​​​​​​​​​​​​​​​​​Summary of latest financial results

UPM Half Year Financial Report 2017:
UPM’s good performance and favourable market demand continued

Q2 2017 Highlights

  • Comparable EBIT increased by 2% to EUR 270 million (264 million in Q2 2016). 
  • Favourable market demand continued. 
  • High maintenance activity and seasonally higher fixed costs impacted comparable EBIT by approximately EUR –20 million compared with Q2 2016, EUR –45 million compared with Q1 2017. 
  • Solid operating cash flow at EUR 269 million (434 million). 
  • Net debt decreased to EUR 1,046 million (1,876 million). 
  • UPM announced new focused investments at the Kaukas pulp mill and Tampere labelstock factory.

 H1 2017 Highlights

  • Comparable EBIT increased by 5% to EUR 575 million (545 million in H1 2016). 
  • Five business areas increased their comparable EBIT. 
  • Growth initiatives contributed to the comparable EBIT growth. 
  • Successful mitigation of raw material cost pressures.  
  • Strong operating cash flow at EUR 665 million (775 million). 
  • UPM announced divestments of hydropower assets in Germany, Austria and the US.


Key figures Q2/2017 Q2/2016 Q1/2017 Q1-Q2/2017 Q1-Q2/2016 Q1-Q4/2016
Sales, EURm 2,464 2,445 2,482 4,946 4,891 9,812
Comparable EBITDA, EURm 349 385 405 755 788 1,560
  % of sales 14.2 15.8 16.3 15.3 16.1 15.9
Operating profit, EURm 269 262 312 581 539 1,135
Comparable EBIT, EURm 270 264 305 575 545 1,143
  % of sales 11.0 10.8 12.3 11.6 11.1 11.6
Profit before tax, EURm 258 250 299 557 513 1,080
  Comparable profit before tax, EURm 258 252 291 550 519 1,089
Profit for the period, EURm 205 198 240 444 425 880
Comparable profit for the period, EURm 205 200 234 440 425 879
Earnings per share (EPS), EUR 0.38 0.37 0.45 0.83 0.80 1.65
  Comparable EPS, EUR 0.39 0.37 0.44 0.82 0.79 1.65
Return on equity (ROE), % 10.2 10.1 11.8 10.9 10.9 10.9
Comparable ROE, % 10.2 10.2 11.6 10.8 10.9 10.9
Return on capital employed (ROCE), % 10.8 9.9 12.0 11.2 10.0 10.5
Comparable ROCE, % 10.8 10.0 11.7 11.1 10.1 10.6
Operating cash flow, EURm 269 434 396 665 775 1,686
Operating cash flow per share, EUR 0.50 0.81 0.74 1.25 1.45 3.16
Equity per share at end of period, EUR 15.14 14.36 14.92 15.14 14.36 15.43
Capital employed at the end of period, EURm 9,965 10,403 9,919 9,965 10,403 10,657
Net debt at the end of period, EURm 1,046 1,876 807 1,046 1,876 1,131
Net debt to EBITDA (last 12 m.) 0.68 1.25 0.52 0.68 1.25 0.73
Personnel at the end of period 20,096 20,711 19,301 20,096 20,711 19,310


​  Jussi Pesonen, President and CEO, comments on the Q2 results:

UPM’s good performance and favourable market demand continued

"UPM's comparable EBIT continued on an increasing track in Q2 despite clearly higher maintenance activity during the quarter. Operating cash flow was solid at EUR 269 million and net debt decreased to EUR 1,046 million.

Market demand was good and delivery growth continued in most businesses during the quarter. As expected, the higher maintenance activity resulted in temporarily higher fixed costs and lower operational efficiency. Moderate cost inflation continued but was mitigated by our own cost reduction measures and targeted price increases. Overall business conditions were favourable resulting in good performance.

UPM Biorefining benefitted from higher pulp prices, strong pulp demand and improved operational performance in UPM Biofuels. Profitability improved despite the maintenance shutdown at the UPM Pietarsaari pulp mill. UPM Raflatac and UPM Plywood maintained strong profitability and continued to show solid sales growth. UPM Specialty Papers achieved an excellent result. Thanks to the new specialty paper machine at UPM Changshu we have been able to grow the release liner business and improve our product mix even faster than expected.

UPM Paper ENA achieved a satisfactory result in the quarter most impacted by seasonal factors. Demand decline in Europe remained moderate. UPM Energy suffered from poor hydrological availability and prolonged maintenance activity at Olkiluoto power plant in Finland. As a result, power generation was exceptionally low during the quarter.

The focused growth projects over the recent years have been highly successful and have contributed to our profits and returns well. During the second quarter we introduced two further focused investments: the Kaukas pulp mill efficiency and competitiveness improvement in Lappeenranta and the UPM Raflatac specialty labels expansion in Tampere, both of which are in Finland.

When it comes to longer-term growth, the discussions continue with the Government of Uruguay concerning infrastructure development and other local prerequisites for a potential pulp mill investment.

2017 has started well for us. Five out of our six businesses improved their performance during the first half of the year. Our businesses are performing well, and our cash flow and balance sheet enable us to distribute attractive dividend and simultaneously invest in profitable growth. We look confidently into the future and our opportunities for creating value from bioeconomy."

Outlook for 2017

UPM's profitability improved significantly in 2016 and is expected to continue on a good level in 2017.

Demand growth is expected to continue for most of UPM's businesses, while demand decline is expected to continue for UPM Paper ENA. The focused growth projects continue to contribute gradually to UPM's performance.

Following a deflationary environment in recent years, 2017 is expected to show modest input cost inflation. UPM will continue measures to reduce fixed and variable costs to mitigate this.

Q3 2017 is expected to include significantly less maintenance activity than Q2 2017 in UPM Biorefining, UPM Paper ENA and UPM Energy.

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