(UPM, Helsinki, 26 October 2011 at 9:30 EET) – Interim report for January–September 2011:
1) EBITDA is operating profit before depreciation, amortisation and impairment charges, excluding the change in value of biological assets, excluding the share of results of associated companies and joint ventures, and special items.
Jussi Pesonen, President and CEO, comments on the result:
“During the third quarter UPM’s delivery volumes fell while variable costs reached a peak level. These coinciding events impacted on our operating profit. Particularly the lower pulp and fine paper deliveries in Europe had an adverse impact on the operating profit”.
“On a positive note, our strong performance in terms of operating cash flow continued. Myllykoski integration proceeded well and the magazine paper business showed solid performance. The demand for publication papers was stable and, during the quarter, we were able to increase paper prices by 1-2%. Also, the Label and Plywood businesses were able to implement price increases. However, this was not sufficient to offset the rise in variable costs during the third quarter. While the cost level still remains high, we estimate that we have now reached the peak and variable costs are expected to start gradually decreasing”.
“We are prepared for a heavy winter. There is already a clear decline in demand in Europe for our timber and plywood businesses. However, UPM is in a much better position to respond to the rough economic climate compared to 2008”.
“The strategic acquisitions of the Fray Bentos mill and the Myllykoski have further improved our cost competitiveness and cash flow generation. Our net debt increased only EUR 205 million year-on-year. Our balance sheet is strong, which gives us opportunities to consider further strategic moves”.
“As announced after the Myllykoski acquisition, we have plans in place to reduce 1.3 million tonnes of paper capacity in Europe and gain annual cost synergies worth EUR 200 million. We are prepared to adopt flexible production operations in various businesses, if needed, and will continue our stringent cost control and strict investment policy. All in all, UPM is well prepared to face any economic scenario”, Pesonen concludes.
Outlook for 2011
Economic outlook has turned weaker during the second half of the year. As a result, demand for UPM’s products for the rest of the year is lower than earlier anticipated.
Price outlook for UPM’s products is mostly stable for the rest of the year and variable costs are anticipated to start gradually to decrease during the fourth quarter of 2011 from the peak level reached in the third quarter of 2011.
UPM’s full-year 2011 operating profit excluding special items is expected to be somewhat lower than last year. Previously, the full year 2011 operating profit excluding special items was expected to improve from last year.
The complete Interim Report is available on the company website at
UPM will publish the Financial Review for 2011 on 1 February 2012.
For more information please contact:
Mr Jussi Pesonen, President and CEO, UPM, tel. +358 204 15 0001
Mr Tapio Korpeinen, CFO, UPM, tel. +358 204 15 0004
UPM, Corporate Communications
Media Desk, tel. +358 40 588 3284
Conference call and press conference
UPM's President and CEO Jussi Pesonen will present the Interim Report in a conference call and webcast for analysts and investors, in English, on 26 October at 13:00 Finnish time (11:00 GMT, 06:00 EST).
Jussi Pesonen will also present the Interim Report in a press conference held in Finnish at UPM Group Head Office in Helsinki, Eteläesplanadi 2, on 26 October, at 14:15 Finnish time (12:15 GMT, 07:15 EST).
Conference call and webcast details:
You can participate in the conference call either by dialing one of the numbers from the list below or following the webcast online at www.upm.com. 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 beforehand to ensure the conference starts timely.
Conference call title: UPM-Kymmene Corporation Interim Report January–September 2011
Conference ID: 891583
Participant - UK: +44 (0)20 7162 0025
Participant - North America Freephone: +1 877 491 0064
Participant - India Freephone: 000 8001 0035 51
Participant - Australia LC: +61 (0)28 2239 543
Participant - Hong Kong LC: +852 300 278 26
Participant - Japan LC: +81 (3)45 8001 94
Participant - Malaysia LC: +60 (0)37 7124 471
Participant - New Zealand LC: +64 (0)99 1924 18
Participant - Singapore LC: +65 6823 2169
Participant - South Korea LC: +82 (0)23 4831 070
Participant - Taiwan LC: +886 (0)22 1626 701
Participant - Austria: +43 (0)268 2205 6292
Participant - Belgium: +32 (0)2 290 14 07
Participant - Czech Republic: +420 (2)3900 0635
Participant - Denmark: +45 3271 4607
Participant - Finland: +358 (0)9 2313 9201
Participant - France: +33 (0)1 7099 3208
Participant - Germany: +49 (0)695 8999 0507
Participant - Hungary: +36 (0)618 8932 15
Participant - Ireland: +353 (0)1 4364 106
Participant - Italy: +39 023 0350 9003
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Participant - Netherlands: +31 (0)20 7965 008
Participant - Norway: +47 2156 312 0
Participant - Spain: +34 9178 8989 6
Participant - Sweden: +46 (0)8 5052 0110
Participant - Switzerland (Geneva): +41 (0)2 2592 7007
Participant - Switzerland (Zurich): +41 (0)434 5692 61
The webcast can be replayed at www.upm.com for 12 months.
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, and 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.
Executive Vice President, Corporate Communications
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