Interim report Q4/2015: UPM finished 2015 with a strong quarter, growth projects deliver earnings

Press Release 2.2.2016 12:00 EET

​UPM-Kymmene Corporation     Financial Statements release     2 February 2016 at 09:30 EET

Interim report Q4/2015: UPM finished 2015 with a strong quarter, growth projects deliver earnings

Q4 2015 compared with Q4 2014
• Earnings per share excluding special items were EUR 0.37 (0.32) and reported EUR 0.36 (0.01)
• Operating profit excluding special items was EUR 225 million, 8.7% of sales (230 million, 9.1% of sales)
• Growth projects began contributing to UPM’s earnings, with a strong start in the expanded UPM Kymi pulp mill and UPM Biofuels reaching break-even level. In addition, the speciality paper machine at the UPM Changshu mill in China started production in December
• The profit improvement programme exceeded its target, reaching a cost reduction impact of EUR 41 million in Q4 2015 (annualised EUR 165 million)
• Operating cash flow was strong at EUR 390 million (462 million), and net debt decreased to EUR 2,100 million (2,401 million)

Full year 2015 compared with 2014
• Earnings per share excluding special items were EUR 1.75 (1.17) and reported EUR 1.72 (0.96)
• Operating profit excluding special items was EUR 1,163 million, 11.5% of sales (847 million, 8.6% of sales)
• In 2015, UPM completed several growth projects: the speciality paper machine at UPM Changshu mill, expansion of the UPM Kymi pulp mill, Lappeenranta advanced biofuel refinery and UPM Raflatac expansions in Poland and APAC. New expansion projects began at the Kaukas pulp mill and Otepää plywood mill
• UPM closed 800,000 tonnes of graphic paper production capacity in Europe in H1 2015
• The Board proposes a dividend of EUR 0.75 (0.70) per share, representing 34% of operating cash flow per share


1) EBITDA is operating profit before depreciation, amortisation and impairment charges, excluding the change in fair value of biological assets and wood harvested, excluding the change in fair value of unrealised cash flow and commodity hedges, excluding the share of results of associated companies and joint ventures, and special items.
2) Includes a fair value increase of biological assets in Finland totalling EUR 265 million, due to adjusted long-term wood price estimates and a change in the discount rate.

Jussi Pesonen, President and CEO, comments on Q4 and full year 2015 results:

“UPM finished 2015 on a strong note. The fourth quarter was the best of the year thanks to solid business performance. The profit improvement programme exceeded its target and the growth projects started to deliver earnings. EBITDA reached a higher level than in five years and our strong cash flow drove net debt to a new record-low level.
Several of our growth projects have now been completed and I’m very pleased to see that they have already contributed to the cash flow.

The UPM Kymi pulp mill expansion was a success and we reached a record-high pulp production in December. UPM Biofuels picked up steam as the year went on and reached a break-even level during the last quarter. UPM Changshu’s speciality paper machine ramp-up started well in December and UPM Raflatac’s investments have already contributed to our earnings during the second half of the year.

It is worth pointing out that much of the good performance was driven by our own actions. UPM Biorefining and UPM Raflatac were the highlights of the quarter both in terms of own profitability actions and good timing in growth projects. UPM Energy and UPM Plywood showed solid performances. UPM Paper ENA had its best quarter of 2015 thanks to continuous profit improvement actions. UPM Paper Asia’s performance was supported by own cost actions as the business faced increased regional competition.
UPM’s Board of Directors has today proposed that the dividend for the 2015 is increased to EUR 0.75  (0.70) per share which is 34% of the operating cash flow per share. I believe the Board’s proposal reflects confidence in UPM’s ability to generate growth in earnings and cash flow.

All in all, 2015 was a good year for UPM and provides a solid foundation, even in a somewhat uncertain environment in 2016. We are starting the year with a stronger balance sheet than ever. Our investment levels are decreasing and earnings and cash flow from growth projects are starting to materialise. We will maintain cost competitiveness and strive to achieve top performance in our businesses. We are confident about our prospects for 2016.”

Outlook for 2016

UPM’s profitability improved in 2015 and the improvement is expected to continue in 2016. The business performance is underpinned by the company’s growth projects and continuous cost efficiency measures.

UPM’s growth projects are expected to contribute positively to the company’s earnings in 2016, compared with 2015. UPM continues its measures to reduce variable and fixed costs also in 2016. Currencies are expected to contribute positively as hedges roll over, assuming relevant currencies stay at the same level as at the end of 2015.

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. The call will be conducted in English on 2 February 2016 at 13:15 EET.

Later in the afternoon, Jussi Pesonen will present the results in a press conference conducted in Finnish 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 dialling 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 dialling in 5-10 minutes prior to the start to ensure that the conference can start on time.
The presentation will be available at for 12 months after the call.

Conference call title: UPM Financial Results 2015

Direct telephone numbers:

BE: +3224040635
DK: +45 823 331 78
FI: +358981710495
FR: +33170721541
UK: +442031940552
NO: +4723500211
SE: +46856642702
US: +18557161597

International telephone numbers with a pin code 77500392 #

AU: +61 29253 5844
AT: +43 19282 258
CH: +44 44580 0083
CN: +86 400 681 5421
DE: +49 030 221 510 067
ES: +34 911 143 608
HK: +852 3068 9834
IN: 0018038524634
IR: +353 1696 8154
IT: +39 2 3604 6798


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 19,600 people and its annual sales are approximately EUR 10 billion. UPM shares are listed on NASDAQ OMX Helsinki. UPM – The Biofore Company –