UPM financial statements release 2023: UPM’s earnings recovery continued in Q4, growth projects set to deliver

Stock Exchange Release 1.2.2024 9:50 EET

UPM-Kymmene Corporation        Financial Statements Release 2023        1 February 2024 at 09:50 EET

UPM financial statements release 2023:
UPM’s earnings recovery continued in Q4, growth projects set to deliver

Q4 2023 highlights                                

  • Sales decreased by 22% to EUR 2,531 million (3,231 million in Q4 2022)
  • Comparable EBIT decreased by 51% to EUR 323 million, 12.8% of sales (653 million, 20.2%)
  • Operating cash flow was EUR 456 million (1,576 million), supported by cash inflow from working capital
  • Net debt was EUR 2,432 million (2,374 million) and the net debt to EBITDA ratio was 1.55 (0.94)
  • Pulp and electricity sales prices significantly lower than in the previous year, impacting UPM Fibres and UPM Energy. Successful margin management in other business areas
  • Demand for many of UPM's products continued to gradually recover from previous quarters
  • UPM Paso de los Toros pulp mill and the OL3 nuclear power plant unit contributed significantly to UPM's deliveries
  • Permanent closure of UPM Plattling paper mill, Germany in November and the sale of the Steyrermühl site, Austria in January 2024
  • In December, UPM was listed as the only forest and paper industry company in the Dow Jones Global and European Sustainability Indices (DJSI) for the years 2023–2024

2023 highlights

  • Sales decreased by 11% to EUR 10,460 million (11,720 million in 2022)
  • Comparable EBIT decreased by 52% to EUR 1,013 million (2,096 million), and was 9.7% (17.9%) of sales
  • Operating cash flow was record strong at EUR 2,269 million (508 million), supported by cash inflow from energy hedges
  • Cash funds and unused committed credit facilities totalled EUR 3.6 billion at the end of 2023
  • The Board proposes a dividend of EUR 1.50 (1.50) per share for 2023
  • UPM Paso de los Toros pulp mill in Uruguay started production in Q2 2023
  • The OL3 nuclear power plant unit began regular commercial electricity production in Q2 2023
  • UPM Leuna biochemicals refinery project is progressing at full speed
  • Permanent closures of PM6 at UPM Schongau, Germany, PM4 at UPM Steyrermühl, Austria and UPM Plattling paper mill, Germany
  • UPM received platinum in the EcoVadis responsibility assessment with a high industry score
  • UPM joined the UN Global Compact Forward Faster Initiative

Key Figures

Sales, EURm        2,531        3,231        2,584        10,460        11,720
Comparable EBITDA, EURm        465        759        376        1,573        2,536
% of sales        18.4        23.5        14.6        15.0        21.6
Operating profit (loss), EURm        211        675        -29        608        1,974
Comparable EBIT, EURm        323        653        220        1,013        2,096
% of sales        12.8        20.2        8.5        9.7        17.9
Profit (loss) before tax, EURm        180        638        -52        464        1,944
Comparable profit before tax, EURm        293        616        196        934        2,066
Profit (loss) for the period, EURm        161        503        -28        394        1,556
Comparable profit for the period, EURm        248        489        149        755        1,679
Earnings per share (EPS), EUR        0.30        0.93        -0.05        0.73        2.86
Comparable EPS, EUR        0.46        0.91        0.28        1.40        3.09
Return on equity (ROE), %        5.5        16.0        -0.9        3.2        13.0
Comparable ROE, %        8.5        15.5        5.1        6.2        14.0
Return on capital employed (ROCE), %        5.9        15.0        -0.5        3.5        12.8
Comparable ROCE, %        8.9        14.5        6.0        6.4        13.6
Operating cash flow, EURm        456        1,576        641        2,269        508
Operating cash flow per share, EUR        0.85        2.95        1.20        4.25        0.95
Equity per share at the end of period, EUR        20.93        23.44        21.42        20.93        23.44
Capital employed at the end of period, EURm        14,916        17,913        15,171        14,916        17,913
Net debt at the end of period, EURm        2,432        2,374        2,363        2,432        2,374
Net debt to EBITDA (last 12 months)        1.55        0.94        1.27        1.55        0.94
Personnel at the end of period        16,573        17,236        16,831        16,573        17,236

UPM presents certain measures of performance, financial position and cash flows, which are alternative performance measures in accordance with the guidance issued by the European Securities and Markets Authority (ESMA). The definitions of alternative performance measures are presented in » UPM Annual Report 2022

Massimo Reynaudo, President and CEO, comments on the results:

“UPM delivered solid 2023 results in a very challenging operating environment as the world went through an exceptional economic cycle. During the first half of the year, we experienced an exceptionally sharp downturn, especially in European markets. Unprecedented destocking significantly affected market deliveries and was combined with falling pulp and energy prices. As the year progressed, there were signs of gradual recovery in many product markets, and we were able to deliver improving earnings.

Our Q4 comparable EBIT increased when compared to the previous quarter by 47% to EUR 323 million and comparable EBIT margin was at a good level of 12.8%.

Looking at full year 2023, we succeeded well in margin management and took decisive action to reduce variable and fixed costs and to adjust our capacity to the low demand. Cash flow was at a record level, and our financial position is strong.

The highlight of the year was the completion of two of our transformative investments that will generate material growth and value for years to come. The UPM Paso de los Toros pulp mill in Uruguay started production in Q2. During the same quarter, the OL3 nuclear power plant unit in Finland began commercial production. These milestone investments increased our pulp and energy capacity by about 50% and contributed to our deliveries already during the second half of the year.

UPM Communications Papers achieved strong results in Q4 and the full year 2023. The business generated a record-high cash flow and strong results despite low capacity utilisation rates. Margin management was successful, cost containment actions were taken, and production capacity was aligned to low demand. In November, UPM Plattling in Germany was closed permanently. In 2023, the annual energy-related refunds in Europe particularly contributed to Q4 earnings.

UPM Fibres’ results improved in comparison to the previous quarter as market prices for pulp were on the rise and variable costs decreased. Production at the UPM Paso de los Toros pulp mill remained at the same level as in Q3 due to ramp-up issues. The issues holding back production in Q4 have been resolved and 2024 has started with good production volumes. The mill’s production reached about 850,000 tonnes in 2023 and this is expected to more than double over the course of 2024. The mill was EBITDA positive in H2 2023 and is expected to turn EBIT positive during H1 2024.

Modest improvement in market demand continued for our two businesses in the packaging value chain as destocking is largely over. UPM Specialty Papers’ results improved and were at a good level. UPM Raflatac’s performance was seasonally weaker, and the business continued cost reductions and adjusting capacity to current demand.

UPM Energy’s results were stronger than in the last two quarters, as energy consumption and prices increased due to wintry weather across the Nordic region. Our hydro and nuclear power generation volumes were good. As was the case for the entire year, energy consumption in Europe was exceptionally low and prices were much lower than in the previous year.

UPM Plywood’s results were stable in slow markets. The business implemented temporary layoffs at all mills to align capacity to demand.

In Other operations, prices developed unfavourably for UPM Biofuels. On a positive note, UPM Biofuels initiated proceedings to qualify its renewable fuel as sustainable aviation fuel. The detailed commercial and basic engineering phase of the potential Rotterdam biorefinery continues.

Our transformative biochemicals refinery project in Leuna, Germany, is progressing at full speed. We are excited about our partnerships, which confirm the keen interest in wood-based products of our new biorefinery. The start of production by the end of 2024 will be one of the highlights of this year.

Our products enable customers and consumers to achieve their sustainability targets, and here we have a strong track record of tangible actions. In Q4, we were again listed on the Dow Jones Global and European Sustainability Indices for 2023–2024 as the sole company in our industry. We updated our Green Finance Framework and received the highest possible rating for it. Earlier in the year, we joined the UN Global Compact Forward Faster Initiative to accelerate our progress towards the UN Sustainable Development Goals.

All in all, 2023 was tough in many ways, particularly in the first half. I would like to thank all UPMers for their perseverance and contribution to our solid results under these exceptional circumstances. Now at the beginning of 2024, our operating environment remains marked by uncertainties in the global economy and geopolitics. At UPM, we focus on performance, margin management and making sure our growth investments deliver. We are well positioned for when the markets recover; and we have an excellent operating model and platforms for growth in place. Together with all UPMers, we will continue to create a future beyond fossils and long-term value for our stakeholders.

Confident in the company’s strong financial position and future performance, UPM’s Board of Directors has today proposed a dividend of EUR 1.50 (1.50) per share for 2023 to our Annual General Meeting."

Outlook for 2024

UPM’s full-year 2024 comparable EBIT is expected to increase from 2023, supported by higher delivery volumes, continued ramp-up and optimisation of the UPM Paso de los Toros pulp mill and lower fixed costs. Demand for many UPM products is expected to continue to improve gradually as the destocking seen in 2023 is largely over. The year starts with lower price level for advanced renewable fuels than last year. UPM continues to manage margins and take actions to reduce variable and fixed costs.

In H1 2024, comparable EBIT is expected to be lower than in H2 2023, due to the timing of the energy-related refunds in Q4 2023 and unusually high maintenance activity in H1 2024. Planned maintenance shutdowns will take place in UPM Paso de los Toros, UPM Fray Bentos and UPM Pietarsaari pulp mills and all three units of the Olkiluoto nuclear power plant.

Invitation to UPM’s webcast on Financial Statements 2023

A webcast and a conference call for analysts and investors begin at 13:15 EET. The financial statements will be presented in English by President and CEO Massimo Reynaudo and CFO Tapio Korpeinen. Participants can view the webcast online through this link.

Those who wish to ask questions from the management must register for the teleconference. Join the teleconference by registering here. After the registration you will be provided with phone numbers, a user ID and a conference ID to access the conference. To ask a question, press *5 on your telephone keypad to enter the queue.

The webcast will be available at www.upm.com for 12 months after the call.


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. The main earnings sensitivities and the group’s cost structure are presented on pages 173–174 of the Annual Report 2022. Risks and opportunities are discussed on pages 32–33, and risks and risk management are presented on pages 132–137.


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

UPM, Media Relations
Mon-Fri 9:00–16:00 EET
tel. +358 40 588 3284

We deliver renewable and responsible solutions and innovate for a future beyond fossils across six business areas: UPM Fibres, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Communication Papers and UPM Plywood. As the industry leader in responsibility, we are committed to the UN Business Ambition for 1.5°C and the science-based targets to mitigate climate change. We employ 16,500 people worldwide and our annual sales are approximately EUR 10.5 billion. Our shares are listed on Nasdaq Helsinki Ltd. UPM Biofore – Beyond fossils. www.upm.com

Follow UPM on X | LinkedIn | Facebook | YouTube | Instagram | #UPM #biofore #beyondfossils