’m particularly pleased with the excellent drive in UPM Biorefining and UPM Plywood during Q1. In both businesses, good demand supported the strong performance. Both businesses are also set to expand their bottom line through ongoing investments in the Kymi pulp mill and the Otepää plywood mill.

The Lappeenranta biorefinery started customer deliveries of renewable diesel during the first quarter. Production ramp-up is still in its early stages but, based on the experience so far, both the technology and business case are valid.

UPM Raflatac and UPM Paper Asia had a stable quarter with good performance. UPM Raflatac enjoyed favourable markets and the ongoing investments in China and Poland will help us respond to demand growth during 2015. UPM Paper Asia investment in label materials and speciality papers in Changshu has progressed well and will be finalised by the end of the year.

UPM Energy and UPM Paper ENA (Europe & North America) faced challenging markets. UPM Energy was impacted by lower energy prices, as well as lower hydropower and nuclear volumes.

As for paper, lower publication paper prices and deliveries, as well as increased pulp costs, materialised in Europe as expected. In UPM Paper ENA, we started a restructuring process in the autumn, and permanently closed three paper machines in Europe during the first quarter. This, combined with the seasonal improvement, will positively impact Paper ENA performance as the year progresses.

All in all, UPM is well positioned for the upcoming quarters. The profit improvement programme will still deliver more than EUR 100 million in annualised cost savings by the end of this year. We have a portfolio of well-performing businesses with several high-return growth projects coming on-stream by the end of this year, bringing a further improvement in next year’s bottom line. And our strong balance sheet allows us to act on strategic opportunities,” says Pesonen.

Outlook for 2015

The improved profitability achieved in 2014 is expected to continue in 2015, and there are prospects for further improvement. Profitability is underpinned by the EUR 150 million profit improvement programme, as well as the first positive impact from the company’s growth projects. Profitability is affected by lower publication paper prices and lower electricity sales prices in the beginning of the year. The current weakened euro and lower oil price are supportive of the company’s earnings.

Conference call and press conference 

UPM's President and CEO Jussi Pesonen will present the results in a conference call and a webcast for analysts and investors, held in English language, on 28 April 2015 at 13:15 EET.

Jussi Pesonen will present the results in a press conference held in Finnish language at the UPM Group Head Office (The Biofore House) in Helsinki, Alvar Aallon katu 1, at 14:30 EET.

Conference call and webcast details

The conference call can be participated in either by dialing a number in the list below or following the webcast online at or through this link.

Only participants who wish to ask questions in the conference call need to dial in. All participants can view the webcast presentation online. We recommend that participants start dialing in 5-10 minutes prior to ensure a timely start of the conference.

The presentation is available at for 12 months after the call.

Conference call title: UPM Q1 2015 Interim Report

Direct telephone numbers:

FI +358 981 710 495
UK +44 203 194 0552
NO +47 235 002 11
SE +46 856 642 702
US +18 557 161 597

International telephone numbers with a pin 118818#

AU: +61 2840 58533
AT: +43 1928 0493
CH: +86 400 612 1262
DE: +49 2119 7190 076
ES: +34 9111 40089
HK: +85 2307 73566
IN: +91 2261 8751 56
IT: +39 0236 0138 09
JP: +81 3445 56491
NL: +31 2070 95111
BE: +32 2402 9661
DK: +45 3544 5574
FR: +33 1707 50706

It should be noted that certain statements herein, which are not historical facts, including, without limitation, those regarding expectations for market growth and developments; expectations for growth and profitability; and statements preceded by “believes”, “expects”, “anticipates”, “foresees”, or similar expressions, are forward-looking statements. Since these statements are based on current plans, estimates and projections, they involve risks and uncertainties which may cause actual results to materially differ from those expressed in such forward-looking statements. Such factors include, but are not limited to: (1) operating factors such as continued success of manufacturing activities and the achievement of efficiencies therein including the availability and cost of production inputs, continued success of product development, acceptance of new products or services by the Group’s targeted customers, success of the existing and future collaboration arrangements, changes in business strategy or development plans or targets, changes in the degree of protection created by the Group’s patents and other intellectual property rights, the availability of capital on acceptable terms; (2) industry conditions, such as strength of product demand, intensity of competition, prevailing and future global market prices for the Group’s products and the pricing pressures thereto, financial condition of the customers and the competitors of the Group, the potential introduction of competing products and technologies by competitors; and (3) general economic conditions, such as rates of economic growth in the Group’s principal geographic markets or fluctuations in exchange and interest rates. For more detailed information about risk factors, see pages 76–77 of the company’s annual report 2014.

UPM-Kymmene Corporation
Pirkko Harrela
Executive Vice President, Stakeholder Relations

UPM, Media Relations
9.00-16.00 EET
tel. +358 40 588 3284

Through the renewing of the bio and forest industries, UPM is building a sustainable future across six business areas: UPM Biorefining, UPM Energy, UPM Raflatac, UPM Paper Asia, UPM Paper Europe and North America and UPM Plywood. Our products are made of renewable raw materials and are recyclable. We serve our customers worldwide. The group employs around 20,000 people and its annual sales are approximately EUR 10 billion. UPM shares are listed on NASDAQ OMX Helsinki. UPM – The Biofore Company –