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

UPM Interim Report Q3 2017:   
Excellent quarter, further steps in transformation

Q3 2017 highlights

  • Comparable EBIT increased by 12% to EUR 351 million (314 million in Q3 2016).
  • Good growth in deliveries and strong operational efficiency with no significant maintenance activity. 
  • Strong operating cash flow at EUR 486 million (506 million). 
  • Net debt decreased to EUR 623 million (1,479 million). 
  • UPM announced a new focused growth project at the UPM Chudovo plywood mill in Russia. 
  • UPM announced the next step towards entering a new sustainable biochemicals business.

 Q1-Q3 2017 highlights

  • Comparable EBIT increased by 8% to EUR 926 million (859 million in Q1–Q3 2016). 
  • Solid profit performance continued through a turn in input cost environment. 
  • Growth initiatives contributed to the comparable EBIT growth. 
  • Strong operating cash flow at EUR 1,151 million (1,281 million).
  • UPM announced focused growth investments at the Kaukas pulp mill and the Tampere label stock factory. 
  • UPM announced divestments of hydropower assets in Germany, Austria and the US.
Key figures Q3/2017 Q3/2016 Q2/2017 Q1-Q3/2017 Q1-Q3/2016 Q1-Q4/2016
Sales, EURm 2,493 2,445 2,464 7,439 7,336 9,812
Comparable EBITDA, EURm 425 423 349 1,180 1,210 1,560
  % of sales 17.1 17.3 14.2 15.9 16.5 15.9
Operating profit, EURm 379 364 269 960 903 1,135
Comparable EBIT, EURm 351 314 270 926 859 1,143
  % of sales 14.1 12.8 11.0 12.4 11.7 11.6
Profit before tax, EURm 357 336 258 914 848 1,080
  Comparable profit before tax, EURm 328 288 258 878 807 1,089
Profit for the period, EURm 286 268 205 730 693 880
Comparable profit for the period, EURm 267 234 205 707 659 879
Earnings per share (EPS), EUR 0,54 0.50 0.38 1.37 1.30 1.65
  Comparable EPS, EUR 0.50 0.44 0.39 1.32 1.23 1.65
Return on equity (ROE), % 13.9 13.8 10.2 11.7 11.7 10.9
Comparable ROE, % 13.0 12.1 10.2 11.4 11.1 10.9
Return on capital employed (ROCE), % 14.8 13.4 10.8 12.2 11.0 10.5
Comparable ROCE, % 13.6 11.5 10.8 11.7 10.5 10.6
Operating cash flow, EURm 486 506 269 1,151 1,281 1,686
Operating cash flow per share, EUR 0.91 0.95 0.50 2.16 2.40 3.16
Equity per share at end of period, EUR 15.61 14.75 15.14 15.61 14.75 15.43
Capital employed at the end of period, EURm 10,098 10,463 9,965 10,098 10,463 10,657
Net debt at the end of period, EURm 623 1,479 1,046 623 1,479 1,131
Net debt to EBITDA (last 12 m.) 0.41 0.94 0.68 0.41 0.94 0.73
Personnel at the end of period 19,335 19,559 20,096 19,335 19,559 19,310


​  Jussi Pesonen, President and CEO, comments on the Q3 results:

Excellent quarter, further steps in transformation

"The third quarter was another excellent quarter for UPM. The markets were favourable and we achieved good growth in delivery volumes. We also succeeded in mitigating input cost inflation with sales price increases and cost efficiency measures. Our operational efficiency was strong in a quarter with no significant maintenance activity.

Our comparable EBIT increased by 12 per cent to EUR 351 million. Operating cash flow was strong at EUR 486 million and net debt decreased to EUR 623 million, representing 0.4 times EBITDA.

UPM Biorefining benefitted from higher pulp prices and good delivery growth. UPM Raflatac, UPM Specialty Papers and UPM Plywood were able to largely offset higher input costs by increasing deliveries and sales prices. In UPM Energy the hydropower generation recovered to normal level.

UPM Paper ENA was able to report the best quarter of this year, despite the significant increase in fibre costs. This is the outcome of consistent and continuous work for cost efficiency and competitiveness as well as the stringent execution of commercial strategies. In order to succeed also next year, we need to take timely measures in capacity management and cost savings.

In addition to our strong performance we are pleased to see good progress in our transformation, including our initiatives for future growth.

This morning we announced another growth project in our top-performing plywood business. The expansion of the UPM Chudovo plywood mill in Russia will enable us to grow in attractive plywood segments in a highly competitive way. Our ongoing growth projects in pulp and in self-adhesive labels are proceeding well and will strengthen our position in the growing markets in 2018. UPM Kymi pulp mill expansion is already starting production in the fourth quarter.

UPM aims to grow in new biomolecule businesses. I'm pleased to say that the Lappeenranta Biorefinery has now reached the designed capacity of renewable diesel and naphtha and generates a good financial return. The biorefinery was the first significant investment in new innovative wood-based products. Today we reported on our progress towards entering a new sustainable biochemicals business. After more than five years of research and piloting we have now entered the basic engineering phase, targeting industrial scale production of biochemicals in Germany.

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

Despite seasonal quarterly variations, we have consistently continued our improvement trend in profitability and our financial standing for several years. The third quarter marks the 18th consecutive quarter of improving profits. At the same time with the improving performance, we have proceeded step by step in our business transformation, and this work will continue." 

Outlook for 2017

UPM's profitability improved significantly in 2016 and is expected to continue on a good level in 2017. Comparable EBIT is expected to increase in 2017 compared with 2016.

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 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.

Q4 2017 is expected to include more maintenance activity than Q3 2017 in UPM Biorefining and UPM Paper ENA.

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