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UPM improved first quarter margins despite challenging cost environment, Earnings guidance for 2011 unchanged

Stock Exchange Release 28.4.2011 9:30 EEST

Helsinki, 2011-04-28 08:30 CEST (GLOBE NEWSWIRE) -- UPM-Kymmene Corporation   Interim Report   28 April 2011  at 09:30 EET

Interim report for January–March 2011 

  • Earnings per share were EUR 0.33 (0.13), excluding special items EUR 0.32 (0.15)
  • Operating profit excluding special items was EUR 198 million (116 million)
  • Sales growth continued, driven by both sales prices and delivery volumes
  • Earnings guidance for 2011 unchanged
Key figures Q1/2011 Q1/2010 Q1-Q4/2010
Sales, EURm  2,356  2,039 8,924
EBITDA, EURm 1)  379 288  1,343
% of sales  16.1 14.1  15.0
Operating profit, EURm 198 107 755
 excluding special items, EURm 198 116 731
 % of sales  8.4 5.7 8.2
Profit before tax, EURm  195 82 635
 excluding special items, EURm  195 91 611
Net profit for the period, EURm 169 70  561
Earnings per share, EUR  0.33 0.13 1.08
 excluding special items, EUR 0.32 0.15 0.99
Operating cash flow per share, EUR 0.32 0.40 1.89
Shareholders' equity per share at end of period, EUR 13.87 12.62 13.64
Gearing ratio at end of period, %  44 54 46
Net interest-bearing liabilities at end of period, EURm 3,197 3,569 3,286

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 on the first quarter of 2011 :

“UPM's earnings showed a clear improvement compared to the same period last year, due to higher sales prices and delivery volumes in most of our businesses. We are now finally seeing market pick up even in our Plywood business.

Our first quarter sales grew by 16% compared to the same period last year. Despite the very clear increase in variable costs, our EBITDA margin was better than it was in the full year of 2010.

The improvement in earnings comes from our Paper and Pulp business areas. In Paper, delivery volumes improved, especially in markets outside Europe. The operating loss of the Paper business decreased thanks to better prices and deliveries. At the beginning of the year paper prices increased on average by 6%. The Pulp business continued to perform well due to remarkably high market prices and more deliveries.

It is clear that UPM is now well positioned both in terms of business cycle and strategy,” Pesonen concludes.

Outlook for 2011

UPM’s earnings guidance for 2011 is unchanged. The operating profit excluding special items for 2011 is expected to improve on 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.

The favourable delivery volume development seen in the first quarter is expected to continue.

Sales prices are also expected to remain stable or improve, depending on the business area.

Variable cost inflation has turned out to be higher than expected at the start of the year, especially in chemical pulp and recovered paper as well as oil-related costs, such as logistics and chemicals. The cost of wood raw material is expected to be stable at the level seen in the first quarter and latter part of 2010. Overall cost inflation in 2011 is now estimated to be about the same as in 2010.


The complete Interim Report is available on the company website at www.upm.com

UPM will publish the Interim Report for January–June 2011 on 3 August 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

Conference call and press conference

UPM's President and CEO Jussi Pesonen will present the Interim Report for January-March 2011 in a conference call and webcast for analysts and investors, held in English, today on 28 April 2011 at 13:00 Finnish time (11:00 BST (London), 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, today at 14:15 Finnish time (12:15 BST (London), 07:15 EST).

Conference call and webcast details:

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

Conference call title: UPM-Kymmene Corporation Interim Report January–March 2011
Conference ID: 891577

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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