UPM financial statements release 2022: UPM had a pivotal year – all-time record results and poised to deliver significant growth

Stock Exchange Release 2.2.2023 9:55 EET

UPM-Kymmene Corporation        Financial Statements Release 2022        2 February 2023 at 09:55 EET

UPM financial statements release 2022:
UPM had a pivotal year – all-time record results and poised to deliver significant growth

Q4 2022 highlights

  • Sales increased by 21% to EUR 3,231 million (2,673 million in Q4 2021)
  • Comparable EBIT grew by 42% to EUR 653 million, 20.2% of sales (461 million, 17.2%)
  • Sales prices increased in all business areas, and more than offset the negative impact of higher variable costs
  • Delivery volumes were impacted by destocking in various product value chains
  • Operating cash flow was EUR 1,576 million (406 million), further supported by cash inflow from energy hedges
  • Cash funds and unused committed credit facilities totalled EUR 6.4 billion at the end of Q4 2022
  • In December, UPM was listed on the Dow Jones European and World Sustainability Indices (DJSI) for 2022-2023 as the only company in its industry
  • In December, UPM was recognised with a triple ‘A’ score for its performance and transparent reporting on climate change, forests and water security by the global environmental non-profit CDP
  • The growth project in Uruguay is getting ready for the start-up and the new pulp terminal in the port of Montevideo is operational since October

2022 highlights

  • Sales increased by 19% to EUR 11,720 million (9,814 million in 2021)
  • Comparable EBIT increased by 42% to EUR 2,096 million (1,471 million), and was 17.9% (15.0%) of sales
  • Operating cash flow was EUR 508 million (1,250 million), impacted by cash outflows from energy hedges in highly exceptional energy markets
  • Net debt increased to EUR 2,374 million (647 million) and the net debt to EBITDA ratio was 0.94 (0.35). A significant part of the increase in net debt is temporary, due to the cash flow impacts of energy hedges and future energy generation
  • The Board has decided on a new, earnings-based dividend policy and proposes a dividend of EUR 1.50 (1.30) per share
  • UPM decided to suspend its deliveries to Russia, the purchasing of wood in Russia and the UPM Chudovo plywood mill operations
  • In April, UPM and the Paperworkers’ Union agreed on the first-ever business-specific collective labour agreements
  • In June, UPM announced the sale of the Steyrermühl site in Austria to secure competitiveness and adapt newsprint production to long-term market development
  • In August, EcoVadis recognised UPM on Platinum level based on the company’s sustainability performance
  • In September, UPM Raflatac completed the acquisition of AMC AG

Key figures

Sales, EURm        3,231        2,673        3,420        11,720        9,814
Comparable EBITDA, EURm        759        470        894        2,536        1,821
% of sales        23.5        17.6        26.1        21.6        18.6
Operating profit, EURm        675        415        781        1,974        1,562
Comparable EBIT, EURm        653        461        779        2,096        1,471
% of sales        20.2        17.2        22.8        17.9        15.0
Profit before tax, EURm        638        420        766        1,944        1,548
Comparable profit before tax, EURm        616        466        764        2,066        1,457
Profit for the period, EURm        503        340        622        1,556        1,307
Comparable profit for the period, EURm        489        373        629        1,679        1,204
Earnings per share (EPS), EUR        0.93        0.63        1.15        2.86        2.41
Comparable EPS, EUR        0.91        0.69        1.16        3.09        2.22
Return on equity (ROE), %        16.0        12.6        21.1        13.0        12.7
Comparable ROE, %        15.5        13.8        21.3        14.0        11.7
Return on capital employed (ROCE), %        15.0        12.7        18.7        12.8        12.4
Comparable ROCE, %        14.5        14.1        18.6        13.6        11.7
Operating cash flow, EURm        1,576        406        -201        508        1,250
Operating cash flow per share, EUR        2.95        0.76        -0.38        0.95        2.34
Equity per share at the end of period, EUR        23.44        20.34        22.35        23.44        20.34
Capital employed at the end of period, EURm        17,913        13,759        18,052        17,913        13,759
Net debt at the end of period, EURm        2,374        647        3,133        2,374        647
Net debt to EBITDA (last 12 months)        0.94        0.35        1.39        0.94        0.35
Personnel at the end of period        17,236        16,966        17,289        17,236        16,966


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

“2022 was a pivotal year for UPM. We delivered all-time high annual sales and earnings, driven by success across all of our businesses. At the same time, our transformative growth projects proceeded as planned, getting ready to deliver growth already this year. This remarkable achievement shows UPM’s resilience in an exceptional environment marked by high inflation, Russia’s war in Ukraine, and the European energy crisis. These challenges were met with commercial and operational agility. I am very proud of the company and all UPMers.

Results for Q4 were excellent, too. The quarter was the second best-ever quarter for the company, paling by comparison only to the previous quarter. Quarterly sales grew by 21% to EUR 3,231 million, and comparable EBIT increased by 42% to EUR 653 million. Operating cash flow was EUR 1,576 million, which this time was positively impacted by cash inflow from energy hedges.

Our net debt at the end of the year was EUR 2,374 million. The net debt to EBITDA ratio was 0.94, at a good level. Cash funds and unused committed credit facilities at the end of the year totalled EUR 6.4 billion. Our financial position is therefore very strong.

In most businesses, margins continued to improve even from the record strong Q3. As a result, prices and margins in Q4 were at record highs. Towards the end of the year, we saw significant destocking in many product value chains, especially in Europe, which held our delivery volumes back in UPM Communication Papers, UPM Raflatac and UPM Specialty Papers. However, in UPM Communication Papers the effects of destocking were offset by declining input costs, especially energy costs, bringing about excellent Q4 earnings.

UPM Energy reported excellent results, however they were down from Q3 and from the same quarter of the previous year. The energy crisis in Europe eased somewhat during Q4, and the electricity markets functioned well, allowing Finland and Sweden to enjoy the lowest annual average prices in Europe. The OL3 nuclear power plant unit was still in the testing phase with very limited contribution to our volumes. The unit is expected to reach commercial production in March, increasing UPM Energy’s CO2-free electricity output by nearly 50%.

UPM Fibres’ quarterly results reflect high pulp prices but were impacted by rising input costs and the maintenance shutdown of the UPM Fray Bentos pulp mill in Uruguay. Sales prices in sawn timber were affected by the slowdown in construction end-uses.

UPM Plywood finished its record-breaking year with a solid quarter. The markets in industrial applications remained strong, whereas markets in construction end-uses slowed down.

In Other businesses, UPM Biofuels achieved excellent quarterly earnings. The business achieved record results for the full year, despite the Lappeenranta biorefinery having only been operational for seven months.

Our large investment project in Uruguay is nearing completion. The pulp terminal in Montevideo was inaugurated in October, and the construction of the Paso de los Toros pulp mill was finalised at the turn of the year. The mill is now solidly on track in the commissioning stage and the start-up will take place by the end of Q1. The cash cost level of approximately USD 280 per delivered tonne of pulp will make it one of the most competitive pulp mills in the world and increase our pulp output more than 50% to 5.8 million tonnes annually.

In UPM Biorefining, the biochemicals refinery project in Leuna, Germany, is progressing at a good pace. There is a keen interest in the products of the new biorefinery, confirming the business opportunity and growth strategy to replace fossil-based materials with renewable alternatives for many end-uses. Detailed commercial and basic engineering studies of the potential biofuels refinery in Rotterdam continues at intensive pace.

Stakeholder interest in mitigating climate change and fostering biodiversity has been growing year on year. UPM has ambitious, science-based targets and a strong track record of tangible actions in both respects. In Q4 our performance and transparent reporting on climate change, forests and water security was recognised with a triple ‘A’ score by the global environmental non-profit CDP. We were also listed on the Dow Jones European and World Sustainability Indices (DJSI) for 2022–2023 as the only company in our industry. Responsibility is an integral part of our Biofore strategy and a driver for future success.

The Board has decided on a new, earnings-based dividend policy in line with our transformative growth strategy. With confidence in our financial position and future earnings, UPM’s Board of Directors has today proposed a dividend of EUR 1.50 (1.30) per share for 2022 to our Annual General Meeting.

Outlook for 2023

UPM reached record earnings in 2022, and 2023 is expected to be another year of strong financial performance. UPM’s comparable EBIT is expected to increase in H1 2023 from H1 2022.

In 2023, UPM’s delivery volumes are expected to benefit from the ramp up of the UPM Paso de los Toros pulp mill and the OL3 nuclear power plant unit and having no strike impact when compared to 2022. In the early part of the year, however, demand for many UPM products is expected to be held back by destocking in various product value chains. The opening of the Chinese economy from the COVID lockdowns and easing inflation in other key economies represent potential for increasing demand as the year progresses.

Year 2023 is starting with high cost level for many inputs, while the lower demand is exerting pressure on product prices. However, several input costs have also progressed past their peak. UPM will continue to manage margins with product pricing, by optimising its product and market mix and by taking measures to improve variable and fixed cost efficiency.

There are significant uncertainties, both positive and negative, in the outlook for 2023, related to the European, Chinese and global economy, Russia’s war in Ukraine, the remaining effects of the pandemic, energy prices and related regulation in Europe, and the ramp-up of the OL3 power plant unit.

Invitation to UPM’s webcast and press conference on Financial Statements for 2022

A webcast and a conference call for analysts and investors in English begins at 13:15 EET. UPM’s financial results will be presented by the President and CEO Jussi Pesonen and CFO Tapio Korpeinen. Participants can view the webcast online at www.upm.com or through this link, but participants who wish to ask questions from the management must register for the teleconference.

To ask questions, join the teleconference by registering here. After the registration you will be provided with phone numbers and a conference ID to access the conference. To ask a question, press *5 on your telephone keypad to enter the queue.

The webcast will be available at www.upm.com for 12 months after the call.

Later in the afternoon, at 14:45 EET, President and CEO Jussi Pesonen will present the financial results in a press conference held in Finnish both at the Group head office and online. Those wishing to attend this event, please contact the UPM media desk.


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, 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. The main earnings sensitivities and the group’s cost structure are presented on pages 165–166 of the Annual Report 2021. Risks and opportunities are discussed on pages 34–35, and risks and risk management are presented on pages 131–135.


UPM-Kymmene Corporation
Pirkko Harrela
Executive Vice President, Stakeholder Relations

UPM, Media Relations
Mon-Fri 9:00-16:00 EET
tel. +358 40 588 3284

We deliver renewable and responsible solutions and innovate for a future beyond fossils across six business areas: UPM Fibres, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Communication Papers and UPM Plywood. As the industry leader in responsibility, we are committed to the UN Business Ambition for 1.5°C and the science-based targets to mitigate climate change. We employ 17,200 people worldwide and our annual sales are approximately EUR 11.7 billion. Our shares are listed on Nasdaq Helsinki Ltd. UPM Biofore – Beyond fossils. www.upm.com

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