UPM reports strong year of recovery

Helsinki, 2011-02-02 08:45 CET (GLOBE NEWSWIRE) -- UPM-Kymmene Corporation   Stock exchange release 2 February 2011 at 09:45 EET 

UPM reports strong year of recovery
Financial Statements 2010 

October–December 2010:

  • Earnings per share were EUR 0.28 (0.57), excluding special items EUR 0.27 (0.21)
  • Operating profit excluding special items was EUR 212 million (186 million)
  • Continued sales growth driven by prices and volume
  • Strong cash flow momentum – best quarter in 2010
  • EBITDA negatively impacted by higher than average maintenance and other costs 

January–December 2010:

  • Earnings per share grew to EUR 1.08 (0.33), excluding special items to EUR 0.99 (0.11)
  • Operating profit excluding special items was EUR 731 million (270 million)
  • Solid top-line recovery – sales increased by 16%
  • Net debt down by EUR 444 million
  • Board’s proposal for dividend per share EUR 0.55 (0.45) 
Key figures Q4/2010 Q4/2009 Q1-Q4/2010 Q1-Q4/2009
Sales, EURm  2,357  2,108 8,924 7,719
EBITDA, EURm 1)  318 362  1,343 1,062
% of sales  13.5 17.2  15.0 13.8
Operating profit (loss), EURm 207 126 755 135
excluding special items, EURm 212 186 731 270
% of sales  9.0 8.8 8.2 3.5
Profit (loss) before tax, EURm  173 311 635 187
 excluding special items, EURm  178 156 611 107
Net profit (loss) for the period, EURm 144 295  561 169
Earnings per share, EUR  0.28 0.57 1.08 0.33
 excluding special items, EUR 0.27 0.21 0.99 0.11
Operating cash flow per share, EUR 0.66 0.71 1.89 2.42
Shareholders' equity per share at end of period, EUR 13.64 12.67 13.64 12.67
Gearing ratio at end of period, %  46 56 46 56
Net interest-bearing liabilities at end of period, EURm 3,286 3,730 3,286 3,730

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. 

J ussi Pesonen, President and CEO, comments :

“The year 2010 was characterised by recovering demand and global commodity price inflation. With higher production volumes we were able to take full benefit of our early efficiency improvements and bring profitability back to pre-recession level. This is a remarkable achievement in the continuously challenging operating environment. Our last quarter profitability was burdened by higher than average maintenance and other costs but showed the best cash flow for the whole year. 

Our Pulp, Energy and Label businesses excelled in 2010, whereas the profitability of the Paper business was weak. Paper deliveries increased, but the business made operating loss due to significantly higher fibre costs. The European paper business clearly needs consolidation to be able to improve its cost structure. Therefore, the Myllykoski acquisition is a major strategic opportunity for our company. 

As for 2011, we remain clearly positive. Stable demand and moderating cost inflation provide a good foundation for further profit improvement. Also our Paper business has a positive view of this year. The price increases we achieved at the beginning of the year will support the necessary margin recovery and to catch up last year’s cost development,” says Pesonen. 

Outlook for 2011

Economic indicators point to continued economic growth, although in the mature European and North American markets, growth is expected to be slow. Robust economic growth is expected to continue in emerging markets. This is also likely to maintain demand and prices for various global commodities at a high level. 

For the Group, delivery volumes overall are expected to either remain stable or increase in 2011. Variable cost inflation is expected to moderate from the pace seen in 2010. Sales prices of UPM's products are expected to increase, especially in the Paper business, where the average price is expected to increase by about 6%at the beginning of the year from the fourth quarter of 2010. 

UPM operating profit, excluding special items, for 2011 is expected to improve from last year. 

In the first half of 2011, operating profit, excluding special items, is expected to be clearly higher than that of the first half of 2010. 

Capital expenditure, excluding acquisitions, for 2011 is forecast to be about EUR 300 million. 

Dividend for 2010

The Board of Directors will propose to the Annual General Meeting, to be held on 7 April 2011, that a dividend of EUR 0.55 per share be paid in respect of the 2010 financial year (EUR

0.45). It is proposed that the dividend be paid on 20 April 2011. 

New disclosure procedure

UPM follows the new disclosure procedure enabled by the Finnish Financial Supervisor Authority (Standard 5.2b) and hereby publishes its Financial Review enclosed as a PDF file to this stock exchange release. UPM’s Financial Review is also available on the company website at www.upm.com

Financial information in 2011

The Annual Report for 2010 will be published on the company’s website www.upm.com on 24 February 2011. The printed Annual Report will be available in the week starting on 17 March 2011. The Interim Reports will be published as follows: 

Interim Report January–March 2011 on 28 April 2011
Interim Report January–June 2011 on 3 August 2011
Interim Report January–September 2011 on 26 October 2011. 

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
communications@upm.com

Conference call and press conference 

UPM's President and CEO Jussi Pesonen will present the Financial Review for 2010 in a conference call and webcast for analysts and investors, held in English, on 2 February 2011 at 13:00 Finnish time (11:00 London time, 06:00 EST). 

Jussi Pesonen will also present the Financial Review in a press conference held in Finnish at UPM Group Head Office in Helsinki, Eteläesplanadi 2, on 2 February, at 14:15 Finnish time (12:15 London time, 07:15 EST). 

Conference call and webcast details: 

You can participate in the conference call either by dialling a number in 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 dialling in 5–10 minutes beforehand to ensure the conference starts on time. 

Conference call title: UPM Financial Review 2010
Conference ID: 885 553  
                                                                            

Phone numbers:
North America Freephone: +1 877 491 0064
India Freephone: 000 8001 0035 51
Australia LC:+61 (0)28 2239 543
Hong Kong LC: +852 300 278 26
Japan LC: +81 (3)45 8001 94
Malaysia LC:+60 (0)37 7124 471
New Zealand LC: +64 (0)99 1924 18
Singapore LC: +65 6823 2169
South Korea LC: +82 (0)23 4831 070
Taiwan LC: +886 (0)22 1626 701
Austria: +43 (0)268 2205 6292
Belgium: +32 (0)2 290 14 07
Czech Republic: +420 (2)3900 0635
Denmark: +45 3271 4607
Finland: +358 (0)9 2313 9201
France: +33 (0)1 7099 3208
Germany: +49 (0)695 8999 0507
Hungary: +36 (0)618 8932 15
Ireland: +353 (0)1 4364 106
Italy: +39 023 0350 9003
Luxembourg: +352 270 0073 408
Netherlands:+31 (0)20 7965 008
Norway: +47 2156 312 0
Spain: +34 9178 8989 6
Sweden: +46 (0)8 5052 0110
Switzerland (Geneva): +41 (0)2 2592 7007
Switzerland (Zurich): +41 (0)434 5692 61
UK: +44 (0)20 7162 0077 

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. 

UPM-Kymmene Corporation
Pirkko Harrela
Executive Vice President, Corporate Communications 

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NASDAQ OMX Helsinki Ltd
Main media
www.upm.com